VENTURES AFRICA – Land is well rooted in our being. Let’s be frank. Africa’s main asset is poverty.
I must articulate that at this moment of writing this article, there is a surge of compassion overload, as the tears stream form my tear ducts. Looking for a fitting picture to add for the article, I am emotionally devastated by what is available. Imagine as I am, this is your child! More so now, as a UNICEF Volunteer do we need more people to get involved.
All of us take for granted the fact that we can get into our cars (yes, there are few who will walk or get on a bicycle) and head for the fast food outlet, grocery store to stock our shelves. The more I am reading on this topic, the scarier life is becoming. Probably almost two years ago, to feed my desire to learn more about food security, I bought a book “The End of Food” by Paul Roberts. This book kept me up a few nights with anxiety and intrigue. Clearly, the modern food economy that the system entrusted to meet our most basic needs is failing daily.
Let’s first look at what history holds for the value of land for humankind.
Proverbs 12:11 – He who works his land will have abundant food……..(written nearly 3500 years ago)
“An honest man would rather sell his land than tell a lie” – Finnish Proverb
“Upon this handful of soil our survival depends. Husband it and it will grow our food, our fuel, and our shelter and surround us with beauty. Abuse it and the soil will collapse and die, taking humanity with it” – Verdas Sanskrit (Wisdom/Knowledge), 1500 BC
A more modern take on land is captured by one of Mark Twain’s best-known aphorisms: “Buy land, they’re not making any more”.
There are three critical points we need to make and really get across;
- Modern society or business leaders have missed a critical piece of the economic puzzle
- Africa is not using land as optimal bargaining power
- African leaders are not failing our people……..up until this day, they have failed “her” people.
As simply depicted above, the understanding of ‘Land’, its value and contribution existed before current trading as an economic commodity. I recorded the documentary aired on CNBC, BMW: A Driving Obsession. Wow! If only such precision was only given to feeding a human being. It is painstaking to know that more than a 1000 times more effort goes into design, development, testing and manufacturing a BMW vehicle.
Sure it’s a great feat in the automotive industry, especially for those who can afford it. It is literally worth more than a human life. For every $100 000 vehicle that a government official spends on a BMW vehicle, if we include the cost of upgrades and cost of capital, more than 100 000 people can be fed daily. This, given that 2/3 thirds of Africa’s people (human beings) live on less than $1 daily. More than 200 million human beings mostly women and children are under-nourished in Africa. Approximately 13 million children need emergency assistance. From 1994 to 2004, poverty in Africa rose by 40 percent.
60 percent of the global uncultivated land…listen carefully, is in Africa. There is more abundant water supply for these lands, especially given the vastness of it, than is anywhere else in the world. Yet Africa imports more than $20 billion worth of food yearly. And so we could argue just who is responsible for creating this quagmire over the last 80 years. Does it matter, if sustainable solutions are needed immediately? Current solutions on the table: investments bankers, corporate consultants.
Let’s finish this painting. Africa now nestles in between the west and east. This locus of control is set for bidding between the US and China. The US however, given their predicament to avoid running out of money by February 2013 plays into the favour of China. If I may, maybe land itself should become a company, yielding rent for its use and dividends on crop production. Yields could increase in proportion to quantities of scale. Demand and supply levers can be changed based on sense and not only theory that gets practiced to satisfy theorists and bank accounts. This sentiment is shared by leading economists (John Beddington and Paul Collier) in favour of the Brazilian model for realistically bringing down food prices through enhanced technological innovation.
Barter though primitive was a fairly safe practice, albeit primitive. The economic merits and economic values have been forgotten though. African leaders and commercial farmers over decades in failed endeavours have yet to increase basic crop production in Africa. A study just a few years back depicted a minimum increase of 40 percent in food production to keep up with commercial demand, let alone those stricken by poverty.
The Chinese seem to have captured the importance of feeding her people. Still dominating the headlines are land-grabs, under-valued land sales and underutilised land. Exporting of food from Africa has not been a solution to benefit Africans. Bargaining power rests in the hands of African leaders. This trade-off needs possible consideration for a balance between current peasant and small-holder famers.
What is the price for political stability? This is a critical question for African leaders and leading economists. Strategy needs to be factored to land transactions. If the US and China both seek stability, especially China who has disposable cash, premium cost of land as a means to produce food for the largest population needs to rake in FDI (Foreign Direct Investment). More than any commodity, food is becoming the most debated agenda globally. Africa stands at the cross-roads of a balancing act between east and west, her own stability and global food production dominance.
On July 1, 2005 the Sydney Morning Herald published an excerpt from The End of Poverty, where Professor Jeffrey Sachs comments that every day our newspapers could report “more than 20,000 people perished yesterday of extreme poverty”.
Arable Land Investments for the Continent
- Small Scale farmers seeking new opportunities from Zimbabwe
- Rice cultivation – the average ROI is approximately 15 percent
- Supply chain development – soil preparation and maintenance
- Extended maize production (increasing quantities of scale)
- For Rural land –Sorghum cultivation (in China Sorghum is being used to produce energy in rural areas)
- Sorghum can also be cultivated in areas that are extremely dry with limited rainfall – normally 10mm per annum
- Wheat farming has extensive room for improvement
- Various fruit farming
- The Chinese have developed methods of growing vegetables such as Lettuce in water – this process is transferable along with any other technology required.
Investment funds are making considerable packages available for land acquisitions in Africa with private equity funds jumping in at $5 million – $10 million. Some growth in land value has been averaged at 175 percent over a five year period. This is due to foreign currency exchange rates and the low starting prices.
While we pursue all else but food security, the seams of Africa will continue to be stretched. The results have always been instability, civil unrest, civil wars, abuse of power and consistent loss of investments in agriculture and land usage.
It is now we that we have to decipher if land is available for grabbing or a real development opportunity.
Just imagine, you cannot feed your child!