Agriculture attracts record foreign capital

The foreign direct investments (FDI) in Turkey’s agriculture and food sectors have been vacuuming international companies over the last decade, according to impressive figures provided by Agriculture Minister Mehdi Eker. 

“The FDI in the food and agriculture sector was $14 million in 2002 and it reached $2.1 billion in the first 10 months in 2012,” Eker said during a breakfast in Ankara, where he hosted a group of journalists. “The investments in the agriculture sector are on the rise,” he said, adding it was “both domestic investments and foreign investments.”

Agriculture is still one of the engine powers of the Turkish economy as one third of the working population is employed in the sector. Eker said this figure stood at a mere 4 percent in European Union member nations on the average. 

The minister said a decrease in the agricultural employment should be considered as normal.

Agriculture generates $62 billion annualy

Some 6.2 million people work in Turkish agricultural fields of 24 million hectares. The sector generated $62 billion of gross domestic products last year. The national income was $774 billion the same year. 

International food organizations are foreseeing inflation in food prices until 2021, Eker said, telling that Turkey had some specific global suggestions to fight back. Support for small and medium sized enterprises is a leading one.

The minister also projected that energy prices and meat consumption would hike and fish growing would replace fish hunting in the given period. 

Turkey’s net trade surplus in agriculture is $3.5 billion on an annual basis. 

When it comes to imports in the sector, Eker said some raw materials, which are also used in other industries, were also accounted as agricultural purchases. These goods are mainly rubber, textiles fabric, and cellulose, the minister said, that the volume of such imports stand somewhere between $6.5 billion and $7 billion. 

Turkey’s agriculture sector steadily grew for 14 quarters in a row and the figures had been positive since 2003, with an exception in 2007, a year of drought. 

The government has provided 7.4 billion liras in grants for farmers so far this year, the minister noted. The figure will rise to 9 billion liras in 2013, he said. 

He also said 2,500 new employees would be added to the ministry’s ranks as of 2013. The new cadre will basically be employed in rural areas. 

Fake product makers announced 

Commenting on a new procedure of publicly announcing food firms that sell fake products, the minister said 50 such companies have been declared. 

Developing countries have been consuming grains rather than rice, which plays a role in building agricultural policies, he also said. 

The current output of global agriculture sector was enough to meet the demand by all the people living on earth, he said. “The problem lies in trade policies, and lack of justice, sympathy and love.” 

The hunger problem was also posing security risks, he said. “If 1 billion people out of 7 billion are hungry, the world cannot be a safe place for the remaining 6 billion.”

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ADB Plans to Boost Asia Agriculture Investments

By Surabhi Sahu

Lured by soaring food prices, sector inefficiencies in emerging markets and attractive returns, many private equity players and multilateral agencies are eyeing agricultural investments in Asia.

The Asian Development Bank has embarked on an ambitious plan to more than double its investments in the agriculture sector to $100 million-$200 million a year from 2013, Mr. Martin Lemoine, investment specialist at ADB, told Dow Jones Newswires.

ADB’s interest in agriculture comes close on the heels of International Finance Corp., the investment arm of the World Bank, which plans to double its agri-investments globally to about $10 billion by 2016.

The ADB’s loan to PRAN, a major agribusiness company in Bangladesh, will finance construction of a glucose factory, a flour mill and a frozen food processing facility, which will support local farmers and employ as many as 1,000 factory workers.

“Farmers are also consumers…it’s important to support them,” Mr. Lemoine said.

In China, ADB provided its first-ever logistics-related loan recently.

Investments in India and Kazakhstan are likely early next year, Mr. Lemoine said.

“In India, the fruit and vegetable sector is interesting [for investment],” he said, adding that about 40% of the country’s fruit and vegetable output gets wasted each year post-harvest. Such inefficiencies create opportunities to invest in companies with warehousing, cold storage and packing facilities, Mr. Lemoine said, noting that the bank is studying a proposal to lend to a provider of fresh produce.

In Kazakhstan, the ADB may lend to a local food and beverage company that sells fruit juices, he said.

The ADB could lend as much as $60 million for the two projects, Mr. Lemoine added.

“We like countries such as Indonesia and Vietnam, where about half the population is less than 30 years of age,” said Victor Lean, managing partner of Singapore-based Caudex Asia, noting that favorable demographics support domestic consumption.

The pattern of production is also changing, reflecting demand for better quality food and lifestyles, Mr. Lean said. Some mills in Myanmar are getting farmers to grow long grain rice instead of short grain fragrant rice to meet rising demand for the former grade, which also commands a higher sales premium, he said.

The average return for a 10 year-old fund with a holding period of about five years is usually 2-3 times on a cash-to-cash basis, but this figure can even reach 4-5 times, said Yap Kian Woon, partner at CMIA Capital Partners. “So it’s pretty good,” Mr. Woon said.

CMIA has invested over $500 million in different sectors including agriculture since 2003, he added.

– Sameer Mohindru contributed to this article.

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Should you be looking at agriculture investing?

Investors looking for an asset class showing strong returns over the turbulent year to date may have noticed the recent gains made by soft commodities such as corn.

