Although overshadowed by the financial and political crisis in Europe in the international press, it is important that agriculture and food security is once again at the top of the international agenda. Galvanising the private sector for development of the smallholder sector must be a good thing. And new money, given the drastic failure of the international community to live up to the G8 L’Aquila accord, must be welcome news. But as ever with such events, there are more questions that arise. In the various statements it is not clear what is being pledged and by whom. A trust fund of $1bn is promised, along with a further $3bn investment by a lead group of multinational companies. Given that $22bn was promised by G8 leaders in 2009 in L’Aquila and only about 20% emerged (and even some of that was simply recycled), it is not surprising that there are cynical voices.
What then is being proposed? Again this is not all clear. The White House press release listed a whole array of worthy activities, many already well established. But it is the Grow Africa initiative of the World Economic Forum, and linked to CAADP and NEPAD, that is attracting new attention. This is framed by the report, Putting the New Vision for Agriculture into Action, prepared by the consulting firm McKinsey and released in last year. This is an intriguing document. It is again backed by some of the biggest corporate players in global agri-food systems and given legitimacy by a well-respected array of researchers from top institutions across the world, including IFPRI, IDS and others. It is full of arguments for supporting smallholder agriculture, but it is centred on an old-fashioned ‘productivity gap’ argument, linked to a dualistic model for agriculture involving both small and large farms, combined with a substantial expansion of farmed area. This is to come about through private investment in entrepreneurial activity, with a heavy reliance on large-scale farming. And this, presumably, is where the big business interests come into play.
Africa has been hailed as the new focus for global economic growth. Certainly there are some eye-catching statistics. According to the African Progress Panel report, Ethiopia grew faster than China in the five years before 2009, and Ghana was the fastest-growing economy in the world in 2011. ‘Destination Africa’ is increasingly appealing as a site for investment; and agriculture, as the core of the economy of most African countries, is often central to this agenda. Combined with the rush for scarce resources to fuel growth or provide food and energy elsewhere, it is a potent mix. Both African governments and big business are lining up to make the most of this.
The launch of this latest G8 initiative had the top brass from Monsanto, Dupont and Syngenta present, some of the largest agri-technology companies in the world. Such companies, as well as others involved in communications, brewing and marketing, are eyeing up Africa as a lucrative new market. And some African countries are presenting themselves very effectively as business-friendly destinations. For example, the heads of Ethiopia, Tanzania and Ghana were all in Chicago for the G8 launch event and are being wined and dined by the global and political business elite.
In many respects this must be a positive development. Africa for too long has been off the radar screens of most major foreign investors. The lessons from elsewhere are that sustained poverty reduction only emerges when wider economic growth really takes hold and this needs a vibrant private sector with sustained investment flows. But there are downsides of a free-for-all neoliberal model promoted by the McKinsey/WEF vision. Growth does not always deliver poverty reduction and growing inequalities result in unrest and discord, as Kofi Annan emphasised at the launch of the Progress Panel report. Furthermore, not all private sector activity is beneficial, as some investments can push countries down a pathway which does not result in inclusive, sustained growth. Benefits are exported, profits are captured and jobless growth may result.
So in this celebration of the private sector’s role in development, let’s step back a bit and reconsider this revival of the much tainted ‘Washington Consensus’. Issues of access, distribution, inequality and justice must be part of the picture, and this is not always delivered by a rush to growth driven by global multinational corporations. An analysis of institutions and politics must be central. FAC research has highlighted for example the damage caused by many inappropriate , it is often small-scale private sector players along the value chain who make the difference – a far cry from the big players assembled by the G8. And in all cases, state support, careful regulation and investment transparency and accountability are essential.
As argued by civil society groups in the lead up to the G8 announcement, a more rooted debate is required on the future of African agriculture, involving all the stakeholders not just a select political and business elite. A two-track Africa – where a well-placed minority win due to elite connections and the rest lose – will not bring long-term sustainable development to African agriculture.
Photo: 20120518-06, by The Chicago Council on Global Affairs on Flickr