Is there a new round of neo-colonial race to carve up Africa's lucrative agricultural lands, or is it all radical rhetoric by hyper-enthusiastic NGO's, irresponsible activists who probably hate themselves and in need of psychotherapy, misguided liberal and leftist western intellectuals looking for a 'politically-correct' causes and who feel guilty about sins that their white ancestors committed in the Dark Continent - the 19th century expression to describe sub-Saharan Africa?
According to the World Bank (September 2010) more than 110 million acres of farmland (the size of California and West Virginia combined) were sold during the first 11 months of 2009. This was all in a mad rush of foreign private and government investors to secure cheap land (and labor to work the land), and all during the most serious economic recession in the postwar period. Between 1998 and 2008, the World Bank provided $23.7 billion for agribusiness around the world, much of it in Africa promoting what it calls 'efficient and sustainable' agriculture.
In 2010 the International Finance Corporation (IFC) has invested an estimated $100 million for agribusiness in Sub-Saharan Africa, compared with merely $18 million a year in the last decade. Naturally, (IFC) and World Bank investment which runs into the billions also focuses on corporate agriculture that displaces the small farmer. This despite the advice from experts in sub-Saharan countries who argued that the best use of farmland is to distribute it to villagers (about 12 hectares per family) and give them the means to cultivate it to end hunger, and begin to generate a surplus for trade. Foreign-owned agribusiness produce commercial crops for export, while the native population remains poverty-stricken. It should be noted that foreign aid for Africa's agriculture dropped by 75% since 1980, thus creating the need for private foreign investment in the sector.
In the last one hundred years, agriculture in the industrialized countries has undergone a revolution that has resulted in just a small segment of the labor force earning its living from farming and animal husbandry. Technology and science applied to the sector has raised production and made agriculture less labor intensive just as specialization and concentration has resulted in higher productivity. Modernization of the primary sector of production entails that large commercial operations, backed by favorable government policies, have taken over the sector that requires expensive agrochemicals and machinery, and a distribution network to secure steady profits.
With each recessionary cycle more small farmers around the world are squeezed out of the business. If they remain, they merely subsist and make more money on side-jobs than in farming or animal husbandry. The transition from subsistence to commercial agriculture in first in Western Europe and then in US freed the surplus labor force for the manufacturing and service sectors of production. In the case of Africa, however, there is no manufacturing or service sector large enough to absorb the surplus labor force that is uprooted from subsistence farming and animal husbandry.
The assumption by governments, banks, and mainstream economists is that commercial agriculture in the form of agribusiness is a necessary development of modernization. Another assumption is that only large-scale agribusiness, which is subsidized by government and international organizations like the World Bank and IFFC among others, can meet the rising demand the world's rising food demand while keeping costs low.
Given the trend toward corporate agriculture, in the last ten years, governments and private firms from around the world have been investing in sub-Sahara Africa. Besides agribusinesses acquiring more land in Africa, banks, hedge and pension funds, commodity traders, foundations and individual investors have been buying land as part of portfolio investments for an average of $1 per hectare. This is in an attempt to cash in on low-cost land and labor amid a growing demand for raw food products and bio-fuels.
The EU is hoping to reduce carbon emissions by using at least 10% bio-fuel of all fuel products by 2020. The US is aiming to reduce its foreign dependence on oil by 70% in the next 15 years. With the help of the World Bank and IFC, both EU and US have been looking to Africa - more than 700 million hectares appropriated for agribusiness - as the continent to invest in bio-fuels. Latin America is also a target for bio-fuel and other agrarian investment.
In the past decade, India, China, Japan, and Arab countries have joined the 'new scramble for Africa', in some cases because governments are concerned about soil, water, and natural resources conservation in their own countries. Private investors and governments are aggressively seeking to partition Africa's rich agricultural land as the costs of agricultural commodities is expected to rise once the current recession ends. Saudi Arabia has set aside $5 billion in low-interest loans to Saudi agribusinesses to invest in agriculturally attractive countries.