The US midwest - a key growing area for crops like corn, wheat and soybeans - has been hit by its worst drought for 56 years, meaning yields are likely to be much worse than expected. The price of some agricultural commodities has reached record levels as a result.

The S&P GSCI Agriculture index rose by 24.10 per cent from the start of the year to 9 August, driven by a 43.19 per cent year-to-date gain in the S&P GSCI Soybean index and a 41.47 per cent increase in the S&P GSCI Corn index.

And gains look set to continue after the US Department of Agriculture lowered its production forecast for both corn and soybeans on 10 August. Corn yields are now expected to fall to 123.4 bushels per acre for 2012-13 - their lowest in 17 years - because of the drought.

Despite the price gains, products tracking soft commodities have not witnessed higher inflows. ETF Securities has seen outflows from wheat and corn exchange-traded commodities over the year to date as investors take profit from the price rises.

ETF Securities senior research analyst Martin Arnold says: “A lot of investors that find appeal in the agricultural space tend to a bit longer term in their investment horizons. Agriculture is generally impacted by longer-term trends - population growth, especially in emerging markets, and supply trends such as decreasing yields.

“When you’ve been holding agricultural products for one or two seasons and you start to see prices gains like this, it’s probably a very attractive time to reduce your exposure.”

Relying on the short-term gains of agricultural commodities for returns may not be the most prudent strategy as prices can literally change with the weather.

Capital Economics commodities economist Muktadir Ur Rahman says: “The current elevated levels of grains prices probably already reflect the worst possible outcome for US harvests.

“In the absence of any further adverse weather shocks, we believe that the prices of corn, wheat and soybeans will drop back by an average of 15 per cent over the remainder of this year.”

But adding exposure to agriculture in a portfolio need not entail directly investing in commodities or the passive products tracking them. Active funds focusing on agriculture - such as the £155.4m Sarasin AgriSar fund, the £132.6m Baring Global Agriculture fund and the £35m First State Global Agribusiness fund - invest in the companies engaged in the growing or raising of soft commodities.

The Sarasin AgriSar fund, which is managed by Henry Boucher and Mark Whitehead, does not seek to capitalise on short-term fluctuations in crop prices but seeks opportunities linked to improvements in agricultural productivity. This is achieved by looking at all levels of the agriculture chain - what Boucher calls a “field to fork” approach.

The managers say: “As equity investors in the sector, we focus on net farm incomes rather than direct crop prices. Despite the slowing global growth outlook, firmer crop prices and lower energy costs are supporting food producers and food consumption trends remain well underpinned by rising incomes.”

Baring Global Agriculture fund co-manager James Govan says the portfolio has been positioned to benefit from rising soft commodity price through holdings in the seed and fertiliser sectors.

The fund has increased its weighting to agricultural biotechnology corporation Monsanto in recognition of its increasing market share in US corn seeds and strong growth in South America.

Furthermore, the portfolio has a strong holding in Agrium, which makes the three main forms of fertiliser, and last month added to positions in fertiliser companies Potash Corp and Yara International as part of the theme.

Recent disposals include processing and distribution company Archer Daniels Midland and pork producer Smithfield Foods, as the profitability of the businesses is likely to be hit by the smaller US harvest and higher prices.

However, Goven adds that the returns of agriculture equity funds are not dependent on high commodity prices.

“In a downwards soft commodity price environment we can provide some protection by investing in meat, fish and dairy companies,” he says. “If you’re a chicken producer, for example, a large part of your costs are in corn and grains so they would benefit from a lower price environment.”

Hargreaves Lansdown investment analyst Richard Troue says the short-term price fluctuations mean he is not keen on directly investing in soft commodity through products such as ETCs. Troue would rather hold agricultural equity funds.

He says: “For investors who believe they can stay ahead of the curve, buying or selling ahead of such news, investing directly could be an option, but accurate timing is likely to be a challenge and the risk of missing the top or bottom high.”

Troue adds that agriculture is a specialist investment and says most investors would only want to allocate about 5 per cent of their portfolio to the area.

“Nevertheless, I am positive on agriculture as a long-term investment theme. With the prospect of over nine billion mouths to feed by 2050, investment in food production is set to rise,” he says.

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Wisdom Korea exploring investment opportunities

ISLAMABAD: A seven-member delegation of Wisdom Korea, a joint venture company, is visiting Pakistan to explore the investment opportunities in agriculture and food sectors of the country. They called on Minister of State and Board of Investment Chairman Saleem H Mandviwalla. The delegation has interest in agriculture and food sectors and also the cultivation of mangoes and pre-cooked rice.

G-Food Korea CEO Lee Jae Ho informed the BoI chairman that the Korean government extends financial support with its ODI programme to assist developing countries like Pakistan to take advantage of the facility. The BoI chairman asked the delegation to meet Rice Exporter Association of Pakistan and Horticulture Development Export Board of Pakistan to establish joint ventures for processing of food and agriculture items for export.

Mandviwalla welcomed the delegation for its interest in Pakistan and assured the group of complete support and facilitation of BoI. He informed that Pakistan is a good destination for investment and our investment policy is very open. The establishment of special economic zones will further help in attracting investment in Pakistan.

