UN appeals for funds to battle locusts in Madagascar

A build-up of locust populations in south-western Madagascar could turn into a plague and seriously endanger the livelihoods of 13 million people unless a new campaign is launched to contain the crop-devouring insects, the United Nations Food and Agriculture Organization (FAO) has warned.

The agency called for a $7.3 million fund to treat 300,000 hectares of locust-infested territory from this November to May next year.

"We must break the locust population dynamics in order to prevent further developments that could affect the island for years and seriously impact on the livelihoods of two thirds of the population, or 13 million people," said FAO's Annie Monard, who is coordinating anti-locust operations in Madagascar. "Preventive control is the best and most cost-effective way of dealing with locusts in a sustainable manner."

Locusts do not always stay in swarms. In south-western Madagascar they typically live on their own as individuals. But if their population density passes the tipping point, their body chemistry changes and they undergo a behavioural, ecological and physiological transformation.

After these changes, individual locusts begin to concentrate and act as a synchronized group of hopper bands, or wingless locusts, or as adult swarms, moving out en masse to find new food sources. Changes in their bodies allow them to fly over greater distances, up to 100 kilometres a day, as well as making them able to digest a wider range of vegetation and crops.

An adult locust can consume its own weight - roughly two grams - in fresh food daily. A very small part of an average swarm eats the same amount of food in one day as about 2,500 people, FAO said.

UN

Madagascar's vanilla industry hits slump

by Nicolas Brulliard

On a recent steamy morning, Simon Vanombelona was clearing his vanilla field to

make way for a rice paddy. “If the quantity is sufficient I’ll eat first and then build some stocks,” said the 49-year-old Vanombelona. So severe is the price slump for vanilla in northeastern Madagascar, which is home to the best vanilla in the world, that growers are focusing on subsistence crops at the expense of vanilla beans that just a few years ago fetched several hundred dollars a kilo. Now local farmers say they only get about $5 a kilo for the fruit of their very arduous labor.

The wild fluctuations in prices are primarily the result of exacerbated cycles of supply and demand. When prices shoot up as they did in the early 2000s, growers respond by planting more vanilla but because a vanilla plant takes three years to produce its first pods the timing is often tricky. Growing in tropical areas, vanilla is also vulnerable to cyclones and disease, the effect of which is often amplified by speculators leading to extreme variations in prices. At the moment, prices are exceptionally low because vanilla brokers — taking advantage of cheap vanilla and the fact that vanilla beans can be preserved in warehouses for several years — have been stocking up.

“There have been excess stocks of vanilla beans really for the better part of the last three of four years,” said Rick Brownell, vice president of vanilla products at Virginia Dare, a New York-based company that has manufactured vanilla products for more than 80 years. “There is very little risk in writing forward contracts for vanilla beans and even for the end product, vanilla extracts and flavors at this point. The price can only go higher. It really can’t go any lower.”

The vanilla vine is a plant from the orchid family that is native to Mexico. Originally, the plant couldn’t be grown anywhere else because it was pollinated by a species of bees endemic to Mexico. When it was discovered in the mid-19th century that the plant could be pollinated by hand, it was exported to other tropical regions of the world and is now successfully cultivated in places as diverse as Indonesia, India, Uganda and Papua New Guinea.

Madagascar, the world’s fourth largest island, has proved particularly well suited for the culture of vanilla and has become the world’s largest producer of the spice. The warm climate is propitious, and local farmers have perfected the art of growing vanilla, which requires the right amount of shade, elaborate pruning and frequent weeding around the plant. Madagascar's vanilla is highly prized because it is the richest in vanillin, the compound that gives vanilla its distinctive flavor and smell.

The pods are harvested green and have to be dried for at least six months before they can be exported. Companies such as Virginia Dare then make the vanilla extract that is used in beverages, ice creams, yoghurts and perfumes.

Historically, vanilla has been a very valuable commodity. To prevent the common theft of vanilla pods right before harvest time, some growers mark their pods the way ranchers mark their cows, with intricate designs that remain identifiable after the curing process.

Vanilla theft became a particularly lucrative crime in the early 2000s when demand exceeding production led to prices reaching $400 or $500 a kilo. The high prices proved a boon for the local economy when newly rich vanilla growers raided the region’s auto dealers and electronics stores, even leaving tips to merchants.

Scared by the ballooning prices, some vanilla consumers resorted to using synthetic vanilla, which, along with excess production, contributed to a sudden and sharp fall in prices.

“Vanillin is vanillin. Synthetic or nature-made it’s still the same,” said Daphna Havkin Frenkel, director of research and development at Bakto Flavors LLC and a visiting scientist at Rutgers University. “Don’t believe anyone who tells you otherwise.”

To make matters worse, the government's attempts to control the price for vanilla has backfired. A government decree this summer that set a minimum price of $27 a kilo for vanilla ready for export has brought the industry here to a standstill, local vanilla exporters said. The measure, probably intended to bring economic relief to struggling vanilla farmers, has had an opposite effect.

Claude Andreas, the head of a local vanilla industry group, said the minimum price is much too high for the current market. As a result, Madagascar’s vanilla exporters, who are not authorized to sell below $27, are not buying vanilla from local growers to replenish their stocks. The majority of vanilla exporters have written to Madagascar’s trade minister to repeal the decree because they fear competitors will take away Madagascar’s market share by undercutting the minimum price.

“They won’t buy it for $27,” Andreas said of vanilla brokers, “because they can buy it for $25 in Indonesia.”

