World Bank Invests U.S.$300 Million in Ghana Cocoa Industry

The World Bank is set to invest $300 million in Ghana's cocoa industry to shore up production of the crop over the next five years, a Senior World Bank Agricultural Economist, Amos Gyau has announced.

Under the Cocoa Sector Value Chain Project, the initiative is to increase productivity levels of cocoa farmers as well as promote value addition.

Gyau explained that the government had approached the World Bank to support the country to increase her cocoa production and thus the World Bank and government as well as Cocoa Board was discussing the modalities of the project.

He said the objective of the project was to help farmers increase their production levels from the current 300 kilogrammes per hectare to two tonnes per hectare over the period.

"The World Bank seeks to support the cocoa sector to double productivity in the next five years," he said, through the provision of better seedlings and inputs to farmers, hand pollination and educating farmers on best agronomic practices.

Dr Gyau also intimated that the annual value of the world cocoa trade amounted to about $9 billion and only 7 per cent got to the cocoa producing countries because the cocoa produce was exported in its raw state to the world market, saying it was to reverse that the World Bank intends to finance the Cocoa Value Chain Project.

Full article...

South African Firm Acquires 40 % Stake In East African Seed

Johannesburg Stock Exchange (JSE)-listed investment holding company Zeder has acquired a 40 percent stake in East African Seed Company for undisclosed price.

Zeder, focused on food and related business, said it made the investment in the Kenyan seed vendor through its agriculture inputs subsidiary Zaad Holdings. The deal is subject to regulatory approvals in Kenya and South Africa, said Zeder.

The Nairobi headquartered firm was established in 1972. Its operations have expanded beyond Kenya to other East and Central African regions including Uganda, Rwanda, Tanzania and Zambia.
​
Its seeds are distributed through a network of dealers and stockists in major cities.

The firm said the investment will give it a foothold in the regional market where agro-dealing businesses have thrived in recent years as small holder farmers — the backbone of the sector turn to various inputs including fertilisers, certified seeds, agrochemicals and farm equipment to boost yields.

Full article...

Senegalese Agri-Tech Facilitates Farm Investment

Senegalese startup Bayseddo, which allows users to crowd invest in agriculture, has facilitated US$400,000 in investments in the last 18 months.

Formed after founder Mamadou Sall visited France and saw that all land was put to good use producing crops for local consumption, something which was not happening back home in Senegal, Bayseddo links farmer associations with land but no funds with potential investors.

“Our platform is predicated upon the fact that a large number of people want to invest in agriculture in Africa, but lack a proper introduction to the environment. We make it convenient for them. There is also approximately 1.2 million hectares of unexploited arable land in Senegal alone, and that is an enormous opportunity.”

“Our business model creates a win-win-win scenario, allowing farmers to increase their standard of living in rural areas, investors to get a return on investment of between 12 and 25 per cent in six months, and us to contribute to the eradication of the food self-sufficiency myth in all of Africa. We are in every step of the value chain, from input level to harvest and sale,” Sall told Disrupt Africa.

Bayseddo stands alone in Senegal, but startups with similar models have succeeded elsewhere, most notably Farmcrowdy and Thrive Agric in Nigeria. This first-to-market status has helped the startup secure real traction, and more than US$400,000 has been invested through its platform so far.

“We work with 135 farmers, and have more than 150 investors,” said Sall. “Successfully operating projects to terms, and giving investors their promised return on investments have been the engine of our growth, because happy investors tend to share their happy experiences with fellow investors. The same goes for producers. Reluctant ones at first became believers in our system because we do not compromise on either the quality of our products or the commitment needed.”

The startup, which takes 25 per cent of the margin from any project run through its platform, raised US$100,000 in funding late last year from the Délégation de l’Entrepreneuriat Rapide (DER), a financing vehicle launched by the Senegalese government to boost the local tech scene, and has already begun expanding.

“We’re also operating in Mali in partnership with Orange Mali. The next step is the entire West African region,” Sall said.

Disrupt Africa

African Cattle Investing - The New Cash Cow?

Cattle have long been considered a measure of wealth across Africa - but it is not just farmers cashing in.

A pioneering app in South Africa lets investors, eager to benefit from rising global beef demand, buy shares in a cow from their mobile phone for as little as 576 rand ($41).

Self-styled "crowd-farming" company Livestock Wealth connects investors with small-scale farmers via its "MyFarmbook" app, where they can buy their own cow and receive interest rates of between 5% and 14% depending on where they put their money.

Launched in 2015 with 26 cows, the project now includes more than 2,000 cows and has taken in 50 million rand, with 10 percent of investors coming from outside South Africa. Groups of investors can buy a whole cow, while individuals can purchase shares in a pregnant cow or young calf.

A pregnant cow costs 18,730 rand and takes 12 months before the newborn calf can be sold for a return, while investing in a calf costs 11,529 rand and takes six months for it to grow enough to be sold.

"We can link small scale farmers to big markets by introducing private capital into the growing phase," said 38 year-old Livestock Wealth founder and CEO Ntuthuko Shezi, who was inspired by his grandparents' farming success.

"The household bank account was a crop," added Shezi of his family experience, standing among a herd of cattle at a partner farm in Vryheid, a ranching town in northern KwaZulu-Natal province.

Livestock contributes around 51% to the agricultural economy in South Africa, with global sheep and beef prices rising after droughts in major producing areas.

Small business consultant Nontokozo Sabela, 34, was once interested in farming - but found the app a better alternative. She bought her first cow in 2016 and earned around 6,000 rand from it. "This way it's easier for me, it's cheaper, it's convenient," said Sabela.


Full article...

German agricultural concern invests US$25 million on Zambian dams

German company, Amatheon is constructing two dams at a cost of over US$25 million to boost farming activities through irrigation in the Mumbwa area of Zambia. The two dams Abba and Katanga, are expected to be fully operational by 2016/17, respectively.


Amatheon Agri Group founder and chief executive officer Carl Heinrich Bruhn said the total investment for Abba dam is over US$15.6 million while Katanga cost is US$10.6 million. Bruhn said Katanga is a joint venture between Amatheon Agri Zambia and Toyota Tsusho Corporation with intentions to develop 2,700 hectares of land for cropping of maize, wheat and soya beans while Abba is part of a farming bloc expansion to develop 10,000 hectares for irrigation farming as well as cattle ranching and rain-fed cropping.

Amatheon operates projects in Zimbabwe, Zambia and Uganda. 


African Agriculture

Have Indian farm investors bitten off more than they can chew in Africa?

That's the question Aman Sethi asks in one of the surprisingly few articles that asks how the wave of farmland investors from India into countries like Ethiopia have fared.

