OECD: African agriculture has appeal and risks

By Michael Haddon

Africa's agricultural sector offers a great opportunity for international investors after years of neglect, an official with the Organization for Economic and Development said Tuesday, but risks still remain over controversial issues such as "land grabbing."

"Africa is clearly a continent where there is a tremendous growth potential in the agricultural sector," Karim Dahou, executive manager at the OECD, told a conference in London. "It's an opportunity for foreign investors, but also one for the countries that have been affected by decades of under-investment," he added.

However, Mr. Dahou said the potential impression international investors were "land grabbing" remained a risk and that proper procedures had to be followed to negate such criticism.

"Land tenure is not an issue that is well settled in Africa at the moment," said Mr. Dahou. "It is not easy for investors to identify the holders of the rights," he added.

Developing better irrigation, secondary roads and improved electricity supply is crucial to domestic, regional and international investment said Mr. Dahou.

Only 5% of Africa's farmland is irrigated, with the remainder rain-fed, he added, while up to 50% of production can be lost after harvest as storage and drying infrastructure are insufficient.

The United Nations food body said last month that the endorsement of new global guidelines to help governments safeguard the rights of people to own or access farmland, forests and fisheries was a "landmark decision" that would help halt the "land-grabbing" phenomenon.

The UN's Food and Agriculture Organization said the new voluntary rules, agreed by the Committee on World Food Security, aim to promote sustainable development and food security by protecting the rights of millions of people, who are often very poor.

The Rome-based body said the guidelines recommend that safeguards be put in place to protect tenure rights of local people from risks that could arise from large-scale land acquisitions, while acknowledging that responsible investments by the public and private sectors are essential for improving food security.

Land acquisition is not the only method available to investors, Mr. Dahou stressed, citing privately-owned Cargill preference to work with producers.

Mr. Dahou said the narrow financial markets of many African countries makes international investment a key component of diversifying funding.

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