Global Post

Lychee trade proves fruitful in Madagascar

European importers have positioned the lychee trade to meet the end-of-year demand for exotic fruits which has meant that imports of lychees from the Indian ocean (southern hemisphere) at this time of year now represent around 80% of total annual imports.

Madagascar currently holds around 70% of this market. The European Union has contributed to reinforcing Madagascar's comparative advantages in this market by helping to structure the trade in such a way as to enhance product quality. This has created export boosters. By ensuring that production meets new EU requirements on food safety, it has been possible to increase exports considerably.

In addition, the progressive opening up of the Madagascan lychee market to the entire major European importers has led to an unprecedented increase in exports. These have risen from 7000 tonnes in 1997 to 21000 tonnes in 2006.

European Commission

Daewoo finds African land is a risky business

by Ed Cropley

A move by Madagascar's army-backed leader to nix a huge South Korean farming deal has exposed the risks of such ventures in Africa, where land remains an emotive issue prone to populist or nationalist opposition.

Although the rich Middle Eastern and populous Asian countries that have turned to the continent in search of cheap, long-term food supplies are unlikely to scrap their plans, they may have to rethink them.

"The greatest political risk in investing in Africa comes from commercial agriculture because of the emotional attachment to the land," said Martyn Davies, head of Johannesburg-based consultancy Frontier Advisory. "With the trend of rising populism in many countries, foreign investors could quickly fall victim," he said.

Land use, particularly South Korean firm Daewoo Logistics' plans in Madagascar to lease a million hectares -- equivalent to an area the size of Qatar -- to grow food, played a big part in the turmoil that led to this moth's removal of President Marc Ravalomanana. The day after Ravalomanana's exit, his populist successor, 34-year-old former disc jockey Andry Rajoelina, said the Daewoo deal was off, telling reporters: "Madagascar's land is neither for sale nor for rent."

Daewoo planned to grow half of South Korea's corn requirements on the Indian Ocean island, reducing the dependence of the world's third-largest corn buyer on U.S. or South American imports. The firm, formerly part of the now-defunct Daewoo Group, had promised to spend $6 billion over 25 years building roads, railways, a port and schools in exchange for huge swathes of arable land.

But, as with similar deals elsewhere, critics such as Rajoelina piled in, saying Africans were being deprived of land needed for themselves in favour of crops being grown for export to wealthier people in Asia or the Middle East.

Daewoo bosses, quoted by Korea's Yonhap news agency, denied ordinary people would lose out. "The project is on deserted land and will create jobs for local residents and new housing, hospitals and schools will be built. That will be a big boost for the national economy," executive Roh Jong-ho said.

Africa is no stranger to outside investment in farming, but since last year's spikes in the price of staple foods, governments, rather than the private sector, have been driving the deals, making them much bigger, and much more sensitive. That is only compounded by the secrecy that can shroud projects financed either wholly or in part by investor governments not noted for their openness.

Early in March, state media in Angola reported that Beijing had granted Luanda a $1 billion agriculture loan, and in February Chinese President Hu Jintao went on a four-nation African tour to cement ties beyond merely the oil and mining sectors.

In the same month, a Saudi Arabian firm announced a $45 million land deal in Sudan in response to a push by Riyadh to lock in long-term food supplies.

"There are a number of transactions taking place but most, generally, not in a transparent manner," said Madiodio Niasse, director of the International Land Coalition, a Rome-based group pushing for a code of conduct regulating such investments. "The receiving country can perceive it as a loss of its own sovereignty for the benefit of another country," he added. "That is not in the interests of anybody."

Only by being open and transparent can both investor and host country avoid the sort of suspicion and upset that ultimately cost Madagascar's elected leader his job, and Daewoo millions of dollars in wasted planning, he said.

Only by being open and transparent can both investor and host country avoid the sort of suspicion and upset that ultimately cost Madagascar's elected leader his job, and Daewoo millions of dollars in wasted planning, he said.

Reuters

Madagascar's new leader cancels Korean land deal

by Sebastien Berger

Madagascar's new military-backed leader, Andry Rajoelina, has cancelled a vast and hugely controversial land deal with a South Korean company. Only a day after the president, Marc Ravalomanana, resigned, Mr Rajoelina, 34, said that the agreement was off.

Under it Daewoo Logistics was to rent 3.2 million acres – a large proportion of the country's arable land and an area half the size of Belgium.

The firm's plan was to use it to grow maize and biofuels, and it was one of the most striking examples of the rush for resources in Africa, which has been led by China.

But Mr Rajoelina said: "In the constitution, it is stipulated that Madagascar's land is neither for sale nor for rent, so the agreement with Daewoo is cancelled."

As the opposition leader he had accused Mr Ravalomanana of running the Indian Ocean island as a private company, citing the project as an example.

Ever since reports of the agreement first emerged last year, it has been shrouded in secrecy and controversy. In January a Daewoo official said that it had been stalled in a backlash against "neo-colonialism."

Analysts said that other foreign investors were unlikely to be affected. Philippe de Pontet, of Eurasia Group, said that while the Daewoo Logistics deal was "off the table," "major mining and oil investors on the ground will likely ride out the crisis without losing their projects"

The London-listed mining giant Rio Tinto is Madagascar's biggest foreign investor and said it did not foresee any problems in the wake of the takeover.

Daily Telegraph

The lessons of Daewoo's failed Madagascar land lease deal

by Chido Makunike

The recent much-publicised plan of South Korean conglomerate Daewoo Logistics to lease a reported 1.9 million hectares of prime land in Madagascar to cultivate maize for export back to South Korea has fallen through. Given the size and audacity of the the proposed deal, its astonishingly generous-to-Daewoo terms and the charges of 'neo-colonialism' from many quarters, it was probably doomed from the beginning.

