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European investors have delayed projects for producing biofuels in African nations due to uncertainty over land tenure and lower oil prices, a senior official of a regional political bloc said on Monday.

Geoff Stiles, technical advisor on biofuels for the 15-member state Southern African Development Community (SADC), said the investors, who he declined to name, who had partnered with oil firms to produce biodiesel from jatropha, had suspended two projects in Zambia and Tanzania.

Jatropha is a non-food crop whose seeds yield oil.

“We are not saying they are not going to do it, but…they are only going to do it as soon as the policy environment, financial incentives that are available and the world financial situation becomes clearer,” Stiles told Reuters in an interview at a biofuels conference in Midrand, South Africa.

“And these (investors) often have paired with big oil companies like Shell and BP, to do large scale jatropha development,” Stiles said.

He said only South Africa and Mozambique had developed national strategies, which target large-scale production of biofuels and include plans to raise the economies of rural communities.

Brazil has said careful planning can ensure biofuels bring jobs, revenue and home-grown energy to African countries without gambling with food security.

But governments, including South Africa’s, the continent’s largest economy, fear that without proper strategies this could cause food insecurity.

Stiles said African countries needed to raise maize production so that the surplus could be used in producing bio-diesel and that African nations were not far from producing biofuels.

“I would say in the next year we will begin to see bio-diesel production primarily from small to medium scale jatropha (growing) … and may be from sunflower and from palm oil, there is a lot of interest from that,” Stiles said.

Stiles said the SADC would provide policy guides to its members to help them start bio-ethanol projects, mainly using sugarcane, although smaller projects have been going on for the last 25 years in Malawi and Zimbabwe.

Source:
Reuters

African countries whose farmland is being bought by foreign investors must defend local people’s rights to avoid eviction, while investors should beware being tainted as human rights abusers or “land grabbers”.

International agencies’ first detailed report on the trend, published on Monday, estimated that nearly 2.5 million ha of farmland in five sub-Saharan African countries has been bought or leased since 2004 – an investment of almost $920m.

“Lands that only a short time ago seemed of little outside interest are now being sought by international investors to the tune of hundreds of thousands of hectares,” said the agencies, calling the huge deals reported so far “the tip of the iceberg”.

The tip of the iceberg

The report was co-authored by the International Fund for Agricultural Development (IFAD) and UN Food and Agriculture Organization (FAO), both based in Rome, and the London-based International Institute for Environment and Development (IIED).

Fears about food security and rising returns in agriculture mean the trend will continue, bringing benefits in terms of infrastructure and jobs, the agencies said, but also meaning risks for recipient countries, local people and investors.

The report focuses on large-scale deals of more than 1 000 hectares in Ethiopia, Ghana, Madagascar, Mali and Sudan, as well as case studies carried out in Mozambique and Tanzania, while warning that data on land deals is “scarce and of limited reliability”.

The authors shy away from the term “land grab”, used by the media to denote the trend towards large-scale farmland purchases by China and oil-rich nations like Saudi Arabia and Qatar in poor countries, which often struggle to feed themselves.

IFAD said the deals could “bring benefits for all parties and be a tool for development” if done the right way.

“Africa has been crying out for investment for decades, so let’s not shoot ourselves in the foot now,” Harold Liversage, a land rights expert for IFAD with about 20 years’ experience in Africa and elsewhere, told Reuters by phone from Tanzania.

Losing access

“Let’s make sure that Africans, particularly small-scale producers and poor rural women and men, are going to benefit from this,” said Liversage.

The report says farmland purchases are being driven by food security concerns, rising demand and changing dietary habits, expanded biofuel production and interest in what is, on paper at least, an improved investment climate in some African countries.

For recipient nations, on a macro level the investment can boost GDP and government tax revenues, while rural areas can see improvements in their livelihood, said the report.

But “large-scale land acquisition may result in local people losing access to the resources on which they depend for their food security – particularly as some key recipient countries are themselves faced with food security challenges”.

It recommended that recipient governments set minimum requirements for such investments in terms of job creation and community benefits as well as the environmental impact on soil and water and the risk of pests from monocultural production.

They should discourage speculative deals and use collective land registration to bolster rights that are often customary to “help local people avoid being arbitrarily dispossessed of their land, and obtain better deals from incoming investors”.

