Hi
jfjUMENT IS THE PROPERTY
Printed
OF HIS BRITANNIC
for the Cabinet.
January
MAJESTVS
GOVERNMENT
1948
pCEET
Copy N o .
IP. (48) 1 8
ih J a n u a r y , 1948
CABINET
EAST AFRICAN GROUNDNUT SCHEME
M E M O R A N D U M BY T H E M I N I S T E R O F F O O D
I A T T A C H a copy of a d r a f t W h i t e P a p e r on t h e E a s t A f r i c a n G r o u n d n u t
Scheme, w h i c h I a m u n d e r obligation t o submit to P a r l i a m e n t .
; 2. I t will be seen t h a t i t d i d n o t prove possible t o begin large-scale c l e a r i n g
iperations i n T a n g a n y i k a i n t i m e t o sow for the 1948 h a r v e s t a l a r g e enough
irop to be a n appreciable factor i n o u r 1948 supply of oils a n d fats. O r i g i n a l l y
I was hoped, to clear 150,000 acres i n 1947. I n o r d e r to do t h i s i t w a s calculated
ihat clearing o p e r a t i o n s would have to begin i n F e b r u a r y . I n f a c t i t w a s
mpossible t o obtain t h e necessary heavy t r a c t o r s a n d o t h e r e q u i p m e n t t o t r a n s p o r t
hem to C e n t r a l T a n g a n y i k a a n d to get t h e m w o r k i n g on a n appreciable scale
lefore J u l y . T h i s delay i n s t a r t i n g operations p l u s t h e i n i t i a l difficulties of
inding t h e best technical methods of clearing t h e bush, a n d t h e problems of m a i n ­
enance of t h e a r m y s u r p l u s heavy t r a c t o r s w h i c h have h a d t o be used, h a s m e a n t
hat not more t h a n some 10,000 acres will be cleared a n d p l a n t e d for t h i s y e a r ' s
rop. T h i s acreage i s q u i t e sufficient to serve a s a large-scale experiment, b u t
lot sufficient t o give u s a p p r e c i a b l e q u a n t i t i e s of oils a n d f a t s . Therefore t h e
cheme, as a large-scale commercial producer for t h e m a r k e t , will, i n fact, only
egin its o p e r a t i o n s i n 1948, a n d will r e a p i t s first commercially disposable h a r v e s t
u the s p r i n g of 1949.
3. Nevertheless, t h e decision t a k e n by t h e C a b i n e t j u s t a y e a r ago ( C M . (47)
th Conclusions, M i n u t e 3) t o s t a r t o p e r a t i o n s i n 1947, before t h e Overseas Food
Corporation could be set u p , a n d t h u s involving t h e employment of t h e U n i t e d
C o m p a n y as m a n a g i n g agents, h a s , I believe, been fully justified,
^though only t h e above c o m p a r a t i v e l y small acreage h a s been cleared, a n immense
mount of indispensible p r e l i m i n a r y w o r k by w a y of e s t a b l i s h i n g camps, e x t e n d i n g
airways, setting- u p workshops, r e c r u i t i n g labour, & c , h a s been done, a n d
valuable experience g a i n e d . I f 1947 h a d n o t been used for these purposes, t h i s
reliminary work would have h a d to be done i n 1948 a n d t h e o b t a i n i n g of a l a r g e ­
cale crop would, i n my opinion, have been postponed till t h e s p r i n g of 1950. T h e
mnaging a g e n t s encountered g r e a t i n i t i a l difficulties i n s e c u r i n g t r a c t o r s , i n
eeping t h e m u n d e r r e p a i r , i n m e e t i n g the novel e n g i n e e r i n g problems of f l a t t e n i n g
he African bush by m e c h a n i c a l means a n d of e r a d i c a t i n g t h e roots. I t w a s , of
urse, a l w a y s envisaged t h a t such problems, t h e exact n a t u r e of w h i c h could only
ascertained by practice, would be encountered. M a n y of these technical
oblems a r e now on t h e w a y t o solution. A n d t h e Government, I a m convinced,
wes a debt, of g r a t i t u d e t o t h e U n i t e d A f r i c a Company, a s m a n a g i n g agents, for
e courageous p i o n e e r i n g w o r k w h i c h they have c a r r i e d o u t on t h e scheme i n
I n n o other w a y t h a n by t h e a p p o i n t m e n t of a l a r g e scale e x i s t i n g o r g a n i ­
ion, such a s t h e U n i t e d A f r i c a n Company, could we have m a d e w i t h i n t h e first
^elve m o n t h s of o u r i n i t i a l decision t o proceed, t h e s u b s t a n t i a l s t a r t on t h e scheme
hich has i n fact been m a d e d u r i n g t h e p a s t year.
ifnca
Q
e
ir
fl
at
?
34802
B
i
Future
Prospects
of the
Scheme
4. Soon a f t e r t h e Colonial Resources Development Bill which is now goin
t h r o u g h P a r l i a m e n t h a s become law, a vesting d a y will be named and the Oversea
Food C o r p o r a t i o n will t a k e over the responsibility for the management of th
scheme. N o doubt t h e U n i t e d A f r i c a C o m p a n y will, for some months, continu
to do w o r k on the scheme a s one of the C o r p o r a t i o n ^ sub-contractors. Sever
other well-known firms, such a s Messrs. Mowlems, B a l f o u r Beattie and Pauling
a r e a l r e a d y a t w o r k on the scheme a s contractors.
