Agri-Business
Monday, June 02, 2014
Tanzania sugarcane farmers to go commercial
Farms will be supported to process on a commercial scale
DAR ES SALAAM, Tanzania - Smallholder sugarcane farmers in Bagamoyo, about 69 kilometres from Dar es Salaam will soon own and operate a modern commercial farm, thanks to $550 million sugarcane farm project.
Agro EcoEnergy which is implementing a multimillion sugarcane farm project in Bagamoyo said it has designed such project so as to empower smallholder sugarcane farmers to own, operate and manage independent commercial outgrowers companies.
“The people (villagers) will be empowered to set up, own and operate independent commercial out-grower companies. Each company farming sugarcane on approximately 75 to 150 hectares of land,” EcoEnergy Executive Chairman Per Carstedt said recently.
Carstedt said some 25 to 35 companies will be supported in the process to produce and supply 300,000 tons – 400,000 tons sugarcane per year to the Agro EcoEnergy Mill.
Currently Agro EcoEnergy is working with three groups of future out-growers (total of 100 people – 60 female, 40 male). These groups have received training since 2012 and are establishing commercial rice farms.
The three groups are from Kiwangwa, Matipwili and Gama and they have been 100% financed and supported by Agro EcoEnergy.
The Agro EcoEnergy has intentionally designed the sugar mill with a major overcapacity that provides an opportunity for people in the surrounding villages and communities to become commercial sugarcane out-growers.
He said the overall revenues for the out-grower farms will, with 300,000 – 400,000 tons per acre,will be approximately $13 million to $18 million annually or on average around $450,000 per company (based on 100 ha, 100t/ha, and $45/ton).
He said the Out-grower Development Strategy is based on modern business principles adapted to suit conditions in rural Africa.
He said the methodologies follow international best practice and build on experience developed in similar successful projects in Swaziland and South Africa.
“The aim for the out-growers is also to comply with the “BONSUCRO production Standards,” he said.
He said the core strategy to be employed is empowerment through training. Agro EcoEnergy is committed to a people centered approach where investment and training is focused on people to grow themselves.
The Open Forum on Agricultural Biotechnology in Africa (OFAB) Tanzania Chapter has been stressed the need to empower smallholder farmers to grow improved seeds and adopting modern farming technology.
OFAB said ordinary people from rural communities should be enabled to believe in themselves and their colleagues. They should learn how to organize themselves into effective working groups to do business.
It added in one of its publications, farmers should learn on how to make decisions for themselves, always working towards creating and operating successful businesses.
The farming company said they will empower farmers to register companies, prepare business plans, environmental and operating plans that enable them to agree cane supply agreements with Agro EcoEnergy and negotiate loan agreements with commercial banks.
Using the proceeds from the loan and through a tender process, the people will appoint contractors to construct their farms and install their irrigation equipment, he added.
“They will then after a lot of training and major support setup, run and operate their own affairs as any other commercial farmer or modern business does,” Carstedt said.
By Leonard Magomba, Monday, June 02nd, 2014