A group of U.S. agriculture companies have committed to investing the minimum of $150 million over the next few years into Africa’s agricultural sector. The investment plans pledged by Monsanto, Cargill, DuPont and other agribusinesses are part of a $3 billion initiative to boost international investments in rural Africa in hopes of lifting millions out of poverty whilst making a healthy profit developing the continent’s vast tracts of unexploited potentially arable land.
This new food security effort was announced by U.S.President, Barack Obama, at the last week’s summit of the G8 — the United States, Britain, Germany, France, Italy, Japan, Canada and Russia – where food security was a key agenda item.The U.S companies, along with corporations from the United Kingdom, Switzerland, Israel, India, Norway and Africa, have committed to a $3 billion investment plan in the developing world aimed toboost agricultural production, particularly among small-scale farmers in Africa who may hold the key to improving world food supplies.The multinational corporations will team up with small African businesses, advocacy groups, banks, African governments and the wealthy, developed nations of the G8 to try to raise 50 million Africans out of poverty in the next decade while answering future supply deficits in the world’s food requirements.
Foreign direct investment flows to Africacurrently hover around $80 billion and trade has tripled over the last decade. But this private sector boom has largely missed Africa’s agricultural economy, favouring investment in resources like oil, gas and minerals.As a result of decades of underinvestment, today Africa is the only continent that does not produce enough to feed its own population. “It has been a bit chaotic. There are all sorts of issues around the countries in Africa,” Jim Borel, DuPont Executive Vice President,said. But according to him, the potential is there.
!m(/uploads/story/74/thumbs/pic1_inline.png)Building on 20 years of experience in agriculture in Africa, DuPont announced that over the next three years it will invest more than $3 million in storage facilities and seed production in Ethiopia. The company will also develop weed control for wheat farmers and create a soil information system to address soil limitations.DuPont is also sponsoring development of a food security index which will be rolled out in mid-July. The company’s investment plans are aimed at growing revenue from African business to over $1 billion within the next 10 years, which, according to Mr Borel, will accelerate the progress on the continent.
The largest seed company, Monsanto, has also committed to invest millions in Africa. Over the next 10 years Monsanto will spend about $50 million on the agricultural development of several African countries. The investment plans include development of corn that uses water more efficiently and development of a network of agro-dealers in Tanzania. Another U.S agriculture company, Cargill, will focus on increasing grain yield for small-scale farmers and on educating farm communities in Mozambique. AGCO,a farm equipment company, also took part in the food security effort, announcing investment plans of $100 million within the next three years. The funds will support farm operations in Kenya, Ghana, Ethiopia and other countries in Africa.
Among the international players taking part in the $3 billion private-sector commitment to strengthen food security in Africais the Norwegian company Yara International.The company will spend $2 billion on a fertiliser production facility in Africa and $20 million on the construction of a port in Tanzania which will help expand its fertiliser delivery network throughout the southern part of the continent. The Swiss company Syngenta AG also announcedplans to invest over $500 million with an expectation to build a $1 billion agricultural business in Africa within the next 10 years.