The privatisation of formerly state-owned sugar cane estates and mills in the late 1990s led to the reconfiguration of the ownership structure and production of the Tanzanian sugar industry. This included the decentralisation of sugar cane production operations to outgrowers and their associations. Based on an investigation of sugar cane outgrowers of the Kilombero Sugar Company, this article explores the outcomes of this transformation and the dynamics of social differentiation, and the ways in which this is shaped by Tanzania’s institutional and legal framework governing the sugar industry. While increased sugar cane production has created jobs and income for some outgrower households, it has also been associated with several adverse impacts. Large-scale outgrowers have rapidly captured the most lucrative business opportunities and the land they require, marginalising smaller outgrowers. This is further exacerbated by heightened competition among farmers and patronage relations affecting the distribution of harvest quotas and cheap sugar imports. The outgrower model is central to national development initiatives such as the Southern Agriculture Growth Corridor of Tanzania and ‘Big Results Now’. Despite the grand ambitions of large-scale agricultural commercialisation, who wins and who loses out depends more on the local political economy, where the sugar industry, local business, political elites and local communities compete for the benefits of expanded sugar production.
