Analysis: Grain crisis and political economy of a new scramble for Africa

This Day (Tanzania) | 11 May 2009

Dar es Salaam

SIGNS are emerging of a far reaching crisis not just in the financial systems of the developed world but also food security in a number of Asian countries, either on account of having vast desert lands or small sizes on which farming becomes a problem. There is also the threat from biofuel needs that pushed up prices of grain, and scarcity of water makes large scale farming of grain in many Asian states unfeasible or uneconomic, thus compelling them to seek land elsewhere. Africa is the choice continent, but it is brittle.

The current situation has been compared to the scramble for Africa, the outward push of European powers that culminated in the Berlin Conference of 1884 to resolve contentions over spheres of influence of the various powers. There is something of a scramble because of the direct requirement of use of land either for grain production to boost food security in the Arabian Gulf and the Far East, as well as biofuel needs similar to other areas. And there is a scramble due to rising tensions on land ownership and use in Africa.

Ordinarily, if one listens to what Africans say or do in relation to land ownership and use, there is no question that the current need for land could be met, as it is seen as grossly unpatriotic to alienate large areas for the use of foreign companies. The trouble is that all is not well in Africa either in relation to food production or obtaining adequate aid to meet or otherwise improve hopes of realizing the Millennium Development Goals that have formed the mantra of donor-client relations since 1999. The situation makes it that African countries need to meet the Asian demand somewhere, for own strategic needs.

That is where the problem comes up, since Africa’s needs for both grain and money are great, and they don’t seem to be getting anywhere with relying on natural resources use to cover the gap. The current spate between the government of Norway and Tanzania over the misuse of aid and the latest report of the Controller and Auditor General that talks about misspending of about one trillion shillings by ministries means that the donor-client dialogue is more or less deadlocked. The way out is likely to be a focus on trade, not aid.

This is another area where African economists and lobby groups either among industry and commerce or civil society groups have been expressing deep worries, asking African states not to proceed beyond interim accords on Economic Partnership Agreements between several African zones and the European Union. Chances however are that this format will be taken up and implemented, because the EU isn’t pursuing this policy on a bilateral basis as NGOs wish to believe, but it is under compulsion from the World Trade Organization (WTO). It is thus a battle that Africa is fated to lose, come shine come rain.

Assuming therefore that Africa is being pushed to prop up its trade structures for greater interaction with the rest of the world, on account of the loss of a privileged place for its crop exports to the EU, the new overtures from Asia will be taken up with the urgency they deserve. In each African country where the idea has been mooted there has been intense controversy, the more notable being Madagascar, where an unpopular regime lost support and was removed with support of the military after a deal relating to allocating 1m hectares to Korean firm Daewoo Logistics for production of wheat, maize and rice. Uganda has reversed a plan to lease a few thousand hectares of land to a foreign investor.

The fact that President Jakaya Kikwete accepted an invitation to Saudi Arabia recently to discuss the possibility of such allocation is important, as it means that Tanzania is attentive to the proposal. It cannot be otherwise because the government has failed to meet half the needs of the peasants, and is finding it difficult to keep pace with constant rises in fertilizer prices on the world market. It is a lost contest for the government to keep increasing subsidy funds for fertilizers each year, but purchasing less for the same.

The other strategy of the president that doesn’t seem to be getting anywhere is the use of presidential funds (that is, a special fund released by the State House) to provide loans to various groups. To an extent these loans have made a difference to various sections of society, but the gains tend to be eroded by the constant rises in food prices and other basic needs, in which case their impact is absorbed and virtually negated by increased pauperization of the sections of society that aren’t loan eligible, or lost out in petty trade.

An unknown factor in Asia’s pursuit of land for farming is that it should be virgin or marginal land that is allocated to an investor, not where a company purchases land from villagers and moves to compensate them. Only countries with vast unused tracts of land can afford such a policy, and to many people it isn’t just Sudan or the Congo which may have such land, but Tanzania as well. But unless the government will be cutting into the zones reserved for game parks, virtually all other areas ignite bushfires when reallocated.

So the need for such engagement with Asia cannot be doubted as it would help to cut the levels of local grain shortage, employ labour and in certain areas compensate farmers, thus providing the basis to engage in less constraining economic activity compared to agriculture. No such strategy has been put up by the government explicitly, but realism may start being noted as the government’s aid and confidence crisis grips further. The trouble is that the critics wish that current problems be resolved by having less, not more, foreign investment; in some areas investors already on the ground have second thoughts.

Who's involved?

Who's involved?


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