Almost 90 percent of the world’s arable land is in use, which leaves highly fertile agricultural land in under-developed countries like Ethiopia, Mali, Senegal and Sudan the last great untapped opportunity for expanding food production and meeting the needs of a growing global population. Given many of these countries lack functioning markets or resources to develop these prime agricultural lands on their own, they are turning to wealthier countries looking to grow food overseas. According to The New York Times, Saudi Arabia recently announced its intention to purchase billions of dollars worth of land in Africa to produce rice and other staple crops for the Saudi domestic market. Kenya recently leased 100,000 acres of its most fertile land to Qatar, and South Korea will develop more than 400 square miles of land in Tanzania. African countries are receiving development assistance in return, but The New York Times questioned whether this form of private agricultural investment creates value for local African farmers, respects existing land rights, or improves local agricultural productivity.
The New York Times notes that “one of the earth’s last large reserves of underused land is the billion-acre Guinea Savannah zone, a crescent-shaped swath that runs east across Africa all the way to Ethiopia, and southward to Congo and Angola.” Unfortunately, much of this land is underused because of lack of investment. While Africa needs to feed its own expanding population and expand its agricultural exports, without domestic and foreign investment, “green revolution“-style productivity gains will be impossible. As a result, foreign investors may need to play a role if these lands are going to be made more productive. “Foreign investors — some of them representing governments, some of them private interests — are promising to construct infrastructure, bring new technologies, create jobs and boost the productivity of underused land so that it not only feeds overseas markets but also feeds more Africans. (More than a third of the continent’s population is malnourished.)”
For Middle Eastern countries like Saudi Arabia and Qatar, with little fertile land for agriculture (or land that require expensive irrigation pumped from desalination plants), food security is tied to “control over the means of production.” According to Al Arabi Mohammed Hamdi, an economic advisor with the Arab Authority for Agricultural Investment and Development, two Arab firms are receiving significant Saudi subsidies and partnering on a $250 million investment in land in Ethiopia or Sudan. He told The New York Times: “There is no problem about money. It’s about where and how.” In fact, some middle eastern sheikhs are investing heavily in African industries in order to create food security and supply domestic markets. “Over time, Al Amoudi, one of the world’s 50 richest people, according to Forbes, has used his fortune and political ties to amass control over large portions of Ethiopia’s private sector, including mines, hotels and plantations on which he grows tea, coffee, rubber and japtropha, a plant that has enormous promise as a biofuel.”
Within Africa, Ethiopia’s Prime Minister, Meles Zenawi, has promoted the leasing of prime land to Arab countries, and become a key supporter of increased foreign private sector investment in the Ethiopia’s agricultural sector. Zenawi has identified key “virgin lands” that will attract needed investment to a poor country reliant on donors. ”An Ethiopian agriculture ministry official recently told Reuters that he has identified more than seven million acres. The government plans to lease half of it before the next harvest, at the dirt-cheap annual rate of around 50 cents per acre.” Arab agricultural investment is seen by Zenawi and others as creating jobs, improving the productivity of soils, and bringing economic development to rural areas.
However, the foreign land acquisition trend is raising land rights issues in the continent. Some Ethiopian farmers argue that previous dictators have taken land from locals in the past and then leased it to private investments firms overseas. “Ethiopia’s government denies that anyone is being displaced, saying that the land is unused — an assertion many experts doubt.” Michael Taylor, International Land Coalition, told The New York Times: “one thing that is very clear, that seems to have escaped the attention of most investors, is that this is not simply empty land.” Some land may be used for livestock or left fallow to prevent nutrient depletion or soil erosion. More than 1.5 million acres of Ethiopian land has been leased to foreign investors says the International Institute for Environment and Development.
Last year, a controversy over foreign land acquisition and local land rights came to a head and helped topple Madagascar’s government. The Financial Times reported that Daewoo Logistics, a major South Korean conglomerate, had made a deal with Madagascar’s president to “take over about half of Madagascar’s arable land, paying nothing, with the intention of growing corn and palm oil for export.” Protests broke out and the president was later overthrown in a coup.
Some development economists believe that Africa can’t afford not to receive this level of foreign private investment in a key sector. “Development economists and African governments say that if a country like Ethiopia is ever going to feed itself, let alone wean itself from foreign aid, which totaled $2.4 billion in 2007, it will have to find some way of increasing the productivity of its agriculture.” Paul Collier, Oxford Univeristy, and author of the influential book, “Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It,” recently argued that a “middle- and upper-class love affair with peasant agriculture” has clouded the African development debate with “romanticism,” and “to ignore commercial agriculture as a force for rural development and enhanced food supply is surely ideological.”
About 10 percent of Ethiopia’s 80 million residents regularly go hungry, and new foreign-run firms could provide “a lasting, non-charitable solution.” On the other side, some local African land activitist think food produced from these leased lands will never be made available to local citizens.
Also, read more on how China has provided $10 billion in concessional loans to African countries in return for preferential access to African natural resources. Over the past few years, China has expanded its investment in a range of natural resources industries in Africa and provided infrastructure construction services (however, often using Chinese firms and imported labor). See Serge Michael and his co-authors’ book, “China Safari: On the Trail of Beijing’s Expansion into Africa” for more.