Now that the heat has died down somewhat, perhaps it is time to examine it more calmly for the lessons that can be gleaned from it. It is one thing to criticise this particular attempted deal but African countries do need foreign investment, and agriculture will for a long time offer the most realistic development options for Africa.

It would be a shame if the perceived take-home lessons of the furore over the Daewoo plan were that African countries are hostile to foreign investment in agriculture. In any case, even as the Daewoo plan was being pilloried, there are many other large-scale commercial farming deals being concluded by foreign investors in many African countries, particularly in the controversial cultivation of biofuel crops.

This suggests that it is the peculiarities of the Daewoo plan that caused the level and ferocity of the objections from so many quarters, rather than necessarily the concept of large-scale foreign involvement in farming in Madagascar per se.

Paying attention to the recent political history of Africa should have warned all parties concerned in this deal that strong opposition to it was not only predictable but almost guaranteed. African prickliness about land dispossession by foreigners dating back to the colonial days still runs deep and strong. Many countries are still battling to find satisfactory post-colonial land tenure systems that meet today's complex political, social justice and economic imperatives. This has been far from easy, partly because these various imperatives often clash against each other.

Zimbabwe, Kenya, South Africa and Namibia are just some of the most obvious examples of African countries with deeply contentious "land issues." But there are many others where the issues exist as well, if not with quite the same intensity as these four countries.

Apart from the basic issue of who has what kind of tenure to what land, what I call 'plantation agriculture' has also had a poor reputation in the many African countries where it existed in one form or another. It has long been associated with being part of the system of extractive colonial plunder, like mining."Cash crops" were introduced, sometimes forcibly, to support the colonial mission, either by growing for consumption in the colonial metropole or for general export with the proceeds repatriated to the colonial power's capital or used to oil the settler economy.

There were situations were forced labor was used on these plantations. And even when they eventually morphed into what were then called large-scale "commercial farms" with paid labor, many of the characteristics of the old plantation remained. The treatment of farm workers was often shabby, and as today, part of the profitability of these farms depended on paying low wages.

The collapse of Zimbabwe's large-scale commercial agriculture may be a special case because of its particular element of political orchestration. But even when the country was lauded as 'regional breadbasket,' it was not a model that was universally regarded with admiration, partly because of the whiffs of the elements of exploitative plantation agriculture. Even if the wholesale takeover of white commercial farms had not been engineered and abetted by the government of President Robert Mugabe, that particular model of commercial agriculture may have still seen its days numbered because of the mix of historical, political, economic and racial pressures. That mix of pressures is building up in South Africa and Namibia, and exists in other variations in many other countries.

The point is that particularly in Africa, it is short-sighted to gauge the appropriateness of a proposed agricultural model in strict agronomical yield or economic output terms, as some development or Africa "experts" suggest. To do that is to risk eventual Zimbabwe-like explosions. South Africa may yet avoid that kind of explosion, but there are many signs of similar pressures causing a lot of friction between the large-scale white farmers' unions on one hand, and government and the representatives of black South Africans clamoring for land "restitution" on the other.

In countries as disparate as Ghana and Tanzania, there is increasingly loud grumbling about the manner in which public land is being ceded to foreign investors eager to grow biofuel crops. Yet governments as well as local communities everywhere are at the same time also eager to welcome foreign investment which offers at least the hope of jobs, infrastructure, export earnings and overall "development." The contentions are therefore not whether foreign agricultural investment is welcome or not, but on how it is done.

Here are what I believe to be just some of the mistakes of the collapsed Daewoo deal: The size of it was simply too big, with the company proposing to lease reportedly up to half the country! It should have been obvious to all that politically that would never fly. Just on the basis of the proportion of Madagascar's land surface Daewoo was proposing to take on, it should have been obvious to the principals on both sides that charges of neo-colonialism would quickly follow.

There were unclear and contradictory reports about the terms, but it seemed generally agreed that Daewoo would get the proposed 99 year lease for little or nothing in rental terms. Even if it had indeed resulted in eventual significant job and infrastructure creation, again it should have been obvious that a lease arrangement without some kind of at least symbolically significant cash payment by Daewoo to Madagascan public coffers would also be politically controversial. It further added to the public feeling of their country being 'given away' to foreigners.

Then there were the statements by Daewoo representatives that made it clear they saw the Madagascans' involvement in the mooted deal as being primarily laborers and support personnel. The impression was given that Daewoo would bring all the key personnel for the operation from South Korea and elsewhere. It made it sound as if the involvement of the Madagascans was seen as being marginal, almost incidental to the deal.

Again, given a merely cursory study of political history and plantation agriculture in Africa, it should have been obvious that right from the beginning this would breed resentment and opposition. It was an amazingly, naively a-historical approach to what could have been structured to be a well-received win-win investment for both Daewoo/South Korea and the Madagascans.

There was also the faux pas of the crop in question to be cultivated on the proposed monster project being maize, an emotive and 'political' crop in Africa, even if it is not the main staple crop in Madagascar itself. Someone should have advised both parties that particularly at a time of widespread talk of a global food crisis that is biting Africans hard, it would be a public relations nightmare for a foreign company to be cultivating a huge chunk of an African country's land mass to grow maize to then export.