Financial
Prospects
of the
Scheme
5. I call my colleagues' a t t e n t i o n to p a r a g r a p h 24 of the d r a f t report, w h i c l j
reads in p a r t : ­
" U n t i l l a r g e r acreages w i t h different types of vegetation have beerfl
cleared a n d the first u n i t i n s t a l l a t i o n s completed, a n d a full year's agricultural
o p e r a t i o n s c a r r i e d out on a t least one u n i t , i t will not be possible to make anj
dependable revision of the e s t i m a t e d costs of production as set out iiq
p a r a g r a p h s 19-24 of C o m m a n d 7030. On the one h a n d the prices of the
mechanical e q u i p m e n t a n d stores of all k i n d s necessary for the scheme are
steadily rising, a n d in a d d i t i o n a l a r g e r e x p e n d i t u r e t h a n had been antici]
p a t e d will be necessary upon, i n p a r t i c u l a r , the t r a n s p o r t services and thd
r e p a i r o r g a n i s a t i o n . On the other, the w o r l d p r i c e of oils and fats is also
r i s i n g a n d now seems only too likely to r e m a i n a t a h i g h level for a mud
longer period t h a n w a s envisaged a y e a r a g o
" These t w o developments, w h i c h a r e merely w h a t w a s to be expected ii
t h e case of a scheme being c a r r i e d out i n conditions of rising prices on
w o r l d - w i d e scale, will, of course, affect the scheme i n opposite directions. The
r i s i n g costs will adversely affect it, the r i s i n g prices of i t s product will tend tc
m a k e i t more profitable. I t would be q u i t e u n r e a l i s t i c to pretend that anj
balance between these o p p o s i t e tendencies c a n at p r e s e n t be struck."
6. I a m convinced t h a t a n y figures t h a t would be published to-day relating
e i t h e r to the probable costs of the scheme in f u t u r e y e a r s or the probable revenue
to be derived from i t would almost certainly be falsified in the event. This isj
first because the world prices of both the e q u i p m e n t w h i c h the Corporation must]
p u r c h a s e a n d the p r o d u c t s w h i c h i t will sell, a r e both r a p i d l y rising, and a l s o !
of course, because experience of the scheme's w o r k i n g s will certainly lead to!
revisions i n the c a p i t a l e x p e n d i t u r e a n d o p e r a t i n g costs. I t would, therefore, bej
m i s l e a d i n g to a t t e m p t to revise t h e o r i g i n a l C o m m a n d P a p e r estimates until we
h a v e experience of a t least one y e a r of commercial w o r k i n g a n d the first crop ha
been sold commercially i n t h e s p r i n g of 1949.
7. Nevertheless, my D e p a r t m e n t h a s carefully s t u d i e d such evidence as is
available of t h e w a y i n w h i c h the costs of t h e scheme a r e going, a n d of its probable!
revenue e a r n i n g capacity. A s t h e scheme is b e i n g conducted in a period of!
r a p i d l y r i s i n g world prices, the result of t h i s p r e l i m i n a r y examination has, off
course, been to show t h a t both the a n t i c i p a t e d costs a n d the anticipated revenues!
of the scheme a r e likely to be s u b s t a n t i a l l y h i g h e r t h a n w a s estimated a year ago.1
A n d i n a d d i t i o n c e r t a i n of the costs of development, i n p a r t i c u l a r the amount ofi
money needed to p r o v i d e a d e q u a t e t r a n s p o r t a n d a d m i n i s t r a t i v e services were!
under-estimated.
8. T h e p r e s e n t position, according t o i n f o r m a t i o n furnished by the managing!
a g e n t s , w i t h the concurrence of t h e members-designate of the Board of the!
Overseas Food C o r p o r a t i o n , i s t h a t if n o f u r t h e r changes in the prices of thef
goods a n d services w h i c h t h e C o r p o r a t i o n will h a v e to buy t a k e place, the capital!
costs of t h e scheme will h a v e risen by some £5,700,000, a n d the a n n u a l o p e r a t i n g
costs b y some. £1,600,000.
9. These increases i n costs would be most serious to the scheme were they not
offset by a t least comparable increases i n the prices of the products which the!
C o r p o r a t i o n will have to sell. T h e m a i n p r o d u c t of the C o r p o r a t i o n is, of course,!
g r o u n d n u t s . A t the inception of t h e scheme i t w a s o r i g i n a l l y estimated that tne­
priee of g r o u n d n u t s would be £ 3 0 a ton u p till A u g u s t , T95Q, a n d thereafter £20
a ton. M y Oils a n d F a t s Division a r e now convinced t h a t (unfortunately from a
w i d e r p o i n t of view) g r o u n d n u t prices a r e now likely to be considerably higher!
t h a n t h i s , a n d they have m a d e the following estimate, which they emphasise is ofl
most t e n t a t i v e c h a r a c t e r , of t h e probable prices which g r o u n d n u t s m a y be
$ted to realise : Per ton
s.
£
1948
1949
1950
1951 ...
1952
1953
1954
1955 ...
,..
...
1956 a n d t h e r e a f t e r ...
35
35
35
32
30
27
25
22
20
0
0
0
10
0
10
0
10
0
An increase of £ 5 p e r t o n i n t h e p r i c e realised for the p r o d u c t w o u l d increase
be revenue of t h e C o r p o r a t i o n by &2\ million p e r a n n u m , w h e n t h e full e s t i m a t e d
nnnal p r o d u c t i o n of g r o u n d n u t s w a s being realised.