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Strategies for investing in agriculture

By Russell Pearlman

High crop prices could be a boon to farmers and investors alike. Here are ways to buy into the world’s growing demand for food.

Play it safe: farming equipment

The world’s population is growing fast, but the amount of land to grow food is not. So, as simple supply and demand economics would dictate, food prices are rising.

According to the United Nations, grain prices have more than doubled since 2003, and some analysts expect them to continue rising for the foreseeable future. That trend could be a boon to American farmers, and when farmers feel rich, they often shop for new equipment.

Gary Bradshaw, a portfolio manager for the Hodges family of mutual funds, likes Titan Machinery TITN -0.99% , a distributor of tractors in the Great Plains. Titan’s 2011 net income was $44 million, nearly double what it was in 2010.

For a more international bet on farming, Bradshaw also likes Deere DE -1.50% . The Moline, Ill., maker of giant green tractors and other big-ticket farm equipment grew its net income by 56% in four years, from $1.8 billion in 2007 to $2.8 billion last year.

Go for broke: a chicken run

If the rest of the world is going to eat more food, it surely will eat more chicken, right? U.S. chicken-piece prices have risen anywhere from 2% (breasts) to more than 120% (wings) from a year ago.

But buying into poultry is a lot riskier than taking a flier on most other farm-related businesses.

Because prices have been so good, chicken firms could produce a lot more birds. “The danger is you drive prices lower,” says Heather Jones, a managing director at BB&T Capital Markets.

Plus, higher crop prices pose a problem: Sanderson Farms, the nation’s No. 3 chicken producer, says its feed costs (primarily corn and soybeans) were nearly 40% higher last year than in 2010.

Still, chicken producers have made their operations more efficient, and they’ve steadily increased exports to Asia and Europe. Bradshaw says he’d consider buying Pilgrim’s Pride, another major chicken producer, if its stock price dipped. 

Original Article here

New planning in agriculture

A 4-day regional training workshop on drafting effective national agricultural development programmes began at Grand Hyatt Muscat Hotel here yesterday. The workshop deals with the process of preparation of the integrated systems designed for implementation in member states of the Food and Agriculture Organization (FAO). Thirty-six officials are taking part in the workshop, which was opened by Dr Hamad bin said al Oufi, Under-Secretary of the Agriculture and Fisheries Ministry for Fisheries.

Dr Khalid bin Mansour al Zadjali, Director-General of Planning and Investment Development, said that the workshop aims at enhancing the capacity of FAO representatives and upgrade the level of technicians to support agricultural development through effective strategic planning. It also seeks to enhance the capacity of specialists in agricultural and fish planning by imparting knowledge and the skills needed to implement national programmes.

Al Zadjali pointed out that effective national programmes include several themes, including medium-term joint response between governments and the FAO by optimising the outcome of joint studies. FAO Representative in the Sultanate, El Zein al Muzzammil, said the workshop is one of the methods to identify medium-term response to the needs of member states in pursuit of development objectives.

El Zein pointed out that the devising of the national framework for programming is a shared responsibility between the governments and the FAO with participation of national stakeholders, including the private sector and civil society institutions. The FAO launched early this year a programme to promote knowledge and upgrade skills on results-based programming, management and resource mobilisation at the national level.
Richard Moore, FAO Head of Human Resources Department, said in a speech that partnership with the Sultanate is a good opportunity to achieve important goals and transform knowledge into reality. He stressed that effective national programme provides an opportunity to exchange opinions and improve policies. — ONA

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Agricultural technologies for food security, or something more?

By Vanessa Meadu

In a world that is becoming increasingly food-insecure, due to population growth, climate change, volatile food prices, unequal food access, and inefficient supply chains, what solutions exist to feed 9 billion people by the year 2050?

The problem we face is by its nature very complex, so it stands to reason that solutions will need to address a range of issues, often several at once. Where do we begin?

As agricultural researchers, it’s easy to start by looking at the biophysical world. Hundreds of existing agricultural technologies and practices have the potential to boost agricultural yields in the developing world, and the International Food Policy Research Institute (IFPRI) of the CGIAR has undertaken a massive effort to evaluate which of these technologies and practices are most appropriate for different places facing different conditions. The project seeks to compile evidence-based information on risks and benefits of these technologies and practices and the policies necessary to implement them. Claudia Ringler, who is part of the IFPRI team implementing the work, shared early findings with participants on 16 June at the Rio+20 sustainable development conference as part of a session called Feeding the World: Sustainable Agriculture and Innovation.

"Agricultural technologies are really at the heart of food productivity growth,” said Ringler. By surveying a wide range of agricultural experts, and combining the results with crop models, her team assessed common practices such as zero tillage, conventional breeding, genetic modification, integrated soil fertility management, irrigation technologies, water harvesting and organic agriculture, to better understand the impact of each technology in different contexts. The results are enlightening: integrated soil fertility management, for example, can significantly boost maize in rainfed and irrigated environments, and has positive impacts on rice and wheat yields grown under the same conditions. Drought-tolerant rice breeds are also likely to help increase yields.  These results are pertinent to policy makers at Rio+20 seeking guidance for their investments in agricultural technologies.  

