Land Grab in Africa - always bad?

As global food prices rocketed in 2007 - 08 media stories started to emerge about large land grabs taking place in Africa. Notably large Chinese companies or more commonly known as ‘China’ buying up hectares and hectares of land. The Economist reported that more than 1 million Chinese farmers were cultivating crops in Africa, The Atlantic stated that the Chinese had set up a US$5 billion fund to invest in African agriculture, CBS News posted an article quoting ‘It has been widely reported that China recently purchased half the farm land under cultivation in the Congo’ (O’ Brien, 2010). Think tanks published stories that China had ‘pledged’ to invest $800 million in modernising Agriculture so that rice could be exported to China, that China had bough 2.8 million hectares of land in the Democratic Republic of Congo, or were farming over 100,000 ha in Zimbabwe (von Braun and Meinzen-Dick, 2009; Mo Ibrahim Foundation 2011).

However none of these stories are or were true, they were all fabricated by the media to grab readers attention. Yes there has been Chinese investment in African agriculture but it is a far more complicated story than the media tells.

Chinese investment in African agriculture is not a new phenomenon. In the 1960s chinese state-owned farms were built by engineers for African governments under the aid program, the most prominent example being the Mbarali Rice farm in Mbaye, Tanzania, which had 100 cows, 50,000 chickens, a rice mill, a piggery and a hydropower plant (Brautigam and Tang, 2012).

During the 70s and 80s large state farm projects became less popular and the Chinese began to focus on smallholder farmers (Brautigam). Between 1960 - 2009 Chinese aid teams built upwards of 150 farms and more than 44 African countries have benefited from these Chinese aid missions.

In 2006, 20 agrotechnology demonstration centres were launched across Africa. Chinese agribusinesses and institutes invested between $6-$9 million and each centre specialises in an activity chosen by their country. Ethiopia’s centre for example focuses on the complete value chain for horticulture exports. For the first 3 years the centre operated, the Chinese companies would search for income-generating activities, so that the centres could fund their own revenue schemes in the future. This ‘responsibility system’ where both parties gain has been practised in many of China’s government centre and agencies, as they allow centres to keep a portion of their revenue from their own income generating-activities. This incentivises workers, and centres are able to reinvest revenue into hybrid seeds, new machinery, different crops etc.

Additional foreign aid included sending 100 senior agricultural experts to Africa for a year of technical assistance (most other countries received 2 or 3), short-term training schemes and a youth volunteer program (Allan et al, 2013). China also provided a zero-tariff entry on certain agricultural and processed goods for Africa’s lowest-income countries.

When the food prices rose in 2007 - 08 the Chinese ministry of agriculture was apparently in favour of more robust policies and there were rumours they submitted a draft plan to the state council which encouraged overseas land investment (Li, 2008; Teng 2008).

However China’s overseas investment policy has always promoted investment in rubber, oil palm and cotton, not grains, wheat, corn or rice and trade data shows that Chinese imports of agricultural products are relatively modest. Crude oil, copper and iron are the main exports Africa provides to China (Lugt, 2014). Investment in agriculture is risky, and returns do not always equal the investment as noted by a chinese economic counsellor interviewed by Tony Allan who started ‘Agriculture is risky here. It is hard to have win-win’ (Allan, 2013:96).

Another prominent news story was that China had pledged US$800 million to grow rice on a major scale using Chinese farmers and ship it back to China (Horta, 2007, 2008). This story was used by several publications, being retold in a different way every time. Horta declared that Beijing and Maputo signed a contract regarding a massive agricultural project in the Zambezi river valley area and that 20,000 Chinese settlers would move into this valley to run a network of farms and that local Mozambicans were outraged (Horta,2007). This story was included in many land-grab interviews and other pieces of research concerning Chinese investment in overseas land (see Cotula et al, 2009 and Steven and Freemantle, 2011) and Horta’s statement was even included in a policy brief by the International Food Policy Research Institute.

However when researchers travelled to Mozambique they have been unable to confirm Horta’s story. They have found no evidence of the US$800 million pledge, the agreement to import Chinese settlers or even the contract between Beijing and Maputo.4years of Mozambican daily newspapers were reviewed along with online media and interviews with Mozambican foreign experts involved in foreign aid and agriculture (Brautigam 2009, Brautigam and Tang 2009, Ekman 2010). Yet no one had heard or seen an agreement which stipulated chinese settlers were going to be brought in and no ‘outrage’ amongst locals had been seen.

Additionally if Chinese companies had wanted to purchase large areas of land it’s not clear why they wouldn’t have been able to. A 2012 Oakland Institute study proved that Mozambique ‘granted concessions to investors for more than 2.5 millions hectares of land between2004 and 2009’, of which the Europeans and South Africans were the predominant investors. China did not feature at all (Hanlon, 2011).

This isn’t to say that China isn’t interested or hasn’t invested in Mozambique. In 2004 Mozambican policy makers declared their strategy to make Mozambique self-sufficient in rice production and eventually develop a surplus which would be exported. To do this Mozambican leaders asked international partners to help with this, including the International Rice Research Institute and China. China responded and in 2006 sent a delegation from the Hubei Provincial Farming Bureau. After conducting investigations the Bureau decided to invest in Mozambique, signing a bilateral agricultural co-operation agreement and investing US1.2 million (Teng, 2008: Zhang, 2008). In 2011 this farm had 100 ha of irrigated rice under cultivation and, financed by the Bill and Melinda Gate Foundation, were conducting trials of improved rice varieties (Chinese Academy of Social Sciences, 2009). The farm was encouraging local farmers to develop their own irrigated rice farms, and was collaborating with other companies with strengths in food production, processing and sales of grain, oil and animal food to increase efficiency.  

Another Chinese company, COFCO, (a grain and oilseed trading company) received approval in 2005 to build a large soybean plant in Beira (Bosten, 2006; Chichava 2006), but this project has apparently failed to be implemented although COFCO had been in talks with the Mozambican government ‘for a major land concession to grow rice and soybeans in Mozambique’ (Cotula et al, 2009:37).

Therefore it is clear that Mozambique has wanted overseas aid and investment to increase their rice production and efficiency in the hopes of creating a surplus for export. The Chinese government provided just over US$1 million in an initial investment to create a pilotfarm to test different varieties of rice and COFCO was involved in talks with the Mozambican government about the construction of a soybean plant. However there is no concrete evidence that supports Horta’s claim that Beijing pledged US$800 million towards agricultural development in Mozambique and intended to import 20,000 Chinese farmers to cultivate the land.

It is clear that China invests in African agriculture regionally, however the picture which is often painted is of a negative story where African land and people are exploited at China’s gain.This is not always the case, as explained briefly above, and Africa has benefited from Chinese aid projects, which have helped to build farms, and provide technical assistance, training schemes and low tariffs. The picture is far more complicated than these sensationalized

 media headlines, and should remind us all to not be led to believe stories based on just 1 person’s research or point of view.

References (no online version available)

     Brautigam, D (1998) Chinese Aid and African Development: Exporting Green Revolution, New York: St Martin’s Press

     Brautigam, D (2009) The Dragon’s Gift: The Real Story of China in Africa, Oxford; Oxford University Press

     Ekman, Sigrid-Marianella Stensrud (2010) ‘leasing land overseas: a viable strategy for Chinese food security?’ unpublished master’s thesis, Department of Economics: Fudan University, Shanghai