10. I t i s i n t e r e s t i n g also t o c o m p a r e t h e above estimate of probable f u t u r e
iroundnut p r i c e s w i t h t h e prices w h i c h we a r e a t present forced to give for
imparable p r o d u c t s . F o r a n exactly s i m i l a r p r o d u c t from I n d i a w e a r e p a y i n g
!50 a t o n a n d for g r o u n d n u t oil from t h e A r g e n t i n e we p a y t h e equivalent of
rer £70 a t o n for t h e n u t s . I t will be seen, therefore, t h a t t h e e s t i m a t e t h a t
roundnut prices w i l l come down t o £20 a ton i n 8 y e a r s ' time is, possibly, a n
ptimistic one on t h e p a r t of my M i n i s t r y — o r , to m a k e the same p o i n t from t h e
iposite p o i n t of view, is a most conservative estimate from t h e p o i n t of view
the p r o s p e c t s of t h e profitability of t h e Overseas Food C o r p o r a t i o n .
11. I t may, of course, be a r g u e d t h a t t h e p r o d u c t i o n of t h e appreciable
though n o t enormous i n r e l a t i o n to t o t a l world production) supplies of g r o u n d n u t s
ontemplated i n E a s t A f r i c a will itself help to b r i n g down t h e p r i c e of ground'
.uts, a t a n y r a t e t o w a r d s £20 a t o n over the n e x t e i g h t years. F r o m a n a t i o n a l
oint of view, such a result is, of course, devoutly t o be hoped for. I t would,
owever, l i m i t t h e profitability of t h e G r o u n d n u t s Scheme. I n fact i t is possible
oshow t h a t if the p r i c e of g r o u n d n u t s d r o p p e d t o £20 a t o n a n d t h e o p e r a t i n g
bsts of t h e C o r p o r a t i o n d i d n o t d r o p a t a l l — a most unlikely h y p o t h e s i s — t h e
Corporation would n o t be able to r e p a y i n full t h e T r e a s u r y a d v a n c e i n the
3 years of i t s p r e s e n t lease of l a n d
However, the C o r p o r a t i o n a l r e a d y h a s a n
ption t o e x t e n d t h i s p e r i o d a n d even on the above a s s u m p t i o n t h a t prices of
ts product w i l l n e a r l y fall to half, b u t t h a t i t s costs will not fall a t all, t h e
Corporation would still be able slowly to repay i t s T r e a s u r y advance. Moreover,
he possible almost h a l v i n g i n t h e w o r l d price of a n i m p o r t a n t p r i m a r y p r o d u c t ,
ach as oils a n d fats, would g r e a t l y assist us i n o u r balance of p a y m e n t s problems,
his is surely an i n s t a n c e of w h e r e w i d e r considerations m u s t be a p p l i e d i n
messing t h e prospects a n d w o r t h w h i l e n e s s of a public e n t e r p r i s e t h a n would
e appropriate i n t h e case of an e n t e r p r i s e c a r r i e d on for p r i v a t e profit. Any
uch possible p r o s p e c t of t h e n e a r h a l v i n g of t h e price of g r o u n d n u t s would be,
rom t h e p o i n t of view of a p u r e l y p r i v a t e profit-making e n t e r p r i s e , a menace
fhich m i g h t deter i t s promoters from u n d e r t a k i n g t h e scheme, B u t from t h e
wint of view of a p u b l i c e n t e r p r i s e t h e possibility t h a t t h e scheme will have
his tendency should be r e g a r d e d a s one of i t s g r e a t e s t a d v a n t a g e s , even t h o u g h
! would have a n adverse effect on i t s balance sheet,
J
I 12. I t w i l l be seen from t h e above t h a t if the price of g r o u n d n u t s merely
alls more slowly t h a n w a s e s t i m a t e d over t h e n e x t decade, w h i c h is only too
fobable, t h e r e s u l t a n t increase i n revenue will fully compensate t h e C o r p o r a t i o n
or the increased costs i n c a p i t a l outlay a n d o p e r a t i o n s which i t w i l l probably
lave to face.
13. T h r e e other factors have a p p e a r e d w h i c h m a y also s u b s t a n t i a l l y i m p r o v e
he revenue-earning c a p a c i t y of t h e G r o u n d n u t s Scheme :—
(i) T h e yield p e r acre of t h e scheme w a s e s t i m a t e d a t 750 lb. a n acre. I t
is now t h o u g h t t h a t t h i s estimate m a y have been a h i g h l y conservative
one. F o r example, t h e t r i a l plots of g r o u n d n u t s w h i c h w e r e sown i n
T a n g a n y i k a over a f a i r l y w i d e a r e a have shown a n a v e r a g e yield of
900 lb. p e r acre. T h i s would be insufficient evidence t o j u s t i f y a
specific revision of t h e e s t i m a t e d yield p e r acre, b u t i t is i n t e r e s t i n g t o
notice t h a t , if a n a v e r a g e yield of even 850 lb. p e r acre w a s achieved,
t h i s would give a n a d d i t i o n a l a n n u a l revenue, a t a price of £30 a.ton, ;
of £ 2 million p e r a n n u m when full p r o d u c t i o n h a d been reached.
34802
B2
(ii) T h e t r i a l plots have now been re-sown w i t h various cereal crops which 1
i t is now t h o u g h t can, w i t h a d v a n t a g e , be grown upon the cleared I
a r e a when, a s c o n t e m p l a t e d i n the o r i g i n a l scheme, the soil has to be I
rested from g r o u n d n u t s . Should i t prove possible, as now seems to be I
the case, to g r o w r e g u l a r crops of cereals on these areas, substantial!
a d d i t i o n a l revenue would, of course, accrue to the Corporation,
(iii) E s t i m a t e s have now been m a d e of the value of t h e timber standing on!
t h e a r e a s to be cleared u n d e r the scheme. T h e Department of the I
Conservators of Forests for T a n g a n y i k a have m a d e an estimate t h a t !
t h e gross value of the timber, m a i n l y h a r d w o o d a n d mahogany, in o n e !
t h i r d of t h e a r e a to be cleared i n the S o u t h e r n Province is £ 6 million.!