But technology isn’t everything. Ringer concludes: “While biophysical potential often exists to significantly increase yields, institutions, governance systems, political will and poor rural infrastructure remain obstacles to achieving full technological potential.” These challenges are particularly striking in African countries, which could most benefit from new technologies and practices.

Lindiwe Majele Sibanda, CEO of the Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) shared her perspectives from working in African agriculture. She highlighted the need for technology investments in both global and local research. Unless global technologies are tailored to local conditions, then these interventions will fail achieve the desired transformations. She also stressed that rural women, who are already bear a disproportionally heavy work burden, must not be put at further disadvantage by practices that are labour-intensive.

Dr. Sibanda also noted that in Africa the private sector is not sufficiently robust, or engaged in, agricultural development activities:

“For markets to be functional,” she said, “you need buyer, seller, and the thread to tie it together. In Africa you see middle-men who work as extractors; they are not part of the system. The system is not in place to ensure your investment pays back over time. If the technology breaks down you need to wait for the next middle-man to sell you something new.”

The public sector also has an important role to play in supporting the implementation of new technologies. Currently, she said, insufficient money is going into research because African researchers are often not working on local issues and that findings are not made public goods. “Research is about empowering with knowledge,” she said “but research needs to feed the development agenda.”

Dr. Sibanda lauded Brazil for leading the way to ensure that research knowledge generated at local level indeed feeds the development agenda. Elisio Contini from Embrapa, the Brazilian national research agency, discussed the current state of Brazilian agriculture, including the successes in implementing low-tillage approaches, and also supporting multifunctional landscapes that combine crops, livestock and grasslands.

Farmers are “essential” to Brazil’s economy, said Dr. Contini. He cited that in the year 2000, Brazil exported $20 billion of agricultural products; in 2012 exports are expected to be worth $100 billion. Despite these successes, he noted that Brazil needs to increase yields through more sustainable land use.

After we identify appropriate technologies, and build the research and development support systems that ensure close links with local knowledge and communities, what else is needed to achieve food security? Adrian Fernandez, who sits on the Commission on Sustainable Agriculture and Climate Change, helped link technologies to the wider picture of the food system. We can only tackle these major food security issues and challenges by approaching them in an integrated way, said Dr. Fernandez, who is an Advisor on Sustainability, Metropolitan Autonomous University, Mexico.

He shared the Commission’s seven key actions for achieving food security in the face of climate change, specifically highlighting the need for countries tosustainably intensify agricultural production while reducing greenhouse gas emissions and other negative environmental impacts of agriculture and how the Rio+20 process must catalyse significant global investments in sustainable agriculture and food systems in the next decade

[Watch: How to transition the global food system into a "safe operating space" by balancing how much food we produce, how we adapt to a changing climate, and how much agriculture contributes to further climate change.

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Private investments – a fair deal for small-scale farmers?

By Cecilia Schubert

Biofuels are a hot commodity, and the private sector is looking at small-scale farms in developing countries to help produce crops to feed the industry. Understandably, this is causing controversy, with accusations of land-grabbing by private companies, and fears that farmers may swap food crops for more profitable biofuel crops, increasing their risk of hunger. But what is actually happening behind the headlines? Can farmers really benefit from the investments or will they only jeopardize food security and degrade the environment? Is it really a fair deal for everyone involved?

These were some the topics discussed during International Institute for Environment and Development (IIED) side event ‘Fair ideas - Making agricultural investments work for small scale farmers’ held on 17 June during the Rio +20 negotiations. Led by Lindiwe Sibanda, CEO of Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN), the panel addressed challenges and opportunities concerning private sector investment in agriculture. The panel also talked about possible ways forward, particularly implementation of a model that supports and builds on the needs of small-scale farmers.

A small-scale farmer in Africa normally owns less than one hectare of land (sometimes only one-quarter of a hectare), to produce food for the family and sell some crops at the market. In humid areas, some farmers raise livestock in addition to farming, while in dry areas livestock is the primary source of income. Sara Namirembe from World Agroforestry Centre (ICRAF), described the limited scope for expansion of African farms, which makes it difficult to combine both production of food crops and crops aimed for biofuels. In Uganda for instance, farmers who received payment for producing biofuel crops almost eliminated production of food crops entirely, leaving the community food insecure. This is one risk involved in this line of business she explained. Another risk is  biofuel crop failure. Who will compensate the farmer and what type of safety nets are there? Currently, she said, these safety nets are rare.

Farmers can, however, improve their negotiation status in relation to the industries investing in their farms, said Ruud van Eck, Director of Diligent Energy Systems. For example joining together and getting organized, is one way of strengthening the voices of farmers. He described how companies want to see farmers organised, to improve communication and the flow of information.  Farmers need access to knowledge and resources, markets and infrastructure, he said, and many of these inputs are missing today.

There are many real concerns and challenges, and more research and local participation is needed before we can ensure that there is a win-win situation for everyone involved. Policies and regulations around biofuels and food production are also crucial in order to make sure that farmers and the environment benefit from this process.

