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. Along with the erosion of subsistence farming that sustained families, there is the corresponding erosion of subsistence fishing owing to competition from European and Asian commercial fishing operations in coastal Africa. All of this is an integral part of the corporate control of Africa with the support of governments in the advanced capitalist countries and with the backing of the IMF and World Bank Group’s subsidiary agencies like the International Finance Corporation (IFC).
In 2010 the IFC has invested an estimated $100 million for agribusiness in sub-Saharan Africa, compared with merely $18 million per year in the previous decade. Naturally, IFC and World Bank investment which runs into the billions focuses solely 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 while also generating a potential surplus for trade. Foreign-owned agribusiness backed by their governments and international financial organizations such as the IFC 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. This is all in the name of furthering the goals of privatization that Western neo-liberal push across the world with devastating consequences for workers and peasants.
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, animal husbandry and fishing. 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 in the primary sector of production, backed by favorable government policies, have taken over the sector that requires expensive agrochemicals and machinery, and a distribution network to secure steady profits. In Africa’s case, only large invariably foreign-owned commercial enterprises are able to operate under this model of development, forcing the small farmers and peasants into poverty.
With each recessionary cycle more small farmers in Africa and around the world are squeezed out of the business, while neo-liberal apologists not just in the corporate board rooms and the media, but in government and UN continue to sing the praises of large scale commercial operations as the panacea for capitalism. 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.
Given the trend toward corporate agriculture, in the last fifteen years, governments and private firms from around the world have been investing in sub-Sahara Africa because corporations chase the highest return for the lowest possible investment under the most favorable conditions to capital possible. Besides agribusinesses acquiring more land, 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.
In the past decade, India, China, Japan, and Arab countries have joined the 21st century 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 cost 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.
Developed countries have used Africa for its raw materials and as a consumer of imported manufactured products and foreign business services, but not as roughly equal trading partners as is France and Germany. Rather, Africa has been the victim of unequal terms of trade, and external control of its key extractive sectors. In short, Africa remains semi-colonial and continues to become increasingly dependent on developed countries for overvalued manufactured products and services while exporting raw materials at prices commodities markets in the West determine based on speculative interest.
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. Protests owing to social injustice do 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, for example, uses as much water as 100,000 people - water of course is the most precious commodity in many parts of Africa. This is the reality of agribusiness and its role in drought-ridden East Africa.