Egypt is said to have been the breadbasket of the Roman Empire. Had Greece depended on Egyptian grain? Did the Romans merely buy Egyptian wheat or did they also buy out or expropriate local landowners and manage Egyptian agriculture as a colonial ruling class? Today Egypt supplies no-one and is a large-scale net importer of wheat.
Nineteenth-century imperialists exploited Africa for copper, cotton, rubber, palm oil, cocoa, diamonds, tea, tin. In southern and east Africa there were European settlers who had their own farms. A few of their descendants are still there.
There must have been some direct foreign investment in agriculture in Africa over the past fifty years. But there was an intensification of interest in 2008 as a result of unprecedentedly high world food prices.
Countries that depended on food imports became conscious of their lack of “food security”. Countries that could only farm unsustainably (by reducing their reserves of water to a dangerously low level: the story in Saudi Arabia, which had engaged in an ecologically-disastrous programme of wheat-farming in the ’80s and ’90s) had a similar problem.
Could those countries improve their “food security” by outsourcing their farming to Africa? Africa was not productive or efficient enough to supply the world’s needs on the open market, and was further hindered by the protectionism of the first world, so why not invest directly there? If having one’s farms in another country was not, on the face of it, the most obvious strategy for improving “food security”, at least it was a hedge.
It would benefit Africa, too. Africa, which should be a major food exporter, buys about a quarter of its food on the world market, where it buys its clothes, and is a net food importer. (For world market, read, in many cases, China, which is about to overtake the US as Africa’s main trading partner. I’m surprised it hasn’t yet.)
African agriculture is inefficient. Education, logistics, distribution systems are poor. Pockets of lingering African socialism and outbursts of official anti-colonialism don’t help. Value chains are short. There has been little investment in food processing or packaging. Africa hasn’t been turned into a continent of consumers.
China was already being accused of rapacity with the world’s mineral resources. Now it is being blamed for agricultural neo-colonialism. (What, one might ask in passing and without prejudging its effect on Africa, is so wrong with Chinese agriculture that it can’t make the investment at home?)
I did a short post a while back on China in Africa, quoting from Prospect. Very few countries have relations with Taiwan now – the Vatican, a few Pacific islands, Paraguay, a few states in Central America and the Caribbean, and four countries in and off Africa: Burkina Faso, Gambia, São Tome and Príncipe, and Swaziland.
The latest African country to have made the switch is Malawi, at the beginning of 2008. A friend of mine who works there watched the Taiwanese government and NGO workers, whom he saw as a mainly beneficent influence, leave in short order. The mainland Chinese are not yet present in large numbers, as they are in Angola and Zambia. When they come, it will be for the sake of uranium and agricultural land. Whatever deals they do with the government holding company, Press Trust, he expects them to be the low-grade Chinese he has seen elsewhere, “floor-gobbing racists” in nasty suits, who will bring their own people along to do the work, because “African people lazy, no li’ wor’.”.
Which sounds racist itself. We all know that China, for the sake of oil concessions, supports the régime in Sudan that supports the militias in Darfur, but how do we compare the economic and political effects of its interventions across an entire continent?
There is already a significant anti-Chinese political movement in Zambia. The Chinese may find themselves reacting to Africans as they did to the Uighurs a few days ago. “We love your culture. How can you object to us when we are bringing so many improvements to your way of life?”
African governments are as sensitive about their farmers as governments anywhere else, and depriving smallholders of their land in the name of agricultural reform is, in most or all African countries, a political non-starter. But isn’t that what many of the projects now being discussed are threatening to do?
The mantra of “working with African smallholders to reform agriculture” is, according to my friend in Malawi, largely sentimental NGO talk. So how will foreign partners be engaged?
GRAIN is a “small international non-profit organisation that works to support small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems” based in Barcelona.
“Today’s food and financial crises have, in tandem, triggered a new global land grab. On the one hand, ‘food insecure’ governments that rely on imports to feed their people are snatching up vast areas of farmland abroad for their own offshore food production. On the other hand, food corporations and private investors, hungry for profits in the midst of the deepening financial crisis, see investment in foreign farmland as an important new source of revenue. As a result, fertile agricultural land is becoming increasingly privatised and concentrated. If left unchecked, this global land grab could spell the end of small-scale farming, and rural livelihoods, in numerous places around the world.”
grain.org links: Introduction to the landgrabbing question here. More here and here.
