Biofuels, land access and rural livelihoods in Tanzania

Dec 2009

This report investigates and describes patterns of biofuel development in Tanzania. It looks at the spread and scale, crop use and different models of biofuel production through several case studies. It also outlines the challenges and opportunities provided by this relatively new source of investment. The report finds that over 4 million hectares of land have been requested for biofuel investments, particularly for jatropha, sugar cane and oil palm, although only 640,000 ha have so far been allocated and of these, only around 100,000 ha have been granted formal rights of occupancy. Some companies are proposing biofuel projects involving initial investments of up to US$ 1 billion, or several billion US$ over the next 10-20 years. Both the Tanzanian and foreign governments have been promoting this surge in biofuel investments, although Tanzania’s government has also delayed some projects while the National Biofuels Task Force works to complete formal guidelines for biofuel investments.
The report also finds that some land acquisitions for biofuels are targeting land that is used for forest-based economic activities that villagers depend heavily on. Large-scale biofuel investments that require such land are likely to create the most frequent negative local impacts and grievances. The compensation process is fraught with problems. Local people do not understand the process, or their rights and opportunities; land valuations are carried out using inadequate criteria and benefits are promised by companies but not incorporated into a written contract. Of most concern is the high level of risk taken by communities where the proposed investment relies on the transferred land to be used as collateral for bank loans, prior to compensation being paid.
The report shows that biofuel companies using outgrower and other contracted smallholder arrangements have little direct negative impacts on land access and represent the most positive model for local livelihoods and the environment – while recognising that the suitability of different models depends on local contexts, including with regard to population densities and levels of local capacity for agricultural production. Crops such as jatropha can provide new opportunities for local farmers to improve income from unproductive or infertile lands and forming farmers’ cooperatives can improve access to markets. Alternative land holding structures such as village land trusts or equity-based joint ventures hold promise for future ways to stimulate private investment and allow for greater collaboration between investors and local communities. As experiences from other sectors in Tanzania have shown, communities should be supported to increase their ability to negotiate with biofuel investors on their own behalf.

By: E. Sulle, F. Nelson (IIED)

 
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