Check out our FREE food commodity markets bulletin service - AGRIMARKETS - market analysis, prices and daily commentary @Agrimarkets

Monday, November 23, 2009


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:

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

No comments: