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Food Security in Africa: Can PPPs help?

June 5, 2012

Global hunger and malnutrition are two of the greatest developmental challenges the world faces today. Currently, close to 1 billion people suffer from chronic hunger. By 2050, the world population is expected to climb to 9 billion people, requiring a 70% increase in agriculture production.

G8 Summit Working Session on Global Economic Issues

During his keynote address at the 2012 G8 Summit at Camp David, President Obama unveiled a new initiative to combat hunger in Africa. The G8 leaders, along with the leaders of Benin, Ethiopia, Tanzania and Ghana, have committed to The New Alliance for Food Security and Nutrition. This shared commitment between the G8 members, African leaders and the private sector, seeks to combat hunger, raise 50 million people out of poverty in the next 10 years, and achieve sustaine agricultural growth.

Initially, Tanzania, Ethiopia, and Ghana will take part. And more than 45 local and multinational private sector corporations have signed on to the New Alliance and have collectively pledged to invest over more than $3 billion in African agriculture over the next 10 years. This investment will go into areas such as crop protection, irrigation, infrastructure and financing.

The program will vary country by country, but a case study of Tanzania provides some insight.  The G8 member nations plan to give $897 million of funding in the next five years to address the main issues of food security in Tanzania.  The government of Tanzania will focus its efforts in three main areas. First it will seek to increase stability and transparency in its trade policy by reducing tariffs. Second, it will implement domestic seed policies that will encourage more private sector involvement in its production, marketing, and trade. Last of all, it will attempt to improve incentives for private sector investment by reducing taxes and increasing transparency in its agricultural tax and incentive system.

Small Farmers in Africa

More than 20 local and international companies have signed letters of intent that describe their investment intentions in Tanzania. These include corporations  like Tanseed International, a private seed company in Tanzania working towards increasing rice and maize productivity and profitability among small farmers. They plan to accomplish this by improving the availability and adoption of high quality rice and maize seeds and the implementation of crop management practices that increases crop yields. International corporations that intend to invest in Tanzania include Syngenta, a global agricultural inputs company that develops crop protection and seed solutions. It plans to launch partnerships in the next 24 months with 5 African nations and invest $500 million to increase the productivity of 5 million farmers by at least 50%. The parties involved hope that their combined actions will pull 6.7 million people from poverty in Tanzania by 2022.

Even though this approach has great potential, many NGOs have expressed disappointment with the Alliance for Food Security. The G8 nations failed to make a timetable outlining when they would fulfill outstanding pledges made at the 2009 G8 Summit at L’Aquila, where G8 nations pledged to disperse over $20 billion by 2012 to end hunger through agriculture. Today, only half of that has been dispersed.

Some agricultural public private partnerships have already proven to be successful in Africa. For example, in Rwanda, a program distributing fertilizers to small farmers has increased crop yield. The Rawandan government imports the fertilizer and auctions it off to private distributors who then transport and sells it to local farmers. Through this partnership, maize yields have more than doubled from 2007 to 2009.

Though the projected benefits of this new partnership are expected to be significant, the president of the IFAD emphasized that since small farmers manage 80% of the farmland in sub-Saharan Africa, they must take advantage of this new partnership that gives them the technology, funding infrastructure and access to markets to build productive and sustainable agricultural systems.

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