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23 September 2013, Zed Books

Book excerpt: Agricultural development and food security in Africa

This compendium of essays edited by Fantu Cheru and Renu Modi analyses the impact of Chinese, Indian and Brazilian investments in African agriculture.

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Scope of the book

The book is divided into five sections. In the first, the approach to the research is elaborated, and the contemporary and historical debates on the role of foreign capital in Africa’s agricultural development are explained. In Chapter 1, Fantu Cheru, Renu Modi and Sanusha Naidu outline the parameters that should be used to measure the contribution of FDI to host countries’ development. They note that the exclusive focus on the role of foreign investors in land acquisitions misses or underestimates the potential of FDI to support technology transfers, skills development and asset creation. In Chapter 2, Sam Moyo provides a historical account of the role of foreign capital in Southern Africa, suggesting that it has been associated with what he refers to as ‘accumulation by dispossession’. He warns that if African governments fail to put in place appropriate checks and balances, FDI in African agriculture could perpetuate these disastrous results, namely the destruction of the livelihoods of millions of Africa’s smallholder farmers and the unsustainable use of land and water resources.

The second section examines the scope and content of India’s private and public sector engagement in African agriculture. It must be stated at the outset that the two Indian contributors present an analysis that in many ways mirrors the official views of the Indian government and the Indian private sector. In its public diplomacy, the government of India has tried to project itself as a ‘rising power’ whose time has come to shape global development in a positive direction, particularly in Africa and South Asia, through its aid, investment and technical assistance programmes. This posturing often does not pay sufficient attention to the more complex and controversial elements of Indian agriculture domestically and Indian investment abroad that have been raised convincingly by Dessalegn Rahmato and Rick Rowden in this volume.

In Chapter 3, India’s former ambassador to Ethiopia, Gurjit Singh, outlines the policies and strategies of the government of India for strengthening economic relations with Africa, and discusses the instruments currently in place to assist Indian entrepreneurs in expanding their investments in Africa. Singh states that India has no ulterior motives other than to help African countries tackle the crisis in agriculture through aid, technical assistance and lines of credit to encourage Indian private sector operators to invest in Africa. This view is corroborated by Modi, who in Chapter 4 examines Indian private sector investments in African agriculture and the role the Export-Import Bank of India plays in financing such investments. Both authors present India as a ‘rising power’ committed to helping African countries escape poverty and underdevelopment, asserting that Indian private sector investment and official aid are helping African partner countries build the policy and institutional foundations necessary for reversing the productivity decline in agriculture, generate jobs, reduce poverty and ensure food security on the continent.

Beneath their invocation of the principles of mutual respect, mutual benefits and non-interference as central elements in India–Africa relations, however, others might argue that their analysis contains elements of the same patronising views often associated with Western donors, who claim that only outsiders can put the African continent on a transformative path. In Chapter 4, Modi acknowledges briefly the chronic problem of widespread hunger and malnutrition, the large number of farmer suicides, the deeply alarming decline of the water table and other environmental problems that characterise Indian agriculture today. A detailed discussion of the shortcomings of the agricultural sector in India has not been undertaken, as it is beyond the scope of the present project. Nevertheless, both Singh and Modi present evidence to confirm the commercial nature of contemporary India–Africa relations in the field of agriculture, which has the potential to produce the same destructive environmental and social outcomes if African governments do not take precautionary measures.

In fact, the governments of Africa have the advantage of hindsight. They can avoid the massive social and environmental pitfalls of the green revolution in particular and of the Indian agricultural sector in general. While incorporating the success stories of the green revolution, safeguards need to be established and preventive measures need to be adopted by countries in Africa to deal with the adverse consequences that have been faced by the Indian agricultural sector. Section two of the book aims to provide a comprehensive picture of India’s engagement in the agricultural sector of Africa and therefore includes various versions of the same story.

In pursuance of this objective, the first two chapters of this segment provide important insight into the Indian government’s and the corporate sector’s perspectives vis-à-vis investments in African agriculture. The upbeat and positive assessment presented by Singh and Modi on India’s engagement in African agriculture is balanced by Rahmato (Chapter 5) and Rowden (Chapter 6), who critically examine large-scale land acquisition by Indian companies from a land rights perspective. Focusing on an Indian company, Karuturi Global, and its acquisition of 300,000 hectares of land in the Gambella region of Ethiopia, Rahmato examines the consequences of a shift from small-scale to large-scale and foreign-dominated production for agrarian relations in Ethiopia as well as for the environment and for biodiversity. In Chapter 6, Rowden, based on a content analysis of the lease agreements of five Indian investors in Ethiopia, arrives at the same conclusion. Without passing judgement, both contributors point out one critical challenge: how to reconcile the need for more private investment in land with the urgent need to protect the land rights of smallscale farmers and pastoralists. The editors address this strategic challenge in the concluding chapter.

