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A G8 initiative intended to get corporations to invest in Africa with the goal of alleviating hunger on that continent is – surprise, surprise – not working out as planned.
President Barack Obama launched the “New Alliance for Food Security and Nutrition” in 2012 when the United States held the presidency of the G8 (the Group of Eight, a forum of eight of the world’s major economies).
By encouraging partnerships between governments and corporations to invest in Africa, the G8 said it hoped to “lift 50 million people out of poverty in sub-Saharan Africa by 2022.”
But instead of becoming a mechanism for improving farm production and reducing hunger in Africa, the New Alliance is causing many hardships for African farmers, including land grabs by companies that is forcing tens of thousands, and potentially hundreds of thousands, of African farmers off land their communities have worked for generations.
“It is unacceptably cynical of the G8 to pretend to be tackling hunger and land grabbing in Africa while backing a scheme that will ruin the lives of hundreds of thousands of small farmers,” Kirtana Chandrasekaran, food sovereignty program coordinator at Friends of the Earth, told the Thomson Reuters Foundation.
How a Plan to Get Companies to Invest in Africa Turned Bad
So far six African nations have signed on to the alliance – Burkina Faso, Ivory Coast, Ethiopia, Ghana, Mozambique and Tanzania – as have about 70 global and local companies.
The New Alliance policies were developed by the African governments in consultation with the private sector investors. For the most part, Africa’s small farmers and their advocacy groups were ignored.
It’s not hard to figure out why the New Alliance has benefited the national governments and those investing in Africa at the expense of small farmers and local interests.
Those interests have protested in vain.
A coalition of African farmers’ groups posted an online petition in May calling the G8 plan for investing in Africa “a new wave of colonialism.”
“Private ownership of knowledge and material resources means the flow of royalties out of Africa into the hands of multinational corporations,” the petition said.
Their concern is well-founded. Numerous multinational grain, seed and fertilizer companies have joined the alliance, encouraged by new rules that require African farmers to buy their seeds – including genetically modified seeds – rather than the cheaper local varieties they’ve used for years.
Other big public companies that decided to invest in Africa under the New Alliance initiative include:
- AGCO Corp. (NYSE: AGCO);
- DuPont Co. (NYSE: DD);
- Kraft Foods Group Inc. (Nasdaq: KRFT) via the African Cashew Initiative;
- Unilever N.V. (NYSE ADR: UN);
- Nestle SA (OTC: NSRGY)
- Swiss Re AG (OTC: SSREY).
Large privately held companies in the New Alliance include Mars, Inc. and Cargill.
African Farmers Hurt the Most
But the worst part of the New Alliance is how the land grabs have affected African farmers.
Nations that have joined the alliance have agreed to deals to facilitate land access to companies that invest in Africa. In practice, this has meant the eviction of small farmers from their land at the hands of Western corporations with the full cooperation of the government.
Already thousands of farmers in Mozambique have been pushed off their land, and new regulations planned for Ethiopia and the Ivory Coast ensure thousands more will soon face the same fate in those countries. The New Alliance rules require that Ghana and Tanzania enact similar laws.
It’s relatively easy for governments to push farmers, and even entire communities off their land because few citizens in Africa hold title to the land, which typically is held in common.
“Communities who have been living on the land… are forced from the land, and therefore lose the resources they rely on both to grow food to eat and to also make a livelihood,” Hannah Stoddart, the head of economic justice at Oxfam’s British branch, told Voice of America.
And the farmers who don’t lose their land will have to contend with the removal of price supports for their products. That will make competing products sold by the multinationals cheaper than the local varieties.
None of this bodes well for a society in which farmers make up 50% to 90% of the population and have few alternatives.
Going About Investing in Africa the Wrong Way
Perhaps the most tragic aspect of the G8 plan is that it was never designed to provide the sort of help that African farmers really could use.
First of all, African farming is already doing quite well, at least if you look at the productivity statistics.
For the early 1990s to the mid-2000s, agricultural production in many parts of Africa exceeded most other parts of the world.
Eight African countries – Nigeria, Sudan, Mozambique, Ghana, Angola, Ivory Coast, Burkina Faso, and Benin – actually grew agricultural production faster over the period than Brazil’s impressive 77%.
So African farmers know what they’re doing. But they are hampered by such things as a lack of capital, difficulties in getting the supplies they need, and getting their products to market.
And lavish agricultural subsidies in the developed nations, particularly in the United States, also make it difficult for African farmers to sell their products at prices that can sustain their operations.
A G8 plan for investing in Africa that was designed to help the local farmers deal with these issues would have been far more successful in tackling hunger in Africa than the unholy alliance of corrupt governments and profit-seeking multinational corporations.
“Food security and sovereignty are the basis of our general development, as all of the African governments underline. This is why we must build our food policy on our own resources as is done in the other regions of the world,” wrote African farming leader Mamadou Cissokho in a May 2012 letter to African political leaders and co-signed by 15 African agriculture organizations. “The G8 and the G20 can in no way be considered the appropriate [forums] for decisions of this nature.”
If you want to catch hold of the next big source of global economic growth, you’ll need to invest in Africa. Here’s one sector in particular that’s on the verge of experiencing $300 billion worth of growth.
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