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A new report turns the heat up on international initiatives such as the G8’s New Alliance for Food Security and Nutrition and the Alliance for Green Revolution in Africa (AGRA) as well as multinational companies such as Monsanto, DuPont, Yara, Syngenta, Diago, Coca Cola and Unilever along with the British Government that are stakeholders in those initiatives, stating that they are staging a new ‘scramble for Africa’ and are trying to control the African food system.
Ethiopia is one of the countries in Africa where the mentioned initiatives and multi-national companies operate heavily.
The report released by World Development Movement entitled “Carving up a continent: How the UK government is facilitating the corporate takeover of the African food system” states that all the agricultural investment heading into Africa is not what it seems.
Between 1991 and 2011, as food production increased by 10 percent per person globally, Africa witnessed a 40 percent increase in the numbers of undernourished people. The problem according to the report is an unjust economic model which exports food to Europe and North America, as well as the Middle East and Asia now, rather than allowing African farmers to grow food for their own communities.
According to the report, all the above mentioned initiatives along with the World Economic Forum’s explicitly corporate-led New Vision for Africa, all encourage big business to invest in African countries.
The claim that the investment made by the multinational companies will lead to growth and thus end poverty and hunger is not feasible. The report states that many of the products and profits are being exported to developed countries, with the small-scale food producers who feed the majority of the African population losing out.
The World Bank has described the continent as the “last frontier” in global food markets. But the intrusion of multinational companies is transferring the control of African resources, including land, water, seeds, energy and labor, to the companies themselves and leading to their domination of markets from fertilizers and seeds to consumer goods.
Since 2001, at least 56 million hectares of African land have been sold or leased. The report states that while proponents of these land transfers argue that local people benefit through the creation of jobs and through new infrastructure, such projects have failed to deliver time and again. Frequent complaints include badly paid work, poor working conditions and not enough jobs for all those displaced.
According to a study by the World Bank, data available suggests that land “investments create far fewer jobs than are often expected”.
Alliance for Green Revolution (AGRA)
The report also looks at different initiatives such as the Alliance for Green Revolution (AGRA). Set up by the Bill and Melinda Gates Foundation in 2006, AGRA works in 14 African countries including Ethiopia.
According to the report, the program’s model is based on networks of agro-dealers, businesses which sell farmers fertilizers, pesticides and hybrid seeds; which are bred to produce good yields in the first season, but fail to maintain yields in the second generation, meaning that farmers need to purchase new seeds every year rather than saving or exchanging them.
The report states that AGRA is currently lobbying for regulatory and legislative change to seed laws in Mozambique, Tanzania, Ghana, Mali and Ethiopia.
“AGRA’s 2013 Africa Agriculture Status report argues for a much more concentrated commercial seed system which would only be possible by changes to seed laws to benefit commercial seed companies. This would include an intellectual property regime under which certified seeds are protected from being produced by third parties and in which the production of non-certified seed is outlawed. Such a system would result in a dramatic reduction in biodiversity, which is increasingly important in a changing climate. It would also prevent small-scale farmers from saving or improving their own seed,” the report reads.
It also states that, although AGRA claims it does not currently fund research into or production of Genetically Modified (GM) crops, one of its founders and major funders, the Bill and Melinda Gates Foundation, is an active funder of GM research and holds investments in biotechnology firm Monsanto.
The World Economic Forum, G8
The report also blasts on the global club of powerful politicians and business people saying it was one of the first organizations to capitalize on the global food price spike of 2007-08, launching its New Vision for Agriculture in 2009.
Building on the New Vision for Agriculture, Grow Africa is an initiative of the World Economic Forum and the African Union convened in 2011. Its aim is to “accelerate private sector investments” in agriculture in the eight African countries involved in the New Vision for Agriculture: Burkina Faso, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, Rwanda and Tanzania.
The initiative introduces investment commitments from 62 companies, including many of the companies involved in the New Vision for Agriculture, such as SABMiller, Syngenta and Unilever.
The report also looks at the New Alliance for Food Security and Nutrition, also known as New Alliance. The initiative launched by the US-hosted G8 back in 2012 aims to “generate greater private investment in agricultural development”. The initiative involves G8 and other donor governments, African governments, the World Bank, African businesses and multinational companies committing to delivering USD 3 billion of investment in Grow Africa.
The report further states that the New Alliance increases benefits for the companies involved by requiring African governments to reform their policies to suit large corporations in exchange for private investment and aid money from G8 and other rich countries.