If, as is believed, the r e m a i n i n g a r e a s in t h e Southern Province a n d !
the a r e a i n the W e s t e r n P r o v i n c e of T a n g a n y i k a to be cleared have!
s i m i l a r q u a n t i t i e s of h a r d w o o d upon them, t h e majority of which will I
be cleared i n a n y case, a considerable a d d i t i o n a l revenue may be avail-1
able to t h e C o r p o r a t i o n d u r i n g the five-year period in which it will be]
c o n d u c t i n g c l e a r i n g o p e r a t i o n s . S a w m i l l e q u i p m e n t a n d other equip-"
m e n t for d e a l i n g w i t h the t i m b e r a r e a t p r e s e n t being procured. These!
will, of course, increase the costs of o p e r a t i o n , b u t there should be a ]
very s u b s t a n t i a l net balance to the C o r p o r a t i o n .
T h i s source of J
revenue w a s n o t t a k e n i n t o account in the o r i g i n a l estimates.
14. I a m convinced t h a t we should deceive ourselves if we attempted to say
w h a t the n e t effect on the p r o s p e c t s of the profitability of t h e scheme of the above
developments is likely to be i n t e r m s of i t s a n n u a l balance sheet. B u t of the new
factors w h i c h have a p p e a r e d since the o r i g i n a l estimates were made, those which
have improved the p r o s p e c t s of the scheme's revenues a r e a t least as important as
those which have increased i t s costs.
Conclusions
15. W h e n the G r o u n d n u t Scheme w a s first proposed to the Cabinet, I
s t a t e d :—
" M y colleagues w i l l see t h a t t h i s is a big e n t e r p r i s e ; it has to be if it
is to meet even a s u b s t a n t i a l p a r t of our d e s p e r a t e need for fats.
My
colleagues would not believe me if I t r i e d to p r e t e n d to them t h a t such a
scheme w a s free from risk. Of course, serious difficulties a n d delays, many
of t h e m unforeseeable, may arise i n the course of a g r e a t u n d e r t a k i n g of
this sort."
I do not consider t h a t t h e delay w h i c h h a s a l r e a d y been experienced in getting
the physical w o r k of the scheme s t a r t e d , a n d the i n i t i a l difficulties met with in
solving the technical problems of c l e a r i n g t h e bush, constitute in themselves
serious setbacks, such a s I h a d i n m i n d a y e a r ago. T h e t r u t h is t h a t the scheme
is still a t a very early s t a g e . I t h a s probably n o t yet encountered its major
difficulties a n d problems. B u t i t probably will encounter these serious difficulties
a n d problems, the overcoming of w h i c h will need all t h e skill a n d resolution of
those c o n d u c t i n g t h e scheme, a n d all the s u p p o r t we c a n give them. I am equally
convinced t h a t the scheme is one of the most significant pioneering public enter­
prises w h i c h the G o v e r n m e n t h a s u n d e r t a k e n . I t p o i n t s the way to a new and
i n c o m p a r a b l y more socially desirable method for c o n d u c t i n g t h a t development of
p r i m a r y p r o d u c t i o n i n Colonial a n d d e p e n d e n t t e r r i t o r i e s on which their pios­
p e r i t y , a n d o u r own, so largely depend. I t is the a p p l i c a t i o n of Socialist public
e n t e r p r i s e i n a n e w a n d p o t e n t i a l l y most f r u i t f u l field. T h e scheme has excited
world-wide i n t e r e s t a n d a t t e n t i o n , p a r t i c u l a r l y i n the U n i t e d States of America,
w h e r e i t h a s been t a k e n a s e n c o u r a g i n g evidence t h a t G r e a t B r i t a i n is a t length
d e t e r m i n e d t o develop h e r h i t h e r t o l a t e n t Colonial resources. I t is along the lines
of t h i s a n d o t h e r public schemes u n d e r t a k e n both by the Overseas Food Corpora­
tion a n d by t h e l a r g e r Colonial Development C o r p o r a t i o n t h a t the u r g e n t problems
of the people of o u r Colonial a n d d e p e n d e n t t e r r i t o r i e s can be solved, a n d at the
same time o u r need for a m p l e a n d reasonably priced p r i m a r y products be met.
J . S.
Ministry of Food,
14:th January,
S.W.1,
1948. CONFIDENTIAL-PROOF EAST AFRICAN GROUNDNUTS
SCHEME
R e v i e w
o f
o f
P r o g r e s s
N o v e m b e r ,
t o
t h e
e n d
1 9 4 7
Presented by the Minister of Food to Parliament
by Command of His Majesty
1948
LONDON
HIS
MAJESTY'S
STATIONERY
NET
OFFICE
EAST
AFRICAN
GROUNDNUTS
SCHEME
R e v i e w of Progress to the e n d of N o v e m b e r ,
1947
Introduction
1. The following report records the progress made in the first year since
His Majesty's Government decided, in November, 19)46, to start work on the
East African Groundnuts Scheme as described in Command 7030. The
execution of the initial phases of the plan has been entrusted to the United
Africa Company Ltd., acting as Managing Agents for the Minister of Food,
on whom His Majesty's Government decided to place the responsibility for
carrying out the programme.
Selection of first site for development
2. .The first question to be decided was which of the five main areas
recommended for development to choose for the first year's operations.
