VENTURES AFRICA- World’s largest seed company – Monsanto as well as DuPont, Cargill and other U.S seed, chemical and equipment companies will make an investment of about $150 million in the next few years. This is part of the $3 billion global investment efforts by companies announced by US President, Barack Obama. These investments are made on agricultural projects and products on the continent by companies are from India, Israel, Switzerland, Norway, the United Kingdom, and 20 companies from Africa. They are investing $3 billion to help farmers in the developing world build local markets and improve productivity.
The move by global corporations to invest on agricultural production in Africa came as a result of the call by the United Nations on the growing population in African countries, which may lead to hunger and poverty affecting about three billion people. United Nations predicts that by 2030, the world will need at least 50 percent more food, 45 percent more energy and 30 percent more water.
As a result of this, investors are buying farmlands with the hope of making Africa farmland more productive while using modern agricultural facilities.
Apart from investing in the project to curb poverty which may affect about three billion people, Investors from these countries said they are investing in Africa agricultural projects as it holds strong profit potential.
However, indigenous African farmers have expressed concern over the growing trend as they fear that they may lose control of their hold on food supply and markets. Some argued that African farmers are being displaced and unsustainable farm practices are being introduced.
Anuradha Mittal, Executive Director of the Oakland Institute, a policy think tank organisation said “The problem is all this is based on large-scale commercial agriculture.”
“Who does it benefit? All of these things are supporting the formation of large-scale commercial agriculture, which will hurt small farmers. They could spend far less but focus on providing credit facilities, ensuring open markets and ensuring the rights of small holder farmers,” he argued.
Nevertheless, in an interview with Reuters, Executive Vice President of DuPont said although it is a bit chaotic as there are some issues around some African countries, he posits that his company can take advantage of what it has now to accelerate progress in their endeavor in Africa.
“It has been a bit chaotic. There are all sorts of issues around the countries in Africa. But the population, the economic growth, the quality of many of the soils is there, the need is there, (and) the potential is there.”
“We’re convinced we can take the base we have now, and accelerate that progress,” he said.
India and China are more stable and growing faster, but Africa is “not far behind,” says Borel who also oversees DuPont’s food and nutrition businesses.
DuPont already has a business in Africa as it operates a Hi-Bred International seed company in Africa for decades. The company plans to spend more than $3 million for the next three years with much focus on Ethiopia where the company is investing in seed production and storage facilities. It is also developing weed control for wheat farmers there, and creating a soil information system to address soil limitations and boost crop yields. It plans is to increase its revenue from the African business to more than $1billion in the next ten years.
On the other hand, Monsanto plans to invest about $50 million for the period of ten years to support African agricultural development and growth. Monsanto’s plans include work in Tanzania on development of corn that uses water more efficiently, and support for development of a network of agro-dealers. While Cargill invests in Mozambique by focusing on grain yields for small farmers as well as training and educating farm communities.
AGCO, a U.S.-based farm equipment company also plans to invest $100 million over the next three years to improve farm operations in Ethiopia, Ghana, Kenya and other African countries.
Among the international players, Norway’s Yara International is planning a $2 billion fertilizer production facility in Africa and is spending $20 million to build a port in Tanzania that will help expand its fertilizer delivery network throughout southern Africa. The Swiss company Syngenta AG said it would invest more than $500 million in Africa. Over the next 10 years, Syngenta expects to build a $1 billion business in Africa, a report said.