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

Friday, January 28, 2011


The news media are full of new concerns about a world food crisis in 2011. FoodWorks and its affiliated companies in Project Partners have been working for decades in the fields of rural development and livelihoods in agriculture, not to mention the more commercial aspects of agribusiness, food processing and related technologies. We believe we have something significant both to contribute to the current discussion and to offer as experts in the entire "farm to fork" value chain.

First, let's review the current concern that is building in institutions like the UN's Food and Agriculture Organization (FAO) which has the primary task of providing early warnings about food shortages. Then we'll go on to say something about the fundamentals of this problem that is not easily going to disappear.

Jacques Diouf, the Director-General of FAO, has underlined with some simple facts the need for a new "Green Revolution" to provide food for hungry nations. There are a billion people on Planet Earth who go hungry right now. World food production will need to increase by 70 percent to feed a population of over nine billion people in 2050. With limited land, farmers will have to get greater yields out of the land already under cultivation. In a strikingly direct statement entitled "Price volatility and food shortages to remain" Mr Diouf says that the FAO Index of Food Prices rose again sharply at the end of 2010, heralding the possibility of another major food crisis. Coming from FAO, but with support from statements made by President Sarkozy of France recently about commodities prices and food riots and the US Government's "Feed the Future Initiative", this is not scaremongering.

FAO rightly identifies the underlying structural causes of the emerging crisis. As development professionals, we at FoodWorks absolutely support this analysis.

1. Falling investment in agriculture: the share of agriculture in official development assistance (ODA) dropped from 19% in 1980 to 3% in 2006, and now stands at around 5% - it should amount to $44 billion per year. ; the budgetary expenditure of low-income food-deficit countries on agriculture represents about 5%, when this should be at least 10%; finally, domestic and foreign private investments of around $140 billion per year should amount to $200 billion.

2. Unfair terms of trade for commodities: The OECD countries protect their agriculture with a total support estimate of $365 billion per year while encouraging through policy changes free, unsubsidised agriculture in the developing world. Non-tariff barriers also restrict trade.

3. Non-food industry speculation in agricultural commodities: there is considerable evidence that hedge funds and other, non industrial users of agricultural commodities take advantage of price upswings that drive the actual commodities to price levels that make their use as raw materials too costly. Not only do price surges take food directly from the mouths of the very poor, but they damage enterprise throughout the value chain, thus entrenching food shortages.

The blunt fact is that human population growth is leading to a Malthusian crisis in developing countries where the usual solution, technical change, cannot easily increase supply.

Tanzania is a good example: the population is growing at nearly 3% which means it will double from 40 million to 80 million in less than 30 years. But the agricultural base - good soil and available water - is limited. Climate change is compounding the problem with extended droughts. The necessary infrastructure, especially irrigation and farm-to-market roads, is lacking.

The awful irony is that this population increase is a result of rapid success in tackling basic health. Health projects (e.g. malaria net distribution) impact rapidly, whereas investments in agricultural productivity take many seasons to show their results. A recent assessment of agriculture in Tanzania conducted by FoodWorks shows that every aspect of the sector and the value chain needs to be tackled. But donors are increasingly reluctant to do so because of the difficulty of producing the easy to understand "success stories" so beloved of desk bound bureaucrats.

We believe that part of the answer will come from the private sector. Already large sovereign wealth funds and other commercial investors e.g. in the Gulf Arab States (the GCC) have begun to invest in agriculture to secure their own food supplies. FoodWorks has a number of plans afoot to help with this process. Equally, the large multi-national agribusiness companies need to be encouraged to make their products and R&D available to partners in the emerging but at-risk economies. USAID already has programs like its Global Development Alliance (GDA) in place and these kind of prgrams, combined with so-called "corporate social responsibility" (CSR) programs can lead to worthwhile public-private partnerships (PPP).

But there will not be any simple answer - and that's what confuses the bureaucrats. They don't understand that agriculture and agribusiness is possibly the most complicated human activity there is. It climate and biology-driven and includes elements of science, technology but also every angle of business, finance and marketing that can be imagined. Grow a crop, increase yields by all means, but if you can't ensure its quality and traceability (origin), store it, move it, package it and ensure that it's safe to eat and do that profitably, then the basic agronomy fails.

FoodWorks and its partners have over 40 years of experience in every aspect of this astonishingly complex activity. We want to be part of the solution. And a solution is urgently needed.

For more information click the link to: Project Partners

Or contact Geoff Quartermaine Bastin directly by email at

Chart: UN FAO

Monday, January 17, 2011


Geoff Q-B has been working in East Africa, in Tanzania and Kenya looking at development possibilities funded by USAID. Part of this work has been to prepare a full Agricultural Assessment of Tanzania that covers every sub-sector and provides guidance for where development funds are likely to go.

Geoff also undertook a trip by road from Nairobi across the international border at Namanga and then past Mounts Meera and Kilimanjaro to Arusha which is the centre of agribusiness in the North of Tanzania. Here's an excerpt from his report:

"The outward trip from Nairobi took 6 hours leaving at 12 noon in a rented Toyota Hilux. The road is adequate. Probably 60 percent completed on both sides of the border, where the Chinese contractors have done their work there is a reasonable two-lane road. Not being a roads engineer I hesitate to pass judgement, but I suspect the overall standard of work is not high; in some place the hard shoulder had already subsided and for much of the new road the drainage seemed inadequate. In the places where the work is on-going, we drove on compacted dirt roads which have not been well maintained either in Tanzania or Kenya (indeed there is no discernible difference between the road – which is the main North-South Highway- in either country). A 4X4 is necessary and I would recommend a slightly more comfortable vehicle than a Hilux.

The border crossing point at Namanga took 2 hours to negotiate on the outward journey. This was due to exit paperwork for the car being processed. Visas were very easy and I was not charged either by Tanzania or Kenya for the entry stamps. The return crossing took less than one hour (because the vehicle was from Kenya)."

Once at Arusha, Geoff met up with Dominick Ringo , Director, Research, Community and Organisational Development Associates (RECODA).

Dominick and Geoff visited one of the smallhoders that RECODA is supporting with funds from the Danish Rockwool Foundation. This farmer (see photo) is one of a local group of 35 farmers that have adopted a model farm approach developed by RECODA. The approximate project fund is $450,000 and the total number of beneficiaries in the project is 400 ($1,125 per farm family). After stakeholder consultations including the district authorities, the project provides a ‘shopping list” of different crops and crop mixes for choice by the farmer. The project provides technical advice, parent livestock (goats and chickens) and seedling (mainly banana). No other subsidies are provided, however the project works closely with the beneficiary on implementation and disseminates the lessons learned throughout the community.

Here's what Geoff reported:

"I was very impressed by the approach (which RECODA is in process of evaluating formally and providing written information about). Of course the farm I was taken to see could have been unique, but I did not form this impression, in any event Dominick Ringo said he could provide all the basic data I needed if I wished to check. The farmer (and his wife) was clearly delighted with the project that had helped them develop a one hectare commercial banana plantation. In addition they grew cassava and had chickens and goats."

Clearly some development projects do work and not necessarily with the huge amounts of money that the major donors seem to require. Well done RECODA!

Note: this assignment was undertaken on behalf of International Relief & Development (IRD)