Most of what usually comes to light are the public relations-type announcements of the millions of dollars one or another company is said to be investing into a country. There is usually little or no explanatory detail behind the numbers meant to impress. In the following years there is often even less information about the inevitable challlenges of establishing a project from scratch in a new environment.

As an example of what he calls the 'bitter harvest' being reaped by some Indian farmland investors, Sethi cites Emami Biotech, which withdrew from a 40,000-hectare biofuel plantation in Ethiopia just a year after it started in 2009.

The best known and biggest Indian investment in Ethiopia is Karuturi Global's rose and food crop operation. It is cited as both an example of Ethiopia's success at attracting large scale investment, as well as an example of a new type of 'land grabbing' colonialism. Seth says questions are being asked about the capacity of companies like Karuturi to manage a landholding as large as its reported 100,000 scattered hectares.

Although biofuel projects have been failing in many countries over an as yet unviable business model, Emami

cited as among its reasons for its pull-out lack of full cooperation from the Ethiopian government, insufficient water access and land disputes with resentful local communities who had not been consulted. An Ethiopian government official is reported to have laid the blame on Emani's failing to do its homework adequately.

An analyst quoted for Sethi's story speculates that when Emani found that jatropha biofuel wasn't going to be the next liquid gold just yet, it then sought land more suitable for food crops. Apparently the Ethiopian government was not impressed and was in no hurry to cooperate to save Emani's hide. In any case, that would have been a very different business plan than the one for which Emani originally raised investment funds, so at that point (the realization of the unviability of the jatropha project) the company was already in deep trouble.

Sethi's article (Indian firms reap bitter harvest in Africa) should be required reading for the many aspiring, inquiring would-be-investors who seem to think that normal due diligence, research and preparation do not apply to tapping into Africa's business opportunities.

Chido Makunike

African Agriculture

Senegalese villagers vow to fight biofuels project over land claims

Villagers from northern Senegal vowed in August to fight a project by Senegalese and Italian investors to produce biofuels on their land, a venture already forced to relocate once by deadly protests.

"We will fight those who want to take our land. It is the land of our ancestors, an area of 26,000 hectares which houses villages, thousands of heads of cattle, mosques, cemeteries," Oumar Ba, a representative of a collective of affected villages, told journalists. "Whoever wants to take our land will first walk over our dead bodies," said Ba, who lives in the village of Ndiael in the region of the same name.

The Senegalese-Italian company Senethanol/Senhuile had recently announced it was moving the project from the village of Fanaye, where violent protests in October 2011 left two people dead, leading government to suspend the venture.

Senethanol/Senhuile wants to grow sweet potatoes for the production of biofuels, a renewable energy source which has soared in popularity as oil prices rise and concerns grow over emissions from traditional fuels.
But the organisation is again encountering resistance at its new project site.

The United States and Brazil are the biggest producers, but investors have been criticised for buying up large swathes of land in Africa to produce fuel to be exported to their nations.

Senethanol/Senhuile has denied its project is an example of land-grabbing, and last year described it as "an unquestionable interest in the improvement of the economic and social situation of the villages concerned and all Senegalese."
 
 "The case of Fanaye must serve as a lesson to authorities," said Marieme Sow of the NGO Enda Pronat, who denounced "land-grabbing in Senegal by multi-nationals." "We are making this appeal for government to realise that 60 percent of the population of this country is made up of farmers who need this land."

Senegalese rap group "Bidew Bou Bess" (New Star in the Wolof language) presented a song called "Don't Touch My Land" to journalists. "Let's block the road to those who want to plunder our land. Let's stop those who tear up our land. They want our land for profit. They are colonising us, they are using us," the song said.

PhysOrg

Malaysian palm oil investment in Liberia causes dislocation crisis

It's now an almost boringly familiar story: the central government negotiates to lease huge chunks of fertile countryside to a foreign investor who promises to bring 'develoment,' jobs and many other benefits. Local communities are told little about the land giveaways until they are displaced. Few jobs or other benefits materialize for the locals and resentment sets in.

In this case its about a Malaysian company developing palm oil plantations in Liberia.  

'Angry villagers accuse Sime Darby of cutting a private deal with the government and failing to consult them. Last December, they rioted against the company, seizing its bulldozers and blocking the plantation project. They say their crops are gone and their sacred lands are desecrated. The jobs, they say, are too few and too poorly paid, especially now that they’re forced to buy their food in the marketplace rather than growing it.'

“Everybody made mistakes on this,” Liberian President Ellen Sirleaf Johnson told the villagers. “More consultations and more talks with the people should have taken place.”

Considering all the publicity about how frequently these sort of "mistakes" have happened in so many other places before, this sounds pathetically weak coming from the Liberian president. 

While dispossessed farmers are clearly victims, that does not necessarily mean they are innocents in the matter. Lump some payments that were offered and eagerly accepted seemed like a fortune "until the money runs out and they realize they’ve got nothing to fall back on."

One farmer was paid $130 for his two acre farm. We are told he is now contract worker for the palm oil plantation, 'getting 3 cents for every hole that he digs for a palm seedling.' Not only is his income now less than what he is said to have earned before, his loss is far more than just financial. 

Blame poverty, lack of education. But where was the government when its citizens were giving away their heritage for a few pieces of silver? Obviously too busy doing deals with the investor to think of more robust protections for its citizens in signing these deals.


Calling it a "mistake" sounds awfully hollow of the Liberian president.

 African Agriculture

DuPont Pioneer now closer to takeover of South Africa's Pannar Seeds, but still fighting public relations battle

U.S. seed ginat Dupont Pioneer had to fight long and hard to get regulatory approval to 'merge' with (really take over) South Africa's Pannar Seeds. Despite spirited opposition by activist groups, Dupont was given approval to go ahead with the deal earlier this year, although that is being appealed.

Among the reasons for opposition to the takeover were fears of  a further swamping of South Africa with GM seeds, fears of a further reduction of 'seed sovereignty' and the general implications of the country's seed supply being significantly under the 'control' of a giant U.S. corporation.

Even though the merger deal is done, the merged entities are still fighting speculation that the price of maize, the country's staple crop and an important export commodity, would dramatically shoot up as a result of the Dupont Pioneer takeover of Pannar. 

Economist Mike Schussler got a lot of attention when he speculated in August that as a result of the merger, South African seed maize prices could rise as much as 15%. He also painted an alarming picture of the potential for collusion between Dupont Pioneer and the other seed giant, Monsanto, to push up seed maize prices. 

This caused much alarm as there is already a feeling that consumers are  squeezed by current maize flour prices. Schussler painted Dupont Pioneer as the big bad wolf. The company is clearly sensitive to this charge after the bruising battle to acquire Pannar.

Dupont Pioneer put out an outraged statement refuting Schussler's contention, with a spokesperson saying immediate post-merger prices were expected to increase by less than 2%.