But there are also opportunities for farmers. Industries are investing, creating opportunities to expand and intensify they agricultural production. Dr. Sibanda summed up the session by saying that every player has a role to play: the private sector needs to open the way forward and be transparent; researchers have to produce better knowledge about the biophysical and socioeconomic costs and opportunities; and consumer need to raise their voices and acquire information about the situation. Sustainable agriculture needs the private sector and success depends on a stronger commitment by investors, NGOs and policy makers to ensure that investments can contribute to development goals.

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The CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) was covering the Rio+20 Conference live between 12 - 22 June. Read the latest stories related to agriculture and food security from the conference. To get the latest updates follow both CCAFS on Facebook and Twitter and Agriculture Day Facebook and Twitter. Join the conversation about agriculture and food security at Rio+20 using #Rio4ag on Twitter.

Cecliia Schubert is a communications assistant at the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS).

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Invest in agriculture skills

Time for action: It's crucial the Federal Government invests in education and training in the agricultural sector.

AUSTRALIA needs to boost agricultural skills to feed Asia, writes BRIDGET McKENZIE

Trade Minister Craig Emerson and Prime Minister Julia Gillard have been keen to talk up the need for Australia to fill the plates of Asia with our locally grown produce.

But a critical skills shortage threatens our agricultural abilities to meet increasing global demand for food and fibre.

The message is not getting through to Gen Y that with a career in agriculture you can make a difference and a dollar.

Australia already exports 60 per cent of its produce, and ABARES says we could lift the value of agricultural exports by 140 per cent by 2050 - but we need a skilled, competent workforce.

Efforts to engage and address the shortage, identified by the Council of Deans of Agriculture in 2008, have been sporadic, with the number of universities offering agricultural-based courses in Australia halving between 2000 and 2010.

The Government must invest in agricultural-sector education and training so we can drive productivity gains and remain internationally competitive.

In the past fortnight, a Senate inquiry and Victorian Government report have gone out, extensively examining the industry's need for a skilled workforce.

Both highlight issues of concern for agricultural education - issues of low enrolment levels, the sector's image and remuneration, and the cost of delivering agricultural education.

It is not surprising that after a decade of drought followed by floods, and several agribusinesses closing their doors locally, a career in agriculture has not been encouraged by parents or schools.

Bright, articulate students who do want a career in the sector are being told not to waste a high tertiary-entrance score on agriculture - so it's little wonder 30 agronomist vacancies went begging across northwest Victoria last year.

Throughout the inquiry it was clear the agriculture industry wants practically-trained graduates from all levels of the education process.

Funding agribusiness education is cost-intensive, and this is not acknowledged in current funding models.

Research tailored to our growing conditions, soil types and business practices is essential for future productivity gains.

In 2008-09, the Federal Government spent less than $160 million on its agricultural research and development. In 2005, China spent $2.7 billion, the bulk government-funded.

It's time to invest in our future.

Both inquiries found academics and industry must practically engage with the teaching profession to promote agriculture in schools.

Turning student teachers on to agriculture, not only as a subject in its own right but also as an example for investigating wider concepts such as science, technology and history, may occur during their time studying at university.

The consequence of letting another review, like so many before it, languish as a talking point for vested interests will see us losing ground economically and socially.

The future of regional Australia has always been - and will continue to be - built on the back of thriving agricultural businesses.

There is enough talk about the problem. Action is what is needed now, because it takes time to train people and to change attitudes.

We have a great story to tell - exciting careers, in industries that are high-tech, internationally competitive and based in the regions.

The menu is written and the Government would do well to digest the reports' contents.

It's time to plate up.

Original Article Here

Food security: Countries need right kind of investment

By Andrew England

As food prices soared and some producer countries placed restrictions on their exports in 2008, a flurry of interest in foreign investment in agriculture was ignited.

Africa, endowed with much fertile but underdeveloped land, found itself the focus of much of the attention, particularly from oil-rich, import-dependent Gulf Arab states.

The interest triggered a series of announcements about planned mega-projects, from Zambia to Sudan, as food security took on fresh importance.

But it also had a second impact – raising the debate about the sustainability and risks that accompany large-scale foreign investment in the land of often poor, undeveloped African states that in many cases struggle to feed their own people.

Often the schemes attract the pejorative tag of “land grabbing” and there have been high-profile controversies, such as the attempted involvement Daewoo, the South Korean conglomerate, in an agricultural project in Madagascar.

Experts say that, ultimately, many of the plans of 2008-09 failed to materialise as the food crisis abated and investors became more aware of the political risks and huge logistic difficulties. But as populations grow and consumption habits change, the trend of foreign investor interest in Africa’s soils is expected to continue.

There are no precise figures on the scale of land acquisitions, but Land Matrix, an online database of land agreements, has tracked 986 deals since 2000, amounting to 57.3m hectares of land – 41 per cent of it acquired in Africa, with Ethiopia, Sudan, Zambia, the Democratic Republic of Congo and Madagascar among the top 10 targeted countries.

Africa stands out because much of the land is in the hands of the state and can be relatively cheap, while several governments have been seeking investment in agriculture, says Michael Taylor, at the International Land Coalition.

