2:20pm

Fri June 15, 2012
Food

African Land Fertile Ground For Crops And Investors

Originally published on Fri June 15, 2012 5:25 pm

Second of a two-part story. Read Part 1

In some countries of Africa, there's a land rush under way as investors claim farmland, establish mega-farms and try to cash in on high prices for food and biofuels. These deals are controversial. Critics accuse investors of dispossessing subsistence farmers.

But there's another side to this story. There are plenty of people working in economic development who believe that this surge of interest in African farmland, if it's handled well, could also be an opportunity for Africa.

Investors certainly think so. Among them is Jes Tarp, CEO of a company called Aslan Global Management. A native of Denmark and former pastor, Tarp now lives in Wisconsin and runs a company that owns tens of thousands of acres of farmland in Ukraine and Africa.

The money for these ventures comes from small investors: "There are farmers, there are doctors, there are insurance agents. People from all walks of life," Tarp says.

Tarp tells these investors that they will do well. The farms in Ukraine are already profitable. And Tarp thinks the one in Africa eventually will yield "solid returns" of 15 to 20 percent each year.

But according to Tarp, his investors also want to do some good in the world. "The one thing that they have in common is, they are looking for an investment where their investment will make a difference," he says.

Some of their money is transforming a remote corner of Mozambique, in southern Africa. It's financing a farm called Rei do Agro, Portuguese for "King of Agriculture."

Trying To Be A Model Corporate Neighbor

Chishamiso Mawoyo, who is in charge of this operation, takes me to the top of a rocky hill for a good view. He points to the right, to land covered by a green canopy of trees. That's how this whole area looked two years ago, he says.

Only a handful of people were living on this land, or growing crops here, before Rei do Agro showed up two years ago. Mawoyo says that's how the company wanted it. "We think it's easier dealing with trees than with people," he says.

And that's probably the main reason why people I met in the closest village had no problem with Rei do Agro moving in here — in contrast to their anger at another farm nearby, operated by the Portuguese company Quifel Natural Resources, which took over some of the best land.

But there's a cost to pushing the frontier. Clearing land is hard and expensive. Rei do Agro acquired 3,000 acres from the government almost two years ago, and so far, the company has managed to clear just 600 acres.

Also, the farm is 10 miles from any power lines. Mawoyo and his colleagues have to run a diesel generator almost nonstop to power their lights and computers.

It's a long way from his former life in the comfortable office of a big accounting firm in Zimbabwe. "But once you've gotten in, there's no way out. You've got to see it through," Mawoyo says. "That's part of the excitement, part of the exhilaration."

The company wants to get even bigger. It's hoping to acquire an additionanl 25,000 acres, which includes a small river that it could tap to irrigate some of its fields.

This farm is growing soybeans, which will go to feed chickens. One of the biggest chicken farmers in Mozambique, hundreds of miles south, is waiting to buy some of the harvest.

"[The chicken farmer will] send 15 of his trucks. In two weeks they'll be here. Because he's got a huge demand for soybeans," says Mawoyo.

It's a sign of Mozambique's economic growth. People are earning a little more money, so they're eating more chicken meat, and that means more demand for soybeans to fatten those chickens.

That upward curve of demand is the reason businesses are interested in commercial farming in Mozambique. It's the reason investors in Aslan Global Management and its subsidiary, Aslan Group Africa, expect to make money.

But what about their bigger ambition, to do some good with their money? Tarp, the CEO, is sure that they will. "We are there not to extract wealth from the community, but to build wealth in the community," he says.

Good For Companies, Good For Communities?

Whether that's really true — whether foreign investment in African farmland is a good thing for local communities — is currently the subject of intense debate. Is it better, for instance, than providing aid directly to the farmers in those communities, most of whom grow crops by hand, on just a few acres?

On one side of this debate is Jake Walters, director of Mozambique operations for Technoserve. a nonprofit economic development group.

Investors have to preserve resources to make the land produce more or to produce more valuable crops, Walters says. "I think it's the combination of technology and access to markets on a massive scale that these companies have, that really brings that rural area to life in a way that, bit by bit, small people having a little bit of access to capital would not be able to do," he says.

Big companies employ more people, Walters continues. And getting a job is often the one thing that most powerfully transforms a subsistence farmer's life for the better.

On the other side of this debate is Danielle Nierenberg, director of the Worldwatch Institute's Nourishing the Planet project. She's not enthusiastic about 10,000-acre mega-farms growing a single crop.

And, she says, there are better alternatives, that preserve greater diversity in the landscape and in what people eat. Small farmers really can lift themselves out of poverty with just a little training and help — for instance, with irrigation. She has seen it happen in villages in Ethiopia.