It was carefully pointed out that out Schussler made his comments at a 'Syngenta-sponsored media event.' Sygenta and Monsanto are Dupont's competitors in the South African market, although the former is a relatively small  player.

Dupont Pioneer's statement also claimed that Schussler's research was sponsored by Syngenta, thereby cleverly planting a seed in the reader's mind about the objectivity and motivation for the research!

African Agriculture      

Why figures of purported agricultural investments into Africa can be so misleading

Chido Makunike 

Even if you're not particularly interested in farming news and developments, you cannot fail to be impressed by chancing across a headline like 'U.S. to Invest U.S.$6 Billion in Nigeria's Agric Sector.'


U.S.$6 billion is a huge chunk of money. Such an investment over a relatively short period is/would be a very significant development for all involved. One would expect to begin to see huge results from such a  massive injection of money into an economy in fairly short order, even if the pay-off time for the investment is much more long term.

But over the years of hearing about all kinds of billions purportedly spent from local and foreign sources on Africa's agriculture, it has become clear that such loosely touted figures can hide as much as they reveal, and can sometimes even be almost meaningless.

Excerpts from the article:

'Foreign investors from the United State of America (USA) would invest $6 billion into Nigeria's agricultural sector, the Minister of Agriculture and Water Resources Akinwunmi Adeshina has said. '

'The Minister said the funds would be invested on sugar-cane plantation in the north and cassava plantation in the southern part of the country. (He) said the funds would be invested on sugar-cane plantation in the north and cassava plantation in the southern part of the country.'

How was the valuation of the investments at $6billion arrived at? Who did the calculating - the investors or the government of the destination country? What is the break down of that valuation? Does the $6 billion refer to new capital/cash to be invested, or does it include many none-cash factors as well? Over what period of time is the  $6 billion to be injected into the Nigerian economy? How much of it will be new capital from outside Nigeria, and how much of it is in locally-sourced money or the contribution to the 'investment' of the host government (tax credits, free or subsidized land, etc, etc)?   

Does the phrase '$6 billion into Nigeria' mean the total value of the two investments cited, or just that part of them that will actually, directly be spent/invested in Nigeria? For instance, if $500 million of those $6 billion are to be spent on importing machinery from the U.S., it is misleading to account for that $500 million as going 'into Nigeria.'

In the case of this example, Nigeria would still certainly benefit from the $500 million portion of the $6 billion that actually 'goes into (or remains in) the U.S.' But how to value this benefit to Nigeria is far from straightfoward.

Is part of that $6 billion valuation composed of aid from the U.S. government, or is it strictly commercially sourced funds? If a big chunk of the $6 billion is in aid (not at all unusual in such big deals), is that portion of it going to be spent in Nigeria, or actually to pay suppliers, consultants and others mainly in the aid-originating country, in this case the U.S? Again, this would be far from unusual, but vastly changes the meaning of what a mere dollar figure represents in actual economic terms.

For example, suppose country A donates $100 million worth of tractors to poor country Z. Country A would stimulate its tractor manufacturing sector by paying them to supply the machines to be donated to country Z. But over the years country Z may have to try to fork out that much or more in spare parts, repairs, etc to keep the tractors running, particularly if the choice of machines (obviously dictated by donor country A) was inappropriate for the conditions of country Z.

Either a lot more than $100 million goes back out of poor country Z to rich donor country A for those spare parts (further stimulating the tractor industry of country A while having declining cost-benefits for country Z), or the tractors soon simply rot because the cost of maintaining them is beyond what country Z can afford. Both scenarios are part of the long, sorry annals of 'development cooperation.'   

Another example of why context, detail and explanation are so important in a story headlined this way: Job-creation is one of the most hoped for investment benefits in a high unemployment country like Nigeria, or any other.

$100 million spent on tractor imports and maintenance over X years would have a much smaller social and economic footprint than a similar $100 million in the same X years spent on wages and salaries. The money spent on wages would have a tremendously bigger multiplication effect than the money spent on equipment imports, so in terms of overall value/benefits to the Nigerian/target economy cannot be calculated the same way. So throwing out a phrase like '$100 million investment' without providing these details and nuances may be thinly, narrowly and arithmetically correct but yet still tell very little.

Shallow and misleading as the heading and article were, they were picked up and re-distributed without question by hundreds of news outlets around the world. And that's how so much of the figures about inward investment and aid to Africa that are thrown about often have very little connection to how much actual,  correct, while at the same time revealing very little about how much actual, real-world meaning and impact they will result in. Unfortunately, sometimes the more you read and hear, the less you know.

African Agriculture
   

Herakles' palm oil plantation in Cameroon: progress or a disaster waiting to happen?

by Chido Makunike

Cameroon's location in the heart of the central African tropics makes it ideal for palm oil cultivation. Not surprisingly, the new rush by foreign investors for African agricultural land has not left fertile, lush Cameroon unaffected.

An excellent July 18 Reuters special report  highlights some, but far from all, of the reasons the new wave of foreign investments in African farm land are so controversial.

World demand for palm oil has doubled since 2000, we are told, and farming it in the traditional Asian growing countries (Indonesia, Malaysia) has increased challenges and costs. So investors are increasingly looking to central Africa.

Herakles Farms, owned by New York venture-finance firm Herakles Capital, is one of many investors with plans for huge palm oil holdings in Cameroon. As with all such investments, they promise Cameroonians 'steady work, roads and health care.'  

But not everyone is jumping up with joy at the Herakles investment. The concerns expressed are now familiar to anyone who has kept up with the land investment rush in recent years. There are allegations of traditional and government leaders doing shady deals behind the backs of the people they lead, fears of displacement and loss of livelihood; and there is also scepticism about the various benefits promised. Will the jobs and other social benefits promised be equal to or exceed the resource-mining, the permanent changes to the society? Without details (and monitoring) of the promised 'steady work, roads and healthcare,' it is impossible to say. 

Herakles is also accused of being under-handed in various ways in how it solicited local community input about its investment plans.


The article depressingly shows that despite years of heated debate about the pros and cons of these large-scale farming investments, very few of the main reasons for conflict have been dealt with by governments or investors.

For the investors, doing business with strong-arm governments that have little regard for the opinions of their people buys them a sort of 'stability' in often socio-politically volatile investing environments. Yet the times have changed to a more open, informed era in which it is no longer quite as easy as before to repress people with complete impunity. Even where government guns can keep a sullen, unhappy population under control, for investors there is now a considerable potential financial and reputational cost to being seen to be in bed with governments that neither respect nor represent their people well.

One fear expressed by some of the locals is that the proposed new Herakles palm oil plantation ("over 60,000 hectares of land - 10 times the size of Manhattan") will remove from community use one of the few remaining areas suitable for viable food cropping. Will 20, 30 or 40 years of mostly low-wage 'steady work' compensate for this kind of loss?

