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Rising food prices strengthen focus on promoting major investments in agriculture in Central Africa

24 February 2013

According to reports on the IRIN website, food price inflation over 2012 in the Republic of Congo saw the cassava retail price rise by 160%, meat prices by 75% and vegetable oil by 50%. As a result, the Congolese government is renewing its policy emphasis on revitalising local agricultural production. According to Ministry of Trade officials, ‘the Congo imports almost half of the essential commodities it needs’, which has a direct effect on prices, since ‘imported products contain imported inflation’.

One initiative to combat this is ‘a US$26 million project to build new agricultural villages’, which was set up in 2010. Another initiative is the government’s large-scale leasing of arable land to South African farmers in 2011, which is expected to boost the country’s maize production.

In neighbouring Gabon, the Minister of Agriculture, interviewed by the Financial Times publication This is Africa, has set out ambitious investment plans for the agricultural sector. The government of Gabon is planning to develop the cash crop sector, including palm oil, soya, sugar, maize, rubber, coffee and cocoa, through a system of intensive agricultural investment. The government is also working with Singapore-based Olam International to ‘develop 50,000 ha for palm oil production’, as well as ‘rubber plantations and ammonia and urea manufacturing facilities for the production of agricultural fertilisers’.

This is Africa also reports that the Belgian company Société d’Investissement pour l’Agriculture Tropicale (SIAT) has been investing in ‘rubber and palm oil production since it took over a set of state-owned enterprises in 2004’. According SIAT’s website, ‘Siat Gabon runs 10,000 ha of mature rubber plantations, 7,300 ha of oil palm plantations, a refinery/fractionation/soap packaging plant of 20,000 tonnes of finished products/annum and a cattle ranch of 100,000 ha with a herd of 6,000 cows.’ SIAT also reported that in February 2012 it ‘entered into a partnership with the Singaporean based GMG Global Ltd (GMG), a subsidiary of Sinochem International from China’. The move is seen as opening the door to the Chinese market for the company’s rubber products.

The media reports note that the government of Gabon is actively seeking investors by making ‘1 million ha of land available for immediate arable use’, under 25–85 year leases, accompanied by a range of tax breaks. In addition to addressing labour constraints in the agricultural sector, the government is reportedly embarking on the establishment of agricultural colleges to produce ‘a class of agricultural entrepreneurs’. 

Editorial comment

In Central Africa, addressing food security by improving production and distribution, and reducing pressures from shifting cultivation on forests and woodlands, are both key priority issues. However, there is considerable controversy over the role of foreign investment in large-scale agricultural development initiatives. On the one hand, this can be seen as an opportunity to enhance agricultural productivity through increased capital investment and infusion of technology and enhanced management capacities. On the other hand, there are fears that foreign land acquisition could pose a threat to local food security and exacerbate rural poverty, if it reduces local farmers’ access to land and other resources.

The critical policy issue is how such large-scale foreign investments are managed, and how they are aligned with local agricultural activities and national food and nutrition security policies. Critical concerns in this regard include:

  • ensuring that the land rights of local communities are respected;
  • striking a balance between production of food and non-food crops (particularly biofuel crops) and establishing a balance between production for domestic and regional markets and production for export.

These challenges can be seen as particularly acute in Gabon, given the low levels of agricultural production, the high dependence on food imports and the extensive deforestation that has already occurred. With growing consumer sensitivity in western markets to the sustainability of production processes for products such as palm oil, ensuring that foreign investment results in sustainable patterns of production would appear to be essential for the development of international trade based on large-scale foreign investments. 


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