Right now even in a relatively prosperous country like Kenya there is talk of a famine-level maize deficit. How would it be seen for millions of Africans to be struggling to find or afford sustenance quantities of the continent's main staple crop when Daewoo was growing and exporting huge quantities of it from Madagascar? The back lash simply would not have been worth it for all concerned.

There are ideologues of various stripes of the raging debate about what type of farming would best serve Africa's pressing food and economic needs. I disagree with those on both sides of this debate who take the position that the choice is a simple and stark one between large-scale, intensive agribusiness-type agriculture and small scale farming. In addition to finding ways for both these models to co-exist, it should also be possible to find situations and to create opportunities where they can actually be combined.

In the case of the Daewoo example, the company could have negotiated for the lease of a far more modest but still large commercial-size parcel or parcels of Madagascan land. On it they could practice variations of the intensive agribusiness type of farming they envisioned. But then they could have contracted thousands of Madagascan farmers to augment what was grown on the nucleus farm(s.) The nucleus farms could have been not just high-yielding production and processing centers, but they could also have been structured to have a teaching/demonstration component to assist the contracted out grower farmers to learn new techniques.

The two farming systems are quite different in their basic nature, so yields and many other parameters would be different. But that is part of what has to be accepted in order to meet the many imperatives that land use in Africa must necessarily take into account because of the continent's history and its present-day economic, political and social realities.

What I am proposing is not anything essentially new. Variations of this kind of model of agribusiness and small-scale farmer collaboration are now popping up in a sort of experimental way in many countries. The model does have its weaknesses and agro-ideologues who are completely opposed to industrial or 'conventional' high-inputs agriculture in any form would oppose the very idea of the collaboration, but the fact is that we live in a reality of nuance and compromise, not of absolutes.

Africa's majority of small scale farmers may practice low-yield agriculture for many reasons, but the solution is to find innovative ways to help them improve their yields, not to ignore or sideline them. For better and for worse, for a long time to come they will predominate in Africa's agriculture, even as more large scale operations take hold in many countries. Yet there is much to be learned and benefited from large scale agriculture as well, despite the bitter opposition to it of various types of activists.

I have simplified the agricultural model described, but some variation of it offers real hope for meeting the disparate needs that are expected of land use in Africa. And if it had been a variation of such a model that Daewoo and the Madagascan government had been negotiating (and perhaps for the cultivation of a crop other than maize) the deal might have well stood a chance, to the benefit of all concerned.

Africa needs foreign agricultural investment to meet its economic needs, and it can benefit from many outside farming innovations. But Africa's small scale farmers also have a wealth of locally-relevant farming expertise they need various kinds of assistance to practice successfully and to improve on.

It is farming investments whose promoters are smart and sensitive enough to study the bigger historical and current picture of African farming who are likely to benefit from what is widely agreed to be the great potential African agriculture offers to help feed the continent and the rest of the world, and to make money for enlightened investors. These elements were largely missing in the way the proposed Daewoo deal was structured and marketed.

African Agriculture

Madagascar land rental deal collapses after backlash against 'colonialism'

By Julian Ryall and Mike Pflanz

Madagascar was poised to sign a 99-year agreement to rent 1.3 million hectares of land to South Korea's Daewoo Logistics Corporation to plant maize and palm oil for export. Food-importing countries with little arable land, mainly in Asia and the Middle East, are increasingly looking overseas to secure food supplies after the prices of staple foods rocketed last year.

But the practice has drawn criticism that it harks back to colonial-era "plantation agriculture" where rich outsiders force subsistence farmers off fertile land to grow export crops. Now the Daewoo plan, the largest in Africa covering an area of roughly half of Madagascar's current arable land, has been put on hold after the Malagasy people protested that it would make them a "South Korean colony".

"We are in big trouble with the government of Madagascar," said Shin Dong-hyun, the general manager of planning and finance at Daewoo Logistics Corporation. "The process was ongoing, but it has suddenly been stopped because of media reports. Those reports have made Madagascan people very angry because it makes them ashamed for being a part of what they say is a neo-colonial system."

The company had planned to grow maize and palm oil on vast commercial farms for export either back to South Korea or to sell at international markets to raise funds to buy other food for its domestic market. Kenya, Sudan, Ethiopia and now Madagascar have all recently offered vast tracts of farmland for lease, hoping to cash in on a growing trend whereby developing countries from Ukraine to Cambodia offer fertile land to the highest bidder. Qatar plans to lease 40,000 hectares along Kenya's coast to grow fruit and vegetables for its own citizens, in return for building a £2.4 billion port close to the Indian Ocean tourist island of Lamu. Abu Dhabi announced discussions with Sudan to rent 30,000 hectares of land watered by the Nile to grow its own maize and alfalfa. Senegal is also said to be hunting for a similar deal.

The idea, which has been called a "new scramble for Africa", is not without its critics, who question why Africa should lose valuable farmland when it is chronically short of its own food.

Jacques Diouf, the head of the United Nations Food and Agriculture Organisation, has called the land deals a type of "neo-colonialism". "It's clearly a good sign that these developing country governments are looking to more long-term ways to benefit from their agricultural land, but at the moment these deals all look far more lucrative for the buyer than for the seller," said Duncan Green, the head of research at Oxfam. Kenya's deal with Qatar also looks set to come up against stern resistance from local growers.

"We cannot be happy in a country which has so many hungry people to see our farmland being used to grow crops for foreigners," said Zachary Makanya, the director of Pelum Kenya, an organisation representing small scale farmers. "Instead of selling our land to Qatar or whoever, the Kenyan government should invest in helping our farmers to grow more and sell more to our own people."