Despite the fact that a branch railway - line and a considerable mileage of
roads had to be built, the choice fell upon the Central Province of Tanganyika
Territory, primarily because of its relative accessibility—the selected area tying
only a few miles to the north of the Central Railway Line and some 240 miles
by rail from the port of Dar-es-Salaam—but also because it was expected that
most of the land, which in this area is covered with thorn bush, would be
easier to clear than the land in the other areas, where the number of sizeable
trees per acre is greater.
The target for development in 1947
3. The aim of the first year's operations was to clear 150,000 acres of
bush for planting by the end of 1947, and at the same time to build up the
organisation required for the later expansion of the scheme. It had been
calculated that in order to achieve-this the clearing equipment would have
to be on the site in February, and that 200 heavy tractor units would be
required. The first task was, therefore, to procure this equipment. The
only source of supply for new equipment of this type is the U.S.A., and
enquiries soon showed that there was no chance of obtaining more than a
few new machines from that source, since the demand already exceeded the
supply from new production. It was therefore necessary to look for second­
hand equipment, and this had to be picked, up almost entirely from surplus
military stores in many different countries. J The largest single source of supply
proved to be U.S. Army surplus machines in the Philippine Islands, but
machines were also found in the U.K., the U.S.A., the Middle East and
Ceylon. A Valentine tank was converted experimentally for use on clearing
work but trials proved this machine to be unsuitable for the work. All this
equipment, of course, heeded re-conditioning before shipment. Orders also
had to foe placed for the wide range of agricultural tractors and implements
required for delivery in Tanganyika later in the same year. It soon became
clear that these could not be obtained in time from the 'U.K., and a Mission
was, therefore, sent to the U.S.A. to examine many different types of
machinery in use in the pea-nut growing areas of Georgia and South Carolina.
As a result of this Mission's report, and of the discovery that it would be
more than two years before manufacturers in the U.K. would be in a
position to meet the requirements of the schsme, a contract was concluded
with a Canadian firm, Messrs. Massey, Harris, for the purchase of all the
agricultural machinery required for the programme for the first two years.
It is hoped that manufacturers in the U.K. will be able to meet at least a
large part of the needs of the scheme from then onwards.
First shipments of clearing equipment to East Africa
4. Although it was clear that it would be impossible to overhaul and to
ship the clearing equipment in time to arrive in the Central Province of
Tanganyika in February, there was reason to hope that by speeding up the
purchase and shipment of heavy tractors against the requirements for the
later years, it might still prove possible to achieve during 1947 substantial
progress towards the year's target. During January and February, however,
the fuel crisis and the general dislocation of the transport system delayed
the reconditioning and movement to seaboard of the machines bought in the
,-^Jnited Kingdom; furthermore, the first shipment of supplies was held up
V.?6r over two weeks by fogs and storms. In the event it was not until the
25th February that the first 10 of the 125 heavy tractors allocated to the
scheme from the U.K. were shipped. These tractors were unloaded in
Dar-es-Salaam at the end of March and (after a journey delayed by the
breaching of a railway embankment owing to floods) arrived at Kongwa, the
site of the operations in the Central Province, on the 20th April. The sub­
sequent build-up of the tractor force is described in paragraph 12.
Preparatory work in Tanganyika
5. Meanwhile, preliminary negotiations were started with the Tanganyika
Government on such problems as those arising from the recruitment of staff,
the need for port and railway facilities, and the terms and conditions of
leases, and every effort was made to ensure that any temporary dislocation
of the general economy of Tanganyika due to the rapidity of the launching
of the Groundnuts Scheme should be reduced to a minimum. Trial plots
of groundnuts, which have since given satisfactory yields, were planted near
Kongwa early in the year.
6. The advance party of the Managing Agents, accompanied by a number
of representatives of the contractors who had been engaged for the first year's
clearing operations, arrived in Dar-es-Salaam at the end of January, 1947.
Their duties were, among others, to arrange for the reception, transport and
servicing of equipment, plant and machinery, the establishment of the first
temporary camp, and subsequent permanent camps near Kongwa, the survey
of the first of the 30,000 acre units, the recruitment of labour and the starting of
preliminary clearing and constructional operations, including the provision
of an airstrip near Kongwa' and the settlement, in consultation with the
Tanganyika Government, of local problems as they arose! By the end of
April, the first few tractors and over r,ooo Africans had begun work at
Kongwa, and the first tasks of building the organisation and starting the
clearing had been accomplished.
Progress of the Clearing Work
7. The clearing work has involved several operations, the cutting of traces
through the bush, the flattening of the bush, windrowing, the burning of the
debris in the windrows, the felling of the larger trees and the extraction of
the roots. For each of these operations it has been necessary to develop a
technique adapted to the conditions on the spot. The complexity of the
clearing work has been due to the particular character of the Kongwa thorn
bush. On the basis of experience elsewhere, it had been expected that the
heavy rooting machines towed by. tractors would rip out the roots of the
. bush, if not at the first attempt certainly at the second, to a sufficient depth
for the planting of groundnuts. In practice, the extensive tough and pliable
roots o f the Kongwa thorns and the multiplicity of stumps have proved
beyond the power of normal rooting machines. After many weeks of expert
ment with modifications of equipment, a method of de-rooting has been found,
but too late in the season to plant more than some 10,000 to 15,000 acres
this year. This particular difficulty is unlikely to .be met with in the new
areas of Tanganyika to be developed in 1948, and subsequently.
8. Large scale clearing operations may be regarded as having begun on
1st July, by which date 97 clearing tractors had arrived at Kongwa. Until
September, almost all the tractors available for clearing work were concen­
trated on the flattening of the maximum possible area of bush. In October
the emphasis was moved to the windrowing of the debris and in November,
on the basis of the varied experiments which had by then been carried out,
to the removal of the roots, so that as much as possible of the cleared are
can be planted with groundnuts. In addition to the clearing work, over 100
miles of traces have been cut through the bush in the Kongwa area in pre­
paration for further clearing, and small areas have been cleared for the
ploughing school at Kongwa, and experimentally in the Southern and Western
Provinces of Tanganyika.