While pointing out that “land grabbers” in Africa are by no means only foreign, the agencies had advice for investors who risk their money in purchases or long leases in countries where land rights are unclear and corruption may be rife.

“Investors can be seen as dealing with or propping up corrupt regimes and human rights violators,” it said. “They may also be perceived as land grabbers in food-insecure countries.”

Source:
- Reuters (news24.com)

Empty plastic sterilised bottles roll down a Zammilk production line about 50 km north of Lusaka.

It takes less than three seconds for a machine to spray yoghurt into each bottle.

Further down the line, another machine screws the lids on. The bottles are then whisked off to sell in shops.

This factory is not just producing yoghurt, but also fresh milk, cultured milk, and a popular flavoured drink called Zamsip.

Over 25,000 litres of milk products are processed here every day.

The company that runs this processing plant, Zambeef, began as a small butcher shop in the capital, Lusaka in 1991.

ince then it has grown to become one of the biggest food production businesses in Africa.

Place “Zam” in front of just about any food product, and there is a pretty good chance this company is producing it.

African breadbasket

Zambeef slaughters 60,000 cows a year.

At the same time, Zamchick produces and processes 3.5m chickens. Then there is Zamleather, Zamflour, and Zamshu, among others.

“Agri-business is definitely the future for this country,” says Zambeef’s managing director, Francis Grogan.

“Zambia has got huge masses of land. We’ve got very fertile soil, fantastic rainfall and a climate perfectly suited to growing crops.”

Many would agree.

But so far, Zambeef stands out as a rare Zambian agricultural powerhouse.

Turning the countryside into a viable, sustainable industry on a much larger scale is something people here have talked about for ages.

But until now, it has not happened.

That is because it takes more than mother nature’s blessing to turn Zambia into an African breadbasket.

“The problem is money,” says Mr Grogan.

“It costs $10,000 a hectare to turn bush-land into farmland. That’s just getting the electricity and irrigation up and running,” he says.

Loan problems

Then there is the fact that banks in Zambia only make loans in US dollars, and the revenues are generated in Kwacha, the local currency.

That carries the potential of exposing farmers to big losses when the dollar appreciates – as it is doing at the moment.

“It’s a very risky business,” says Mr Grogan.

The other challenge for Zambian farming has been the country’s proximity to its much bigger neighbour, South Africa.

“South African exporters have used their export power to destroy farming potential in Zambia,” says Ndambo Ndambo, executive director of Zambia’s 300,000-strong National Farmer’s Union.

So in light of all this, how has Zambeef done it?

Francis Grogan says the company business model of controlling every stage of the food production chain – including retailing – has been the key to its success.

Mr Ndambo agrees.

“Zambeef is providing leadership in farming,” he says. “They can compete with South African producers. They have the muscle.”

Small producers

But Zambeef will remain the exception to the rule, says Mr Ndambo, unless the Zambian government begins to make investment in agriculture a top priority.

That, he says, means giving farmers financial breaks, encouraging banks to lend to the sector, and making it more difficult for South African competitors.

With the right incentives agri-business could become Africa’s new emerging market

“Now is the time for investment in Zambian agriculture,” he says.

These days, the government might just be swayed.

Zambia’s Agriculture Minister, Dr Brian Chitu, says the government recognises that the country’s farmers need incentives if the industry is to continue to grow.

“We don’t really believe that agriculture can take off without credit facilities,” he told the BBC World Service.

Dr Chitu says the problem of access to credit, which is particularly critical for small-scale farmers, will be addressed in the next session of parliament.

“I intend to introduce a bill in parliament – the agricultural credit act – this we believe will assist small-scale farmers particularly to access money.”

Since the downturn, the price of Zambia’s biggest export, copper, has more than halved, and mines in Zambia’s copper-belt are beginning to close.

Suddenly, the need for a more diversified economy has taken on a new urgency.

When it comes to farming, Zambia certainly will not be starting from scratch.

The country’s share of food and other farm products in total exports has been increasing – from less than 5% in the 1980s to more than 20% today.

Zambia is also better able to feed itself, becoming mostly self-sufficient in staple products like wheat and maize.

Now, the Zambeef success story might just provide enough incentive for Zambian policy makers to place agriculture at the centre of a new economic strategy.

Source:
BBC Online