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It looks like progress. But is it? In Alemgena, outside Addis Ababa, at Dire Highland flower farm, which is managed by Ethiopians contracted by Dutch flower importers, a workforce of 220 grows 9 hectares of roses, snow peas and mangetout. Men are paid 90 cents an hour, women 79 cents. "They don't give us masks and gloves for the pesticide," says one female worker. "We sold this land for a few cents, and now we're laborers on it. It's been a disaster." A villager, Salomon Girma, 18, says, "When these commercial farms came, everyone thought it was a good thing. But the farmers were confused by the sales negotiation, and they sold their land for 75 cents a hectare. Then the bosses hired people from outside the area at cheap rates, and they forgot about the school they said they'd build. People even say that women who work there can become sterile because of the chemicals. We benefit nothing from this."
Expert opinion is also divided on whether such land deals and the subsequent commercial farming that takes place have represented progress or regression so far. "Some see it as an opportunity to reverse long-standing underinvestment ... to gain access to better technology and more jobs [and] create the preconditions for sustained, broad-based development," the World Bank said in its report. "Others say ... an environment where state capacity is weak, property rights ill-defined and regulatory institutions starved of resources could lead to projects that fail to provide benefits ... [and] result in conflict, environmental damage [and] although benefiting a few, a legacy of inequality and resource degradation." Several Western NGOs now campaign against what they call land grabs. So do some Africans. In 2009 the Madagascar government's decision to lease 1.3 million hectares to the South Korean company Daewoo sparked a revolution that ousted President Marc Ravalomanana.
As boss of the world's largest producer of cut roses, Sai Ramakrishna Karuturi is only too aware of how emotional land issues can be. In Ethiopia, Bangalore-based Karuturi Global, which produces 1.5 million roses a day on 292 hectares in Ethiopia, Kenya and India, was accused of neocolonialism when it leased 100 sq km in the west of the country. But Karuturi, who wants to expand across Africa, is adamant that his company boosts development. "I don't know what all the fuss is about," he says. "Where we're farming, there are seven people per square kilometer. That's better than Canada. We're not pushing people off. Who would work for us then?" The company creates jobs, he insists: 5,000 each in Ethiopia and Kenya. It has built schools, homes and a hospital as well. "India was a basket case. Then came the Green Revolution, and now we're in the top three in the world in most agricultural products. I do not see why a similar thing cannot happen in Africa. Africa is the world's next grain bowl."
If Africa is to benefit, it must manage the new international interest in its farmland carefully. If it is to take full advantage of the rising demand for food, it also needs to create a modern farming industry where historically there has been none. The gaps are apparent. The World Bank estimates that Africa loses 1% to 2% of its GDP every year to poor infrastructure and calculates the productivity of Africa's farmland at 50% of Latin America's and 40% of Asia's. In its report this year, it noted, farming has started on just 21% of the African land bought by foreigners in 2009 because of "inadequate infrastructure, technology and institutions."
The good news is that those conditions are beginning to improve, at least in parts of Africa. The ECX, Africa's first food exchange, is the continent's standout example of how to commercialize farming. Establishing the exchange in April 2008 required setting up a national agricultural infrastructure: 16 food warehouses, eight regional coffee laboratories, 31 electronic price boards at markets across the country and 600 employees, including specialized product graders. The U.N.'s Food and Agriculture Organization (FAO) estimates that building such a comprehensive commercial structure could spur farmers to double their output. Other efforts are smaller yet still meaningful. In Kenya, Equity Bank made itself the largest bank in East Africa, with 6.5 million customers, by catering to farmers with loans to, say, buy a single cow. Also in Kenya, Syngenta has set up one of Africa's first farm-insurance schemes, now covering 21,000 farmers. In Nigeria, First City Monument Bank has set itself a target of $3 billion in loans to farmers by 2020 and is also exploring insurance. "Agriculture is a real imperative right now," says Ladi Balogun, the bank's CEO. "The idea is to develop an enabling environment to help small farmers." Tech entrepreneurs are adding another piece of the puzzle. New African-developed, farm-focused mobile-phone apps include programs for planning rural credit, a crop-disease alert system and iCow, which tells a herder when his animals are in estrus.
Foreign aid is also reflecting the change from subsistence to commercial farming. Aid workers now recognize that while handing out food during a catastrophe may spare people from going hungry in the short term as the emergency operation to alleviate famine in Ethiopia's lawless neighbor Somalia is attempting it can also ensure that they do so in the long term: free food undercuts and ruins African farmers, who work not on a charitable basis but a commercial one. The U.S. and Britain, Africa's leading donors, are pushing ever more money toward developmental projects such as irrigation and roads, which help create the foundation for local agricultural markets to grow.
There's no doubt the time is right for an African agricultural revolution. The FAO said Sept. 8 that food prices are up 26% so far this year and have surpassed their 2007-8 peak. Understanding that this could ultimately represent not a problem but a promise that could lift an entire continent out of poverty, involves a change of mind-set as profound as imagining slick food traders in a place once famous for famine. "People ask, 'Who is this crazy woman, creating a food exchange in a country where there isn't any food, in the middle of a food-price crisis?'" says the ECX's Gabre-Madhin. "They don't understand. This is Africa's moment."