Buy Land, They’re Not Making it Anymore

Africa land grab
Foreigners are buying up land in Africa

AFRICANGLOBE – Warlords, Russian oligarchs, Wall Street speculators, Chinese state-owned corporations, Britain’s landed gentry, Saudi Arabian princes, Mumbai’s dotcom billionaires and Parisian commodity traders have at least one thing in common.

They all understand the implications of one of Mark Twain’s best-known aphorisms: “Buy land, they’re not making it anymore.”

Nowhere is the meaning clearer than in Africa. It has 60% of the world’s uncultivated land and there is plenty of water nearby. Just add fertiliser and watch the hyper profits come rolling in, or so the investment pitch runs.

Land sales in Africa are no longer for the gifted amateur; they are pulling in the top 10 investment banks and corporate consultants.

Take Emergent Asset Management run by David Murrin, an ex-JP Morgan man. Emergent combines investment nous with apocalyptic geopolitics: in other words scare the rich into buying lots of land.

Even a cursory reading of commodity price swings and forecast food shortages can be unsettling. Murrin adds his own fatalistic forecasts of a clash of civilisations – not over culture or ideology but commodities.

The locus of this clash between Western demand and China’s gargantuan appetite will be on Africa’s farmlands.

Peasant farming is not suited to innovation and investment, and the most realistic way of bringing down world food prices is to replicate the Brazilian model

These are also the kind of investors who have done rather well out of China’s record-breaking growth rates, which were based, significantly, on smallholder farming – not the industrial agribusiness that the new prophets of land use are advocating for Africa.

Africa Land Grab

To pre-empt any scintilla of doubt, Emergent then wheels out a mathematical formula named after Russian economist Nikolai Kondratiev.

Suffice it to say, this formula provides conclusive evidence based on the synchronicity of conflicts and commodity production over the past two centuries that we will all be fighting over Africa’s commodities by the end of this decade.

Should this all sound too dire, the more conventional number-crunchers are in the act too. McKinsey points out that the growth rate of Africa’s farm production is running at about 12%, twice the average rate of other economic sectors over the past decade.

This year, a report provoked a storm of controversy over the claim that Africa had lost about $100bn in badly priced land transactions.

To put it in perspective, the Wash- ington DC-based Global Financial Integrity calculates Africa is losing more than $50bn a year in tax evasion and transfer-pricing schemes.

As for the volume of land grabbing, the best estimates range from the World Bank’s figure of 47m ha to Oxfam’s figure of 227m ha.

What is indisputably clear is that the land rush is on.

That opens up the two biggest questions: what to do with the land and who should do it?

Two British economists, John Beddington and Paul Collier, demand that sentimental attachments to small- holder farming be cast aside.

Collier wrote in The Plundered Planet: “Peasant farming is not suited to innovation and investment, and the most realistic way of bringing down world food prices is to replicate the Brazilian model of large technologically sophisticated agro-companies.”

In short, says Collier, Africa’s land could be used far more efficiently if it was managed by large companies.

And in the red (or green) corner are the proponents of smallholder farming, Raj Patel and Fred Pearce (whose new book The Land Grabbers should be essential reading in every African secondary school).

They liken the idea of uprooting small farmers, who grow 90% of Africa’s food, to the capitalist equivalent of Pol Pot’s Year Zero.

Yet not all the backers of the smallholder farmer are left-liberal writers.

A former head of the Rockefeller Foundation, Gordon Conway, argues incisively that Africa’s green revolution should be based on its 33 million small farms.

As land prices, but not farmers’ incomes, rise relentlessly, the debate over how Africa runs its farms and manages its land will get ever more critical to the continent’s future.

It’s time for African governments to listen far more closely to their scientists and farmers before selling the continent’s birthright.

They’re not making it any more!


By; Patrick Smith