According to Chido Makunike, an African agribusiness analyst and food exporter based in Dakar, Senegal, such "plantation" agriculture models are old fashioned and ineffective, despite promises of jobs and modern farming techniques. "The realistic future of commercial farming in Africa is likely to be a hybrid combining commercial farms with local growers," said Mr Makunike.

"Commercial farmers can set up a smaller nucleus farm for high yield, high input agriculture, but then support surrounding small-scale farmers to be out-growers who they contract to grow for them. "Instead of these people being farm-labourers they remain farmers or small business people in their own right who retain the dignity of being their own bosses."

The Daily Telegraph

Daewoo unsure of Madagascar land deal

by Christian Oliver

Daewoo Logistics of South Korea has not received approval from Madagascar for a plan to farm maize and palm oil in an area half the size of Belgium, contrary to statements by company officials, it has emerged.

Daewoo managers told the media last month the company would develop 1.3m hectares on the island to secure stable food supplies for South Korea under a 99-year lease, joining a flurry of Asian and Middle Eastern companies seeking to tap Africa’s agricultural export potential.

A Daewoo official said that the company understood it would not have to pay to lease the land, given the investment involved and the jobs to be created. But in a statement attributed to the company and posted on the website of the Malagasy president, Daewoo said: “There is not yet a contract on the land between Daewoo Logistics and [the] Madagascar government.”

Echoing that, the Malagasy land reform ministry said: “There has been no contract at regional or central government level. They [Daewoo] have prospected for land and now the central government is waiting for the prospecting reports.”

The ministry said an environmental investigation would be required as well. Marius Ratolojanahary, the land reform minister, confirmed to a Malagasy newspaper that Daewoo still had several hurdles to clear. “Every request must be examined by a commission before being supported by the cabinet,” he said. “So Daewoo was free to file an application in line with the procedure but that does not mean it will get the land.”

Daewoo declined to confirm or comment on the statement on the government website.

Responding to initial reports of the deal, critics said the welfare of Malagasy people and global food security would be better served by islanders being helped to manage their own farms.

They stressed the trickle-down effect of Daewoo’s plan would be marginal and noted the company’s focus on exporting food from a country in which about 600,000 people rely on relief from the United Nations World Food Programme.

South Korea is the world’s fourth biggest maize importer and wants to wean itself off US shipments.

Financial Times

Madagascar to be the breadbasket of South Korea?

by Vivienne Walt

Tenant farming was popular in rural America until the Dust Bowl years of the Depression, but the practice is making a comeback on an epic scale in much of Africa.

This time, however, the "tenants" are not simply family farmers down on their luck and willing to work land they don't own; they're major international corporations and governments looking to compensate for shortages of arable land in their own countries by setting up massive industrial farms abroad.

South Korea's Daewoo Logisticslast week announced it had negotiated a 99-year lease on some 3.2 million acres of farmland on the dirt-poor tropical island of Madagascar, off southern Africa's Indian Ocean coast. That's nearly half of Madagascar's arable land, according to the U.N.'s Food and Agricultural Organization, and Daewoo plans to put about three quarters of it under corn. The remainder will be used to produce palm oil — a key commodity for the global biofuels market.

A Daewoo manager, Hong Jong-wan, told the Financial Times that the crops would "ensure our food security," and would use "totally undeveloped land which had been left untouched."

Land is scarce and expensive in South Korea, which makes it the world's third-largest importer of corn. Daewoo says the Madagascar land will be leased for a price of around $12 an acre, which is a fraction of the price for farmland in the corporation's home country.

Not everyone is convinced that Daewoo's move is the most effective way of promoting food security. Riots have shaken dozens of countries across the world over the past year as poor people have found themselves unable to pay the rocketing prices for staples such as rice, corn and sugar.

The U.N.'s World Food Program runs school-feeding schemes for children in Madagascar, where about 70% of the country's 20 million people live below the poverty line. The island's residents also rely on WFP emergency food relief programs because of the frequency with which they're struck by cyclones and droughts.

Given those hardships, the prospect of a corporate giant growing hundreds of tons of food to be consumed by people and animals in Korea raises "ethical concerns," says David Hallam, head of the FAO'S Trade Policy Service in Rome. "If we have another world food crisis, and you have a poor country where food is produced by foreign investors, and then repatriated, that is ethically and political tricky," Hallam warns.

Those ethical quandaries have not prompted restraint on the part of other outside investors moving into Africa to exploit its agricultural potential. Several European companies have leased land during the past two years to grow crops for food and biofuels (although on a far smaller scale than Daewoo plans in Madagascar) including the British company Sun Biofuels, which is planting biofuel crops in Ethiopia, Mozambique and Tanzania.

Africa's fertile soil certainly appeals to the countries of the oil-rich Persian Gulf, whose vast deserts force them to import most of their food. "The Gulf states have an incredible surplus to invest and now that the old economies are facing recession they are looking at Africa," says Marie Bos, an analyst at the Gulf Research Center in Dubai. Although such wealthy countries as South Korea and the Gulf states are easily able to pay for food imports, this turmoil on global food markets may have increased the incentive for food-importing countries to secure their own sources of supply.

"[Food-importing countries] have lost trust in trade because of the price crisis this year," says Joachim von Braun, director of the International Policy Food Research Institute in Washington.

For African governments, the incentive to sign deals such as the one between Madagascar and Daewoo is equally clear. Millions of African farmers lack money for fertilizer, basic tools, fuel and transport infrastructure to efficiently grow crops get them to market. While international organizations have plowed billions into health and education, agriculture in Africa has lagged badly, hugely exacerbating the food crisis of the past year.

