Launched with great fanfare at the Camp David G8 summit in 2012, the New Alliance for Food Security and Nutrition was supposed to inject much-needed money into rural communities in Africa. But three years later, one of the first projects of this US$8 billion initiative is set to force communities off their land in Tanzania.
New research from international aid agency ActionAid has revealed that up to 1,300 people will lose their land or homes in the initial phase of the project, which will see Swedish-owned company EcoEnergy lease more than 20,000 hectares of land in the Tanzanian District of Bagamoyo for a sugarcane plantation.
The research found that families were being forced off their land following an inadequate consultation process conducted by EcoEnergy. Many of the people affected were not allowed to choose whether to leave their land, and were denied crucial information about the impact of the project on their ability to make a living off the land and feed their families.
Under pressure from the agribusiness lobby, the Obama Administration threw its weight behind the New Alliance, committing nearly US$2 billion dollars of taxpayers' money to the initiative. But in doing so, it has opened the door to even more murky land deals, some of which will see poor farmers shoved aside to make way for large plantations, producing food and fuel for overseas markets.
Opening the door to agribusiness
As part of the New Alliance agreements, ten African governments signed up to make policy changes that favor large agribusiness, and provide the land and labor for these huge plantations. But much of the land that is being allocated for New Alliance projects is already a source of food and income for some of the continent's poorest farmers. These smallholder farmers produce up to 80 percent of the continent's food, but need greater investment in skills and equipment to ensure sustainable growth for their countries' economies.
The EcoEnergy plantation in Tanzania will take up 20,000 hectares - that's an area of land bigger than Washington D.C. But it doesn't stop there. In Tanzania alone, there are more than 20 other large land projects in the pipeline. Projects that will see more farmers evicted from their land to make way for large plantations backed by foreign investors.
You may think that any investment must be welcome in some of the poorest parts of the world. Not so. As many of these schemes often fail to deliver on their promises, leaving farmers without land and paid employment.
In the case of the EcoEnergy project in Tanzania, the company claims that its project will inject US$45 million a year into the local economy, but ActionAid estimates that it may only generate a maximum of US$11.5 million per year. With its Swedish owners almost certain to be selling the sugar for biofuel to meet booming global demand, both the product and profit look set to leave the country, leaving little for the landless farmers of Bagamoyo.
The company claims that the communities will benefit through an 'outgrower' scheme, which will see farmers grow sugarcane and supply the company at a fixed price. However, the scheme comes at huge risk, with local farmers expected to take out loans equivalent to US$16,000 per person, or 30 times the minimum annual agricultural salary in Tanzania, to fund their participation in the scheme. EcoEnergy estimates that it will take at least seven years for the farmers to pay back the loan and make a profit, while farmers' costs will rise, as they will be forced to buy food and pay for housing elsewhere.
With foreign companies attracted by the large amounts of public cash on offer, many more of these New Alliance deals look set to be announced. Poorly paid, high debt schemes such as what is being proposed by EcoEnergy in Bagamoyo, will not deliver the cash injection for rural communities in Africa that the Administration is aiming for.
The New Alliance can't be fixed, it needs to be scrapped. That's why ActionAid is calling on the Obama Administration to end support for the New Alliance, and focus its funding on supporting poor farmers in Africa, rather than initiatives that take away their land and livelihoods.