twitter RSS Feed linkedin acp contact

Land acquisition - a fair deal?

SOUTH AFRICAN FARMERS are considering concessions in the DR Congo, the Chinese have expressed interest in the biofuel potential of Angola’s run-down eucalyptus plantations, and the sovereign wealth funds of the Middle East are snapping up large parcels of high-potential land wherever they can find it, Sudan being a prime target.

There’s no doubt that land leasing has become a major activity. But the much publicised failure last year of a Korean company’s attempt to lease more than a million hectares for maize and biofuel operations in Madagascar showed that this development model is not welcome everywhere. So much so that the UN’s FAO, in association with IFAD and IIED (multilateral agricultural and environmental development institutions) has seen fit to investigate agricultural investment and international land deals in Africa*.

Their report is based on a series of acquisitions (1000ha or more, from January 2004 to April 2009) in Ethiopia, Ghana, Mali and Sudan, as well as Sudan where data collection was particularly difficult. Nearly 2.5mn ha of large-scale allocations in all have been approved in these five countries over this short period, they say. Case studies from Mozambique and Tanzania are included. Approved allocations to date include a 150,000 livestock project in Ethiopia, 452,500ha for biofuels in Madagascar, and 100,000 highvalue hectares suitable for irrigation in water-stressed Mali. Foreign investment dominates There is a dominance of foreign investment, the report says, but domestic investors are also playing a major role in land acquisition. Another myth put to rest is that China, via its Africa Development Fund, is trying to enhance its own national food security; these operations are largely commercial. “Large-scale acquisitions of farmland in Africa...[have] made headlines in a flurry of media reports across the world,” the downloadable document states. “Yet international land deals and their impacts still remain little understood.”

It discusses key trends and ‘drivers’ in such land acquisitions, the contractual arrangements that are entered into and the way these are negotiated. It also covers the early impacts on land access for rural people in target countries. Notwithstanding the difficulties the trend has been picked up by farm machinery manufacturers and other inputs suppliers all over the world who see a new opportunity to open up significant new overseas markets. Much of the activity so far has been initiated by land agents from China and India, two well-endowed countries which can supply most of the hardware themselves. But a major source of funds remains the sovereign wealth institutions of the Middle East, such as SAMA Foreign Holdings (KSA) and KIA (Kuwait).

These are reliant mostly on established Western technology in the form of high-power tractors, implements and harvesting/storage machinery. And both types of funding rely on global supplies of fertilizers and other agrochemicals. In the process a series of important training opportunities, both for expatriate managers and for part-time smallholders, is being thrown up as well. Just the summary of the FAO’s findings cover more than three pages, amongst which are:

• there is a dominance of the private sector in land deals

• domestic investors are playing a major role

• government-to-government deals are rare

• eases rather than purchases are predominant; “host countries tend to play a key role in allocating them”

• transparency and checks/balances on contract negotiations are inadequate. And, perhaps most worrying of all, “Virtually all the contracts analysed by this study tend to be strikingly short and simple compared to the economic reality of the transaction.”

A series of recommendations is made. “What should African agriculture look like in 30 years’ time? What place should large investment and smallholders play within that, and why? These basic questions should frame decision making.” Fortunately the debate has already begun.h


LATEST NEWS IN Agriculture

Norway promises top-up contribution of urgently needed climate finance

Norway promises top-up contribution of u…

On 9 November 2022, Norway, as part of a commitment to triple its support to climate adaptation by 2026, has pledged an additional US$9.5mn contribution of urgently needed climate finance...

Better Cotton signs partnership agreement with IDH and CotonChad

Better Cotton signs partnership agreemen…

Better Cotton recently signed a multi-stakeholder Letter of Intent to participate in the landscape approach, developed with local stakeholders in Chad in conjunction with IDH, intending to work towards improving...

