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Corridors of power

By Sean de Cleene
Posted on Friday, 22 January 2010 11:30

In the Know features an interview, opinion or analysis from the people making the news in Africa each week.

Stretching from Mozambique into Zimbabwe, Zambia and Malawi, the Beira agricultural corridor should bring a breadbasket its route to market. Viable projects that bring together private and donor funds to catalyse infrastructure investment are vital to scale up Africa’s agricultural potential, says Sean de Cleene of Yara International.

Last year brought a raft of global initiatives to reduce food security and address poverty. The commitment from the G8 countries to mobilise $20m over three years for sustainable agriculture marked an important shift. For too long, investment in agriculture has been decreasing, making farmers less and less resilient to crises. Now, agriculture is back as a priority after 30 years of neglect.

The challenges are real. Last year’s World Food Day was a stark reminder that for the first time more than 1bn people are hungry. It seems obvious that to be effective, political commitment on this front must be accompanied by action from the private sector.

The year 2010 promises to be a big. The UN Millennium Review Summit is going to be a much needed reality check. Instead of a polarised debate on whether the Millennium Development Goals are realistic targets, we need humility and honesty to discuss how we can work together effectively to achieve concrete progress before 2015.

As important as the G8 countries’ commitment is, donor aid alone will not reduce poverty, particularly in the context of agriculture. For this to happen we need sustainable and transformative change that sees donor funding as part of an integrated investment strategy that looks to responsibly leverage much greater amounts of private sector investment.

The exciting thing is that we are not making an educated guess about what might work. It has worked well in Brazil already – agricultural productivity in the Cerrado region skyrocketed due to coordinated support from the public and private sectors. Soya bean production, for example, jumped five-fold from 9.9m tn in 1975 to 51.4m tn in 2005. The challenge for Africa is to do this in a way that benefits the large number of smallholder farmers that rely on agriculture for survival. Climate change and effective water management also must be addressed.

So, if investment strategies focusing on agriculture have so much potential then why aren’t there more of them? Businesses have traditionally not invested in Africa because of a lack of trust between governments and the private sector. Inadequate infrastructure and unclear regulations appear as formidable challenges, and regional markets are fragmented and lacking in scale.

Corridors of growth

The answer is simple – governments (from the donor and the recipient sides) and businesses need to work together to overcome some of these challenges. A key focus needs to be the forging of partnerships between the public and private sectors to help make African agriculture more profitable for smallholder and commercial farmers alike.

The potential for these partnerships and investments to achieve change is demonstrated through agriculture growth corridors. Not only are they public-private partnerships in a traditional sense but they are also a multi-sector commitment to action. Farmers need access not only to land, seeds and fertiliser but also to transport, power and water. Ports must be efficient to be able to import inputs, and roads must be built to reach the farmers. Smallholder farmers and agro-dealers need access to rural financing. ‘Patient capital’ is needed to mobilise investments into irrigation capacity and value addition.

I’ve seen this for myself having lived and worked in Malawi for six years – farmers are able to organise themselves and grow crops in significant volumes. The real goal is to access regional and international markets in order to create sufficient demand. The National Smallholder Farmers’ Association of Malawi and African Institute of Corporate Citizenship Malawi argue that corridors represent a critical next step if the farming business is to be sustainable for millions of smallholder farmers.

Bring out the blueprints

For approaches such as this to work, agriculture development plans need to be turned around from being donor-targeted strategies to becoming investment blueprints. This will ensure agriculture becomes an engine for widespread national economic growth. Agriculture growth corridors focus on identifying and clustering investments into a given geographic region. They aim to deliver tangible and sustainable outcomes for African smallholder farmers. Such an approach is being rolled out in two regions that the New Partnership for Africa’s Development has identified as potential breadbaskets and which have strong economic potential – the Beira and Dar es Salaam corridors.

On the Beira corridor, we have been working with the government of Mozambique, InfraCo, Technoserve, Universidade Eduardo Mondlane, the Alliance for a Green Revolution in Africa, Transfarms, the World Bank and the African Development Bank, amongst others, to draw up an initial corridor investment blueprint. This spells out infrastructure and agriculture investment opportunities, with concrete proposals for how they could be financed. Research shows that a coordinated basket of donor and private sector investments totalling $250m over five years could directly benefit 200,000 smallholder farmers, leading to improved yields and higher incomes, and helping lift up to one million people out of extreme poverty.

Along the Beira corridor, which stretches from Mozambique into Zimbabwe, Zambia and Malawi, the corridor consortium has already identified 12 viable projects that could be implemented within five years. Agriculture growth corridors could attract investment into Africa that has so far been lacking.

There is clearly the land, soil and water resources across Africa to enable the continent to feed it own population and to become a major breadbasket for the world. The reality is that the majority of existing agriculture businesses struggle to make a profit. With access to investments supported by patient capital flows, targeted rural infrastructure investments into water management, electricity and feeder roads, and improved market access, it will become easier to reach the scale needed to realise Africa’s agricultural potential.

Sean de Cleene is vice-president of global business development and public affairs at

Yara International. He will be speaking in Davos at the World Economic Forum on 27-31 January on how global companies can provide solutions to tackle the impacts of climate change, food insecurity and the financial crisis on the world’s poorest.