Jun 30 2010

African plantations: the trend towards scale in African agriculture

Category: Uncategorized<ADMINNICENAME> @ 10:30 AM

The push by foreign investors to form large aggregations of land in Africa — plantations, in a word — is getting lots of attention and concern, but the reality on the ground is inconclusive about the potential for peril. Foreign investors may simply be dumb or naieve about the returns on aggregating farm land in a region of the world where historically plantations have not proved either practical or profitable. Africa is not, and never has been, Latin America. Assemblng land, meanwhile, is one achievement. But growing crops profitably requires much more than land and even farm labor, which is not actually plentiful in Africa either (because most farmers have their own land and want to work it). Crops, whether grown on plantations or in small plots, require water and sometimes fertilizer. The crops also must reach markets, some of them distant. Even if the owners of the plantation purchase all of their output, they must still move output in a timely fashion. And if they plan on exporting crops out of Africa, the logistics of international transport may be prove daunting.

So there is no reason to imagine that African planations will suddenly become numerous in parts of Africa (such as Ethiopia and Ghana) where they haven’t historically been. But if plantations do arise, alternative exist to the prospect of wage labor. Perhaps the most compelling alternative is for small farmers themselves to form cooperatives, in order to achieve production scale. Or they can themselves contract directly with a large buyer — a practice I’ve described in detail in The New York Times regarding the case of the American cotton merchant, Dunavant¬† — in order to benefit from the undeniable movement towards scale in African agriculture. In some parts of Africa, such as a tea plantation I once visited in Malawi, “outgrower” arrangements with farmers who live outside of the plantation proper provide them with both a ready buy for a cash crop, and technical assistance in growing it. A new study from a British development agency, the International Institute for Environment and Development. offers a review of Africa’s “plantation future” and its alternatives. While the authors presume too-bright a scenario for corporate farming in Africa, their survey of alternative “business models” for small farmers in Africa (and elsewhere) is valuable and timely.

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