Outsourcing food and energy production – boon or curse?

by Kayvan Farzaneh

Print | Email | |

Thursday, August 27, 2009

number of articles over the past year have highlighted a new trend in Africa: wealthy countries in Europe, Asia and Middle East are buying or leasing huge tracts of land in African countries, growing food, and then shipping nearly all of it back home. Capital-starved governments are selling their ‘extra’ land to countries that export capital but import their food. Rich countries are, in effect, outsourcing their food production.

A number of articles over the past year have highlighted a new trend in Africa: wealthy countries in Europe, Asia and Middle East are buying or leasing huge tracts of land in African countries, growing food, and then shipping nearly all of it back home. Capital-starved governments are selling their ‘extra’ land to countries that export capital but import their food. Rich countries are, in effect, outsourcing their food production.

As the Economist reports, these deals have been on a massive scale:

“In Sudan alone, South Korea has signed deals for 690,000 hectares, the United Arab Emirates (UAE) for 400,000 hectares and Egypt has secured a similar deal to grow wheat. An official in Sudan says his country will set aside for Arab governments roughly a fifth of the cultivated land in Africa’s largest country…

It is not just Gulf States that are buying up farms. China secured the right to grow palm oil for biofuel on 2.8m hectares of Congo, which would be the world’s largest palm-oil plantation. It is negotiating to grow biofuels on 2m hectares in Zambia, a country where Chinese farms are said to produce a quarter of the eggs sold in the capital, Lusaka. According to one estimate, 1m Chinese farm labourers will be working in Africa this year, a number one African leader called ‘catastrophic’.”

A similar deal was reached between Uganda and Egypt in late 2008. Egypt acquired over 2 million acres of Ugandan land (2.2% of the country’s total) to use for growing wheat and corn.

Supporters argue that such projects would help to inject new technology and investment into the struggling agricultural markets of African countries and would ultimately aid in their overall development.

Now, Britain’s Independent reports that we are seeing a similar trend in energy production. European firms hoping to use Africa’s resource potential have launched two ambitious mega-projects in recent weeks. The Desertec plan aims to build a massive solar farm in the heart of the Moroccan and Algerian Sahara Desert, while the Grand Inga project hopes to construct a 40,000 megawatt-capacity dam on the Congo River. These would cost 400 billion euro and 80 billion euro, respectively. Desertec would export the majority of its energy to Europe while Grand Inga would first supply electricity to South Africa and to Egypt and then sell the remaining electricity to Europe as a means to maintain the project’s financing.

The World Bank argues that keeping just a fraction of the generated power for African consumption could solve much of the continent’s electrification issues. The World Bank estimates that Grand Inga alone could provide power to 500 million African homes.

Still, doesn’t exporting food from Ethiopia and energy from the DRC sound somewhat backward? There are over 4 million Ethiopians threatened by hunger and a mere 6% overall electrification rate in the DRC.

Daniel Howden poses the question…

“Should Europe be allowed to continue its power-generating schemes in Africa?

Yes...

• Europe needs renewable energy and Africa needs massive investment, it's a win-win situation.
• The Sahara is empty and barraged with more solar power every morning than Europe needs in a year.
• A new grand dam on the Congo River would power up to 500 million African homes.

No...

• These mega-schemes are huge indirect subsidies from rich nations to multinationals seeking mega-profits.
• The centralised grand designs don't meet Africa's dispersed power needs and are a huge distraction.
• Africa is full of Western-funded white elephants, two of them already on the Congo River.”

Do such efforts fast-track African development or is it just the latest neocolonialist economic initiative? What do you think?

Article found at The Independent