The second of those pages allows you to download a summary called The 2008 land grabbers for food and financial security. This is a list of projects announced or referred to in the media in 2008 up to October. It isn’t limited to Africa. The link to a page which is supposed to show us its sources doesn’t work.
GRAIN have also created a dedicated site about global landgrabbing. The word landgrabbing is obviously loaded. GRAIN has a point of view.
In the course of a work project, I extracted from The 2008 land grabbers for food and financial security everything about Africa. I’m reproducing those extracts below. I made some stylistic changes, added a small amount of new material, and tempered the language in the direction of caution where it seemed advisable to do so by inserting phrases such as “was reported”.
Much of this is hearsay. It is easy to turn these reports into alarmist headlines. Some people have suggested that large tracts of African land are being virtually given away. The list here is presumably not even complete. China is not the only grabber. Many of the projects promise to be on a huge scale, but how many are turning into realities? How new is all this? Is the pressure still as strong in 2009? (Cereal prices have continued to rise in 2009: Economist.)
Some of the investments were being made as a means of supplying the local African market or the world market, but the majority in the list are envisaged as a method of supplying the investors’ home countries with staple products.
Some of the projects were being considered at a government-to-government level. The majority depended on the technological expertise and financial commitment of the private sector. Many involve public-private partnerships and dialogue between governments and investors, with government-to-government discussions to prepare the ground.
“The government of Bahrain, working with private-sector investors, was reported to be seeking to lease farmland in Egypt and Sudan and contract out food production.”
“In the first half of 2008, it was reported that China’s Ministry of Agriculture was drafting a central government policy to encourage domestic firms to acquire (lease or purchase) land abroad, including in Africa, for farming purposes, especially to assure China’s long-term soybean supplies. Five state-owned firms were chosen to implement the plan.”
“In May 2008, the French television station TF1 produced a major report on how the Chinese businessman Jianjun Wang has acquired rights to 10,000 hectares of land in Cameroon to produce rice. The local farm-workers contracted to work the fields believe that the project is meant for rice to export to China.”
“According to a study by Loro Horta, the son of Timor L’Este’s President Ramos Horta, the Chinese government has been investing in infrastructure development, policy reform, research, extension and training to develop rice production in Mozambique for export to China since 2006. EximBank has already provided a loan of US$2bn and pledged an additional US$800m for these works, though more is expected. Some 10,000 Chinese settlers will be involved. G2G contracts and land leases are still under negotiation. Land cannot be owned by foreigners in Mozambique, so joint partnerships with ‘sleeping’ Mozambican entities may need to be formed.”
“According to China’s Economic Observer, the US Blackstone Group, one of the world’s largest private equity firms, in which Chinese investors have a stake, has already invested heavily in sub-Saharan agricultural projects.”
“President Museveni of Uganda was reported to have provided Chinese investors with 4,046 hectares of land, to be farmed by 400 Chinese farmers using imported Chinese seeds. The project is being overseen by Liu Jianjun, a former Chinese government official and now head of the China-Africa Business Council, who also has contracts to build a cornflour-processing factory in Kenya and a farm in Côte d’Ivoire.”
“In May 2008 it was reported that China has received rights to farm 101,171 hectares of maize in southern Zimbabwe.”
“Egypt, one of the world’s largest importers of wheat, signed a contract with President Omar Al Bashir’s government to produce 2m tonnes of wheat a year in the north of Sudan for export to Egypt. Egypt is also eager to raise livestock there.”
“The Ugandan government was reported to have leased 840,127 hectares of land – a staggering 2.2% of Uganda’s total area – in various parts of the country to Egypt, so that Egypt’s private sector may come in and produce wheat and maize for export to Cairo. The deal was apparently struck in late August 2008 and would involve seven Egyptian agribusiness firms, according to Reuters’ discussions with Egyptian officials.
The details were denied by Ugandan ministers, as well as Egypt’s ambassador to Uganda, though he did confirm that a deal of this nature is under preparation; it will focus on wheat and organic beef for export to Egypt; they hope small farmers, not large, will be contracted for production; the Egyptians may build abattoirs in Uganda for the scheme; and it will be financed by the private sector.”
