Whether for profit or social motives - and often both - an increasing number of investors are targeting opportunities in African agriculture. At the same time innovative approaches for deploying aid to support farming businesses linked to smallholders are emerging. This blog provides a snapshot of who is doing what, where and how.

16 June 2010

Food prices to rise by up to 40% over next decade, UN report warns

Food prices are set to rise as much as 40% over the coming decade amid growing demand from emerging markets and for biofuel production, according to a United Nations report today which warns of rising hunger and food insecurity.

Farm commodity prices have fallen from their record peaks of two years ago but are set to pick up again and are unlikely to drop back to their average levels of the past decade, according to the annual joint report from Paris-based thinktank the OECD and the UN Food and Agriculture Organisation (FAO).

The forecasts are for wheat and coarse grain prices over the next 10 years to be between 15% and 40% higher in real terms, once adjusted for inflation, than their average levels during the 1997-2006 period, the decade before the price spike of 2007-08.

Link to Guardian article

15 June 2010

UK's Andrew Mitchell urged to support poor farmers

NGOs set to lobby the UK's international development secretary, Andrew Mitchell, over support for agriculture and poor farmers in developing countries.

Mitchell made a number of comments about agriculture during his time on the opposition bench. For example, he spoke about the importance of private sector led growth and wealth creation as a path to prosperity and investment in low cost rainwater collection and irrigation systems. If the minister needs reminding of any of his promises, Keith Palmer, executive chairman of AgDevCo, will be on hand to do so. When we met last week, Palmer handed me a list of Mitchell's top lines.

AgDevCo is a not-for-profit company that develops and arranges finances for sustainable agriculture and agri-business opportunities in Africa. With its focus on business development, it is perhaps less focused on the groups to which Peacock refers, but he is no less passionate about the importance of agriculture in changing the world – and he believes the key to achieving this is investment in irrigation.

"If you're really serious, you've got to sort out irrigation. It solves the problem of famine when rains go away. It's been a persistent problem in Africa for a long time. It's not just that we can massively improve yields and production, you can two-crop and in some parts of Africa you can triple crop. You improve nutrition and health. It's so obvious to me that it's depressing that there is almost no irrigation systems in Africa – except in south and north Africa," he told me last week.

The reason for this apparent lack of interest is, he says, is money. He estimates that the cost of installing irrigation infrastructure is, on average, US$7,000 per hectare. (Although organisations like International Development Enterprises (IDE), which champions small-scale irrigation schemes to farmers living on $1 a day, would no doubt argue you can do it for much less.)

"You've got to create irrigation agriculture businesses to pay for the cost of all that, but it's not a government priority."

At an event organised by AgDevCo last week, delegates called on governments and donors to support a major increase in resources for sustainable and pro-poor agricultural initiatives in Africa, and to channel a greater share of the budget towards NGOs.

"I hope that we can get this message across about agriculture production being the single best thing we can do to help the rural poor. Let's look at effective ways to do this. Let's put some commitment behind it. If you want quick wins you're not going to get it [with agriculture], but this is the way to go," Palmer says.

The UK government has already been vocal in its support for women in developing countries, focusing on a reduction in maternal mortality rates. But it has been tight-lipped so far on agriculture - a sector in which women make up around 70% of the workforce in many parts of Africa – except to include the Food and Agriculture Organisation (FAO) and the International Fund for Agriculture and Development (IFAD) in its review of spending on multilateral aid.

In January, a report published by the All Party Parliamentary Group on agriculture and food for development, Why no thought for food?, was heavily critical of the Department for International Development (DfID) for neglecting agriculture. It called on the UK government to commit at least 10% of its overseas aid budget to farming. At the time Mitchell called the report "hard-hitting" and said: "Improving food security for the world's poorest people is a matter of life or death, and should be an important part of our international development efforts."

Link to Guardian article

11 June 2010

Agriculture ignored: the failure of aid to reduce rural poverty

A recent article by Cunguara and Hanlon (2010) shows that rural poverty in Mozambique has been increasing in recent years, depsite record levels of donor assistance. Education outcomes are improving (slowly) but "people are in the process of losing faith in education as a vehicle for upward social mobility" because there are no jobs. There needs to be much increased support to productive agriculture, the authors argue. Donors and governments have neglected the agriculture sector for decades. If they are serious about tackling rural poverty, that must change.
Link to full article