The G8 Alliance: Gambling on Food Security?
Private sector-led agribusiness brings with it opportunities but also
dangers.
Article | 5 July 2012 - 12:08pm | By
<
http://thinkafricapress.com/author/joan-nimarkoh> Joan Nimarkoh
The G8 summit last May ended with a pledge to end hunger in Africa and a
plan to
<
http://www.guardian.co.uk/global-development/poverty-matters/2012/may/25/20
12-g8-summit-private-sector> inject $3 billion into African agriculture with
the <
http://transition.usaid.gov/press/factsheets/2012/fs120518.html> aim
of “catalysing private sector investment in African agriculture”. This
record investment, derived entirely from the private sector, appears to stem
from a realisation that previous aid commitments have failed, as well as
perhaps an assessment of government priorities in an environment of Western
austerity.
The G8’s position represents a significant leap of faith in market-friendly
agriculture four years after the 2008 global food
<
http://www.globalissues.org/article/758/global-food-crisis-2008> crisis
when increasing food prices led to unrest in a number of developing
countries. For its alleged ability to promote business opportunities in low
income markets, offer inputs and links to markets for small-scale producers,
<
http://www.unido.org/index.php?id=7881&tx_ttnews%5Btt_news%5D=894&cHash=ca7
d067e2b1b2b56ca16bb605faea5b2> agribusiness was recently
<
http://www.ifad.org/events/op/2011/gssd.htm> elevated by the International
Fund for Agriculture and Development as a key
<
http://info.worldbank.org/etools/edp/doc/edp-agribusiness_flyer.pdf> driver
of hunger reduction. The primary objective of the G8’s
<
http://transition.usaid.gov/press/factsheets/2012/fs120518.html> New
Alliance for Food Security and Nutrition is a shared commitment to increase
<
http://www.state.gov/s/globalfoodsecurity/190282.htm> investment into
African agriculture, luring investors to Africa’s food markets on the
premise of favourable returns and low tax rates. It will initially be
launched in Ethiopia, Ghana, and Tanzania.
Despite positive forecasts for record level investment, some
non-governmental organisations have been critical of the G8’s propositions.
Lamine Ndiaye at Oxfam International, for instance,
<
http://www.oxfam.org/en/pressroom/pressrelease/2012-05-18/g8-food-security-
alliance-answers-question-hungry-people-have-not-> claims "the New Alliance
is neither new nor a true alliance”. “The rhetoric”, she says, “invokes
small-scale producers, particularly women, but the plan must do more to
bring them to the table.” She continues: “This new alliance is a nice
complement at best, a deflection at worst. The role of the private sector is
important, but they will not be able to make up for the G8’s broken
promises”.
Similarly, Henry Malumo, Africa Advocacy Coordinator of Action Aid
International,
<
http://www.marketwatch.com/story/ngos-react-to-obamas-announcement-on-food-
security-2012-05-18> cautioned against investment packages that neglect the
needs of smallholder cooperatives, particularly women, noting that private
sector partnerships should emphasise women and civil society.
Benefits of private-public partnership in Africa
As part of the alliance, private sector companies will receive access to
potentially lucrative agriculture markets. In theory, this should enable
producers to benefit from improved technology and rural infrastructure while
generating greater income as a result of guaranteed supply lines to large
agribusiness companies.
Existing agribusiness success stories such as Kenya’s horticulture
<
http://www.epzakenya.com/UserFiles/File/Horticulture.pdf> industry
<
http://www.fpeak.org/about.html> point to the advantages of forming
partnerships between government and private enterprise. HomeGrown Kenya
Ltd., a leading horticulture export company established in 1986, has
<
http://www.unido.org/fileadmin/user_media/Services/Agro-Industries/Agribusi
ness_for_Africas_Prosperity_e-book_NEW.pdf> invested over $100 million in
Kenya and employs over 8,000 people with additional capacity to run its own
in-house farmer training and extension services. Another example is Zambia’s
outgrower scheme, which <
http://allafrica.com/stories/201110110881.html>
helps thousands of sugar cane farmers connect to Zambia Sugar, a private
company that receives financial assistance from Barclays Bank.