1
Difficulties which have delayed the Clearing Operations
9. In Command 7030 attention was drawn to the risks, difficulties and
delays inherent in a pioneering scheme of this kind. The delays in the
arrival of the equipment early in 1947, which have already been described,
caused some setback to the clearing work. The most serious obstacles to the
rapid progress of the scheme, however, have been the small proportion of
available tractors which it has proved possible to maintain in regular, opera ­
tion during these early months, and the character of the Kongwa bush.
Spare parts, tools and mechanical repair facilities have been required on
a far more extensive scale than it was possible to provide for at the outset.
Indeed, up to the time when operations began, it had been impossible to
obtain adequate spares. The Managing Agents have given special atten­
tion to the improvement of the repair organisation, and additional workshops,
tools and plant are being provided as rapidly as possible. Further supplies
of this sort of equipment are, however, needed to overcome the immediate
difficulties, and for these, as for many other classes of supplies, the scheme
is dependent to a very important extent on surpluses arising from military
disposals. The shortage of mechanics and other skilled artisans will be
overcome as quickly as possible by the training of a sufficient number of
Africans, but, in the meantime, 200 Italians, many of them with a know­
ledge of Swahili, have been recruited on short term contracts to help to fill
the gap.
10. The number of tractors available for clearing operations has also
been reduced by the need to use a proportion of the total force for the
urgent and important task of training African drivers, for the making of
railways and roads, and for work in preparation for the erection of the
essential buildings. In no one week, so far have more than 872 tractor
hours been devoted to flattening the bush, or more than 2,590 tractor hours
to windrowing.
1 1 . It must be recognised that the results so far achieved cover a period
of only five months since bush clearing was started on a substantial scale at
the beginning of July. During the period the most important task has been
to find out, largely by a process of trial and error, the best methods to adopt
in order to put on a sound footing the recruitment and training of the staff,
and their assimilation into co-ordinated teams for their different jobs, and to
develop by continued experiment the most suitable techniques for clearing
the type of bush prevalent at Kongwa. There is good'reason to expect a
rapid speeding up of the bush clearing work, when this preparatory phase has
been completed, and a sufficient supply.of suitable equipment to eradicate
the roots of the Kongwa thorn bush has been obtained. One of the most
important changes in technique which has already been decided on is what
may be described as " selective clearing ". In future any ground on which
the vegetation is particularly dense will be left uncleared; the consequent con­
centration of equipment on the easier ground will, it is expected, greatly
accelerate clearing operations.
' Progress in t h e build-up of the organisation
(a)
MACHINERY AND EQUIPMENT
( " ^ 1 2 . The number of heavy tractors in Tanganyika at the end of each month
lias been as follows:
May
161
June
185
258
July
330
August
330
September
367
October
"
November
420
These numbers are actually in excess of what was originally planned for the
first year, but they consist of secondhand machines.
During the early months the rate of railing the tractors from the port of
Dar-es-Salaam inland 240 miles to Kongwa was kmited to 12 a week owing
to shortage of suitable rolling stock. This rate was, however, subsequently
doubled by the release of wagon flats, which previously had been used for
the transporting of rails and sleepers for the railway extension from Masagali
to Kongwa.
13. Despite the failure of the experiments with the Valentine tank, further
experiments have been undertaken with other types of surplus tanks with a
view to using them for clearing work. It has become clear, however, that
tanks can be used for heavy bush clearing work only after very substantial
structural and mechanical modifications, and it has proved necessary to
design special equipment to use with the tanks. There is now reason to
hope that a successful adaptation of the Sherman Mark III tank will be
achieved and that it will prove possible to meet from surplus tanks of this
type a large proportion of the balance of the requirements of the scheme
for heavy tractors.
14. As has already been mentioned, the agricultural machinery required
for operations during 1947 and 1948 is being obtained from Canada. Much
of this machinery is not of a type which could be used in the U.K., the
design of the machines being based on the development of mechanised ground­
nut production in the Southern States of the U.S.A.
15. A wide range of other kinds of machinery and equipment has been
obtained for the scheme. Landing craft and cranes have been acquired for
-the landing of equipment, particularly in the Southern Province; for road
transport, jeeps and lorries of different types in large numbers have had to
be obtained; for running repairs, many kinds of tools, and for base line
repairs, fully equipped workshops, including power lathes and grinding
machines and electric welding and other equipment; for the supply of water,
equipment for bore holes, pumps and piping; for the health services, drugs
and surgical equipment; for the land survey work £111(1 LX16 scientific unit,
many kinds of laboratory supplies and surveying equipment; and for the
housing and the meagre comforts of the staff until permanent buildings can be
built, large quantities of tents, huts, furniture, household and sanitary
61461
A 2
supplies, building and electrical materials and equipment. These needs are
being met, in almost all cases, either by ordinary commercial procurement
without the exercise of any priority or from military-surpluses.