"These governments are desperate to get capital into agriculture," says von Braun, who believes the drive by giant companies to lock up land deals could benefit poor African countries whose governments negotiate wisely. Although Daewoo plans to export the yield of the land it is leasing in Madagascar, it plans to invest about $6 billion over the next 20 years to build the port facilities, roads, power-plants and irrigation systems necessary to support its agribusiness there, and that will create jobs thousands of jobs for Madagascar's unemployed. Jobs will help the people of Madagascar earn the money to buy their own food — even if it is imported.

Time

Daewoo's Madagascar land investment deal promises jobs, but at what price?

by Billy Head

Dawn near Antananarivo, and in the first light the red hills slowly took shape. Rice fields stretched into the distance, where half-lit figures were arched over their crop. This land feeds 4 million people around the capital of Madagascar, but down in his red-brick house, vegetable farmer André Rakatobe had two concerns: that his children were late for school and that South Koreans were poised to become his country's biggest farm tenant.

"It's just too sad," he said, staring at his feet. Land rights are a sensitive topic in Madagascar, as in much of post-colonial Africa. "My worry is leasing land today could lead to its eventual sale."

His response hinted at rural concern in this vast country of the precedent being set by South Korea's Daewoo Logistics, which announced last week it had secured a 99-year lease of land, largely for planting corn in Madagascar's remote west. With a likely spend of $6bn (£4bn) over 25 years according to Daewoo officials, the venture is said to be the biggest of its kind in the world.

Though the Madagascar government says the deal is not yet sealed, it could signal a turning point in the country's development. Madagascar is the world's fourth largest island but like many African countries, it lacks the capital and technical expertise to harness natural resources. And herein, officials say, lies the project's chief benefit. It will also create jobs - 70,000 of them according to South Korean projections.

But the Daewoo concession, amounting to as much as 1.3m hectares, would eat up an area of arable land half the size of Belgium. Much of Madagascar is arid. Food crises have hit the desert south three times in five years, often hampered by a cyclone season affecting points of access from the north. Crucially, the South Koreans have indicated that they want to ship their output back home for their own domestic market, which is overdependent on imports.

Officials in Antananarivo insist they will be able to keep some of the new supplies within the country, enabling them to build up a reserve of produce for drought or famine. "We're very excited because we're frightened by this food crisis," said Eric Beantanana, a spokesman at the Madagascar Economic Development Board. According to one rural landowner, the development of a large-scale crop production would make "all the difference" to a country with no meaningful state food reserves.

There are some doubts about the Malagasy people's taste for corn. While the plant is a central part of the South Korean diet, used for the production of syrups flavouring meat, the dominance of rice in Madagascar is deep-rooted and may prove hard to break.

The other attraction to the Malagasy government is that revenue from corn produce and land rental would be channelled back into developing regional economies, the minister of land reform, Marius Ratolojanahar, explained - particularly for infrastructure. With floods affecting the main road between western cities Morondava and Mahajanga, parts of western Madagascar are inaccessible for several months a year, he said.

Madagascar's separation from the rest of the world for 100m years has meant a unique natural history - 80% of the island's plants and animals are unique - and some environmentalists have voiced concern about the potential damage from the large-scale farming project and the impact upon western Madagascar's Sakalava cattle-herders.

The Guardian

Daewoo says Madagascar land lease deal may cost $6 billion; host govt. enthusiastic

by Sungwoo Park

Daewoo Logistics Corp., a South Korean natural-resource development company, expects a project to lease vast tracts of farmland in Madagascar to grow corn and palm oil may cost about $6 billion over the first 20 years.

The investment will pay for the lease costs as well as building a port, roads, irrigation, and power plants, along with schools and hospitals for locals, Shin Dong Hyun, a manager leading the project, said today by phone.

The North Asian company said this week it agreed to lease 1.3 million hectares (3.2 million acres) in the island nation for 99 years to produce food and biofuel for export. The total project area is about the same size as the U.S. state of Connecticut, according to Bloomberg calculations.

Food-importing nations have stepped up efforts to lock in overseas resources to ensure food security after the prices of rice, corn and palm oil surged to records this year, stoking concerns that there could be worldwide shortages. South Korea has also said it may seek farm leases in Russia's Far East.

``As not only Korean companies but also foreign firms express interest, we're thinking of going on an overseas roadshow to attract partners,'' Shin said, without elaborating.

Leasing the land may cost as much as $5 per hectare per year, according to local law, Shin said. ``But it's negotiable, so we are in talks with Madagascar officials hopefully to cut it down before finalizing the rental fee.''

Daewoo Logistics, set up in 1999 after being spun off from Daewoo Corp., is engaged in logistics, shipping and resource development. The company has also established a branch in Indonesia, Southeast Asia's largest economy and a producer of metals and agricultural commodities.

The leased area in Madagascar, including the regions of Menabe and Melaky, may produce 4 million metric tons of corn and 500,000 tons of palm oil a year, Shin said on Nov. 18. The company was contacting Nonghyup Feed Inc., South Korea's biggest single buyer of feed grains, and some Chinese firms as potential partners in the venture, he said then.

Still, Nonghyup Feed hasn't considered joining the project, Yang Sang No, the leader of Nonghyup Feed's business development team, said today by phone in Seoul.

``We are aware of the project, but we've not started any review,'' Yang said. ``In principle, we are interested in overseas farming projects because, as you know, we have to diversify import sources.''