“In August 2008, three Gulf firms – Abu Dhabi Investment House, Ithmaar Bank and Gulf Finance House – announced the creation of AgriCapital, a new Islamic investment fund. The US$1bn investment vehicle will engage in land purchases in Africa and elsewhere to produce food for the region, through a separate investment bank specially created for this purpose, and to fund biotechnology research.”
“There are reports that some Gulf states have talked with the government of Somalia about allocating land for Gulf food production.”
“According to the Economic Times (India’s largest financial daily), Africa has been among the places targeted by India’s Ministry of External Affairs as a place where Indian agribusiness firms can go and farm for export to India.”
“In 2006, the governorate of Qena, in Egypt, granted 1,600 hectares of farmland to Kobe Bussan, a Japanese agribusiness firm, to produce food for export at a total investment cost of LE1.2bn (US$290m).”
“In March 2008, Jordan’s prime minister announced that his country would cultivate land allocated to it by the Sudanese government to produce food for Jordanians, and urged the private sector to get involved. Four months later, the agriculture ministry in Amman said that it was appointing a private company to handle the government’s overseas agricultural investments in the fight against domestic food insecurity and inflation.”
“In 2008, it was reported that the Kuwait Investment Authority, the country’s US$265bn sovereign wealth fund, may invest in food production, particularly poultry, in Morocco, Yemen and Egypt for export to Kuwait. The trade ministry was also seeking to change the statutes of the Union of Cooperative Societies, the government-run group which dominates food retail in Kuwait, in order to enable the union to invest in overseas farmland, possibly in cooperation with other Arab Cooperative Unions. That move is apparently on hold for now.”
“On 7 September 2008, Kuwait’s Minister of Finance was reported to have signed what his Sudanese counterpart called a ‘giant’ strategic partnership deal with the government in Khartoum. Under the agreement, the two will invest jointly in food production in Sudan, including cattle.”
“In April 2008, during the World Islamic Economic Forum, the government of Kuwait was reported to have launched a new US$100m fund called ‘Dignity Living’. The funds will be invested in food production and agribusiness development in Uganda, among other (unreported) countries, to supply the Middle East market.”
“In December 2007, Libyan African Investment Portfolio, a Switzerland-based subsidiary of Libya’s sovereign wealth fund, put US$30m into a rice project in Liberia through a tie up with a local NGO, the Foundation for African Development Aid. The Liberian government has granted the joint company, ADA/LAP Inc, land concessions of over 17,000 hectares to produce rice for the local and international markets.”
“The Qatar Company for Meat and Livestock Trading (Mawashi) has established a sheep farm in western Sudan and has signed a memorandum of understanding with the country for further expansion in livestock farming.”
“In July 2008, Qatar and Sudan announced the formation of a joint holding company which will invest in food production for export to the Arab markets. Zad Holding Company (previously Qatar Flour Mills), a state-owned firm, and QIA, the emirate’s sovereign wealth fund, are both involved.”
“There are reports that Saudi Arabian investors are exploring possibilities for land acquisition to produce food for Saudi Arabia in Egypt, Senegal and Uganda. There are also reports that Saudi Arabian firms are looking for Thai partners to jointly go into rice production in Uganda and Sudan.”
“In August 2008, Ethiopia’s Prime Minister told the Financial Times that he is eager to give Saudi Arabian investors access to ‘hundreds of thousands’ of hectares of farmland for investment and development.”
“In August 2008, the Saudi Fund for Development announced that it will set up a US$566m special investment vehicle for buying land abroad for domestic food production. Both the government and the private sector will invest in the fund. The priority crops are rice and wheat, and the first investment will be made in Sudan.”
“In June 2008, the Saudi Arabian ministers of trade and agriculture both visited Sudan to survey possible food project investment sites and push for further agriculture investment liberalisation, including for livestock.”
“Hail Agricultural Development Company (HADCO), a Saudi Arabian agribusiness firm, which has since been acquired by Almarai, leased 10,117 hectares for US$95m north of Khartoum to produce food and feed (presumably alfalfa) for export to Saudi Arabia.”
