Big Agriculture Looks to Africa

As the world begins to awaken to the looming food crisis -- how we will feed 2 billion more people by the year 2050 -- investors are turning to a place not typically associated with its agricultural bounty, but a region that National Geographic Magazine (NatGeo) is calling “The Next Breadbasket”:  sub-Saharan Africa.  In its July edition, NatGeo’s Joel K. Bourne Jr. (aided by predictably stunning photos from Robin Hammond) points a wide lens at the issues raised by the creation of giant agricultural developments in sub-Saharan Africa, including some of the potential benefits as well as the likely pitfalls.

First, why sub-Saharan Africa?  The short answer is that the region has the most potential upside, or what is referred to as "yield gap," on Earth.  This essentially means that Africa is home to an enormous amount of arable land, yet the continent produces "roughly the same yield Roman farmers achieved  ... in a good year during the rule of Caesar."  Put another way, less than 5 percent of arable land in the sub-Saharan area is currently irrigated, and farms in the region are not reaching anything near their potential output.

This is likely true for a number of obvious reasons, and NatGeo’s Bourne lists the clear culprits:  poor infrastructure, limited markets, weak governance and brutal civil wars.  The other key ingredient is the amenability of African governments, some of which are willing to overlook (or inadequately safeguard) the property rights of their citizens in favor of influxes of foreign cash and the attendant benefits.

The “why now” is two-fold.  On the one hand is the impending food crisis, which is centered on the African continent and which, for most of Africa, is not really impending but has been plaguing the region for years.  Second, there's the real driving force:  the potential monetary upside for investors.  As Bourne puts it, “Since 2007 the near-record prices of corn, soybeans, wheat, and rice have set off a global land rush by corporate investors eager to lease or buy land in countries where acreage is cheap, governments are amenable, and property rights often ignored.”  Large Chinese and Brazilian companies have eyed the “millions of acres of fallow land and plentiful water available for irrigation” and seen the potential for massive profits.  It seems only a matter of time before others join the party as well.  In fact, Bourne points out that a recent conference in New York for agricultural investors drew some "800 financial leaders from around the globe who manage nearly three trillion dollars in investments."

The potential problems, from a human rights perspective, are manifold, and the line that opens the NatGeo piece nicely frames the primary risk:  "She never saw the big tractor coming."  The article goes on to detail how a Mozambican woman and her family watched their farm be taken over by a Chinese corporation that was in the process of building a 50,000 acre farm in Mozambique's Limpopo River Delta.  Corporate land-grabs in emerging markets are not new, but nothing tees-up the possibility for widespread abuse like a potential gold rush. So, this specific issue in this particular place and time presents one of the primary human rights issues we face as we edge closer to a true, worldwide food crisis -- a crisis which will only be exacerbated by the impacts of global warming, predicted to hit those most vulnerable the hardest.

The potential benefits flowing from the agricultural development of sub-Saharan Africa are, however, quite alluring.  Experts suggest that, if farmers in the region can raise their yields to 2 tons of grain per acre -- up from the current regional average of half a ton, and as compared to the 3 tons achieved in the U.S., China and most of Europe -- they could not only better feed themselves but could actually export food, leading to much-needed cash for African farmers and much-needed food for the rest of the world.  The need for more food in this part of the world is obvious.  Nearly a quarter of the population in sub-Saharan Africa is malnourished; in Mozambique, to take just one example, almost half of the children under 5 suffer from the deadly effects of malnutrition.

Yet, what is the likelihood that these benefits actually accrue to the Africa farmers and their families and neighbors who undoubtedly need them the most?  If history is a reliable guide, the answer seems pretty clear: not terribly likely.  Africa, after all, is the place that birthed the theory of the resource curse, and the continent is no stranger to the exploitation of that which naturally occurs on and beneath its land -- think conflict diamonds in Liberia, or the oil wells in Nigeria.

At this juncture, it appears that there is little that will stem the infusion of cash into the region, but in order for it to benefit more than just corrupt African heads of state and greedy investors, land rights must be secured -- and there must be non-governmental oversight of the governments and accountability demanded by investors.  If those things are achieved, the potential is there to benefit businesses, communities and governments alike.  Not only might hungry people get fed, but infrastructure could also be developed and food security protected.

Bourne’s NatGeo piece is a must-read, and it covers additional aspects of the issue including a potential middle ground and some interesting success stories (and failures).  I hope to cover these and other additional angles in future pieces.

Image credit: Flickr/afronie