the first “major institution” (Rodney 1983: 1) of German colonialism, but also rented out land to settlers. Altogether, the company was involved in at least 24 other companies spanning different sectors. Later, Deutsche Bank and other banks were also crucial providers of credit to support the building of the colonial space economy (Slater 1977). Some of these “did good business in that they were able to declare high dividends” (Peter 1990: 208). Since the Germans wanted to turn Tanganyika into a settler state, the DOAG also provided credit to white settlers, although this provision seems to have been quite limited. This plan was soon abandoned by the colonialists after they faced local resistance to the expansion of large-scale farms from the 1890s onwards. In 1891 the state took over territorial control from the DOAG, and proclaimed all land occupied or unoccupied as Crown land, except for that land already in private ownership or owned by chiefs, who were often collaborators in the colonial project (ibid.). Despite this adjustment, settler estates and plantations cultivating sisal, coffee, tea, tobacco, rubber and cotton numbered around 700 in the Usambara and Kilimanjaro regions of the north-east and north, and a few other places, by 1912.
Even though not all were set up by German investors (the Germans restricted the involvement of other nations), they marginalized local populations and significantly altered existing agricultural practices (Sunseri 2005: 1540). When the Germans saw that a settler-colonial project akin to the Aotearoa New Zealand venture was not possible, they tried to expand cash crop production by imposing taxes on smallholders, which thereby were forced to join the export economy. Credit provision to local farmers was extremely limited, however, and even restricted by law (Coulson 2013 [1982]). It served the extractive need of the colonial economy rather than allowing local farmers to transform their farms. As in Aotearoa New Zealand, local people were locked out of colonial credit markets, but, contrary to there, they largely kept their de facto power over land, despite some large-scale appropriations in the north and north-east of the colony. This would initially remain the case under the British, who took over Tanganyika after Germany’s loss in the First World War as part of a League of Nations mandate in 1922. Under these political restrictions, the British moved away from the alienation of local land to the promotion of African cash crop production (Aminzade 2013), espoused by the Colonial Development Act (1930) and Colonial Welfare Act (1940) respectively.
After the Second World War, Britain shifted to a more transformative approach that was meant to promote “modern farming” in order to serve the rising food and foreign exchange needs of the empire. The infamous groundnut scheme, supported by public money via the Overseas Food Corporation, but also the extension of private credit to large-scale farming settlers via commercial banks, particularly the Land Bank (founded in 1947), was indicative of this shift (Mittelman 1981: 190). By 1959 1,284,647 hectares of land had been alienated for commercial agriculture (Aminzade 2013: 35).3 Additionally, the Colonial Development Corporation (now called the Commonwealth Development Corporation: CDC), founded in 1948 and widely considered to be the first development finance institution, became an important provider of loans to large-scale plantations and food enterprises across Africa. It reinvented itself as a private-equity-focused institution in the late 1990s (and will reappear later as a backer of one of the Tanzanian investment cases).
When Tanganyika became independent, in 1961, it quickly embraced an Afro-socialist path of development. After 1967 many large export-oriented estates, plantations and businesses in other sectors were nationalized. Although foreign capital, both private and public, was still backing some farming projects, the institutional and political features of the time limited foreign capital’s penetration of agriculture. The main transformative effort of the time was focused on rural collectivization, and rural farmers were serviced by national banking institutions, whose access to foreign private finance was restricted, however. This would change after the demise of socialism towards the end of the 1980s (Aminzade 2013). After Tanzanian subscribed to the structural adjustment plans of the World Bank and International Monetary Fund (IMF) in 1986, the financial sector and virtually all other domains of the economy were liberalized (Lwiza & Nwankwo 2002). In the 1990s this also led to the privatization of former state assets (Temu & Due 2000), including many agricultural enterprises (one of which we shall encounter later as a “financial asset”). As we shall see in Chapter 8, the privatization of former state farms, and the rise of associated market-oriented agricultural policies in the new millennium as an apex to the neoliberalization of the Tanzanian economy, would provide a window of opportunity for the entry of large-scale overseas investments (Chachage & Mbunda 2009). At the same time, the rural population’s overall access to credit did not improve and sometimes even got worse compared to the era of state-backed credit provision (Bee 2009).
The historically limited expansion of credit in earlier periods paired with the restrictions put on large-scale private farming during the socialist period (other than state farms and a few other plantations) would provide opportunities for the entry of global finance in the 2000s. On the one hand, friends of the market could argue that smallholders – still the majority of the country’s population – did not produce enough to feed the nation and posed no viable development future (Collier & Dercon 2014). On the other hand, the country, despite the fact that it still presented significant barriers to foreign investment in agriculture (e.g. a quite restrictive land tenure system), inherited a number of large-scale farming pockets that had the scale that institutional investment needed.
This brief account of imperial frontier making shows that finance, even structured transnational investments, had tight connections to the production of agricultural landscapes in many parts of the world. In certain geographical regions, such as modern-day Tanzania, a number of structural barriers prevented finance from penetrating agriculture more thoroughly, while in others it faced far fewer obstacles. In some contexts finance proceeded through genuine equity investments and direct ownership chains, but in the majority of cases it advanced through the provision of credit. Credit is central to the (re)production of capitalist relations and “facilitates structural change in agriculture” (Green 1987: 69) and, by itself, is a way of extracting surplus from production (ibid.: 62). Across the globe, for sustained periods of time, it was the vehicle of choice for money flowing into agriculture. Credit not only links savers and borrowers, who would use it in the creation of new “assets”, including agricultural ones, but also serves as “a mechanism for increasing the turnover rate of capital” (ibid.: 29). Depending on the context, however, the “terraforming” power of credit was limited or even restricted (such as in colonial and socialist Tanganyika/Tanzania), or at least heavily regulated, as part of a wider state-interventionist project of economy making (as was the case in Aotearoa New Zealand).
After the demise of empire, financial thinkers and practitioners soon discovered new ways of capitalizing on farming. By the mid-1960s attempts were made to reimagine agriculture as a genuine object of modern asset management. This manifested itself in the rise of institutional farmland investment thinking in the United States, and a first wave of institutional farmland investments in the United Kingdom in the 1960s. Although, in the United States, it would take until the farm crisis of the 1980s before finance could legitimately enter farming more directly, backed by finance-mathematical claims about how it could add value to an institutional investor’s portfolio, the flow of finance into farmland in the United Kingdom was born out of more practical considerations on the part of the institutional investment managers of the time. After
