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Hunger and food security: Is Africa selling the farm?

Foreign investors see Africa as a breadbasket. Done well, investment could help with African hunger but create food security for the rest of the world.

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But for the ordinary African consumer, it was a disaster. Corn prices jumped 119 percent from June 2007 to June 2008.

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The economic collapse in the United States and much of Europe helped to cool things off, but the sleepy world of African subsistence farming had changed forever: The 21st-century African land rush had begun.

The World Bank estimates that worldwide, 115 million acres of land are leased to foreign investors, and the bulk of that is in Africa. A small sampling of countries targeted by foreign agricultural investors documented in the past five years by the International Food Policy Research Institute includes:

Democratic Republic of Congo: 7 million acres secured by the Chinese firm ZTE to grow oil palm for bio­fuels; and 24.7 million acres offered to the South African farmers' union, AgriSA.

Mozambique: Nearly 250,000 acres secured by the Swedish firm Skebab to produce biofuels.

Tanzania: Nearly 1.25 million acres requested by the Saudi Arabian government for food production; more than 110,000 acres purchased by the British firm CAMS Group for biofuels made from sweet sorghum.

Sudan: 1.7 million acres secured by the South Korean government to grow wheat; nearly 1 million acres secured by US-based Jarch Capital; nearly 75,000 acres secured by the Abu Dhabi Fund for Development to grow corn and alfalfa.

Ethiopia: More than 32,000 acres secured by the German firm Flora EcoPower to produce biofuels.

Not all deals are made alike, to be sure. Deals on leased farmland to produce food do manage to create jobs and can also help to transfer state-of-the-art farming skills, such as erosion control, to the local farm-labor force. Deals to grow crops for biofuels sometimes also involve simple refining, which also creates jobs. But many land deals are decidedly one-sided, with all food produced sent away for export

"Setting aside the 'you're selling our land' histrionics," says a Western diplomat who has closely studied Madagascar's agriculture sector, "I think that countries of Africa would benefit from foreign investment by creating low-end jobs, some of it on larger commercial plantations and even some on the small-holder farms."

The key, this diplomat says, is to negotiate a deal that benefits the host country as much as it does the foreign investor. In the Daewoo deal – as with numerous similar deals involving companies from China, Saudi Arabia, Dubai, and elsewhere – all the food produced in Madagascar was intended for export.

"The landlord country needs to be really thoughtful about the conditions of the investment contract," says the diplomat. "They have to be saying, 'We want this to be environmentally sustainable, so the commercial farmers are using best practices for soil conservation and water use. They should be carbon-neutral. They should bring in good technology and show local small-holder farmers how to use it, so the general productivity of the region increases.' "

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