“It is of serious concern that the investment model that has been used up to now, that of acquiring land, is seemingly the dominant one, so there’s a need for regulation. There’s a need for governments to be making firm decisions in light of a broader strategy on rural development,” he says. “We talk to many stakeholders and the one thing we hear right across the board is that we need investment, but it has to be the right kind.”

It is an issue that goes to the heart of the debate around large-scale land projects in Africa – whether foreign investment can be used to aid badly needed development rather than being deemed exploitative.

Paul Mathieu, a senior land tenure officer at the UN’s Food and Agriculture Organization, says: “It cannot be seen as necessarily negative, it can be positive, if it’s handled in the proper way from the start,” says .

“People may become more cautious and more keen to consider types of investment that do not necessarily imply the acquisition of land.”

Investors could employ people as contract farmers rather than displacing them. “It all depends on how it’s done,” Mr Mathieu says.

He says that what is often overlooked is the increasing role of domestic investors in agriculture, but adds that governments often struggle with limited technical and human resources to monitor and regulate projects.

However, there is a risk that, if governments and investors become too cautious, it could stymie investment altogether, says Chris Isaac, director of business development at AgDevCo, a non-profit organisation that works on sub-Saharan Africa agricultural projects.

He says: “There need to be more visible examples of things that work well and that will take some time, because patient capital [long-term, low cost debt] has become available only recently.”

He believes there are benefits when multinationals source local produce through contract farmers or if commercial farming hubs are extended to enable communities to share in expensive large-scale infrastructure such as irrigation systems.

Mr Isaac says: “We think that model is the only way for certain crops, particularly field crops such as rice, to get productivity levels up to where you can really tackle food insecurity.

“If you can secure the markets for farmers, that puts you in a good place. But you need to do more than that. You need to help farmers become more productive.”

Mr Isaac is based in Mozambique, a poor country with an estimated 36m hectares of arable land available, of which less the 16 per cent is under production, according to the UN. It has attracted significant foreign investor interest in biofuels projects, rice schemes and forestry plantations.

But some have failed, while others have come into conflict with local communities.

Mozambique also illustrates the underdeveloped state of domestic farming in many African countries – two-thirds of Mozambican farms struggle on two hectares or less, while 42 per cent of farms are unable to ensure food security for the household throughout the year, according to a UN report.

“Unless you bring in private investment, technology and skills, it’s going to be very difficult for the agriculture sector to move beyond where it is today,” Mr Isaac says.

 Original Article here

Africa Has Tremendous Future In Agriculture

 ABS Staff 

Land still equals wealth, and in an increasingly cautious investing climate, many are turning to an old philosophy to put their money to work. New York’s Waldorf-Astoria Hotel played host to a conference on global agriculture investments. The event was organized by HighQuest Partners, whose managing director, Philippe de Laperouse, explained that with the demand for food increasing globally, and its future sources undetermined, investors are looking to move in on agriculture.

The center of this movement currently lies in Africa, where land and fresh water remain plentiful. “Africa has a tremendous future in terms of agriculture. Africa could feed much of the world,” Jes Tarp, CEO of Aslan Global Management, told NPR.

Mozambique, a southern African country approximately the size of Texas, is one of the hot spots for agricultural investments. Within the country, all of the land is owned by the government. Investors can lease the land for 50- or 100-year terms, for an extremely low price. Needless to say, the scenario benefits investors in the extreme long term.

For the country’s impoverished citizens, however, increased corporate presence can mean the loss of livelihood. Though the land is government-owned, Mozambique is home to a large number of farmers, who work on the land to make ends meet. When land is sold to investors, it can mean the displacement of established farms and workers, if the company decides to work differently. Schools, villages and medical clinics can become compromised when the ground they’re built on is transferred into foreign control.

In some villages, companies that gain control of the land will simply plow over the crops of the local farmers. Such was the case in the small village of Ruasse, where Hoyo-Hoyo Agribusiness paved over the local crops in favor of their own plantations and use the water with little care for the villagers, who rely on it to drink. Instead, the water is carried away in large tanks to feed a potato field.

“This whole community has just one river; this one here,” said one of the villagers. “By the month of August, this river will be all dry.”

Though some companies develop larger corporate farms to employ the Mozambique natives, there is little long-term support and government protection against foreign abuse is non-existent. Agricultural investments are becoming more and more popular in other countries like Ethiopia and Tanzania as well, and Africa’s importance in the global economy could be on the rise. However, these countries must take precautions in order to protect the interests of their own people and secure their own future.

Original Article Here

Godapani murder stirs up agriculture department subsidy scam

GUWAHATI: The murder case of the agriculture department's superintendent engineer, Godapani Pathak, who was abducted and killed more than a month ago, is yet to be closed. It has, in fact, blown the lid off a subsidy scam in distribution of farm machinery in the department.

"There is a subsidy scam going on in the agriculture department. The government provides subsidies on machinery like tractors, power tillers and pump sets for farmers, but the benefits do not reach the beneficiaries. On paper the subsidies are doled out but there are no lists of beneficiaries," a source said.