(b) LABOUR
16. At the end of November, 400 European staff and 5,500 Africans were
employed on the scheme in Kongwa. The total number of Africans employed
on the scheme elsewhere in Tanganyika was 1,000, of whom the
majority were in the areas to be developed, in 1948, in the Western and
Southern Provinces. The recruitment of the African staff has been under­
taken in -close co-operation with the Government of Tanganyika in orde
to avoid unnecessary competition with the recruitment of labour for thts­
growing of sisal or for other local industries.. At an early stage the scheme
was explained to a meeting of the African Chiefs in the Dodoma district of
Tanganyika, and the recruitment of labour, largely of the Wagogo Tribe,"
from this district has proceeded with their support and approval. The scheme
is proving attractive to African labour, and there have been instances of
men walking 150 miles to join the staff in Kongwa. A strike originating
in the port of Dar-es-Salaam and on the central railway line in Tanganyika
in September, 1947 developed into a "sympathetic strike at Kongwa, but the
men returned to duty after four days when they heard that the dockers in
Dar-es-Salaam had returned. No complaint was ,made by the Africans at
Kongwa of conditions of employment.
17. The main shortage of labour, which it is believed it will be possible
to overcome by the expansion of training facilities, is of skilled African
artisans (e.g., carpenters, plumbers, masons, electricians, fitters, lorry and
tractor drivers). To meet this temporary shortage, 200 Italian mechanics
and other skilled workers have, as mentioned above, been recruited on short­
term contracts and the recruitment of limited numbers of skilled workers
has been extended to Kenya, Northern Rhodesia, Nyasaland and the Gold
Coast. Satisfactory progress is being made with the training of Africans for
work on the scheme. The clearing tractor school opened in April, 1947, and
the agricultural tractor school in July, 1947. Up to the end of November
456 African drivers have been passed as proficient in the operation of heavy
(Clearing tractors and 240 in the operation of agricultural tractors. The
proportion of entrants for the training course failing to qualify as proficient
has been only 15 per cent, in the clearing tractor school and 10 .per cent,
in the agricultural tractor school. One of the encouraging features of the
operations has been the aptitude shown by African labourers for semi-skilled
work in the repair of mechanical equipment.
(c) RESEARCH
18. The strong scientific research and control unit is undertaking a series
of experiments in crop rotation, the use of fertilisers, seed selection etc., and
has initiated work preparatory to the local production of vegetables and live­
stock products for consumption by the staff of the scheme.' Experimental
plots have been laid out with the immediate objective of providing data on
such problems as soil fertility, and agronomic experiments on the depth of
ploughing, spacing, the time of planting, variety performance, weeding etc.
have been started. The Chief Scientific Officer has been actively at work
since January, and later appointments to his staff include a chemist, a soil
chemist, an agronomist, an entomologist and a geologist. The setting up of
a Soil Conservation Service for the scheme is foreshadowed in the appoint­
ment of a Chief Soil Conservation Officer. The-boundaries of the area for
cultivation are being determined on the basis of the soils and vegetation
surveys undertaken by the Scientific Staff, which is maintaining close contact
with the East African Agricultural Research Organisation, now being formed
at Nairobi, and with Universities in the U.K. and in South Africa.
19. Seven small trial plots in the Kongwa area were planted with ground­
nuts in January 1947 and on the basis of their varying yields it is estimated
that the average yield of decorticated groundnuts this year, assuming the
same spacing as is to be adopted in the planting of groundnuts in December
1947 would have been over 900 lb. per acre, even though some of the plots
were on soils of low fertility. The yield on the most fertile of the plots was
at the rate of 1580 lb. per acre. The estimates of the cost of the scheme in
jmmand 7030 are based on a yield of 750 lb. of decorticated groundnuts
per acre.
(d) COMMUNICATIONS
20. A new branch line 16 miles long has been built from Masagali on the
Central Tanganyika line to Kongwa. The work on this line was seriously
delayed in February and March by the breaching of a railway embankment
following the flooding of the River Kinyasunewe. There has been serious
congestion at the port of Dar-es-Salaam owing to an increase in its normal
traffic coinciding with the arrival of large supplies for the scheme. Special
arrangements are being made, however, to ensure that the capacity of the
port is used to the maximum possible extent. The present limited port
facilities and the consequent danger of congestion will, however, remain a
serious problem. There are no deep-water berths—vessels must anchor in
the harbour and unload into lighters. Storage space at the docks is limited
by the site and layout of the dock area, and clearance from the docks inland
is limited by shortages of railway rolling stock.
21. A small technical mission visited Tanganyika in February 1947, to
investigate and make recommendations on the suitability of sites for the
construction of a deep water port to handle the supplies and produce "of
the main producing area, which is expected-eventually to extend to 1,650,000
acres, in Southern Tanganyika. On the recommendation of this mission it
has been decided to build a port with deep water berths at Mikindani south
of Lindi. This is a fine natural harbour completely landlocked and ships of
deep draught can enter and leave at any state of the tide. Work has begun
on the building of the port and of. the railway line 120 miles long connecting
Mikindani with the area to be developed in Southern Tanganyika. It is hoped
that the first berth will be completed by the end of 1948. Preparations are
being made for the building of a pipe line from Mikindani for the supply of
fuel to the Southern Province groundnuts area. Meanwhile, to enable the
preliminary opening up for development of the Southern Province areas to
proceed in 1948, a temporary lighterage quay 600 feet iong is being con­
structed further North on Lindi Creek. Supplies and equipment will be
moved up the Lukuledi Valley, initially by road, and then by rail, when this
section of the new railway is completed.
(e) HOUSING
At present, both the European and the African staff are living in tents.
Suitable permanent housing will, however, be provided as quickly as possible
and designs for the housing and for the lay-out of the first village have been
approved. In the development of the large building programme new building
methods are being used relying on local materials to the utmost. The principal
material for the permanent buildings will be blocks made of local soil corn­
pressed with a binding material (cement or local lime). In most areas there
will be ample timber for all the building requirements of the scheme. At
Kongwa, however, the total absence of local building materials has made
satisfactory progress extremely difficult.