Such policy areas involved include trade, land and seed and agrochemical market regulations, with eight out of ten of the countries involved committing to reform their seed laws to facilitate private sector involvement in this area.
The report states that in other cases, Ethiopia has committed to reforms to enable foreign investors to secure access to land and obtain a business license without following the necessary regulation. Last month ten UK companies that have investments in Ethiopia met with Prime Minister Hailemariam Desalegn and held talks about the challenges they face. Moreover in December 2013, European companies that are doing business in Ethiopia submitted a letter to the government of Ethiopia saying that the conditions of doing business in the country should be more open.
Bio-technology, food and drink companies
Multi-national fertilizer and pesticide companies are also expanding into Africa. The world’s biggest fertilizer company, Yara, is involved in the New Alliance. The report says these agrochemicals already have contributed to serious levels of poisoning in sub-Saharan Africa, with the UN estimating that problems linked to pesticides could cost the region USD 90 billion between 2005 and 2020.
Fertilizers also damage soil; leading farmers to rely on them even more in order to maintain production, which increases their risk of getting into debt. The tragic consequences of small-scale farmers’ reliance on fertilizers in India have been much reported. An estimated 250,000 farmers committed suicide between 1995 and 2010 after getting into debt through buying agrochemicals.
The report says companies which are involved in the New Vision, Grow Africa, New Alliance and at least one of the agricultural growth corridor projects includes DuPont, Monsanto, Syngenta, Diageo, SABMiller and Unilever.
According to the report, Diageo is a partner in the New Alliance and Grow Africa, as well as a founding partner of SAGCOT (Southern Agricultural Growth Corridor of Tanzania) and is represented on the board of the New Vision.
Diageo has been funded by DfID for a project to replace its imported barley with local sorghum in Cameroon through the Africa Enterprise Challenge Fund which is hosted by AGRA. This helps its beers appeal to local consumers. However, a similar scheme which sourced another staple crop, cassava, for brewing in Ghana has led to higher prices, which could result in higher levels of hunger.
The report says the company is now carrying out similar programs in Ethiopia and Tanzania as part of the New Alliance, stating: “The new projects in Ethiopia and Tanzania will provide Diageo with a long-term, secure and sustainable source of raw materials, which reduces exposure to increasingly unpredictable changes in availability of material and potentially volatile global commodity markets”.
The Alliance for Food Sovereignty in Africa (AFSA) recently released a statement signed by 100 African farmers groups and civil society organizations which rejected the approach of these initiatives, stating: “opening markets and creating space for multinationals to secure profits lie at the heart of the G8 and AGRA interventions…Multinational corporations like Yara, Monsanto, Syngenta, Cargill and many others want secure markets for their products in Africa…Across Africa, so-called ‘harmonization’ of laws and policies are underway to align African laws and systems with the interests of these multinationals…Private ownership of knowledge and material resources (for example, seed and genetic materials) means the flow of royalties out of Africa into the hands of multinational corporations. In some countries where laws protecting the interests of corporations are well established, for example in South Africa, multinationals have entirely occupied domestic seed and agrochemical sectors with profits flowing out of the country. The same is happening for agricultural services, trade, manufacturing and even selling of food.”
Misleading a continent
The report argues that the objective of the New Alliance and the other initiatives is to create a safe and profitable investment climate by enabling companies to access African resources and markets. They are not, as their names suggest, geared at reducing hunger or malnutrition, because they have no mechanism to reduce poverty and are likely to increase it.
Their proponents appear to deliberately use words such as production, investment and growth interchangeably with food security and poverty reduction, as if the former will inevitably lead to the latter. But as the World Bank recognizes, while sub-Saharan Africa has seen strong economic growth over the past decade, it has done little to reduce poverty, with almost half of the population continuing to live on less than USD1.25 a day. In fact, inequality is rising, and many countries are highly dependent on exports to volatile global commodity markets.
All of the initiatives result in land being taken away from small-scale food producers and transferred to agribusiness corporations. This is occurring both through direct handovers and more indirect means such as policy reforms.
In addition, most of the New Alliance cooperation framework agreements require African governments to make it easier for foreign investors to access land in their country and/or facilitate the development of markets in land such as through land titling initiatives.
An analysis of the African countries involved in these initiatives makes it clear that the initiatives are about companies making profit, not tackling hunger and poverty.
The report claims that the UK government is playing a major role in efforts to push corporate-controlled food systems in Africa. Significant amounts of the UK aid budget is being used to support the interests of multinational companies in Africa, regardless of the evidence of what impact this will have on some of levels of poverty.