Africa agricultural initiative gets $7 billion boost from private companies

Investors are warned that “private interests do not always line up with foreign policy objectives,” such as when they purchase land in Africa even if it means displacing villagers.
Washington Post | 5 Aug 2014

Africa agricultural initiative gets $7 billion boost from private companies

By Juliet Eilperin

A group of African and U.S. firms on Tuesday will announce an additional $7 billion in spending to promote agricultural development in Africa, nearly doubling an Obama administration initiative aimed at mobilizing private money to ease hunger and poverty on the continent.

The commitments — which are being made as part of this week’s U.S.-Africa Leaders Summit and include a $5 billion pledge by ­Coca-Cola to source more of its products from Africa by the end of the decade — highlight how U.S. food aid policy has shifted under President Obama. Rather than relying primarily on federal funds to support small farmers overseas, the administration has enlisted African companies and major multinationals to help address some of the development challenges Africans still face.

In an interview, U.S Agency for International Development Administrator Rajiv Shah said the New Alliance for Food Security and Nutrition — the private-sector-oriented program Obama launched at Camp David in 2012 — was attracting new investment “because this way is working.”

“We have been able to do some extraordinary things to dramatically reduce hunger through the commercialization of the agriculture sector,” Shah added.

The initiative attracted $3.5 billion when it launched, with the majority of the money coming from large international companies. The new commitments bring it close to $15 billion. Two-thirds of the firms participating are African, and these companies account for roughly half of the program’s pledges.

Tuesday’s financial commitments include an array of initiatives, including plans by Coca-Cola to secure more reliable sources of mango puree in Kenya and Malawi and promote orange and pineapple concentrate production in Nigeria; $5 million from the Global Shea Alliance to provide storage facilities for women in communities that collect and process shea butter for Western food and cosmetic brands; and $1.2 million from Agriaccess Ghana Ltd. in support of training for local sorghum farmers.

Carl LeVan, an African-politics professor at American University and author of the new book “Dictators and Democracy in African Development,” wrote in an e-mail that the administration’s approach to food aid has benefits, as well as potential risks.

“Partnering with the private sector will increase the volume of aid, and it has the potential to improve the impact and efficiency of assistance, especially where corporations like Coca-Cola already have infrastructure and experience in Africa,” LeVan wrote. But he added that “private interests do not always line up with foreign policy objectives,” such as when multinational firms did business with South Africa under apartheid, or when they purchase land in Africa even if it means displacing villagers.

Shah said he is aware of the skepticism some Africans have of corporate investors, noting that each year the U.S. government publishes a report on the deals it helps secure under its food assistance programs. “We have to work hard to build trust and transparency with civil society and small farmers,” he said.

The administration has a separate initiative called Feed the Future, which launched in 2010 and receives about $1.1 billion a year in federal money. Rep. Betty McCollum (D-Minn.) announced Monday that she is working on bipartisan legislation to make the program permanent. It has provided assistance to 7 million small farmers in Africa, Shah said, and ensured that more than 12 million children there are “adequately nourished.”

In many instances, the United States has leveraged its aid dollars to push for new agricultural policies. In Ethi­o­pia, the government liberalized its regulations to allow private players — including DuPont, a participant in the administration’s New Alliance program — to develop and distribute seeds to farmers. Tanzania opted not to impose a ban on agricultural exports after working with U.S. officials. And Ni­ger­ian President Goodluck Jonathan said in a statement that his government “ended corruption of four decades in the fertilizer sector” by developing an “electronic wallet system” that allows farmers to get subsidized seeds and fertilizers though coupons they receive on their cellphones.

Vice President Biden emphasized the importance of cracking down on corruption while speaking to African activists and nonprofit organizations Monday at the summit, calling it a “cancer.”

“Widespread corruption is an affront to the dignity of your people and a direct threat to each of your nations,” Biden said. “It stifles economic growth and scares away investment and siphons off resources that should be used to lift people out of poverty.”
Transparency International rates all countries in Africa as moderately to highly afflicted with official corruption. Botswana got the nonprofit organization’s highest rating for the continent last year, with a score of 64 out of a possible 100. Somalia scored the worst among African nations, with eight points.

Humanitarian aid groups have generally praised Obama — who took office shortly after rising food prices led to serious shortages in the developing world — for placing an early emphasis on alleviating hunger. But they have also cautioned against an overreliance on private companies to address the needs of the poor in Africa, as well as some anti-terrorism policies that have constrained humanitarian assistance activities in conflict zones.

Oxfam America policy director Gawain Kripke said the president and his deputies “deserve credit” for making agriculture and food security “a trademark, branded priority for this administration.” But Kripke warned that depending on corporations to provide the financial resources to lift the agricultural sector in Africa does not substitute for government aid, because “a lot of small farmers aren’t commercially viable or aren’t commercially interesting.”

Separately, several aid groups have questioned why the administration had not done more to modify a legal prohibition that bars organizations from conducting any transactions with groups on the federal terrorist list — even if it is minimal contact, such as paying a road toll, to deliver food assistance to civilians. Officials from Somalia — a country that suffered a famine in 2011 and still faces food shortages — said this week they are concerned these prohibitions will again impede assistance efforts there.

“They haven’t made a reasonable attempt to balance the humanitarian need for food assistance with the security needs,” said Kay Guinane, director of the D.C.-based Charity & Security Network.

Anne Gearan contributed to this report.
Original source: Washington Post

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