LAND GRABBING OR THE WAY OF THE FUTURE?

Is the new wave of major private sector investments in (mainly) African land just a new form of colonialism or perhaps the only way to successfully leverage major underutilized natural resources? This is a question that Andrew Rice tries to answer in an important and well-researched 6-page article in 'The New York Times' (see:

http://www.nytimes.com/2009/11/22/magazine/22land-t.html?pagewanted=1&_r=1&sudsredirect=true

Outlining the way often Arab investors have moved into countries like Tanzania, Congo and Sudan, Rice uses the example of Ethiopia to illustrate both the pitfalls and advantages of the private sector doing what the public sector (including the donor agencies) has largely failed to do. On the one hand as my ex-tutor at Oxford, Dr. Paul Collier, has pointed out, ignoring commercial agriculture in favour of peasant farming (which he delightfully calls "middle class romanticism"!) has not provided food security, but on the other hand, much of the land best suited for commercial ventures is already spoken for by local people - don't they have a voice too? And what if it is ignored?

I tend to agree with Collier; significant agricultural (and agribusiness) progress - and hence increased food security - occurs when the huge resources of multi-national agribusiness are leveraged responsibly, which was my experience as a manager with Cargill. Thailand, for example, is a major food exporter for quality standard products not least because Cargill made significant investments in the industry that were rapidly taken up by local groups. Few governments and less donor agencies or NGOs can match the technical R&D and market clout of these big corporations. But the emphasis has to be on responsible development, paying particular attention to the local socio-economics and local cultures. The fact is unless the project takes these factors and all the stakeholders into account it will inevitably fail.

This is one aspect of the new wave of investments that concerns us at FoodWorks: as both technical and economic consultants (having worked in both private and public sectors) we understand the full complexity of agricultural development through the value chain "from farm to fork". I wonder if many of the new investors (perhaps speculating on future rises in food commodity prices but without in-house expertise) realize that agriculture goes beyond simple agronomy? Unless a full package of development services is applied to their investments that deals with local concerns as well as, for just one example, international marketing standards, many of Mr. Rice's dire predictions will indeed come to pass - Geoff Quartermaine Bastin, Bangkok

Photo: Simon Norfolk, NYT

EASTERN EUROPE - AGRIBUSINESS POTENTIAL

Belgrade - a pretty dramatic and interesting change from Islamabad! However elements of this work have been similar to the competitiveness activities in Pakistan. Geoff Quartermaine Bastin has just spent a month assessing USAID's Economic Growth Program (EGP) that includes an Agribusiness Project that has focused on small enterprise development throughout Serbia. The Agbiz Project is primed by Development Alternatives Inc. The Project has 195 'clients' and aims at increasing enterprise sales and creating jobs. A successful example of the work is a family-owned company called Bio-Trend Donato, a producer of prepackaged salads, dressings and vegetable-based sauces in Novi-Sad where the Project helped develop a new marketing plan, improved product packaging and increased sales by $1 million as the result of a sponsored visit to a major trade fair in Germany. For more information on this particular activity with Bio-Trend see http://www.america.gov/st/business-english/2009/September/20090930160446amskoorb0.7583887.html

Serbia is a fascinating country with a huge scope for agricultural development and FoodWorks hopes to return sometime in the not too distant future.

CHANGE OF PERSPECTIVE AND NEW HORIZONS

For the last three years FoodWorks has been focused on South Asia, principally Pakistan, although Eddie Vernon has been working in Afghanistan and Bob Lindley has been in the Pacific. However, now the time has come to change perspective somewhat and look at opportunities throughout the region. This does not mean we have finished with Pakistan - the problems in agriculture remain enormous - but that the donor community has put agriculture on hold for a while. The Asian Development Bank has re-focused on infrastructure while USAID is pondering about whether to move ahead with the the $400 million planned investment (that we helped design) in staple crops and livestock/dairy. Hopefully by Christmas some decisions will have been taken and things might move ahead. We'll be happy to participate if the do. Meanwhile, we are looking at Nepal (crop diversification), Bosnia (capacity building) and Cambodia (private sector investment in rice).

AGRIBUSINESS DEVELOPMENT FUND IN SINDH

SINDH DEVELOPMENT FUND: Working with the Competitiveness Support Fund (CSF - see link), we have created, designed and now mobilized a $30 million agribusiness investment fund exclusively for the Provincial Government of Sindh (Planning and Development Department). As designed by the CSF team, the SDF will eventually make grants to small farm enterprises and provide credit guarantees for larger investors; it will provide technical assistance (Eddie Vernon and Bob Lindley have designed the crops and fisheries aspects respectively, Younus Sandeela has supported the project) and access to infrastructure development funds. The CSF-SDF Team was put in place by Geoff Q-B and has now been handed over to a local CSF manager. Based in Karachi, the CSF managed team will operate throughout rural Sindh. Projects so far identified include date processing in Khairpur District, banana processing, continued development of the Karachi Fish Harbour, and installation of an effective cool chain system at Karachi Airport. The SDF is initially funded by the provincial government for 3 years but is expected to be augmented by other donors.

NEW WORK IN 2009

EMPOWER PAKISTAN: AGRICULTURE. This program is a new USAID initiative undertaken via CSF (see link) aimed at counter-terrorism, poverty alleviation and rural development along the supply chain. Geoff Quartermaine Bastin is currently working as Design Economist with the Program Design Team led by Don R. Mickelwait of Experience International, Inc. The EPAG will be a $400 million group of projects in livestock (mainly dairy) horticulture and food security (including wheat, maize, oilseeds, pulses and sugar). The activities and interventions will be right along the supply (value) chain "from farm to fork" and will be implemented throughout Pakistan with trade connections to the Middle East, Afghanistan and Central Asia. The US Government under the new administration emphasizes three elements in foreign policy: Defense, Diplomacy and Development. The EPAG program is aimed square on at improving incomes and creating jobs in those areas of Pakistan most likely to produce radical insurgents. Success in this Program which will last 3 to 5 years and will bring 1 million women into the cash economy is seen as critical to winning the argument over radicalism and winning the War on Terror. Pakistan's agriculture accounts for more than 40% of employment and food security is vital. Failure in either the design or implementation of the EPAG is not an option.