Tuesday, February 17, 2009

Africa for sale


There has been a spate of announcements and news items in recent weeks about the acquisition of African land by foreign governments and investors for the purpose of food production. While not quite on the scale of the colonial era, this trend raises numerous questions over the role of government, over food security, over land ownership and over the rights of African smallholders and pastoralists (who, one fears, will be displaced from customary land to make way for large-scale agriculture).

Many economists seem to think that this is a good thing. They point to employment creation, infrastructure investment and increased agricultural efficiency. To be sure, in an environment where population growth remains rapid, where inadequate infrastructure hampers communication and distribution and where agriculture is, in general, extremely inefficient, the potential benefits are substantial.

And that's the key word - potential. Historically, I am sorry to say, Africa is littered with investment failures in large scale agricultural projects. Most famous among these is the Tanganyika groundnut scheme. This plan, to cultivate a large area of modern-day Tanzania with groundnuts, was a catastrophe in every way (see Wikipedia http://en.wikipedia.org/wiki/Tanganyika_groundnut_scheme for the full story - which is almost comical in its catalogue of disaster). It is, however, by no means unique.

The latest investment fad has centred around the production of biofuels and, in particular, a plant called jatropha curcas. This plant, it is claimed, will yield four times as much fuel as soya, and will thrive in semi-arid conditions unsuitable for almost any other commercial crop. To go back to a theme running through this blog, just remember, if it sounds too good to be true, it probably is.

What can the new investors learn from past and present mistakes? Three things stand out: the importance of research; experimentation and pilot programmes; and the need to invest in management and training. Simple, really.

Leaving aside these long term issues, let's hope that the details of these transactions are made public and that the proceeds are used first to compensate smallholders and pastoralists who have been or will be affect by the proposed developments, and second to invest in long term improvements to infrastructure. Sometimes it's good to be an optimist: in the words of David Landes "...pessimism offers little more than the hollow satisfaction of being proved right"

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