Chinese, Brazilian and Indian Investments in African Agriculture: Impacts, Opportunities and Concerns, April 2016
New report on BRICS investments in African agriculture
A major new report released by the Pan-African organization ACORD finds that Africa’s small holder farmers are not benefiting enough from the increasing Chinese, Brazilian and Indian investment in African agriculture. The technology being promoted in Africa – such as irrigation equipment and tractors - tends to be more suited to Chinese, Brazilian and Indian agribusiness interests than to Africa’s smallholder farmers.
“Investments and aid programmes do not appear to systematically involve African smallholder farmers in project design or implementation, but appear more suited to large-scale farming”, said Salina Sanou, ACORD’s Head of Policy and Advocacy.
On the positive side, thousands of African agriculture practitioners are being trained due to Chinese, Brazilian and Indian funding. This training may be leading to significant crop yield increases in some cases, although there are few genuinely independent evaluations of these projects. The study brings together new case studies of Chinese investment in Africa and aims to assess the impacts of these investments on Africa's smallholder farmers. Brazilian, Indian and Chinese investment and aid programmes are substantially about promoting their own commercial interests. China has established many agricultural technology demonstration centres in Africa designed to train farmers and scientists to improve agriculture production. Yet these centres also promote sales of Chinese hybrid seeds and agro-chemicals. Chinese companies are the largest producers of glysophates in the world, and have largely captured the African market. China regularly promotes trade fairs in Africa seeking to sell more chemicals.
Technology transfer is a key feature of many Chinese, Brazilian and Indian investment and aid programmes in Africa. But these projects are normally heavily ‘tied’ to buying equipment and technology from these countries. Indian companies are selling irrigation technology and farm tractors to Africa, but there is little evidence to suggest that expensive infrastructure built to service large-scale commercial farming is directly benefiting small-scale subsistence farmers. African Governments are welcoming Chinese, Brazilian and Indian agricultural investment. Yet this is often not aligned with African policy priorities. It is not clear how the Chinese agricultural technology centres are integrated into wider policy-making in several countries.
The research found that the Chinese agricultural technology demonstration centre in Zambia focuses on training farmers to produce mushrooms; yet mushrooms are grown by less than one per cent of local farmers and the Zambian government has not identified such production as a priority. The biggest problem with Chinese, Brazilian and Indian investments is the failure to systematically involve African smallholder farmers in projects. This is compounded by a lack of transparency in such programmes, whereby investment projects are often shrouded in secrecy, meaning that scrutiny of projects by civil society groups and others becomes difficult or impossible.
The report calls on African governments and Chinese, Brazilian and Indian investors to increase the transparency of investments, end land grabs, and review the appropriateness of technology transfer programmes. It also calls on civil society organisations in Africa to step up their monitoring of such investments.
ACORD is a pan-African organisation working towards active citizenship and more responsive institutions contributing to a peaceful, inclusive and prosperous Africa. Its strategy includes a focus to build sustainable food systems and livelihoods, increase resilience and enhance natural resource management. More specifically, ACORD is committed to support small-scale food producers in marginalised communities to double their agricultural productivity, add value to their produce, increase incomes and ensure access to safe, nutritious and sufficient food all year round. ACORD will promote development of domestic and regional markets for small-scale producers and support partnership with the private sector to develop inclusive and equitable business models across the value chain that create quality and sustainable jobs for young people. ACORD is supporting marginalised and small holder farmers to secure coherent and inclusive policies that increase quality investment in sustainable food systems, enhance access to markets and increase community resilience to shocks. ACORD is currently hosting the CAADP Non-state actors coalition (CNC).
Case studies from Zambia, Uganda and Tanzania
The Zambia Agricultural Technology Demonstration Centre (ZATDC) became operational in 2012 and is situated in Chongwe district near Lusaka and staffed by Chinese nationals. It is managed by the Jilin Agricultural University (JAU) which collaborates with the University of Zambia (UNZA) and the Ministry of Agriculture through the Department of Agriculture. The objective of the ZATDC is to improve the capacity and expertise of Ministry of Agriculture staff, university/college students and small-scale farmers in order to increase crop productivity through trainings and demonstrations. The Centre has so far conducted around 38 training sessions and has trained 718 people. The main training focus of the Centre is on mushroom production.
Research found that the training offered by the Centre was valuable. However, the research found no evidence that small-scale farmers are consulted on what trainings they would like to attend; instead they are just told by their camp extension officers to prepare to attend trainings that have already been arranged. Trainings are attended by interested individual farmers, and selection is not based on whether farmers are members of a particular cooperative or represent large numbers of farmers. Thus it is not at all clear how or whether farmers being trained will pass on their knowledge to other farmers. Small-scale farmers could be represented at the Centre by a cooperative federation which is likely to be best suited to negotiate and speak on behalf of farmers. There is currently no such cooperative on the board of the Centre. Of the 718 people trained so far, only 42 are women. This is a low proportion indicating that the Centre has no particular focus on women farmers. Yet women comprise around 65 per cent of smallholder farmers in Zambia, and are the main producers of food.
In Uganda, research was conducted into the Osukuru fertilizer project, whereby the Guangzhou Dongsong Energy Group, a private Chinese company with assets of over $1 billion, is promoting a US$620 million project to build a fertilizer plant and conduct phosphate mining in the east of the country. The project is expected to employ around 1,000 people and produce 300,000 tonnes of phosphate fertilizer annually - enough to supply Uganda, Kenya, Tanzania and Rwanda. The financial benefits to Uganda of the project are unclear since the Mineral Agreement signed between the company and government has not been made public. Different estimates have been circulating: the Ugandan government was reported as claiming that the project would ‘generate’ $350 million a year; however, reports in China Daily state that, according to the company, the project will generate an annual net profit of $81 million.
People affected by the project are overwhelmingly subsistence farmers who have small holdings of around two acres. The project’s Economic and Social Impact Assessment states that ‘the major impact [of the project] is the loss of crops and the land itself. Being a fertile area, the persons affected are likely to become more vulnerable as they will lose their source of income’. The project covers 26 square kilometres and could displace up to 1,500 households; some 122 have already have been relocated. The project paid compensation according to government standards, which benefited those who used the money to invest in, for example, starting other businesses or in livestock like cows and goats. Yet the relocation process did not involve providing training on developing alternative livelihoods; thus most people moved in ignorance, without ensuring a reliable source of income to sustain them in future. This has meant that most people have spent their compensation money and now have no alternative livelihood. Community members interviewed also said they were in effect made to sign documents to relocate in an intimidating atmosphere amidst heavy police deployment. Since many more people will be relocated, the project will have an even greater impact on the livelihoods of the people of the area. The project may create over 1,000 jobs, but most community members are likely to be employed as casual labourers only, and mainly in the construction phase.
In Tanzania, research focused on a Chinese sisal farm in Morogoro District owned by the Chinese government’s China National Agricultural Development Group, which established the China Africa Agriculture Investment Company. The farm involves a sisal plantation and processes the sisal to fibre, producing around 14,000 tonnes of sisal during 2000-15.
Chinese occupy senior management positions in the farm, which employs 414 people, of whom 128 people are in permanent positions and 286 are casual workers. Many workers also complain of low wages and poor housing conditions in the farm. The research found that the farm pays a low rate, but which is more than the government’s minimum wage.