A new scramble for Africa: but is it really win-win for everyone?

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Friday, 27 June 2008 03:28

The UAE National
Alan Philips
Original Publish Date: June 26, 2008

The first duty of any country is to ensure its people have enough food to eat. So it is not surprising that the UAE, along with other Gulf states, has rushed to look at innovative ways of securing supplies in the wake of the global food crisis. With inflation soaring, and the cost of food threatening the livelihood of workers and the lifestyle of the middle class, the UAE is investigating buying or leasing agricultural land in friendly countries such as Sudan and Pakistan.

Other countries are looking around Africa and as far afield as Ukraine, whose once prolific agriculture was destroyed by the Soviet system. At the same time, China, with its newly wealthy population expecting a better diet than cabbage and rice, has authorised its companies to buy land in Africa and Latin America.

Some analysts, including the economist and National columnist Jeffrey Sachs, see these agricultural investments as a "win-win" situation where Africa gains money and expertise and the investors secure a source of food that will not be blocked by export restrictions such as those India has imposed on rice.

It is indeed a good time for African governments, who find their neglected agricultural land transformed into a coveted commodity. A new scramble for Africa is under way, particularly in Sudan, which has plentiful water and undeveloped land. Indeed, of its estimated 40 million hectares of cultivatable land, only eight million are used, and of those, less than one million are farmed intensively.

The era of petro-farming is about to dawn. But many questions remain – not least, are these deals really necessary, and will they work? The first problem is that the commodisation of agricultural land is utterly new. African governments do not know what to charge, and what is a good deal. If they had minerals to sell – oil or gold – the deal would be clear: you want the highest price. But rural land, with its residents, small farmers and a fragile ecosystem, is fraught with imponderables.

For the investors, too, there are problems. What guarantee is there that the indigenous government will not, if there are food shortages, slap a ban on exports in order to feed its own people? Every investor will bear in mind the example of Nigeria, where residents of the Delta have risen in rebellion because they feel the benefits of the oil boom have passed them by. Mechanising Sudanese land into giant agribusinesses would inevitably put local people out of work, and could swallow up water resources, leaving the peasantry starving and angry.

It is easy to understand the motivation for Gulf states trying to secure their food supplies. The existing market mechanism has betrayed them – a sentiment keenly felt in China, too. In truth, there is no one in charge of global food supply at the moment. The World Trade Organisation – which ought to take a lead – is in danger of collapse. It was, in any case, set up to resolve disputes about access to markets involving countries with things to sell – clothing, computers or movies. It is flummoxed by the current food crisis. Thus there is no one to stand up and take charge.

Critics of the rush to Africa by countries that cannot grow their own food see this as a return to the dangerous principle of autarky. This is where each country cuts down on foreign trade, relying on its own food production or securing supplies from abroad with long-term contracts. It was fashionable in the 1930s, and was a basic principle of the Communist system; economists see it as a step back to the era of hostile blocs.

If demand for food rises and supply is tight, then it is easy to predict a Malthusian meltdown, where armoured convoys export grain from Africa through ambushes laid by the starving. To counter this nightmare, there is only the thin voice of the international bureaucracies. The World Bank believes there is no real crisis, only a panic in the markets, and pleads: "Calm down everybody!" The latest 10-year outlook by the UN's Food and Agriculture Organisation predicts that commodity prices will decline in real terms, thanks to human ingenuity and bringing more land into cultivation.

Alex Evans, a food, energy and climate-change expert at the Centre on International Cooperation at New York University, believes that this prediction is too rosy. "I am wary of the argument that there will be a long-term food price decline. There could be a bumpy ride ahead," he says. What is needed is global collective action to ensure food supplies, but no one is talking about that, and realistically there is no chance of the political will emerging any time soon.

In the mean time investing in Africa, despite all the unresolved problems, could be a boon for the Gulf states and Africa, he believes. The Gulf certainly has an advantage over China, which has a bad reputation in some parts of Africa for its business practices and for bringing in its own labour.

But the greening of Africa will not be as simple as repeating the successes of Indian and Pakistani agriculture in the Green Revolution of the 1960s and '70s. That revolution was too thirsty for water and hungry for pesticides and fertilisers to meet the needs of the 21st century, with water in short supply and oil expensive. What is needed is a "doubly green revolution" – to borrow a phrase from the Rockefeller Foundation – which is more ecological, less wasteful of resources and involving fewer inputs, while making the best use of biotechnology.

This will involve not just money, but advanced techniques and lots of time. It will not succeed if the only goal is short-term profit. If Gulf money can achieve this, then the windfall from the oil price rise would really have been put to the service of humanity.