Brazil’s strategy to transform African agriculture is the focus of section three. In Chapter 7, Thomas Cooper Patriota and Francesco Maria Pierri examine the increasing commercial ties, including FDI, between Brazilian multinationals and a number of African countries. While current initiatives are small compared with Chinese and Indian investments in Africa, Brazil pursues more structured and multi-sectoral cooperation in agriculture and sustainable rural development that could potentially bring enormous benefit to Africa. These initiatives include a more systematic approach to sharing tropical agricultural technologies provided through Embrapa (Empresa Brasileira de Pesquisa Agropecuária), a state-owned company credited with Brazil’s agricultural boom in the last decade; a concessional financing platform for importing Brazilian farm machinery; and a knowledge-sharing platform that offers about four decades of Embrapa expertise aimed at poor smallholder farmers. In Chapter 8, Kai Thaler examines Brazil’s investment in the production of biofuel feedstock in Mozambique and criticises the prioritisation of biofuel production in a country where the vast majority of the population experiences high levels of food insecurity. He questions whether the emphasis on biofuel production can be reconciled with enhancing food security and furthering the government’s goal of poverty reduction.

In Chapter 9, Alexandra Arkhangelskaya and Albert Khamatshin discuss the contributions made to agriculture in Africa through IBSA, a trilateral forum comprising India, Brazil and South Africa. Although the resources of IBSA are minuscule, it complements the bilateral strategies of Brazil and India to improve agricultural productivity in order to reduce poverty and enhance food security in the least developed countries. One such country is Guinea-Bissau, where targeted projects are increasing the cultivation of rice through improved lowland rehabilitation, water management and animal husbandry.

The fourth section focuses exclusively on China’s engagement with African agriculture within the framework of the Forum on China–Africa Cooperation (FOCAC). In Chapter 10, Simon Freemantle and Jeremy Stevens describe the domestic dimensions of China’s growing interest in investing in the agricultural sector in Africa and other developing regions. The authors note that China’s role in land acquisition in Africa has so far been minimal in comparison with India and Middle Eastern investors. Indeed, the authors point out that China’s 20-year food security strategy, unveiled in 2008 by the National Development and Reform Commission, did not include foreign land acquisition as a pivotal feature, with the exception of soya bean production in Brazil. In future, however, foreign land acquisitions will certainly become part and parcel of China’s food security strategy for two compelling reasons. With increasing incomes among average Chinese consumers, demand for agricultural commodities is likely to grow during the coming decades and this demand cannot be met through domestic production alone because of diminishing local resources, principally arable land and irrigable water.

In Chapter 11, Xiuli Xu and Xiaoyun Li, professors at the China Agricultural University, discuss in detail China’s post-1979 agriculture-led development strategy that is credited with the country’s unprecedented scale of poverty reduction over the past 25 years. The authors persuasively argue that China’s success was the outcome of strong incentives provided by government through land tenure reform and pricing policies, coupled with major public investment in infrastructure (roads, irrigation and energy), research into seeds and soils, greatly expanded fertiliser production and use, farmer education and, crucially, off-farm employment through local enterprise development. Central to the Chinese approach, from which Africa can learn much, is the existence of a strong, effective development state with a long-term vision. The authors conclude that China’s approach has been pragmatic and is based on learning from others, adapting to local circumstances, scaling up what works and abandoning unsuccessful experiments, a lesson that is instructive for African countries.

In the final chapter (Chapter 12), the editors, based on the evidence presented by the contributors, conclude that the actual impact of Chinese, Indian and Brazilian private and sovereign investment in African agriculture has been positive in the short and medium term thanks to enhanced technological transfers, skills development, provision of infrastructure and finance, and the creation of the conditions needed to unleash Africa’s agricultural productivity. At the same time, the editors highlight two important problems that will ultimately determine the effectiveness of the current approach to South–South agricultural cooperation. The first relates to the sensitive issue of the land rights of local communities affected by large-scale land investments. The second concerns the downstream effect of technology and infrastructure designed for commercial agriculture on the surrounding communities, and how to ensure that smallholders also benefit from these costly rural infrastructure networks.

The issue of land rights goes beyond policies on agricultural development. It is part and parcel of the unfinished governance agenda in Africa. That said, a more transparent governance framework on property relations that protects the land rights of local communities should be a precondition for attracting FDI into the agricultural sector. This would entail the development of policies that delineate the roles and responsibilities of the state, the peasantry and domestic and foreign capital in a consultative and transparent way. The editors question the relevance and legitimacy of international efforts to introduce voluntary guidelines on FDI in the agricultural sector by arguing that voluntary guidelines are poor substitutes for strong and transparent national laws and regulations governing the operation of FDI in African agriculture. They insist that a robust and nationally owned institutional framework governing such FDI in terms of technology transfer, skills development, asset creation and compliance with international labour and environmental standards is a necessary precondition for monitoring compliance by foreign and domestic investors and for evaluating their overall contribution to the transformation of African agriculture.

This excerpt is republished with permission from Zed Books.

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