BRICS African agriculture investments paying off

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Some of the large agriculture projects include PROSAVANNA project in Mozambique by Brazil
Ghana Web | Wednesday, 13 March 2013

BRICS African agriculture investments paying off

by Samuel Hinneh

The African agriculture sector is showing signs of improvements attributed to BRICS investment flows in smaller agricultural projects, reversing the trend triggered by the global food crisis in 2008.

The investments have resulted in significant rise in employment for communities living near farmlands, improvement in productivity, as well as improvement in sales to the local and export markets.

BRICS investment has led to the creation of over thousands of employment opportunities in many African countries such as Mozambique, South Africa, Ethiopia, among others.

“There are many farms or lands that have been taken over by investors and being put into productive use and in these cases they are smaller farms ranging from 3,000 hectares, 4,000 hectares or 5,000 hectares-seem large but not like the 10,000 hectares in the general scheme of things’’, said Carin Smaller, an Advisor on Agriculture and Investment to the International Institute for Sustainable Development (IISD).

BRICS is the acronym for the grouping of emerging national economies of Brazil, Russia, India, China and South Africa. They are distinguished by their large, fast-growing economies and significant influence on regional and global affairs. As of 2013, the five BRICS countries represent almost 3 billion people, with a combined nominal GDP of US$14.9 trillion and an estimated US$4 trillion in combined foreign reserves.

Information from the International Food Research Institute says the Chinese aid teams have constructed agricultural projects, including state farms, irrigation schemes, and demonstration centres for African governments. Yet these projects’ poor sustainability caused the Chinese to revise their approach against that to give Chinese companies a leadership role.

Thus, in an experiment launched in 2006, Chinese aid is financing 20 agrotechnology research, training, and demonstration centres in Africa. A Chinese research institute or agribusiness firm is building each one at a cost of US$6 to 9 million. The centres specialize in activities chosen by the host country. For example, Ethiopia wants its centre to demonstrate the complete value chain for horticulture exports.

In 2004, China’s Ministry of Commerce started to encourage country-specific opportunities for Chinese agricultural investment such as cotton in Egypt, fruit and nuts in Nigeria, sisal in Tanzania, tobacco in Zimbabwe, and nonspecific crops in Zambia, Ethiopia, Guinea, Benin, the Democratic Republic of the Congo, and Cameroon.

India is also bolstering its cooperation with Africa. For example, the Africa–India Forum Summit, launched in 2008, is paving the way for greater cooperation, such as through the transfer of agricultural technologies that meet the real needs of small-scale farmers in Africa. India is a leader in tropical technology—not only improved varieties but also resources management technologies, which are just as important for meeting farmers’ needs.

Evidence from United Nations agencies and universities points to the fact that investments in very large agriculture projects of 10,000 hectares and above in Africa is having negative impacts.

The negative impacts range from displacing local communities living on these lands without recognised legal title or land title, as well as cutting off access to forest and water resources by people who formerly crossed the land.

Some of the large agriculture projects include PROSAVANNA project in Mozambique by Brazil. Other projects by Brazil can be found in Cameroun, and Angola, whilst China is also funding large projects in African countries such as Mozambique, Cameroun, as well as Ethiopia. However, the only BRICS country not engaged on a large-scale basis is Russia.

“In a worse case when the acquired land is not put into productivity use, the government cannot hand it to another investor because they have signed these agreements. So these large plantations have not worked and have not brought benefits to African agriculture’’.

Carin Smaller, whose organisation contributes to sustainable development by advancing policy recommendations on international trade and investment, economic policy, climate change and energy, and management of natural and social capital, believes that African governments are not doing enough in shaping when agriculture investments come in and where they go to.

She notes that investment in agriculture needs to focus more on smaller projects that will yield better results than larger projects, adding, investing in smallholders in these countries will yield better results.

The World Bank Group (WBG) notes that overall Gross Domestic Product (GDP) growth originating in agriculture has proven to be, on average, two to four times as effective in raising incomes of the poor as growth generated in non-agricultural sectors. The WBG emphasises that to support broad-based poverty reduction and food security in Africa, smallholder agriculture must be a central investment focus.

The majority of African farmers are smallholder farmers, who contribute 80 percent of food needs in the face of numerous challenges. However, recent years have seen increasing investments in commercial projects.
To ensure skills transfer, and skills development, Smaller emphasised that African governments have to ensure that the agreement with an investor for a project include in that agreement requirements that insist that the investor for example employs a certain percentage of local workforce, and train the local workforce to fill in management positions.

“Contract in Liberia for example, the Liberian government have insisted that the investor should set aside certain a number of management positions to the local workforce. Through training programmes, the local workforce who are employed by the investors improve their skills and later on occupy important management positions. So there are innovative ways for governments to include in private contract - particularly agricultural activity provisions that support local employment but also develop the local workforce along the way’’.

Although the majority of investors in African agriculture come from Europe, North America and from wealthy Asian countries, such as Japan and Korea, BRICS are playing an important role, and the future looks interesting for African agriculture.

“There will be investment strategies both coming from China and Brazil that put agriculture as a priority for African agriculture, the future will be much more interesting looking at what China and Brazil will be doing in the African agriculture sector’’, Smaller said.

Dr Ward Anseeuw, CIRAD Researcher and of the Post Graduate School of Agriculture and Rural Development, University of Pretoria, says South Africans are investing as independent farmers, in more than 20 countries in Africa, often produce for local markets, creating employment.

“Many South Africans are investing on an independent basis - often smaller scale than the large corporate investments by the other BRICS partners. Countries such as Mozambique, Zambia, Malawi, etc. are benefiting from such projects’’.

Deborah Brautigam, Director of the International Development Program Johns Hopkins School of Advanced International Studies (SAIS) in an interview said the BRICS, especially China, South Africa, and Brazil, have extensive experience with the modernization of agriculture.

“There are many aspects that can be transferred or demonstrated to African producers, such as irrigation techniques, water management, research and development, new seed varieties, mechanization and labour saving devices’’, she stated.
Original source: Ghana Web
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