The Korean grain buyer said in July it made an initial agreement with Daewoo Logistics to jointly farm corn on 20,000 hectares of farmland in Indonesia starting next year.

South Korea's government said the nation needs to ``farm grains overseas in the longer term in order to secure sources for stable food supplies,'' according to a June 2 statement.

The country, the world's third-largest corn importer, has targeted production of half the grain it needs either at home or from overseas farmland that it controls by 2030 compared with about 27 percent at present, the statement said.

President Lee Myung Bak said in April the country may seek to farm rice and other grain overseas, possibly signing 50-year leases for agricultural land in Russia's Far East.

Bloomberg

Madagascar enthusiastic at corn deal with Daewoo

by Billy Head

Madagascar officials are enthusiastic about a company's big farming plans for an undeveloped area but say the deal won't go ahead if it threatens the island's unique ecology.

An environmental impact assessment was to begin shortly, the Malagasy Environment Office said November 20, a day after Daewoo Logistics Corp. announced it would grow corn on 2.5 million acres (1 million hectares) of land, mostly in the Indian Ocean island's arid west.

Shin Dong-hyun, the Daewoo official in charge of the project, said Daewoo would likely spend $6 billion over the first 25 years. It has secured a 99-year lease, and was working out final details on rental fees and taxes with officials in Madagascar.

"There's no deal without a favorable conclusion" of the environmental assessment, the Malagasy Environment Office said in a statement. Madagascar is home to a number of animals found nowhere else in the world.

Officials on the island were nonetheless enthusiastic about the prospects of the Daewoo deal. The country off the southeast coast of Africa now produces more than 3 million tons of rice per year, yet remains a net rice importer.

"We are very excited because we're frightened by this food crisis," said Eric Beantanana of the Madagascar Economic Development Board.

Tourism and the mining sector have been the mainstays of Madagascar's economy.

Revenue from the Daewoo project would be pumped into development and infrastructure in a region made inaccessible for four months a year by flooding, Minister of Land Reform Marius Ratolojanahary said.

Google News

South Korean company plans maize project in Madagascar

A South Korean company hopes to turn an undeveloped stretch of Madagascar into a corn-production center, an official said on November 19.

Daewoo Logistics Corp. envisions growing corn on 2.5 million acres of land, mostly in the Indian Ocean island's arid west, said Shin Dong-hyun, the Daewoo official in charge of the project.

Besides corn, the company also wants to plant palm oil on 741,000 acres in rainy eastern Madagascar, Shin said. He said Daewoo has secured a 99-year lease and is working out final details on rental fees and taxes with officials in Madagascar. "We hope we (can) launch the project as soon as possible," Shin said.

South Korean business groups have expressed interest in investing once the deal is finalized, he said. He said it will likely cost $6 billion over the first 25 years.

Ultimately, the project is targeting production of 5.5 million tons of corn a year, though that could take 15 years to achieve, Shin said. South Korea currently imports about 11 million tons of corn a year, he said, mostly from the United States.

Shin said the sparsely populated area on Madagascar's west coast targeted for corn production lacks roads and irrigation facilities, which will need to be built. About 2,000 hectares may be planted initially, he said. There is "almost no infrastructure there now," he said.

He said the company has yet to finalize a sales plan for the corn it produces, though added it could end up being used as corn starch or animal feed in South Korea or exported to the Middle East, India and China.

Daewoo plans to bring in agricultural experts from South America and South Africa to work on the project. Laborers will mostly come from Madagascar, with a few from South Africa, he said. The project could end up creating more than 70,000 jobs on the island.

"We'd like to contribute to Madagascar's economic development," he said.

Forbes

African Development Bank lends Madagascar $15 million for irrigation

The African Development Bank on March 25 loaned Madagascar almost 15 million dollars (9.6 million euros) to finance an irrigation project, the bank said.

AfDB Vice President for Sector Operations Zeinab El-Bakri and Madagascar's Finance and Budget Minister Haja Nirina Razafinjatovo signed agreements for a 14.82 million dollar loan and a 480,000 dollar grant.

The support will cover 82 percent of the cost of the entire project, which will benefit about 48,000 people, the bank said in a statement.

Africasia

Madagascar orchid growers strike deal with perfume industry

A slender delicately-perfumed white orchid unique to Madagascar is the pick of the French cosmetics industry to symbolise its new commitment to biodiversity and sustainable development.

Angraecum eburneum longicalcar had all but disappeared from its natural habitat when much of its forest home was destroyed, but for this project will be grown commercially in partnership with Madagascar farmers, and then exported to France. "These orchids can be grown for use as either cut flowers or for their cosmetic value," said Alban Muller, president of both Alban Muller, a producer of fragrances and flavours, and the Cosmetic Valley grouping of France's top perfumers and fragrance specialists. "Orchids have hydrating and softening properties. They also have a very powerful image, which is important for our industry," Muller said. Companies like Guerlain, Yves Rocher and Clarins have been using orchid extracts for a long time, he said.

The island of Madagascar was separated from the African and Indian landmasses 160 million years ago, becoming a sanctuary for rare plant species. It is now home to the world's greatest number of orchids species, with 1,200 different types. Starting in the 1930s, celebrated collector Marcel Lecoufle roamed the island in search of orchids, building up a collection that today includes 105 species native to Madagascar.

Françoise Lenoble-Predine, vice-president of the conservatory of specialised plant collections, says she has found three laboratories in Madagascar that are sufficiently well equipped to handle the delicate operation of reproducing the orchid. "This will enable us to begin reproducing other plants with high added value," she said, kicking off a process of sustainable development in a country ranked as one of the poorest in the world.