“In May 2008, President Lee Myung-Bak publicly declared his government’s plan to purchase land in Sudan to grow food for South Koreans, and invited President al-Bashir to cooperate with him.”
“In May 2008, the Sudanese government committed 690,000 hectares of land for Koreans to grow wheat to export home. Production will start later this year – through a joint venture between Korean, Sudanese and Arab firms – on an 84,000-hectare farm.”
“Al-Qudra Holding, an Abu Dhabi investment firm, plans to acquire land by early 2009 to produce wheat, maize, rice, vegetables and livestock in Egypt, Eritrea, Morocco and Sudan (to name only the African destinations). The land will be acquired through a mixture leases, concessions and outright purchases. Al Qudra have reportedly already acquired 1,500 hectares in Algeria (cattle and dairy) and Morocco. According to the CEO, Mehmood Ebrahim Al Mehmood, 40% of the total investment will go to maize, although no decision has been taken yet about whether to convert it to ethanol, with the first harvests expected in 2011 or 2012. The investment plan may expand to port operations, breeding and the manufacture of irrigation equipment.”
“The UAE’s Minister of the Economy is on record as saying, in mid-July 2008, that UAE intends to purchase farmland in Africa to ensure the emirate’s food supply.”
“The Abu Dhabi Fund for Development is seeking land in Senegal (to refer only to Africa) to produce food and feed for the UAE market.”
“The UAE government is investing in food production in Sudan to meet its own market needs. As of August 2008, it was reported that the UAE had invested in a total of 378,000 hectares of farmland in various Sudanese states, including a 16,000-hectare plantation for maize and wheat production. According to some sources, Khartoum is providing the land free of charge. It was also reported that the Abu Dhabi Fund for Development is hoping to set up a joint company with another Arab partner to develop at least 28,329 hectares in Nile State, northern Sudan, to the tune of ‘hundreds of millions of dirhams’, for the production of wheat, maize, alfalfa and possibly potatoes. Initial studies on this will be finalised in November 2008.”
“Cru Investment, a UK-based ethical fund, facilitates private investment in African agriculture for guaranteed returns of 30-40%. They already control more than 2,500 hectares of farmland in Malawi and operate another 4,000 hectares there through outgrower schemes. The produce is exported to the UK. In September 2008, Cru announced that in 2009 it will expand its Africa fund to the Middle East. This means teaming up with Gulf investors to address food security concerns in the GCC.”
“In September 2008, the IFC, the commercial investment arm of the World Bank, announced that it would greatly increase investments in agribusiness development because of new private sector interest in seeking returns through the food crisis. Part of its spending will be to bring ‘under-utilised’ lands into production. In 2008, IFC spent US$1.4bn in the agribusiness supply chain, of which US$900m went directly to agribusiness firms.”
“In October 2008, the Financial Times reported that Lonrho, a UK-based pan-African corporation, is putting together funds to acquire 20,000 hectares of productive farmland in Angola. This is part of a wider ‘aggressive’ strategy to acquire ten times that amount – 200,000 hectares – for the same purpose across Africa. The Angolan government is reportedly trying to attract US$6bn worth of new agricultural investments and is engaged in talks with corporations from Brazil, Spain, Portugal, Argentina, Canada and the US.”
“Trans4mation Agri-Tech, a UK investment house, is involved in a joint venture with a Vietnamese company that will bring Vietnamese workers, scientists and technology to villages in the Niger Delta in Nigeria to produce food for the local and world markets. T4M, as it is sometimes called, has reportedly received loan financing from the UK government of US$36m, and the Delta villages are providing infrastructure, including land. A minimum of 10,000 hectares of fertile land has been assigned to the project for 25 years by Delta state officials. Stephen Liney, the project director, is in similar discussions with the Rivers, Abia and Ebonyi state governments.”
“At the G8 summit in Italy (July 2009), Japan advocated a set of principles to ensure smooth investment in agriculture in developing countries and to limit ‘land-grabbing’. Tamaki Tsukada, director of the economic security division at the Ministry of Foreign Affairs, has said: ‘We feel there should be a code of conduct, a set of principles, for investment in farmland [...] for both producing and consuming countries. There’s a need to provide a scheme to ensure private sector investments are promoted while the interests of the producing countries are preserved.’”