Speaking of steady wage-labour, which are the kind of low-range jobs that will be mostly on offer, it is a toss up whether such jobs mean an overall improvement in the livelihoods of the workers concerned, and of the communities. When the workers have these tenuous low-wage jobs as well as access to their traditional farmlands for the rest of their families to continue to work, it could be argued that the long-term security and earnings synergy of the  two income streams does indeed lead to greater security.

The lack of much of a cash economy in remote, poorly developed rural areas often wins the day in the argument over whether to allow/welcome investments such as that proposed by Herakles. The attitude is 'any jobs/steady income is better than subsistence farming.'  But if an extended family is giving up their ancestral land (the source of food security, cultural grounding, 'belonging,' independence, etc) for one or a handful of its members to have wages, the net gain is highly debatable.

But a huge investment such as that proposed by Herakles will act as an anchor for other kinds of investment in the area, won't it, increasing job opportunities and general economic prospects, won't it? Not necessarily, and certainly not automatically. In the absence of a dedicated plan to lure accompanying services to the area, those 'new opportunities' that will spring up on their own are likely to be brothels, bars and so forth. Single large agricultural or mining investors that come to dominate an area have proven this general rule all over Africa, and many places elsewhere.

When the large extractive investor pulls out for whatever reason, even  after a decades-long presence, there is often pitifully no long term 'development' left behind. Where there hasn't been a long-term plan between the area-dominant investor and the government, not only does the 'steady work' evaporate, so do the means/resources to keep the local school and clinic running. In addition, the environmental mess and the social and cultural dislocation is often such that the community can no longer simply resort to their previous subsistence agricultural existence. 

This is the reality of many similar investments all over Africa. One would have hoped that all these previous experiences would inform the discussion between Herakles and the Cameroonian government, but there is little indication that this is in fact the case, at least from reading the Reuters article.

The main investment driver's stated motivations are fascinating to hear.   
Bruce Wrobel, chief executive of Herakles Farms, is not the stereotypical culturally deaf and blind foreign investor who cares about nothing else as long as he has the minister or president's signature/protection.   

Reuters tell us that, "Since a 1999 visit to West Africa during the civil wars of Sierra Leone and Liberia, Wrobel's aim has been to mix business with philanthropy in order to assist the continent." 

Wrobel's do-gooder credentials are further bolstered by how he 'helped cut telephone costs for millions of East Africans, he says, via his fiber-optic cable joint venture Seacom. A hydro plant run by his Sithe Global Power company in Uganda has reduced power blackouts there.'

But all this impressive 'helping' that he has done was in the course of doing business for profit, which is fine, even good; certainly much better than the unsustainable, unsuccessful brand of aid-based do-goodism that has been inflicted on Africa for decades now. Where governments are alert and responsive to their people's needs, for-profit investment certainly has much more potential to be harnessed into long-term development than aid-based 'projects.'

Strangely, Wrobel out seems to be conflicted about whether he wants to do ethical for-profit business in Cameroon, or whether he is primarily going there is a Peace Corp worker.    

Listen to this mushy mumbo jumbo from Wrobel: "Our big concern is that over a relatively short period of time there will be no way for the African consumer to compete with the Chinese and the Indian buyer. That could lead to some of the types of instability and food riots that we saw a few years back."

Wrobel may well be a genuinely good guy who is sincere in his do-gooder rhetoric. But part of the history of the foreign exploitation of Africa over the last 100 years or so is that very often, the exploiters have claimed to be motivated by pity for Africans. It is tired, it is old, and it is increasingly met with suspicion.

If Wrobel really wants to show a new model of ethical farming investment at a time of growing scepticism, the best way he can do so is by practically showing that his Cameroonian palm oil venture has thought about and is addressing the many doubts and worries about such enterprises.  

 African Agriculture

 

Alliance for a Green Revolution in Africa unsurprisingly deeply embedded in G8 plan

It was hard not to notice how the thinking behind the G8 nations’  New Alliance for Food Security and Nutrition, recently announced by U.S. president Barack Obama, sounds so similar to that of the initiatives so far spearheaded by the Bill and Melinda Gates-funded Alliance for a Green Revolution in Africa (AGRA.)

Indeed, the G8 plan seems to have been heavily influenced by AGRA-type thinking. So it was not surprising when it was announced that AGRA ‘was given a key role in the G8's next phase of a shared commitment to achieve global food security. The Scaling Seeds and Other Technologies Partnership, part of the new initiative focused on increasing agricultural food production in Africa, will be housed at AGRA and will focus on strengthening Africa's seed sector.’

To those who believe these initiatives are a welcome addition to local initiatives to give more support to African agriculture, this is welcome pooling of resources. To those who fear that they represent a new type of corporate-led agricultural neo-colonialism, the ganging up of AGRA-like initiatives with the money and influence of the governments of G8 nations on weak, easily donor-influenced African governments is a nightmare scenario.

Seed and who controls it is a major area of ideological contestation between pro and anti-AGRA/green revolution people. It also is a huge business opportunity that remains largely untapped in most of Africa, as Monsanto, Syngenta and many others have noted. These and many other similar companies were very quick to issue sugary Press statements crowing about their eagerness to participate in the G8’s announced focus on private sector ‘investment’ in Africa’s agriculture.

‘Strengthening Africa’s seed sector’ is a deceptively innocuous phrase that can mean almost anything depending on whether you’re AGRA, Monsanto or a small scale African farmer.

The banding together of AGRA and the G8 on their vision of what Africa’s agriculture ‘needs’ is a either a cause for great celebration, or an occasion to be very afraid.

Which is it?

African Agriculture

Trying to make sense of the African Development Bank’s muddily explained ‘fund of funds’ for agribusiness

Chido Makunike

The African Development Bank issued a statement on May 30 about its new ‘Initiative to Invest in Agribusiness in Africa.’

I saw the message heading of the Press Release in email inbox and reacted with interest and excitement. After all, although there is a tremendous amount of talk about availing more funds to African agriculture, the money that actually gets to the ground is a tiny percentage of the talking.

While now skeptical about announcements of new funding schemes, the email heading nevertheless piqued my interest. The AfDB is not a retail lender, but does get involved in various national-level interventions that means when it has a new scheme to roll out, it could be important to the affected sector in participating countries.

However, on reading the Press Release, not only did I not understand what its ‘Fund of Funds focused on agribusiness investments on the African continent’ is about, I went back to my usual cynicism that this is yet another of a long line of announced plans that will mean little or nothing to the average person or company working in agriculture in Africa.

To try to illustrate the reasons for my skepticism, let’s go through the AfDB Press Release together.