Pathak was inquiring into anomalies in the subsidies given on farm machinery in Dhubri district.

The source added, "It is suspected that the machinery is sold in the open market for a price slightly lower than the actual cost, but the subsidies are never transferred to the buyers," the source said.

The agriculture department has now asked all its district offices to submit list of beneficiaries of subsidized power tillers, hand pump sets and other farm machinery. The source added that the department is also now examining the volume of the subsidy scam and several officials are scanner.

Chief minister Tarun Gogoi has said on record that the investigation so far points towards involvement of some officials of the agriculture department in the murder of Pathak through hired killers from Kamatapur Liberation Organization.

The agriculture department's rules binds farmers legally not to sell subsidized farm machinery after procuring them from the department. The rules say that the district agriculture officer will sanction the application of farmers for farm machinery and arrange the procurement and supply. After the machinery is commissioned, the agriculture department will arrange for release of payment.

Under the Assam Agricultural Competitiveness Project (AACP), the state gives 50% subsidy each on shallow tube wells, low-lift pump, 30% on tractors, power tillers, 80% on sprinkler irrigation.

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More investment in agriculture and livestock needed

By Nassir Al Majrafi — Investment is the cornerstone in the development in the field of agriculture and livestock. The agricultural sector sees robust growth when the investment is based on a solid grounds. Understandably, agricultural investment needs to be supported in several ways so that the sector could be able to allure investors to invest their money without worries of any kind. These aspects include security, stability, investment laws, availability of agricultural resources and active markets, in addition to the existence of viable means of production which includes scientific research and the application of cutting-edge technologies in the agricultural operations.
The Ministry of Agriculture and Fisheries is constantly developing the efficiency of the agricultural infrastructure. The ministry has already set up several research centres all across the country in order to improve the quality and quantity of agricultural product. Researches have achieved considerable success in utilising salty water in cultivating specific types of fruits that resist to salinity.
The ministry applies modern technology to improve agriculture and livestock and it has introduced advanced irrigational systems in small farms as well as the use of other techniques such as agricultural mechanisation and greenhouse farming. These modern methods have proven quite successful in boosting the productivity of the agricultural sector. The ministry is also encouraging animal breeders to utilise advanced methods in livestock breeding projects and the use of modern animal barns. The success in applying these methods has proven quite successful in boosting livestock products and is highly likely to attract investors to the livestock sector.
A quick look at the agricultural sector shows the investment opportunities are aplenty and diversified, the likes of which never exist in other sectors. For instance investors can benefit from date palm trees in many ways besides food production, as palm trees are known for being useful as far as every part of it is concerned.
The field of honey bees production is a promising one for investors wishing to benefit from the Sultanate’s huge potential of honey bee breeding. The demand for high-quality Omani honey and the other related products is increasing both inside Oman and across the Gulf region.
Livestock projects executed in Oman have achieved an amazing success due to availability of healthy climate for investment in the field of animal rearing. This is yet another lucrative sector and with the huge livestock potential that abounds in Oman the investment future looks bright and promising.
In a nutshell, if we put into consideration the increase in the Omani population and the rise in income, which reflects in excellent purchasing power, investment in the agriculture and animal sector is becoming more and more attractive, particularly when investors think about the previous successful experiences and most importantly the facilitations and encouragement given by the wise Omani government to investors in all sectors.

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US Agriculture after the Closing Bell Report

The flight out of commodities by investors continued Thursday as Soybeans and Wheat both closed below initial support levels. New-crop corn rallied modestly as reported rain totals from Thursday continue to come in disappointing.

Wheat futures were under pressure throughout the session Thursday, and most contracts finished with losses of 0.06 to 0.14. Futures trimmed losses slightly in after hours trade. Harvest pressure continues to encourage selling in the Wheat pit, especially as dryness concerns overseas have subsided. The HRW crop has limped into the finish, however, keeping selling interest in check.

Corn futures closed mixed and remained choppy in after-hours trade. Given the fact Soybean futures ended 0.20- to 0.30 + lower in most contracts, Corn held up relatively well. Pressure on Corn to end the month was limited by concerns recent rains have not been widespread enough to erase drought conditions.

Soybean futures sold off into the close and finished mostly 0.1775 to 0.3325 lower, with nearby contracts bearing the brunt of pressure. Traders trimmed losses slightly in after hours trade. Soymeal and Soyoil also closed with moderate losses. Funds sold 8,000 Soybean contracts today, 40-M bu. Risk aversion on disappointing US economic data was the dominant attitude ahead of the calendar flip to Jun.

Lean Hog futures gapped higher on the open and buying interest mounted as the day progressed. Jun through Aug futures closed 2.125 to their 3.00 limit higher, and most deferred contracts saw $1+ gains. Traders were Bullish as they evened positions ahead of the calendar flip, largely thanks to a 1.95 rise in Pork cutout values yesterday along with strong movement.

Live Cattle futures ended about where they began, which was good for a mid-range finish. Futures closed 0.65 to 1.025 higher in the Y 2012 contracts. Cattle futures were supported in part by ideas yesterday’s losses were overdone, with fundamental support coming from the Beef market. Choice beef values were up 0.77 this morning and Select declined 0.51 on strong movement of 114 loads.

