20090318 africa tree seed 18
A tree seed, which Africa Biofuel plans to use to make biodiesel - 


Kai Ryssdal: Biofuels are the hot topic in Brussels, Belgium today. Politicians, business leaders and activists are talking about sustainability, and whether producing biofuels displaces food production and so bumps up prices. There were riots in some poorer countries last year over exactly that. But given the worries over climate change, demand for biofuels is still pretty healthy. And investors from the U.S. and Europe are looking at Africa as a place to grow them. Marketplace's Gretchen Wilson reports now from Tanzania.

GRETCHEN WILSON: In the rural Kisarawe district, the woodland is dry, the soil sandy, and there's no water for miles.

PETER AUGE: Nobody really lives on the land. There's a few cashew trees, a few old mango trees.

Peter Auge is with a British company, Sun Biofuels. The firm wants to lease 30 square miles of this tough terrain to grow a drought-resistant plant called jatropha. It'll turn the oil-rich jatropha seeds into biodiesel.

The company will get this land for 99 years. In return, local people will get schools, clinics and roads. Farmers here have OK'd the scheme. But doubts remain. Bureaucracy often means a long delay between the agreement and the promised benefits. Hamiz Balati is the head of the village of Mtamba.

HAMIZ BALATI: We're giving away our land, but we still don't know whether we'll benefit from the project. We're waiting for jobs.

Tanzania's at the heart of a new "bio-fueled" land rush in Africa. Foreign investors have already applied for four percent of the country's land. That'd be like the U.S. leasing out all of Nebraska and Kansas to overseas companies. Some Tanzanian officials are raising concerns. Ngosi Mwihava is with the Ministry of Energy and Minerals.

NGOSI MWIHAVA: There is a worry that some companies or some investors may grab the land, and even displace people.

Some critics go further. They say these deals are like colonialism, with wealthy outsiders using Africa's land and cheap labor force to grow cash crops. Then, when global markets for those crops tank, so do local economies. Emmanuel Mvula is with the Land Rights Research and Resources Institute.

EMMANUEL MVULA: Like colonialism which came as a solution for a crisis elsewhere, biofuels comes to us as a solution for a crisis which is not ours. It's not for us, it's for someone else. And when it collapses, we'll be back to square one.

But Western companies say local people can benefit from these deals. The U.S. firm Africa Biofuel plans to make biodiesel from the seeds of trees. It says the fuel will run generators and power cars right here in Tanzania. Christine Adamow is CEO.

CHRISTINE ADAMOW: We believe that the first part of creating a sustainable economy is to actually provide some source of affordable energy. And why not look to the agricultural base, which is so rich in Africa?

Like many biofuel investors, she says she can create good local jobs and a meaningful profit.

ADAMOW: There's opportunity in Africa. There's opportunity to do good, as well as to make money. And as an entrepreneur, that's good enough for me.

That's good enough for many African nations, too -- countries from Ghana to Mozambique are signing away vast tracts of land for biofuel development. But Tanzania's creating guidelines to make sure this isn't colonialism revisited. And right now all new land deals are on hold.

In Dar es Salaam, Tanzania, I'm Gretchen Wilson for Marketplace.