"These were people who went from basically living in huts to being able to build their own houses, to buying bicycles, to sending their children to school for the first time. So you see that these things can work," she says.

Yet Nierenberg and Walters don't completely disagree. They both say that it's doesn't have to be one or the other. You can help small farmers and encourage big ones. In fact, the hot new trend among development agencies is trying to bring these two kinds of farming closer together.

To illustrate how this might work, let's go back to Rei do Agro. That farm hopes to bring in electricity, better roads and water for irrigation.

Keeping Promises

This is often the case with commercial farms. They have to build essential infrastructure. Chris Isaac, the Mozambique-based director of business development for an agricultural development group called AgDevCo, says that once they have built that infrastructure, others can use it, too. "Around those farms, you can extend the infrastructure, including irrigation, to small farmers," he says.

Rei do Agro isn't that far along yet. But it is doing some things that don't cost so much money. It has hired a full-time extension manager to work with a handful of local farmers — providing seeds, training, and storage for their crops at harvest time, so they can get better prices later.

One of those farmers is Caterina Alberto. She's tall, dignified, and one of the most prosperous farmers in her village — although like everybody else here, she still has to carry her cooking water from a nearby stream. She and her husband grow crops on about 25 acres, which is a lot for this area.

"We'd like to have more land," she says. "Maybe 60 acres. We have some goals to reach."

In a way, her goals are also those of Mawoyo, the man in charge of Rei do Agro.

In another 20 years, "I would love to see 10 other farms like ours here, with a good cluster of emerging farmers within and around us," he says.

For now, though, that's just a dream. There's not even any guarantee that this one farm will survive. It's a few years, at least, away from making money.

But the company is doubling its bet on Africa, moving into the country of Tanzania, just north of here. Aslan Global Management recently got preliminary approval to buy 75,000 acres of farmland there.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.

AUDIE CORNISH, HOST:

And I'm Audie Cornish. This week, we're reporting on the rush to claim large chunks of the world's farmland. The claiming is being done by deep-pocketed investors. They're betting that the rising cost of food is going to make farming and owning farmland an increasingly lucrative business.

It's happening in South America and Eastern Europe, but it's becoming controversial in Africa. That's because, in some cases, investors have pushed aside subsistence farmers.

NPR's Dan Charles brought us that story yesterday. Today, he reports on the upside for some African communities, where this new interest in their land could also be an opportunity.

DAN CHARLES, BYLINE: One man who really believes in that opportunity is Jes Tarp, CEO of a company called Aslan Global Management. Tarp was raised in Denmark, then moved to Wisconsin. He was once a pastor. Now, he runs a company that owns tens of thousands of acres of farmland in Ukraine and Africa.

The money for these ventures comes from small investors, ordinary Americans.

JES TARP: There are farmers, there are doctors, there are insurance agents, people from all different walks of life.

CHARLES: Tarp tells these investors they will do well. The farms in Ukraine are already profitable and Tarp thinks the one in Africa eventually will yield 15 or 20 percent returns each year.

TARP: Solid returns, solid returns.

CHARLES: But Tarp says his investors are looking for more than profits. He says they also want to do some good in the world.

TARP: The one thing that all of them have in common is that they are looking for an investment where their investment will make a difference.

CHARLES: Their investment is transforming one remote corner of Mozambique in southern Africa.

CHISHAMISO MAWOYO: If you look to the right, pretty much, you'll see how this farm started off. Everything was like this.

CHARLES: Chishamiso Mawoyo is in charge of the Aslan group's operation in Mozambique. It's called Rei do Agro, Portuguese for king of agriculture. Mawoyo has brought me to the top of a rocky hill for a good view. He's pointing to a part of the farm that's covered with trees.

MAWOYO: We started clearing, way back in the distance you'll see there's a green patch there.

CHARLES: Yeah, yeah.

MAWOYO: That's the first place we cleared.

CHARLES: The government of Mozambique turned over 3,000 acres to this company almost two years ago. Only a handful of people were living on that land or growing crops there and that's probably the main reason why people I met in the closest village had no problem with Rei do Agro moving in. Mawoyo says that's the way the company wanted it. It was a way to build trust.

MAWOYO: I had to invest a lot of time with the community leaders here. I had to come and explain what the project is about. I had to come and explain why commercial agriculture may be a good idea.