‘ARUSHA, Tanzania, May 30, 2012/ -- The African Development Bank Group (AfDB)  launched today, at the AfDB Annual General Meetings, a Fund of Funds focused on agribusiness investments on the African continent. This transformative initiative will address growing food security concerns and unleash the largely untapped potential of the African agriculture and agribusiness.’

Normally one would expect the first brief paragraph to not only explain what took place and the potential significance, as this one does. One would also expect that there would also be a description of what ‘this transformative initiative,’ the Fund of Funds, actually is!

Maybe their just whetting our appetite; saving the explanation for the second paragraph. Let’s not get prematurely impatient; lets read on, the AfDB is sure to soon make everything about this no doubt exciting new initiative crystal clear.

‘The launch of the initiative comes as African agriculture and food security gain increasing prominence on the global agenda, with the recent G8 Summit in Camp David pledging to promote investments in sustainable agriculture on the continent.’

Nothing yet about what the AfDB’s ‘Fund of Funds for agribusiness’ is yet. However, the G8 summit mention, before the elucidation of what the new scheme is, makes a certain cynic suspect that the AfDB is simply looking forward to getting some of the service charges and commissions from parceling out the monies it is hoped will be flying around from the G8-announced Alliance for Food Security And Nutrition.

The AfDB specifically wants us to know that its chief executive, whose photo is for some unclear reason included in the Press Release, taking up space that could have gone to provide a little more relevant and clarifying information, was actually in attendance at the prestigious meeting.

‘Speaking from Camp David,’ the AfDB statement tells us, ‘AfDB President Donald Kaberuka stated: “There was broad consensus that it is the right thing to do…” blah blah blah, waffle waffle waffle.

Mouhamadou Niang, an AfDB’s official, is quoted in the statement as saying some syrupy sweet things about the G8’s initiative. In the lush praise for the G8 we learn, in an almost incidental way, that the AfDB is the initiative’s ‘sponsor,’ whatever that means.

‘‘The Fund of Funds will be in compliance with a state-of-the-art environmental and social management system, currently being developed by AfDB in cooperation with the WWF (World Wildlife Fund.)’’

The WWF is referred to as the ‘environmental advisor,’ but it is not clear whether it is advisor to the G8 food security initiative, advisor to the AfDB’s Fund of Funds, or to both. And although we have been told how well it will be environmentally and socially managed, we still haven’t been told what the Fund of Funds is or what it will actually do.

However, we are given some tidbits, some small hints, as if it was a crossword puzzle to which you are given clues, but are expected to put the words and themes together yourself.

Here are those clues: ‘‘The initiative is in line with AfDB’s strategy to support private sector development on the continent... will catalyze investment into the agribusiness sector with the ultimate goal of inclusive job creation and promoting innovative, environmentally sustainable approaches throughout the agribusiness value chain.’’

Yes, but how will it accomplish all these politically correct, very noble goals that everybody talks about?

When the statement says it is ‘the first initiative of this nature on the continent,’ apart from simply being told that by the AfDB, how can we decide for ourselves if this is something new under the sun when we are not told what it is; who it is targeted towards, how it will work?

Is the AfDB’s briefly-worded and yet long-winded, unhelpful, uninformative statement simply a way of saying that thy have positioned themselves as middlemen to receive and then pass on (minus the usual service charges of course!) some of whatever money may actually end up in Africa as part of the G8’s newly announced agriculture support initiative? If so, how would that be new and different?

It’s possible that cynicism about the AfDB’s Funds of Funds is uncalled for and unfair. Maybe the person who wrote the Press Release did not try to put himself or herself in the shoes of the recipients, and instead wrote it as if it were a memo to AfDB colleagues who already have all the inside information a distant reader could not be expected to have.

Either that, or the statement was written to be purposefully as confusing and uninformative as possible, because the AfDB Fund of Funds is merely the umpteenth purported finance initiative that will fail to address the real challenges faced by African agriculture, but will certainly still be eagerly looked forward to and benefit certain strategically-positioned ‘stakeholders!’

The more words are spoken about addressing the basic problems of African agriculture, the more things stay largely the same.

I have read the statement they kindly emailed to me several times, but I still don’t have a clue what the African Development Bank’s Fund of Funds is. Perhaps it will turn out to be a wonderful new initiative that actually plugs the many gaps in funding that is relevant to the bulk of Africa’s agriculture, but it is impossible to tell from the statement as written.

However, not all was lost. I am pleased to end on a positive note, by mentioning that AfDB president Donald Kaberuka looked very smart and dashing in the photo that was embedded in the statement.

I assume a good time was had by all at Camp David.

African Agriculture

If Jain Irrigation is in trouble back home in India, can it raise $375 million to invest in Africa?

Why do foreign profit-seeking ventures in Africa have to so often be hidden as if they were free 'assistance?'

There is widespread new global interest in and excitement about the potential to make money in Africa, including in agriculture. The great potential itself is not new, but apparently there are more people across the world now willing to see it, partly by looking beyond the dominant ‘international media’ stereotypes about Africa.

But clearly, the paradigm switch from seeing Africa as a place of opportunity rather than as a perennial target of aid is proving very difficult for some. The CNN/BBC/’international media’ stereotypes are for many still much stronger on the imagination than the realization that along with its problems, ‘Africa’ is also a place on the move, with ‘normal’ people and great opportunities both because of and in spite of the many challenges.

Jain Irrigation, an India-based company is eager to exploit the opportunities that lie in providing irrigation equipment to the agriculture sector in African countries. The G8 Summit seemed to Jain like a good opportunity to express its Africa interest. Like many others, they can already smell money to be made from the newly announced G8 plan for the private sector to play a bigger role in agricultural ‘development’ in Africa.

Here are snippets from a May 21 Times of India article:

‘Jain Irrigation Systems said the company will invest $375 million over the next few years to improve income of small and marginal farmers in African countries, including Nigeria, Kenya and Rwanda…The company said that it is launching significant African expansion programme which aims to provide an integrated set of irrigation and infrastructure solutions for small-holder and commercial farmers. It would also invest in creation of storage, handling, supply chain and processing infrastructure in the African countries.’

It reads like yet another ‘project’ from a selfless, kind-hearted external ‘donor’ touched by the plight of Africa’s ‘small and marginal farmers.’ Yet behind the propaganda about investing to ‘improve the income’ of those farmers, what Jain obviously has in mind is to set up a presence in the countries mentioned in order to sell its products and services to these ‘small and marginal farmers.’

In other words, they want to do business in these countries. What is wrong with that? If they provide a good deal, indeed irrigation products accessible by small holder farmers should be a potentially very lucrative business opportunity for Jain. So why pretend to speak about it as if the planned/purported $375 million investment will be some kind of donation?

