SAGCOT

Happy Thanksgiving everyone! Alena and I are just back from one of the 2Seeds villages, Lutindi, where our hosts Marc Dominianni and Chung Kim did a heroic job of recreating an American Thanksgiving feast.

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Thank you Marc and Chung! (Photo credit: Marc Dominianni)

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Lutindi is a mountain village (in the Usambara Mountain Range) home to a beautiful/bizarre variety of wildlife (dog admittedly not a good example) and incredible views. We held our project site meeting at the edge of a cliff overlooking the plains; it felt approximately like we were meeting about the fate of the universe.

 While I am deeply grateful whenever any of you read this blog, I feel obligated to warn you that this blog post is long and heavy on descriptions of a Tanzanian government agriculture initiative. If you want to leave us here and check back in for next week’s post, I’ll understand!

SAGCOT

People who we meet with in Dar will often mention “SAGCOT,” a Tanzanian government agriculture project in its early stages. Judging by their comments, SAGCOT seems to be 1) very important, and 2) alternatively either revolutionarily effective or shadowy and malicious. Knowing, well, nothing else about it, we set out over the last month to find out what SAGCOT, in fact, is.

Overview

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Source: SAGCOT Investment Blueprint 

SAGCOT, the Southern Agricultural Growth Corridor of Tanzania, is a diagonal strip of exceptionally fertile farmland that extends southwest from Dar es Salaam to the Zambian boarder. In addition to its favorable agricultural conditions, the area enjoys good transportation by rail and road and access to the Dar es Salaam’s ports. Furthermore, unlike Northern Tanzania, it lacks a history of failed government agriculture projects in sisal (a spiky bush that is the key material for making some varieties of twine) that could drive skepticism.

Our group considers a massive sisal field north of Korogwe. The originally-foreign-owned sisal industry was nationalized in 1967 and re-privatized (after output had plummeted 90%) in 1998.

The project commonly known as “SAGCOT,” which is technically called the Kilimo Kwanza Growth Corridors, is a very ambitious attempt by the Tanzanian government to raise smallholder farm yields to the levels seen in modern commercial agriculture. The plan is to invest a lot of money, $1.3 Bn of public funds (the government and donors will split the bill approximately 50-50) in infrastructure, agricultural technology, and training in the SAGCOT region. The government hopes to make these investments without buying out smallholder farmers; rather, it will focus on the direly-in-need-of-a-more-pleasant-name “hub and outgrower” model, in which smallholders continue to own their own farms, but interact heavily with a central megafarm that provides enhanced seeds, trainings, loans, and a means of communal selling. The government hopes this public investment will lure $2.1 Bn of private capital in after it, and eventually bring 350,000 hectares of new land (approximately 25 San Franciscos) under cultivation, creating a projected 420,000 jobs. (These goals are set for 2030.)

Agriculture is Incredibly Important in Tanzania

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President Kikwete speaking at the WEF in 2011, a year after SAGCOT was first proposed there. Note the awesome Tanzanian flag pin.

The project was conceived at the World Economic Forum’s Africa Summit 2010, and soon became the flagship initiative of the TZ government’s Kilimo Kwanza (“Agriculture First”) initiative, a broad government effort to achieve economic security for farmers. Farming is vitally important to the livelihoods of most Tanzanians, and therefore important for nearly everything else in the country from political stability to public health. In the words of current President Jakaya Kikwete, “Tanzania is, in essence, an agricultural country where agriculture means almost everything. Over 80 percent of the people live in the rural areas and agriculture is their main source of livelihood.” Today, only 24% of arable land is under cultivation, and only a small fraction of that is irrigated. Furthermore, Tanzania is (sort of) the breadbasket of East Africa, feeding rapidly growing urban centers in Dar es Salaam and Arusha, and exporting to Kenya, Uganda, and Malawi. If the project is successful, the humanitarian and economic impacts could genuinely be huge.

