Frequently Asked Questions - Outgrower Programme

Outgrowers

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  • Who will be the out-growers?

    Outgrowers will be the ordinary people from the surrounding communities. They will be those who are interested in joining and working together in the business of commercial sugarcane farming.

    Agro EcoEnergy will NOT DECIDE who will be an outgrower. The people will do that for themselves supported by knowledge given freely byAgro EcoEnergy's Outgrower Team.

    Agro EcoEnergy will NOT RUN AND MANAGE any outgrower farms. The people will do that for themselves supported by knowledge given freely by Agro EcoEnergy's Outgrower Team.

  • Which land will be used for the out-grower project?

    Land owned by individuals who hold land titles within the areas suitable for growing sugarcane.

    In principle, this means village land that has been designated for agricultural use in the land use plan and has been allocated to people who want to be sugarcane out-growers.

    Agro EcoEnergy will NOT play any role in deciding which parcels of land are allocated.

  • What makes for good Business in commercial sugarcane farming?

    Ingredients for doing good business are:

    Good business means good citizenship which in turn means respect for other people and the environment, knowledge of the law and a readiness to comply with it.

    Knowledge and understanding of good business practice, including governance, organisation and operations.

    Knowledge of and Commitment to following systems for selecting healthy seed-cane, using water wisely, harvesting on time and delivering to a schedule.

  • What makes for growing good Sugarcane in Bagamoyo?

    Sugarcane requires good  soil, the right climate and plenty of water.

    In Bagamoyo there is not enough rain to provide "plenty of water" so farms must be irrigated.

    Most of the suitable land is not farmed today because of seasonal flooding. The project has an infrastructure programme to prevent that.

  • How many hectares of land will be used in the out-grower's project?

    Agro EcoEnergy have purposely designed the sugar factory to have excess capacity. This excess is equivalent to 300,000 tons of sugarcane.

    Agro EcoEnergy has an experimental Farm in Bagamoyo and results have shown that 100T/ha is achievable under good management and irrigation.

    This means approximately 3,000 hectares of irrigated out-grower farms.

  • Who will own the out-grower farms?

    The out-grower farms will be owned by the businesses set up by the members of the surrounding communities who are interested in commercial sugarcane farming. It is envisaged that they will register companies owned by themselves.

  • How will the participating communities acquire the skills they need to be able to do this ?

    The participating communities will be empowered through an intensive training programme. This will enable the participating communities to make their own informed decisions, leading to socially and commercially viable irrigated sugarcane farms.

  • What are the tangibles that will come from the training?

    The outputs of the training will be:

    1. Legally registered out-grower companies with land title deeds.

     2. Shareholder agreements that are responsive to the challenges of business owned by members of the communities.

     3. A business plan for each company which allows the company to apply for financing.

     4. An environmental management plan in line with the overarching ESIA.

     5. A farm development and operational plan, including health and safety plan.

     6. A livelihood improvement plan with an emphasis on food security.

    7. Tender documents and a fully designed farm.

  • How many people should be in a group in order to become an out-grower farm?

    The participating villagers will decide how many people will form an out-grower company which is socially cohesive.

  • When will the training start?

    Training started in 2011. The Agro EcoEnergy out-grower Development Team has been working with the surrounding communities, This initial training has been around rice farming. The full training programme will start as soon as Agro EcoEnergy has reached financial close for the entire project.

  • How long will it take before the out-grower scheme will start?

    The first out-grower farms are expected to deliver cane to the EcoEnergy factory when it opens. The timeline leading up to the first delivery of sugarcane is as follows: 1. Business, Organisation and Technical Training to prepare Business Plan and Concept Farm Designs (9 months), 2. Detailed Design of the farm (3 months), 3. Preparation of tender documents (2 months), 4. Farm building up to planting (4 to 6 months), 5. Planting to harvesting (52 weeks).

  • How will the new Companies get Finance?

    The establishment of the farms will be financed by loans. The out-grower companies will apply for loans from commercial banks such as the Tanzanian Investment Bank. The Kilimo Kwanza window for small holder farmers is ideal for this. The companies will need several documents in place in order to apply for loans:

    A Business Group Registration Contract between themselves as individuals

    An Agreement or Title from the Village for the Group to occupy and use the land.

    A sound business plan covering elements required by the bank ,

    A Sugarcane Supply agreement between themselves and Agro EcoEnergy,

    A water use permit from the Wami-or Ruvu River Basin Office.

    An Environmental Permit

    EcoEnergy will play a strong role in enabling companies to get finance through (1) robust Cane Supply Agreements (2) advocacy with the banks.

  • What impact will the out-grower project have on local food production (food security)?

    It will be good.

    Nearly all of the land earmarked for sugarcane is unused, mainly because of flooding but also because the land is too far from the centers of habitation.

    The project is enabling flood protection to be built, thus opening up large areas of land to full time cultivation.

    Farmers will learn new skills such as irrigation, fertilisation, cropmprotection all of which will raise crop production levels.

    Farmers will become business people selling food to the new market brought about by Agro EcoEnergy wages.

    More crops will be grown under irrigation, either as small individual plots but also through the Outgrower Companies themselves on "spare" bits of land within the farm. Remember 1 ha of irrigated land can yield up to 20 times more than 1 ha of rain fed land.

    Irrigated food plots are part of the development strategy for the Gama Growth Centre, where the Outgrower Scheme will be centred.

    The Agro EcoEnergy out-grower Development Team is working with the district and the villages on improving three irrigated rice schemes. These irrigated rice schemes have already impacted positively on food availability in the villages.

  • Who determines the price that farmers get for their sugarcane?

    Agro EcoEnergy is offering a price which is internationally competitive and benchmarked on the Tanzanian sugar industry. The final price will be negotiated between both partners, enabling the out-grower farms as well as Agro EcoEnergy to be financially viable.

  • Will people be resettled for the out-grower project?

    No people will be resettled for the out-grower farms, as the communities will be using their own land. The villages will make a master plan through which they will allocate land for irrigated sugarcane, food production, livestock areas, forest areas and areas for current and projected settlements.

  • Will an environmental and social impact assessment be done for the out-grower project?

    Yes, a holistic ESIA will be done for the entire 3,000 ha out-grower project. In addition to that, each out-grower farm will prepare an environmental management plan, which will be in line with the overarching ESIA.

  • Will the out-growers be irrigating? Or is the sugarcane rain fed?

    The out-grower farms will be modern irrigated commercial farms using the appropriate technology in order to become commercially viable.

  • Where will the water for the irrigation for the out-growers come from?

    The water for the irrigation for the out-grower farms will be pumped from the Wami river.

  • Is there sufficient water in the Wami river for irrigation of the out-grower scheme?

    A full Water Basin management Plan has been developed by the Project. It reports the findings of a full assessment of the water availability in the Wami River balancing the requirements of the environment, human beings, livestock and irrigation including that for Agro EcoEnergy and the outgrowers.

    It was found that during wettest and normal years there is surplus water in the Wami River and during the dry months of a driest year, there is a shortage of water.

    The project is enabling off-river dams to be built storing 4.5million m3 of water for use during the driest months of dry years. Both the out-growers and Agro EcoEnergy will is such case be rationing their irrigation and will be using water from these dams.