It turns out that the company may be in some trouble, and perhaps in not such a strong position for the currently fashionable ‘business philanthropy’ bandwagon that Africa is currently a target (victim?) of, and that Jain seems to want to join.

But according to ‘Jain Irrigation Systems: Can’t pay its huge debt and wants to conquer Africa,’ published in a different publication on the same day of the company’s Africa investment announcement, ‘from where will it get the money, still remains unanswered…because the company has huge debt on its balance sheet in India and has not been paying its dues to the banks. Even its receivables for FY11-12 were 343 days, which means the company has yet to receive cash for its sales done almost a year ago.’

Aha! So perhaps this is a company in trouble at home, hoping to make easy pickings in Africa?

Sure, it is a welcome development that the rest of the world is waking up to the fact that there are opportunities galore in Africa, and that perhaps much of the media they are exposed to gives them a very distorted, uni-dimensional picture. But boy, do those who naively think the ‘poor helpless Africa’ of their stereotypes is a place to just pick money off the streets have a steep learning curve waiting for them!

Here’s wishing Jain Irrigation good luck and good business, both back home in India and if and when it comes to Africa!

African Agriculture

When foreign aid, investment props up unpopular regimes

Ethiopian blogger Keffyalew Gebremedhin makes some important points about the possible pitfalls of the various efforts of foreign parties to participate in the transformation of agriculture in countries like his. He writes generally favorably about these initiatives by private investors and 'development partner' (aid), but warns that these programs' chances of success are imperiled from the start when they are instituted in countries where there  is tension between the government and significant sections of the population.

Gebremedhin tackles the recently announced plan by the G8 group of nations to target increased agricultural production in a number of African countries through supporting various private sector efforts. He points out that the New Alliance for Food Security and Nutrition fist in very well with the pet project of the Bill and Melinda Gates Foundation, the 'African-led' Alliance for a Green Revolution in Africa (AGRA.) Ethiopia is going to be one of the testing grounds for the new G8 plan announced in May by U.S.president Barack Obama.

The Ethiopian government of prime minister Meles Zenawi is considered to be an African government in good standing in Western capitals, but is the object of much more, passionately mixed feelings amongst the country's citizens   

According to Gebremedhin, there is ''huge distrust of Prime Minister Meles Zenawi’s regime'' by Ethiopians. Two other major concerns are ''worries about the dangers of foreign companies serving their own interests at the expense of Ethiopia’s. There is also the fear of genetically modified organisms (GMOs), crops in general and if it results in possible loss of native crops, their consequences to human health and the environment in

particular.''

He continues, ''fears have been also been repeatedly expressed if Meles Zenawi succeeds in enlisting Bill Gates, as a famous person, to provide his tyrannical regime with international approval and support.''

Of course, one person's 'tyrannical regime' may be another person's dynamic reformer. The latter seems to be the view preferred by G8, if the presence of Zenawi at the May meeting was any indication. And if Gate's foundation has any problems with the current Ethiopian government, that certainly hasn't stopped its experiments in that country. So the fear expressed by Gebremedhin that powerful foreigners are giving support and succor to a ruler he and other Ethiopians may consider a ruthless despot is almost a moot point. 

Obama, G8, Gates & Co. have no problems with Zenawi, even if many Ethiopians do. As Gebremedhin writes in answer to his own earlier expressed worry, ''In his 8 May update, Bill Gates has responded to that extolling praises on Meles Zenawi, without addressing his human rights records.''

If the international agricultural interventions in Ethiopia are generally successful, the government will inevitably benefit politically. But if they fail, the various investors will also inevitably be tarred with the brush of association with a highly controversial government. 

Mentioned several times in the article is the perceived lack of information and transparency on the government's part to the citizens. If this feeling is widespread amongst Ethiopians, it is an issue of practical concern for all involved, including foreign investors, because of the particularly emotive rise evoked by the impression that their country is being hocked out to foreigners while they helplessly look on. The recent spate of fatal armed attacks on a Saudi rice farm is an early warning sign of the depth of local unhappiness about this.

Would more information prevent such feeling? Perhaps, but not if it revealed that foreign investors (and local politicians?) really were getting a much better deal than from the new deals than the country is doing.

Gebremedhin writes, ''The problem is not about what the foreign companies could and could not do. It is about the government failing to inform the public what is underway. The problem with this is that rightly or wrongly all companies may end up being associated with the regime, as its promoters and bank rollers it and its Machiavellian approaches, especially the end justifies the means the prime minister employs. In a country where the excesses of government have reached astounding levels, such reaction is inevitable and may impede the companies’ activities.''

Complicating the issue is that into the information vacuum have stepped in foreign NGOs and non-profits. These have tended to paint the wave of land/farming investment deals in Ethiopia in negative, sometimes even calamitous terms. In the absence of clear information from their own government, it is hardly surprising that a sense builds up amongst many Ethiopians that both the foreign investors and their own government have only contempt for their concerns. One result is that the various agricultural schemes are greeted by automatic cynicism and resentment, rather than on any merits they may have. 

His blog post is somewhat rambling, but Gebremedhin brings up important points that should occupy both the Ethiopian government, foreign investors and 'development partners' but probably don't, with consequences that will only become clear in the coming years.    

Given the wealth of information that there now is particularly about how not to engage in 'development,' it is astonishing how people who really should know better keep on sabotaging by poor implementation what might otherwise be very good plans. How a plan is perceived can be as important to its success as how well it is conceived or funded.  

African Agriculture 

    

   

Has Saudi Star learned right lessons from deadly anti-'land grab' attacks on its Ethiopian farm?

Chido Makunike

Major agricultural investor in Ethiopia, Saudi Star, has bigger problems there than it might have expected.

Negative publicity regarding Ethiopia’s aggressive drive to attract foreign investors into its agricultural sector has been relentless in recent years. The government is accused of brutally relocating communities to make way for the foreign investors, a charge it denies.

But now the local resentment has boiled over. In recent weeks there have been a number of reports of fatal armed attacks against Saudi Star. Ethiopian employees and Pakistan sub-contractors of the company are said to have been killed by groups thought to be opposed to the land give-aways, the government, or to both.

In a statement in response to what it said was the killing in late April by armed men of at least six Pakistanis and four Ethiopians, the Solidarity Movement for a New Ethiopia (SMNE) summarized the reasons for ill-will against Saudi Star and other big investors, and against the government.

The SMNE statement said the assailants attacked a group of workers being dropped off at their company residential compound at the end of the day, as well as the Pakistanis (‘‘allegedly agricultural experts hired by Saudi Star’’) working in the offices. The statement claims that soldiers guarding the site ran away rather than confronting the armed gunmen, and only returned later to pick up the dead and wounded. A few policemen who tried to resist the 15-minute attack were apparently overwhelmed, one of them also being killed, and the gunmen were able to escape.