CHARLES: But there's a cost to pushing the frontier. Clearing land is hard and expensive. Mawoyo had to bring in bulldozers from Dubai to knock down all the trees and rip out their roots. So far, the company's managed to clear just 600 acres. Also, we're 10 miles from any power lines. Mawoyo and his colleagues have to run a diesel generator almost nonstop to power their lights and computers. It's a long way from his former life in the comfortable office of a big accounting firm in Zimbabwe.

MAWOYO: But, once you've gotten in, there's no way out. You've got to see it through, so that's part of the excitement. That's part of the exhilaration.

CHARLES: This company wants to get even bigger. It's hoping to acquire another 25,000 acres, which includes a small river it could tap to irrigate some of its fields. The farm is growing soybeans, which will go to feed chickens. One of the biggest chicken farmers in Mozambique, hundreds of miles south of here, is waiting for them.

MAWOYO: He'll send 15 of his trucks. In the next two weeks, they'll be here because he's got a huge demand of soybeans.

CHARLES: It's a sign of Mozambique's economic growth. People are earning a little more money, so they're eating more chicken meat and that means more demand for soybeans to fatten those chickens.

MAWOYO: That is the sort of curve we are riding right now in Mozambique.

CHARLES: This is the business case for commercial farming in Mozambique. It's the reason why investors in the Aslan group expect to make money, but remember what Jes Tarp said - that those investors also want to do some good with their money. Tarp says they will.

TARP: We are there not to extract wealth from the community, but to build wealth in the community.

CHARLES: It's an ambitious claim and there's debate about whether it's true, about whether foreign investment in African farmland is a good thing for local communities. Is it better, for instance, than providing aid directly to the farmers in those villages, most of whom grow crops by hand on just a few acres?

Jake Walters, director of Mozambique operations for Technoserve, a nonprofit economic development group, thinks it often is.

JAKE WALTERS: I think it's the combination of technology and access to markets on a massive scale that these companies have that really brings that whole rural area to life in a way that, bit by bit, small people having a little bit of access to capital would not be able to do.

CHARLES: The companies get the land to grow more and, often, to grow more valuable crops. They employ more people and Walters says, in my experience, what really changes a poor farmer's life for the better is a job.

Others are skeptical. For instance, Danielle Nierenberg, director of the Worldwatch Institute's Nourishing the Planet project. She's not enthused about 10,000 acre mega-farms growing a single crop.

DANIELLE NIERENBERG: I think that there's opportunities to create really a more diverse food and agricultural system that, you know, does more than just produce commodity crops.

CHARLES: And she says small farmers really can lift themselves out of poverty with just a little training and help, for instance, with irrigation. She's seen it happen in villages in Ethiopia.

NIERENBERG: These were people who went from basically, you know, living in huts to being able to build their own houses, to buy bicycles, to send their children to school for the first time, so you see that these things can work.

CHARLES: Now, Nierenberg and Jake Walters don't completely disagree. They both say it doesn't have to be one or the other - you can help small farmers and encourage big ones. And a lot of development experts now say the key is to bring those two kinds of farming closer together. Think about the big farm, Rei do Agro. That farm hopes to bring in electricity, better roads, water for irrigation.

Chris Isaac, director of business development for an agricultural development group called AgDevCo, says once commercial farmers have built that infrastructure, others can tap into it, too.

CHRIS ISAAC: Around those farms you can extend the infrastructure, including the irrigation, and stretch it to small farmers.

CHARLES: Rei do Agro, the farm I visited, isn't that far yet, but it is doing some things that don't cost so much money. It's hired a full time extension manager to work with a handful of local farmers, providing seeds, training and storage for their crops at harvest time so they can get better prices.

One of those farmers is Caterina Alberto. She's tall and dignified, one of the most prosperous farmers in her village, although, like everyone else here, she still has to get water from a nearby stream. She and her husband grow crops on about 25 acres, which is a lot for this area.

CATERINA ALBERTO: (Foreign language spoken).

CHARLES: We'd like to have more land, she says, maybe 60 acres. We have some goals to reach. In a way, her goals are also those of Chisamiso Mawoyo, the man in charge of the farm, Rei do Agro.

MAWOYO: I would love to see 10 other farms like ours with a good cluster of emerging farmers within and around us that are also beginning to learn and appreciate the gains that (unintelligible) agriculture can bring to this society.

CHARLES: For now, though, that's all just a dream. There's not even any guarantee that this one farm will survive. It's a few years, at least, away from making money, but the company is doubling its bet on Africa, moving into the country of Tanzania, just north of here. The Aslan group recently got preliminary approval to buy 75,000 acres of farmland there. That's 115 square miles.

Dan Charles, NPR News. Transcript provided by NPR, Copyright NPR.

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