Another reason for the new scramble for Africa is because of what the UN Food and Agricultural Organization calls 'spare land', areas not under cultivation, or underutilized.
On 22 September 2010, I wrote a brief piece on UN & GLOBAL POVERTY, focusing on the Millennium Development Goals, noting that the political and business establishment of most countries is behind this effort because there are immense profits to be made in corporate farming in Africa.
Africa has been used by the developed countries for its raw materials and as a consumer of imported manufactured products and foreign business services. In short, Africa remains semi-colonial and continues to become increasingly dependent on developed countries for manufactured products and services while exporting raw materials. The EU and US quest for bio-fuel development in Africa, and for that matter in Latin America, has nothing to do with 'sustainable development' or engendering greater 'self-sufficiency' or helping to 'develop' Africa - rhetoric that the UN, World Bank, western governments and multinational corporations are using to make 'the new scramble for Africa' more palatable to the world.
Will the people of Africa solve the chronic problems of poverty and disease as a result of the exploitation of land and labor to satisfy the demand for food and bio-fuels in Western nations? Africa's food requirements will double in the next two to three decades, a point that foreign agribusinesses, governments and IFC and World Bank are using to justify the commercialization of agriculture under foreign ownership.
In the process of the neo-colonial land-grab, evictions of peasants and small farmers, entire villages uprooted, civil unrest, and citizens' complaints of 'land grabbing' have been common. Nevertheless, protests owing to social injustice does not stop governments from approving agribusiness deals backed by powerful forces. One common justification used for the new scramble for Africa is that the acquired territories are not utilized or 'wasteland'. Governments often do not charge agribusiness for the water they use. Just a single agribusiness belonging to an Arab investor in Ethiopia uses as much water as 100,000 people - water of course is the most precious commodity in many parts of Africa. All of it is justified by various arguments including 'no country has developed with two-thirds of its labor force living off the land', foreign investment is needed for 'development'.
It is an interesting coincidence that just as sub-Sahara Africa has been targeted by drug lords in the last few years, it is also targeted by corporate farm investors whose mode of operation is to use the low-valued land and labor and corrupt public officials in order to serve foreign market demands. Rural poverty will rise as a result of foreign corporate investment in African agriculture.
As Richard Hancock recently pointed out, between 1960 to the present, Africa experienced the highest population growth in the world, an astonishing 200%, while it suffered the lowest living standards on the planet. Will the 'new scramble for Africa' by corporate investors result in the elimination of famine and disease; will it result in higher rising living standards for the native population, or will it be another form of neo-colonialism in the name of progress?
In January 2009 and again in October 2010, I wrote about Africa's structural problems that have contributed to a thriving narcotics trade. Given that in sub-Saharan countries the percentage of labor force involved in agriculture and animal husbandry ranges from 50 to 75, the result of agribusiness will be to create a larger percentage of poor people, some of who will choose to make a living in illegal activities like gun and narcotics trade, others in piracy, still others in the thriving human trafficking and teenage prostitution business that has a ready market around the world.
The social fabric disrupted yet again by 'the new scramble for Africa', continued political instability is a guarantee as much as a rise in crime and social unrest. Amazingly, the same institutions that contribute to Africa's devastation claim that they are acting in the name of 'progress, sustainable development and efficiency, helping to raise productivity and exports, to create jobs by bringing foreign investment,' etc.; the modern versions of "The White Man's Burden".
The 'politically palatable' rhetoric of 'efficiency and sustainability' has resulted in an outward-oriented agrarian sector catering to foreign markets instead of inward-oriented economy designed to meet the rapidly rising population's food needs. In 16th century England, farmers switched to animal husbandry owing to rising demand for wool textiles. Peasants starved as the cost of grain increased, thus "sheep ate people". In this century, 'agribusinesses will be eating Africans'.