Says the SMNE, ‘‘These deaths could have been prevented. Since 2009, we have been calling for transparency and inclusion of the local people in the decision-making surrounding the long term leasing of agricultural land in Ethiopia to foreign investors and regime cronies for next to nothing.”

It then goes on to mention human rights abuses many other reports and organizations have alleged are associated with the Ethiopian’ government’s relocations and the land-leasing drive.

Getting to the crux of the matter, SMNE says, ‘‘Neither the Meles regime, Al Amoudi (the owner of Saudi Star) nor any other investor should expect there to be no reaction to these “takeovers” of land and water sources from the people whose ancestors have claimed this indigenous land for centuries. When they take away land and water, they take away the means to sustain life for the people. Some Anuak (the predominant ethnic group of the area in question) have said they now are waiting to die; others will fight. This should not come as a shock to anyone.’’

The presence of soldiers and policemen shows there was a realization of the potential for trouble. Other investors have almost boasted about the government’s protection of their farms, and the implied sense of security that provides. Yet the very need for these farms to also be armed camps, probably more so from now on than before, is a big part of the investors' problem. If feelings against them are so strong that there are groups willing to go as far as to confront the government’s on-site security forces and to commit mass murder, this is a heightened element of investment risk. It needs going back to the drawing board to think of how to relate to and engage with the locals, rather than merely to hire more guns and effect more ruthless security measures.

Yet the latter is exactly what the SMNE fears. It says, ‘‘Indigenous people fear collective retaliation by security forces…(prime minister Zenawi) Meles will crack down on all the people. It is the blueprint of their regime and they have done it many times before. They will try to hunt down the rebels in the bush, but they will be hard to find so in their frustration and in order to teach a “collective lesson” they will target the local people.’’

The ‘rebels’ may have other long-standing grievances with the government, but the deep unpopularity of the ‘land grabs’ has given them a powerful, emotive new issue to champion. In an already volatile situation, a foreign investor who makes no effort to respect and engage with the local communities becomes a very easy target for pent-up frustrations. This is especially so when the locals are dispossessed and treated with contempt, when no significant local benefits from the investment are apparent, and when they become thought of as allies and enablers of central government authorities the locals may consider as a significant part of their woes.

It is not a good way for a foreign entity to start a long-term investment!

If they didn’t know it before, Saudi Star seems to be slowly waking up to the fact that they might have a problem that will not go away simply because they have the protection of the government.

A May 30 Bloomberg report, ‘Saudi Star Offers Jobs to Overcome Criticism of Ethiopia Project,’ says offering ‘jobs and training’ to locals will be a key part of how it counters opposition.

‘Jobs and training’ are almost always mentioned as some of the major benefits that will accrue to locals as part of the controversial new wave of farmland investments. The locals perhaps weren’t told about this in this case, didn’t believe it or haven’t seen those jobs materialize since 2009, when Saudi Star’s rice project began.

But apart from that, it may be too late to easily appease the locals with promises of future ‘jobs and training.’ The importation of foreign ‘agricultural experts’ in the absence of accompanying training of locals will only have inflamed feelings even further. Local suspicions and resentments of investors and the central government are likely to be much higher and harder to overcome now than would have been the case if both parties had taken local sensibilities into account right from the conception and initial implementation stages of the project, rather than as an afterthought of an attempted public relations exercise three years later.

Besides, ‘jobs and training’ are not the only concerns now. They cannot compensate for the humiliation and resentment at alleged forcible relocations to make way for companies like Saudi Star. All over the world, governments often have to move people for reasons of what can be broadly considered the common or national good. But there is ample evidence,also from all over the world; that there are right, good and effective ways to do it, and that there ways to do it that only cause many short and long  term problems. These are the kind of big issues of ‘development’ that once poorly done cannot simply be corrected by offering some ‘jobs and training.’

According to the Bloomberg article, Saudi Star’s Chief Executive Officer Fikru Desalegn believes that ‘providing employment for residents of the Gambella will “definitely teach the public it is very useful for them,” Fikru said. Other benefits for the 13,000 residents of the area will include investment in infrastructure such as roads and vocational education by the company, he said.’

All this remains to be seen, not only in whether it materializes, but also in whether it will be sufficient to assuage the deep local grievances about the manner in which foreign investors have been suddenly thrust among them.

Meanwhile, ‘Work has resumed on the Saudi Star project and the federal police are guarding the area, Fikru said,’ Bloomberg tells us. “All the culprits were caught,” Fikru said. “Things are normalized. All our contractors are back to work.”

But are things really ‘‘normalized,’’ or are more soldiers and police simply going to cover up the many abnormalities for a while, until the next flare up of violence?

The style and manner of ‘land grabs’ or investments (take your pick) unfolding in Ethiopia has precedent in other parts of Africa, and indeed elsewhere. So much attention is paid to the potential benefits for investors and central government that little attention is paid to the sensibilities of communities. But land grabbing history in Africa and elsewhere has shown that these local communities, typically thought of as ‘backward’ and against outside efforts to ‘develop’ them, can get their comeuppance in unexpected ways, at a loss to all concerned.

It didn’t have to be this way. More humility and sensitivity to local concerns from the beginning by both the host government and sometimes just as arrogant investors could have resulted prevented some of the predictable but still alarming backlash against companies like Saudi Star.

In the recent land rush, it is astonishing how often it appears that otherwise smart people with millions of investment dollars at their disposal fail to ask some important basic questions before sinking their teeth into big projects.

It will be fascinating to watch how things develop with the Saudi Star and other investments in Ethiopia in the in the near and long term.

African Agriculture

If you have an agro-investment in southern Africa, are you automatically equipped to operate in western Africa?

by Chido Makunike

From the Business Day Online (Nigeria) of 6 April 2012, under the heading 'Nigerian agriculture to benefit from equity deal: '

''Zeder Investments Limited, a South African listed agricultural investment company, is committing $46.7-million to acquire and expand an agricultural business, Chayton Africa, which is focused on primary production.''

So far so good. We are then told that Chayton Africa has made investments in Zambia since 2010 and now ''it is thinking on moving on to cocoa-rich west African regions, e.g. Nigeria, Ghana and Cote d’Ivoire.''

In what reads like script taken from the written-about company's public relations release or website, Business Day Online informs its readers that Chayton Africa ''produces 10 percent of Zambia's soya and 5 percent of the country's wheat.''

Such loosely thrown-about statistics can hide as much as they reveal, and would anyway be impossible or very difficult to independently verify. For the purposes of this post, let us assume that its ''acquired six farms totalling just over 4,000 hectares with 1,250 hectares being farmed, and 430 hectares under irrigation'' do indeed account for Chayton Africa's purported significant footprint in Zambia's agricultural economy.

