In November 2008, the South Korean company Daewoo Logistics made a deal with Madagascar to lease roughly half of its agricultural land for corn and palm oil production. Yet, for the people of poverty-stricken Madagascar, it was intolerable that a foreign company could buy up tracts of their farmland while they remained hungry. Two months later, the government was overthrown, due in part to popular opposition to the land deal.
This land deal is part of a broader development in which governments and individuals — especially from the Middle East — have been investing in Africa’s farmland in order to feed their own populations. In 2009, for example, global farmland deals involved 110 million acres, 70% of them in Africa, according to the World Bank. This trend has generated the concern of a second scramble for Africa.
However, stigmatizing every such land “grab” is inherently problematic for two reasons.
First, the absence of public access to contractual agreements between investors and African governments means that nobody really knows the terms of the deals, as Harvard University Professor Calestous Juma told me. Second, Africa urgently needs agricultural investment, given the continent has suffered years of neglect in agricultural development from the international community. The 1960’s Green Revolution, which boosted crop yields in Asia and Latin America, never reached Africa, in part because it lacked the irrigation essential for the use of high-yielding crop varieties. The result has been Africa’s dependence on foreign food aid and imports, a precarious situation particularly during times of global food crises.
In 2008, for example, rising food prices led many countries to impose export bans aimed at ensuring food security for their domestic populations, causing even more Africans to be thrust into poverty. Thus, the new wave of private investment in Africa’s agricultural land presents an opportunity to strengthen the continent’s food security, if done responsibly and equitably.
Given legitimate concerns that outside investors may ship all crops to their own countries, the burden is on African governments to ensure that the land deals do not undermine local food security. According to World Bank economist Klaus Deininger, African governments should connect outside investment with a national agenda that prioritizes food security. Governments could solidify such an approach by setting criteria for outside investments and permitting only those that guarantee a certain amount of the food they produce will be devoted to local consumption. Such emphasis on production for the local population is particularly important as a buffer against a global food crisis. According to the UN Special Rapporteur on the Right to Food, Olivier De Schutter, the contractual agreements should stipulate that investors sell a higher percentage of crops to the local market during periods of high global food prices, when food would be unaffordable for many Africans.
This private investment is by no means a substitute for African governments’ own investment in the agricultural sector. The perils of government absence from agriculture are painfully evident in the famine that struck Ethiopia in 2003. The World Bank imposed structural adjustment policies that forced the government to remove investment in agriculture, and the private sector was too underdeveloped to fill the void, resulting in famine.
International institutions, while unable to actually regulate land deals, can certainly play a role in influencing their implementation. The best example so far is the concept of voluntary “Principles for Responsible Agricultural Investment,” developed by groups including the World Bank and the UN Food and Agriculture Organization. The key principles include regard for local people’s land rights, food security, and environmental sustainability. These principles do not suggest that outside investment is the only option for African agriculture; instead, they attempt to guide a land deals trend that cannot be prevented.
Photo Credit: andre.vanrooyen