African Land Rush

From a long piece in the Christian Science Monitor, "Hunger and Food Security: Is Africa Selling the Farm?" (February 7, 2011):

Africa is drawing dozens of corporate giants like Daewoo and even governments of such nations as Saudi Arabia, the United Arab Emirates, Brazil, Japan, and even India (which is food self-sufficient) to grow the food and biofuel crops they need back home. The coup in Madagascar and food riots in Mozambique last August – which followed news of a similar food and biofuels deal with the European Union and Brazil – are a warning sign of the volatility of the global balance of wealth and poverty that foreign investors and African leaders face.

By all rights, Africa could be a breadbasket for the world. Its fertile land, lengthy rivers, and farm labor tempt investors from around the globe.

But the continent continues to import the bulk of its staple food items, including corn, wheat, and rice from richer countries. On paper, foreign investment in African agriculture should correct that trade imbalance and help Africa become food self-sufficient. With global food prices skyrocketing, the demand for biofuels increasing, and the amount of arable land static, Africa is well situated to capitalize on global demand. And with its vast rural populations living on less than $1 a day, it would seem hungry for such deals.

So the continent's discontent with these deals takes many development experts by surprise. Almost any investment in a poor country generates jobs, tax revenues, and better skills for the future. But in today's Africa, investment in agriculture – even a $6 billion long-term deal like Daewoo's – is increasingly portrayed by the media and rights groups as "land-grabbing," neocolonialism, and even a threat to a country's ability to feed itself. And when many African countries are still unable to feed themselves, foreign investment can become the spark for revolution. . . .

"Setting aside the 'you're selling our land' histrionics," says a Western diplomat who has closely studied Madagascar's agriculture sector, "I think that countries of Africa would benefit from foreign investment by creating low-end jobs, some of it on larger commercial plantations and even some on the small-holder farms."

The key, this diplomat says, is to negotiate a deal that benefits the host country as much as it does the foreign investor. In the Daewoo deal – as with numerous similar deals involving companies from China, Saudi Arabia, Dubai, and elsewhere – all the food produced in Madagascar was intended for export.

"The landlord country needs to be really thoughtful about the conditions of the investment contract," says the diplomat. "They have to be saying, 'We want this to be environmentally sustainable, so the commercial farmers are using best practices for soil conservation and water use. They should be carbon-neutral. They should bring in good technology and show local small-holder farmers how to use it, so the general productivity of the region increases.' "

Often, such long-term development goals are the furthest thing from the minds of the people who sign such deals. And in a region where government transparency is nearly nonexistent, the question of who benefits from a deal depends most upon who negotiated and signed it. In many poor countries of Africa, power is heavily centralized, often in the hands of a political elite that has ruled more or less nonstop since independence in the early 1960s.

Legal systems little changed since colonial times don't offer individual farmers much protection in terms of land rights, and they offer little in terms of government assistance such as agricultural extension agencies. National leaders – sometimes more impressed by gleaming developments like glass-and-steel skyscrapers than by less-glamorous development like tractors and training – have often ignored farmers' needs. Even enlightened African leaders who see the benefit of improving the rural farm economy are often hampered by stodgy old laws and meet with resistance from a rural population that distrusts their motives.

"As much as 90 percent of Africa is under customary tenure, which means it's held by the state on behalf of the community, who are then given the customary right to the land," says Ruth Meinzen-Dick, a land-rights ­specialist at the Consultative Group on International Agriculture Research, the one responsible for India's green revolution in the 1960s.

Many African small-holder farmers know they can be moved off their land at any time, and the growing number of farming deals confirms their worst fears. As a result, many African farmers are reluctant to invest in their land or to improve their techniques, knowing the benefit may be taken away in the future.

"The question is, do people have an expectation that they will have their land in 10 years?" says Ms. Meinzen-Dick. "If they don't, they're not going to plant a tree that will give fruit later.... [T]hey're not going to make long-term decisions that increase their productivity."

Legal reforms in each of Africa's 53 nations may slowly start to improve the ability of small-holder farmers to lift themselves out of subsistence farming into more profitable and productive commercial agriculture. Many development agencies say Africa's best bet seems to be a bit of outside investment.