But despite some successes, large-scale investment is often fraught with
risks as well as opportunities. For one, investors normally require
guarantees that the financial returns promised are secured. In the case of
African agriculture, scarce land resources are often used as collateral for
private investors – this can undermine the sovereignty of African states and
at worst risk widespread displacement.
Against the powerful multi-national agribusiness companies
<
http://www.bond.org.uk/pages/g8-us-2012.html> included in the G8 alliance –
such as Monsanto, Kraft and Yara International – African governments could
find themselves in relatively
<
http://www.ethiosun.com/2012/06/05/the-new-alliance-for-food-security-and-n
utrition/> weak bargaining positions. African states may lack sufficient
leverage and may be pressured into giving in to contract demands for
favourable investment terms, which could inadvertently undermine the most
vulnerable in the longer-term.
In his
<
http://www.srfood.org/index.php/en/component/content/article/984-access-to-
land-and-the-right-to-food> report on increasing land investment in Africa,
the UN’s Special Rapporteur on the Right to Food Olivier De Schutter
highlighted the importance of African governments to act strategically.
Stressing the need for free and full participation and agreement of local
communities in contract negotiations, full transparency of national
ministries, and adherence to environmental protection, De Schutter insisted
that, where possible, investment terms should be backed by specified
sanctions and, where necessary, there should be legislation to protect
labour and land rights along with the right to food.
Growing activism around the terms of Africa’s engagement with international
agribusiness also reveals a degree of grassroots discontent toward the kind
of large-scale agriculture market expansion backed by the G8 alliance. For
example, activist groups such as the União Nacional de Camponeses (UNAC) in
Mozambique have formed strategic links to the influential international
advocacy group La Via Campesina, highlighting the
<
http://viacampesina.org/en/index.php?option=com_content&view=article&id=110
8:mozambique-unac-restates-its-position-against-gmos-in-agriculture&catid=22
:biodiversity-and-genetic-resources&Itemid=37> threat posed by the
dissemination of seed technology by giant agribusiness in the name of
boosting food production.
Managing risks to political stability
By pushing the initiative firmly back toward international agribusiness, the
G8 alliance has also shifted its emphasis to enhanced agriculture growth as
the route to reducing hunger. This approach, however, neglects the critical
issue of food access.
Several African states are challenged not only by the availability of food
but also by how to widen access for the poorest who are unable to purchase
it as a result of rising food prices. As witnessed during the 2008 food
<
http://www.nytimes.com/2008/04/18/world/americas/18iht-18food.12122763.html
?pagewanted=all> riots, African governments are accountable to their
citizens for ensuring food is affordable. 14 African countries
<
https://docs.google.com/viewer?a=v&q=cache:9V1yCOeMFOEJ:www.csae.ox.ac.uk/c
onferences/2011-EDiA/papers/711-Berazneva.pdf+&hl=en&gl=uk&pid=bl&srcid=ADGE
ESi-yI4nU-yMQu3t5X4pWz_eQgmkKUR_J3M6gVL04qxsco1iuYrKvVg4jOGj7-et2wz2-CUnKkUE
dp2MtjJFiq-3-aWagYtJ4_lxfBxqliK6MiqOfIkImi5sTh_aGvNQVQd4cVvn&sig=AHIEtbRepnc
Wj-_k4qhT1sJQ0BD7NS8Owg> experienced mass disturbances at the time, ranging
from organised trade union demonstration to sit-ins by consumers to sporadic
store looting.
Unfortunately for the G8’s plans, increased production by no means
guarantees increased food access for the poorest. The mediating role of
government to regulate the social impact of private investment into
agriculture is therefore paramount if repeated political turmoil is to be
avoided.
When working towards investment agreements which serve the interests of a
hungry urban poor, marginalised smallholder producers, and ambitious private
investors, African governments will have to strike the right balance. They
must help deliver the right type of investment into Africa’s agriculture
sector in ways that benefit, not jeopardise, hunger reduction.
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Received on Thu Jul 05 2012 - 08:03:31 EDT
