Bruce Rastetter, CEO of Pharos Ag and co-founder of AgriSol Energy, pictured with former New York City mayor and potential Republican candidate for the 2012 presidential election Rudy Giuliani. (Photo: AP)
U.S. firm, AgriSol Energy LLC, and its joint venture partner in Tanzania will invest more than $100 million over the next 10 years to develop a large-scale commercial farming project in the east African country, a company director said on Tuesday.
AgriSol, led by well-known Iowa farming and ethanol executive Bruce Rastetter, has joined with Serengeti Advisers, a Tanzanian investments and consulting firm, to invest in crop and poultry production in western Tanzania.
"Our initial project in Lugufu involves approximately 10,000 hectares -- a tiny percentage of the overall available land in Tanzania -- but large enough to have a meaningful impact on the country's agricultural industry," Bertram Eyakuze, one of AgriSol Tanzania's directors, said in an e-mailed response to questions submitted by Reuters.
"We project that it will cost in excess of $100 million over the next ten years to develop Lugufu fully," Eyakuze said, adding the focus would initially be on the growth of maize and soy, which would in part be used to produce feed for livestock and cooking oil.
Poultry production would also be a focus of the project, to eventually wean Tanzania off importing chicken from Brazil and other countries.
"Tanzania has 43 million hectares of arable land, of which only about 10 million hectares, or 23 percent, is currently being farmed, leaving more than 30 million hectares available to produce food for the people of Tanzania and eventually the rest of Africa," Eyakuze said.
He said investors would look into expanding farming activities once the Lugufu project was completed.
AFRICAN LAND-GRAB DENIALS
Tanzanian prime minister Mizengo Pinda said in June the country would offer over 1.6 million hectares of land for lease to investors to set up large-scale projects.
Companies have already injected about 1 trillion shillings in free trade zones since 2007 and exported goods worth 525 billion shillings in the same period, Pinda said at the time.
AgriSol denied allegations it was among wealthy U.S. and European investors accumulating large swathes of African agricultural lands in deals that have little accountability and give them greater control over food supply for the world's poor.
A report by Oakland Institute, a think tank in California, said in June some U.S. public universities, pension and hedge funds and speculators were among those in on the land rush, eyeing returns of 20 to as much as 40 percent.
"Some recent news accounts and reports have inaccurately portrayed our intentions ... Our project is about partnering with world-class agricultural experts and putting Tanzanian farmland to its best and fullest use," Iddi Simba, a director at Serengeti Advisers, said in an open letter to the public posted on AgriSol's website last month.
"(Tanzanian) government made AgriSol aware of three tracts of land in western Tanzania that were previously used as camps for refugees, but were, at the time, either closed or being closed. The decision to close these camps was made well before AgriSol became involved and was based on a model program agreed to with the United Nations."
Eyakuze said Agrisol's farms in Tanzania would generate thousands of jobs and improve food security in the country.