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Making Farming Better in Developing Countries

Joe DeCapua

The new head of a major research organization says the key to food security is to farm smarter, not to plow more land. The strains on agriculture are growing as the global population rises and emerging economies demand more types of food.

“Agriculture had been neglected for several decades. We had become used to abundant and cheap food. And the world got a wake-up call in 2008, ’10, ’11 with spikes in food prices. And people realized that we have to produce an awful lot more food for a growing world population, as much as 70 percent by 2050,” said Frank Rijsberman, CEO of the Consultative Group on International Agricultural Research, more commonly known as CGIAR.

Right and wrong

The world population is expected to reach 9 billion by 2050, an increase of 2 billion from the current level. But to feed that many people is it simply a matter of planting more seeds on more land?

“No, actually, that’s the wrong way to go because basically crop yields – the amount of crop that we get per hectare has sort of plateaued. It’s no longer increasing. The only thing farmers can do is indeed plow under more land and they’re doing that at an alarming pace. They’re doing that now more rapidly than during the green revolution. But if they do that they’re going to plow under marginal lands, key environmental areas. That would be quite disastrous and not a long-term sustainable path,” he said.

Rijsberman said the key is research to learn how to get greater crop output from existing agricultural land. That’s one of the main goals of CGIAR.

“There’s a lot of private sector research in agriculture, but that serves primarily the big commercial farmers. We are serving the smallholder farmers – the 500 million farmers on less than two hectares – that provide most of the food in developing countries,” he said.

Some of the organization’s key research programs include improving varieties of corn, wheat, rice, potatoes and yams, as well as fish and animals.

A second goal is to get the latest research into the hands of smallholder farmers as quickly as possible. Information such as ways to better access markets and reduce post-harvest loses. Another is to address the issues of climate change, nutrition and gender, since women account for much if not most of the agricultural production around the world.

Rijsberman said while recent spikes in food prices may not hit consumers very hard in developed countries, they can have a devastating effect in poor countries.

“The poor billions in Africa, Asia and Latin America, who spend 80, 90 percent of their income on food - if the food price goes up 10, 20 percent that has an immediate impact. Those people are more vulnerable. Just the recent food price spike from 2010/11 pushed some 44-million more people into poverty. So big impact immediately felt by the most vulnerable,” he said.

The CGIAR is getting ready for the Rio+20 conference on sustainable development. It begins June 20th in Rio de Janeiro. The meeting marks the 20th anniversary of the first so-called Earth Summit. Rijsberman says at the initial summit, agriculture and environment were opposing forces. He describes them now as “best friends.”

At the recent Camp David G8 Summit, President Obama announced the New Alliance on Food and Nutrition Security. It calls for much greater investment and involvement by the private sector. Rijsberman said for Africa to reach its food security goals, agriculture investment would need to increase by $21 billion dollars per year. Most of that would have to come from the private sector.

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Agriculture needs investment in new seeds, technology

Application of old techniques and technology damages the crop and reduces the income of farmers PHOTO: FILE

By Imran Rana

FAISALABAD: In an effort to increase crop yield for achieving food security, massive investment is needed in introducing new varieties of seeds and improving farm technologies, suggest agricultural experts and farmers.

Seepage from watercourses, canals, distributaries, uneven fields and poor drainage have also made life difficult for farmers, underscoring the need for immediate rehabilitation, they say.

“Productivity remains low, causing a decline in exports and incomes of farmers,” said Mahmood Ahmad, an agricultural expert while talking to The Express Tribune. “If seed quality improves, crop yield can increase by 35%.”

“Imported seeds have better yield. Seeds being imported from Canada and Europe give a good output,” said Bilal Saeed, who deals in imported seeds. However, he pointed out that imported seeds were expensive compared to local seeds, forcing farmers to buy cheaper ones.

The farmers claimed that the country has not been able to produce required quantity of hybrid seeds. Though the farmers may not be able to bear the cost of such seeds, the government should provide subsidy on these, they suggested.

Water shortage is also a problem that has plagued farmers. Water shortage has destroyed crops, causing heavy losses to farmers, particularly when expensive imported seeds had been used, they said.

“Farmers are also handicapped by electricity outages for several hours in a day as they cannot run tube wells to make up for reduced water releases from rivers,” said farmer Junaid Ali.

At the same time, he cautioned that more than 50% of water pumped out through tube wells was saline or brackish, affecting the yield of crops. To address this issue, he called for applying water preservation technology.

“Major factors in productivity loss are poor soil fertility and less use of mineral fertilisers,” said Jamaal Ahmad, a farming expert.

He said urea and di-ammonium phosphate (DAP) were two major fertilisers used to fulfill requirements of land for getting a good yield, but their shortage was increasing due to high demand.

“Soaring prices of fertilisers have forced the farmers to opt for alternatives like bio-fertiliser,” he added.

Besides all these, the experts say, application of old techniques and technology at the time of handling the harvest damages the produce and reduces the income of farmers. Post-harvest losses are estimated to be in millions of rupees, they say.

Published in The Express Tribune