Preparations for the extension of the Scheme to other areas
22. Preparations are well advanced to begin clearing in 1948 in the Western
and Southern Province of Tanganyika, and to develop the clearing work in
the Kongwa area in the Central Province. By extending the work in several
areas with different climatic characteristics the risk of a set-back owing to
drought will be materially reduced. A complete air contour survey, as well
as extensive soil and vegetation surveys, have been undertaken in each of
the areas covered by the full programme of development. The results",
these surveys have been encouraging except in Kenya where the areas origin­
ally selected have been found to be unsuitable. It has, therefore, been
decided to exclude these areas from the scheme, but the Government of
Kenya has been invited to suggest alternative areas. In any event, there
is reason to believe that there are very large additional areas in Southern
Tanganyika suitable for inclusion in the scheme if additional land is required.
The scheme has aroused considerable interest in Northern Rhodesia, and the
problems involved in the extension of operations into that colony are at
present under examination.
Health, Welfare and Education
23. The full programme of health, social and educational development
which is part of the scheme cannot be introduced until the agricultural stage
of the work has been reached and settled village communities established.
Preparations are, however, well advanced and an efficient medical service
with temporary hospital accommodation already exists.
Thirty-four appointments have so far been made in the Medical Depart­
ment, including doctors, nursing sisters, health visitors, hospital stewards, a
radiographer, etc. In addition 200 Africans have been chosen for training
as medical auxiliaries and nursing staff and the training of some of these
has been completed. The health of the African staff generally may be
expected to improve as a result of the better diet they are already receiving
and the medical services to which they have access. Since the opening of
the temporary hospital there have been 20,572 attendances by the African
staff. The health of the European staff has, on the whole, been good.
To overcome the difficulties of language in the technical training of the
Africans employed on the scheme, and ultimately in the general education
both of the African employees and of their families., it has been decided to
make use of the valuable experience which was gained in the great expansion
of the Indian Army during the war, when hundreds of thousands of recruits
were rapidly and successfully equipped with a basic knowledge of English
and the ability to use it on their jobs. It will be necessary to make consider­
able use of modern educational techniques including films, film strips, models,
gramophones, etc. The preparations for the development of the educational
work are being made with the co-operation of the Education Adviser to the
Colonial Secretary, the Education Department of the Government of
Tanganyika and with UNESCO which has agreed to send a consultant
to help with the development of education policy. An Education and
Welfare Advisory Committee is being set up, -and the Chief Education Officer,
who has recently been appointed takes up his duties in January, 1948.
Finance
2 4 . The total net expenditure on the scheme up to 30th November, 1947,
was £4,250,000. This expenditure has been almost entirely of a capital nature,
a large part representing the cost of mechanical equipment required for
clearing and agricultural purposes. Until larger acreages with different types
of vegetation have been cleared and the first unit installations completed,
and a full year's agricultural operations carried out on at least one ^unit,
it will not be possible to make any dependable revision of the estimated costs
of production as set out in paragraphs 19-24 of Command 7030. All that
can be said at this stage is that it is already clear that both the previously
estimated costs and the previously estimated revenues of the scheme are
likely to be considerably higher than those given in Command 7030. On
the one hand the prices of the mechanical equipment and stores of all kinds
necessary for the scheme are steadily rising, and in addition a larger expendi­
e than had been anticipated will be necessary upon, in particular, the
transport services and the repair organisation. On the other, the world price
of oils and fats is also rising and now seems only too likely to remain at a
high level for a much longer period than was envisaged a year ago.
These two developments, which are merely what was to be expected in
the case of a scheme being carried out in conditions of rising prices on a
world-wide scale, will of course affect the scheme in opposite directions.
The rising costs will adversely affect it, the rising prices of its product will
tend to make it more profitable. It would be quite unrealistic to pretend
that any balance between these opposite tendencies can at present be struck.
No useful purpose would therefore be served in attempting a revision of the
figures given in Command 7030.
Two further indications of the general prospects of the scheme may however
be mentioned. As already stated in paragraph 19 above, there is some
evidence that the yield of groundnuts was most conservatively estimated at
75a lb. per acre in Command 7030. Second, there is now a prospect of a
substantial new source of revenue to be devised from timber resources of the
areas to be developd in the Southern and Eastern provinces of Tanganyika.
Summary
25. Reference was made in Command 7030 to the analogy, between the
carrying out of this cheme and certain military operations of the last war.
In reviewing the progress made in the past year, it becomes clear that
the criteria to be applied are those by which the success of the initial phases
of a modern military operation is judged, rather than those which are usually
applied to a commercial enterprise. The two most important factors are
supplies and transport,- for the building up and deployment of the vast
quantities of operational and maintenance stores and equipment. The East
African Groundnut Scheme is still in the phase of building up the bridgehead
and consolidating the organisation required to direct and control the first
major advance. Over the critical field of procurement of supplies and equip­
ment as a whole progress is well up to schedule, and in some sectors of this
front ahead of schedule. On the other hand, the acreage of land cleared
is far behind schedule. This is a healthier situation than the reverse would
be.
26. The experience of the first six months of bush clearing in the Central .
- Province of Tanganyika has not brought to light any unforeseen factors to
cast doubt on the validity of the basic principles on which the scheme is
founded. There will clearly be many technical problems to be solved; their
solution will require a high degree of skill and flexibility in management.
There is, however, no more reason now than there was a 3'ear ago to doubt
that the whole scheme—modified here and there as to its details in the light of
the experience continually being gained—can be carried out on the broad
lines and within the time schedule set out in Command 7030.
(61461) Wt. 1478—1378 13 1/48 D.L.
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1948
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