Criticism 

As with any major development effort, the SAGCOT initiative has met a healthy level of criticism (as any ambitious, expensive development initiative should be, to make sure it holds up to scrutiny). Here are the main complaints we’ve heard:

  • SAGCOT has failed to attract private sector investment. It is still essentially too early to judge this criticism. SAGCOT has been under way for one year, and is planned on a 2030 timeline.
  • SAGCOT is excluding smallholder farmers from decision-making. This point seems to be semi-legitimate, as the SAGCOT investment blue print does not outline a way for smallholder farmers to contribute to management decisions. That being said, the project does have strong Tanzanian (as opposed to foreign donor) leadership, and the investment blueprint discusses strategies for coordinating with and building relationships with smallholder farmers extensively.
  • SAGCOT is a Trojan horse for commercial interests: major agriculture companies and land grabbers. This seems to be the most unfair accusation of the group. As several representatives of the project explained to us (hilariously), buying land in Tanzania is extremely difficult for anyone because that the government technically owns all land in Tanzania and land “owners” actually have long-term leases. The many years of paper work and many levels of scrutiny make landgrabbing nearly impossible. Furthermore, and more unambiguously positively, the SAGCOT partnership agreement includes rigorous social, ethical, and environmental guidelines for all investors that they insist on to be able to invest in the projects.

Meetings Alena and I, somehow, got

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Mr. Kirenga gives an address in support of adding more fruits and vegetables to Tanzanian diets 

Through the magic of simply cold calling people and asking for a meeting, Alena and I got to meet with the CEO of the SAGCOT Center, Geoffrey Kirenga (credit is due to Alena for devising this plan and making the call). Mr. Kirenga was very smart, very busy (our 8:30 am meeting was interrupted by multiple phone calls, and he had to run to another meeting after half an hour), and very bullish on the project. He saw the project as important because it avoided some of the issues that have held NGO efforts back in the past (the typical ones: no incentive to be economically sustainable, lack of funding, poor discipline), while also mitigating the risk of private sector exploitation.

We also got the opportunity to meet with the Team Leader for USAID’s Feed the Future Tanzania operation, Thomas Hobgood, thanks to an extremely kind introduction made by Marg Sullivan. Mr. Hobgood was humble, polite and almost shy in a way that made his impressive public service career – following the Peace Corps and an M.S. in agricultural econ, he spent decades building offices for USAID across Africa and Asia – particularly inspiring and disarming as it emerged over the course of our discussion. Thomas was also bullish on SAGCOT (which USAID will put tens of millions of dollars into) and stressed the importance of giving smallholder farmers voluntary access to resources while respecting their autonomy.

An Early Win  

The SAGCOT initiative found initial success with the Kilombero Plantation Limited, a group of 1,600 Tanzanian farmers near Morogoro growing a variety of crops, with the highest volumes in rice and sugar cane. The area’s farms are organized into the hub and outgrower model around the massive Mngeta Farm, where private companies have invested tens of millions of dollars in tractors, irrigation, and a 6,200 m2 warehouse and rice mill.  Mr. Kirenga told us that the central farm’s yields have doubled, while outgrower yields increased almost eightfold! Interestingly, the outgrower yields are significantly higher than the hub yields, says Mr. Hobgood, which makes sense because there is a lot more human attention going into each acre. While n=1 for this sample, it is definitely an astonishingly good result.

Conclusion

For someone who cares about farmers in Tanzania, SAGCOT is both very exciting and very scary. If the early promise of the project is realized, it could help farmers afford education and good health for their children, and allow the shrinking agriculture sector to support a rapidly growing urban economy. By doing that, it could allow the transition away from a homogenous agriculture economy towards strong urban economies to be gentler and more equitable. On the other hand, if the project inadvertently displaces farmers or causes some other rapid or harsh shift for the agricultural economy, the consequences would be severe and widespread. Alena and I have just scratched the surface – we are very excited to learn more over the course of the year. (Going forward, I will do my best spare you from hearing in depth about my learning via this blog!)

Alena and I remain happy and healthy. Happy Thanksgiving everyone!

External Links

SAGCOT Website: http://sagcot.com/

SAGCOT Investment Blueprint: http://www.sagcot.com/uploads/media/Invest-Blueprint-SAGCOT_High_res.pdf

HKS Case Study: http://www.hks.harvard.edu/m-rcbg/CSRI/publications/report_48_SAGCOT.pdf

Oxfam America Criticism of SAGCOT: http://politicsofpoverty.oxfamamerica.org/2012/04/19/lessons-from-tanzania-for-the-g8-food-security-initiative/

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About Sam Steyer

Head of Analytics, Station A
This entry was posted in Team 2012-2013 and tagged . Bookmark the permalink.

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