Madagascar is already a major producer of plants for the perfume industry, including ylang ylang, vetiver and vanilla, another member of the orchid family. "It is a country rich in natural resources, but very much under the control of middlemen who buy the crops while they are still growing," said Lenoble-Predine. Crops are bartered against rice, with merchants pushing up prices of the food staple, leaving farmers with debts of up to one and a half harvests and families short of food.

The French cosmetics industry is therefore considering ways and means to form partnerships with Madagascar farmers, although it is too early to talk of quantities or prices, said Muller. "What is impossible nowadays is to ignore environmental issues," Muller said. "To secure access to resources in projects like these, we need to work fairly and intelligently with local farmers."

Angraecum eburneum could be cultivated in the very heart of the Madagascar capital, Antananarivo, where there are 3 200 hectares of polluted and deteriorating rice paddies.

Mail and Guardian

Madagascar scheme assists vanilla growers become more businesslike

Madagascar is the world's leading vanilla exporter, accounting for half of global production. But it remains one of the poorest countries in the world. There are also wide disparities between small-scale growers and larger estates that sell vanilla on the international market.

The International Fund for Agricultural Development (IFAD) in 2006 successfully completed a scheme introduced in the late 1990s to tackle the issue of fairer distribution of economic benefits. It sought to help small farmers learn new skills to improve their revenues from vanilla and better manage their irregular income. A goal was the linking of the various aspects of commercial production and the market, while also promoting subsistence farming, traditionally rice growing.

Vanilla farmers were encouraged to form vanilla growers' associations to gain more selling power and negotiate better prices for their crop. They were taught to process vanilla and store it to sell strategically at a better market price. More than 400 local associations of various types were created under the project. The groups include about 10,000 members, and membership is still growing. "Small farmers had previously sold their vanilla green, just after being picked. It doesn't keep when fresh, so they had to sell it immediately at a low price to buyers who came around and collected it straight after harvest," said Fabien Randriambololona, the project manager.

Farmers were also given access to financial services through the establishment of a network of credit unions. Poor farmers were excluded from the banking system and previously had to rely on high-interest loans. "This is probably the most successful aspect of the project, linking production and sales to a system of savings and credit," said Benoît Thierry, IFAD's country programme manager for Madagascar. Previously small rural producers had no way of saving, and would spend their sudden income on disposable goods such as stereos and bicycles, which put them in a dire situation for the rest of the year, as vanilla is sold only between June and October, and they neglected subsistence farming. A total of 18 credit union branches were created, exceeding the programme's target of 14. They covered 43 communities, with savings averaging about US$10 to US$15 million and the total amount of credit granted amounting to about US$32 million.

Despite its success, the project had some drawbacks, particularly because it coincided with a period of highly volatile vanilla prices, which soared to between US$450 and US$500 per kg at their peak in 2003 before plummeting to the level of US$25 to US$70 per kg at the end of the project (which was their level when the project started in 1998-99). The price surge was partly the result of a devastating cyclone in 2000, which destroyed part of the plants and created a shortage.

With the end of the project, the situation remains difficult because vanilla prices remain low. Other tropical countries like India and Uganda began to grow vanilla after the 2003 price hike, increasing international tonnage and keeping prices down. Farmers' associations will need to continue and extend their activities, diversification away from the price volatility of vanilla is necessary, and the credit unions will need to attract more members.

The introduction of an international fair trade certificate for vanilla, which, like those for other commodities, has the aim of guaranteeing a better income for small-scale farmers, will also help improve life for small growers in Madagascar.

IFAD

Floods, cyclones cause crop losses in parts of southern Africa

Floods and cyclones have destroyed thousands of hectares of crops and infrastructure in southern Africa, with the greatest damage in Mozambique, Madagascar and Zambia. However, the heavy precipitation may have beneficial effects in other parts of these countries, compensating partly for crop losses. FAO has requested close to $3.8 million to provide assistance to flood-affected communities in Mozambique and Madagascar.

In Mozambique, heavy rainfall throughout the month of January and the first half of February, compounded by persistent, heavy rains in neighbouring countries, has led to flooding throughout the Zambezi river basin with an estimated 285,000 people affected. In a separate incident farther south, Cyclone Favio struck on 22 February, affecting an estimated 150 000 people. Infrastructure and thousands of hectares of crops were destroyed.

FAO’s main proposed response targets approximately 87 000 agricultural households which have been made food insecure due to loss of assets, food stocks and new production. Assistance will involve urgent rehabilitation of productive assets and replanting of crops for the secondary agricultural season (April to July).

Families who lost part or all of their agricultural assets will be given vouchers that can be redeemed for seeds, tools and other implements, as well as small livestock, at input trade fairs organized by FAO and the government of Mozambique in affected districts. The fairs will attract commercial traders and thus also support local trade development.

In Madagascar, a series of severe cyclones and tropical storms over the past four months have damaged agricultural production in several regions. An estimated 200,000 farmers have been affected, with the potential loss of up to 80 percent of crops in some locations. FAO is appealing for US$850,000 to restore agricultural production for the flood-affected farmers during the 2007 farming year through the provision of agricultural inputs and related assistance.

Zambia has experienced exceptionally high rainfall since early January, provoking flooding in many parts of the country. Crops are reported to have been swept away by the water, while the remaining crops are stunted. In the short to medium term, poor harvests and outbreaks of livestock disease are expected to increase the food insecurity of vulnerable households. FAO will be appealing for funding in the coming days to provide the needed support for them.

FAO