NFU president Minette Batters appointed as ambassador of Farm Africa

NFU president Minette Batters appointed …

Farm Africa, a charity that promotes sustainable agricultural practices, strengthens markets and protects the environment in rural eastern Africa, has announced the appointment of NFU president Minette Batters as an...

AfDB grants US$63.38mn loan to implement agro-processing project in Senegal

AfDB grants US$63.38mn loan to implement…

The board of directors of the African Development Bank (AfDB) Group in Abidjan has approved a loan of US$63.38mn to Senegal to implement the Agropole-Centre agro-industrial processing zone project

Farming innovations which help conserve nature and create jobs

Farming innovations which help conserve …

On World Food Day, farmers in the UK and globally showed how innovative farming methods and techniques can improve lives, help meet global climate targets and produce food without harming...

US$20.5mn renewable energy agriculture project launched in Ethiopia

US$20.5mn renewable energy agriculture p…

On 12 October, the Distributed Renewable Energy - Agriculture Modalities (DREAM) initiative began with the launch of nine renewable energy mini-grids and irrigation systems across Ethiopia

Prev Next

OTHER RELATED ARTICLES - Agriculture

Tanzanian cashew farmers seek government support

Tanzanian cashew farmers seek government…

Tanzanian cashew farmers in the Tanga region have asked the government to repossess idle cashew nut processing factories and give them use of the facilities through co-operatives

Indorama to build US$1.2bn Nigerian fertiliser plant

Indorama to build US$1.2bn Nigerian fert…

A US$1.2bn fertiliser plant is to be set up in Nigeria by a subsidiary of Indorama Corporation, and will become the world's largest urea manufacturing complex

Postponement of the Agroinvestment Summit

Postponement of the Agroinvestment Summi…

We regret to inform you that the Agroinvestment Summit, that was scheduled for 12 -13 March, has been postponed until later this year, circumstances permitting

Zimbabwe considering scrapping fertiliser import duty

Zimbabwe considering scrapping fertilise…

Zimbabwe’s government may remove the import duty on fertilisers this season to help reduce production costs for farmers

Zimbabwean tobacco farmers earn US$4.9mn

Zimbabwean tobacco farmers earn US$4.9mn…

Tobacco farmers in Zimbabwe have earned US$4.9mn after the sale of 2.5mn kg of flue-cured tobacco since the season started last week

Zambian breweries support commerical growing of sorghum

Zambian breweries support commerical gro…

Thousands of small-scale farmers are benefiting from the 'grow sorghum' initiative introduced by Zambian Breweries, a subsidiary of South African brewing giant SABMiller a few years ago

Gates Foundation joins forces with GFIA 2014

Gates Foundation joins forces with GFIA …

The Bill & Melinda Gates Foundation has been announced as the global development partner for the Global Forum for Innovations in Agriculture (GFIA)

Small farms in Togo to benefit from AfDB digital expansion

Small farms in Togo to benefit from AfDB…

The African Development Bank (AfDB) has launched a digital payment project to support small scale farmers in Togo

Canadian government backs agricultural development in Ethiopia

Canadian government backs agricultural d…

Minister MacKay and MP Armstrong have rolled out two projects that will help increase farmers’ productivity and resilience in Ethiopia

Zambeef announces 45,000 tonne crop prediction

Zambeef announces 45,000 tonne crop pred…

Zambia’s top wheat-producing company Zambeef expects to generate 45,000 tonnes of the crop this year, with its Mpongwe farm contributing more than 50 per cent of the production

EU provides critical support as WFP faces funding shortages in Sudan

EU provides critical support as WFP face…

The World Food Programme (WFP) has received a US$11.32mn contribution from the European Union’s Civil Protection and Humanitarian Aid Operations department (ECHO) for life-saving food assistance in Sudan, in addition...

Uganda to get agriculture assistance from FAO and China

Uganda to get agriculture assistance fro…

FAO, China and Uganda have signed a two year agreement worth almost US$2.5mn to support small-scale farmers in Uganda

Prev Next