The conference was held in the British Academy, in their fine building on Carlton Terrace off the Mall in London, the inside of which is adorned with portraits and busts of the great and the good of years gone by (all men, at least the ones I saw). The establishment of the BA was first proposed in 1899, and established in 1902, just before the coronation of Edward VII, following the death of Queen Victoria. It was at the height of the British Empire when Britain ruled the world, or at least large parts of it.
111 years on, Britain’s role in the world has much declined, and the great and the good of today assembled in the conference hall of the Academy (there were lots of Lords, Sirs, OBEs and more in the guest list – and I even wore a tie for the occasion) were having to contemplate a new configuration of power and influence, with Britain as a declining power.
Our panel was on food and agriculture, and included the inevitable discussion about ‘land grabs’, large and small farm models, and how investment in Africa could be increased, but also guided and regulated. The panel included two investors in farm businesses in Africa (including Zimbabwe), a financier from the International Finance Corporation of the World Bank, and researchers from India, Brazil and the UK. We had an excellent debate. Here are some highlights:
- The pattern of large scale land acquisition (‘land grabbing’) noted post 2007-08 is on the decline. Many investors have had their fingers badly burned. One panellist indicated that he would never touch land acquisitions, and would only invest up the value chain. Another said that you enter ‘green field’ investments with trepidation, and it’s so much easier to go for ‘brown field’ sites, where ownership is clear, infrastructure is available and so on.
- There was universal support for a smallholder led strategy (this was a surprise given the panel composition), but with linkages to large-scale capital investments in core estates or farms. Outgrower and contract farming arrangements were favoured, allowing for market connections, quality control and upgrading. While there were ‘intermediation’ problems to be addressed, the efficiency and productivity of smallholders was acknowledged, especially if they could be offered capital investment, input support and training.
- Land tenure and ownership was highlighted as a big issue affecting land based investments in Africa. Lack of clarity of who owns what, and empty land turning out not to be were highlighted. Negotiating at a local level with traditional leaders and local communities was seen as one route, but with its own risks.
- The ‘Africa rising’ narrative had to be tempered. The massive growth estimates that are sometimes touted are often based on extremely dodgy data; and where growth occurs it tends to be associated with oil discoveries or recovery from conflict. The longer term future is not as bright as the hype. Clearly investments from Brazil, China and others are going to be key, but they will inevitably allied to other investors and finance arrangements as part of multi-partite business arrangements. Unlike geopolitics, business does not differentiate between old or new powers in the same way, and there is much more interconnection.
- There is far more room for manoeuvre by African states than is sometimes imagined. While everyone is prepared to play on with the rhetoric of solidarity and South-South cooperation, everyone also knows where interests lie. And in the end national sovereignty counts. Getting a good deal from investments in a ‘buyers’ market’ is easier than some think, however some states are better than others at the negotiations.
Commentaries on the business potentials of agriculture in Africa – and particularly smallholder agriculture following land reform – from agribusiness entrepreneurs are not often heard in the hallowed halls of venues like the BA. But these are surely just the discussions going on Sao Paulo, Delhi and Beijing, not to mention Johannesburg, as emerging powers and their investors plot how to make the most from Africa’s potentials. While investing in agriculture is tough, as the panel confirmed, Zimbabwe may well be a good bet. This is certainly the view of the book, Flight of the Phoenix – Investing in Zimbabwe’s Rise from the Ashes during the Global Debt Crisis, which offers a very positive longer term view of the investment prospects.
This post was written by Ian Scoones and originally appeared on Zimbabweland