For some who don't know any better, or have to rely on popular, stereotypical (sorry; no offense, but nvariably Western) media, Zambia and Nigeria would obviosuly be part of the same messy but now opportunity-though-danger-filled, armophous and fairly uniformly similar blob called 'Africa.'

So therefore, it would seem to make perfect sense that once having acquired some going farms in Zambia, it would not be a big deal to look for opportunities in West Africa, a mere 4000 kilometers away. If one can acquires some soya and wheat farms in Zambia, what could be the big deal about acquiring or starting cocoa farms in Nigeria, Ghana and Cote d’Ivoire? Big deal-it's the same Africa, innit it?

These are rhetorical questions beyond the scope of a blog post like this to attempt to answer. However,  they are absolutely fundamental, necessary questions to ask for the type of investor who gets more excited by gold-rush, herd mentality-type hype than by common sense and prudence. Recently there seems to be even more of the former than the latter. Investors seem to be in not just a land rush, but also in a rush to outdoor each other in almost casually tossing about figures of the millions or billions they are investing in African agriculture, and the vast returns they will easily, obviously, quickly reap.

Sure, Zambia is on the same geographic land mass as are Nigeria, Ghana and Cote d’Ivoire. And yes, given the vastness of the African continent, the history of migrations and the barriers that increased with colonial fragmentation, there remain some astonishing commonalities amongst African peoples/cultures/nations, even those spatially far apart.

But it is also true to say that there are important ways in which southern Africa and western Africa are two vastly different worlds. They differ in a manner (beyond the scope of this post!) that should be of concern to any investor said to be ''thinking on'' transposing their business experience in one region to that in the other.

Speaking generally and loosely, I would say an investor/business entity from southern Africa to western Africa, or vice versa, should give themselves from three to five years to just get a good grip of the differences, how they might impact on their prospects of success, and what modifications in thinking/attitudes/strategy are required to avoid certain failure.

But surely, seasoned agricultural investors from South Africa would be much better equipped to understand this and do the necessary 'due diligence' and preparation than those from say, the U.S., Europe or elsewhere outside the continent, whose general 'Africa learning curve' would presumably be much, much steeper? Wouldn't they?

Perhaps, but far from at all necessarily so (sorry, beyond the scope of this post).

Chayton's diversification to West African cocoa from Zambian soya and wheat is still at the 'thinking on' stage. One reader wonders why not just do that 'thinking on' privately, quietly rather than expose yourself to possible embarrassment if the plans don't materilalize, or even if they do but then fail because you only find out later just how vastly different doing business in one part of Africa can be from doing it in another part 4000 km and a veritable world/planet away?!

There is a question that often comes to mind on reading splashy investment multi-million dollar 'investment' announcements that on closer inspection are at no more than the 'thinking on' stage, or are at the very beginning of implementation. Given the very many new things that will have to be learned about operating in a new country/region/culture/environment, particularly in a sector with its own peculiar subset of high risk such as farming, why do so many investors jump the gun? Why not instead begin your investment away from the limelight, quietly going through the inevitable initial years of mistakes and/or failures, and only then surprise the world with the announcement (if necessary) of your first successes?

Of course, the need to engage in some high profile hype to entice investment funds is understood. But a severely under-reported but now emerging phenomenon of the recent wave of African agriculture investment fever is the number of high profile investment groups who appear to have more fund-raising ability than basic common sense, inquistiveness and humility.

However, no doubt the people behind Chayton Africa have or are pondering the huge, vast differences between growing soya and wheat in Zambia, and entering the cocoa production sector in West Africa, or vice versa for any other investor for that matter. At least one hopes so for the sake of their funders!!!

African  Agriculture

    

Fears that DRCongo law favoring nationals in farm ownership may scare off foreign investorsn

A new law requiring nationals of the Democratic Republic of Congo to be majority shareholders in farms has caused concern about its effects on the country's image as an emerging agricultural investment destination.

The new law, passed in December 2011, provides tax breaks and other incentives designed to kick start investment in agriculture in the DRC, which imports much of its food requirements despite being a vast, fertile land mass. War and the country's many political problems over several decades have decimated much of what local agriculture used to take place.

But it the clause of the law requiring Congolese to be majority owners of farmland that has raised concerns that potential foreign investors will be scare off from the country, while few nationals will have the means for significant new farming investment.

African Agriculture 

South Africans to invest in Mozambique's sugar sector

A group of South Africans is expected to invest in sugar growing on a 10,000 hectare area in Mozambique's Zambézia province.

A district official is reported to have told news agencies that work on the sugar plant was expected to begin in the second half of 2012. 400 direct jobs and up to 3000 more downstream are hoped for from the investment.

The sugar plant would be Mozambique's fifth.

African Agriculture

US agric group to partner Nigerian government in ‘Africa’s biggest rice farm’

by Maram Mazen

Dominion Farms Ltd., an Oklahoma- based farming company that produces rice in Kenya, agreed to start a rice farm with the government in Nigeria that would be Africa’s biggest with production at 300,000 tonnes a year.

The $40 million rice farm will reduce Nigeria’s rice imports by 15 percent and cut rice costs by 54 billion naira ($342 million) a year, Agriculture Minister Akinwumi Adesina said in Abuja, the capital, at a press conference attended by officials from Dominion Farms Nigeria Ltd. Terms of the ownership were not announced.

“There’s absolutely no reason in the world for Nigeria to be a food importing nation,” Adesina said. Nigeria must be a “food self-sufficient and food exporting nation.”

Nigeria is the world’s largest importer of rice, at 2.3 million tons a year on consumption of 4.9 million tons, according to the U.S. Department of Agriculture. Demand in the country will be 35 million tons by 2050, Adesina said.

Nigeria will produce enough grain in four years to cover its needs, which would allow it to export to other West African countries and compete with Thailand and India, Adesina said.

The farm will stretch over 30,000 hectares in Taraba state in Nigeria’s east, according to a statement from the Agriculture Ministry. About 90 percent of the land will be operated by contract farmers, and the rest will be run as a corporate farm and for training purposes, according to the statement. The farm will require 15,000 workers.

Dominion Farms is based in Guthrie, Oklahoma, and operates a 17,000-acre leasehold in western Kenya, according to the company’s website.

Agriculture accounts for 44 percent of gross domestic product, and contributes to about 77 percent of all employment in Nigeria, Adesina said. Africa’s top oil producer spends “well over” 1.3 trillion naira annually to import the four basic food items of wheat, rice, sugar and fish, he said.

Nigeria plans to add 20 million tonnes of production over the next four years of crops including rice, cassava, corn, soybeans, sorghum and cotton, Adesina said.

Bloomberg