Africa will be ground zero for globalization's integration

ARTICLE: The ultimate crop rotation, By Stephanie McCrummen, Washington Post, November 23, 2009

As I've noted in old columns, along with The Economist, the third great wave of outsourcing (after manufacturing and services) continues unabated:

This impoverished and chronically food-insecure Horn of Africa nation is rapidly becoming one of the world's leading destinations for the booming business of land leasing, by which relatively rich countries and investment firms are securing 40-to-99-year contracts to farm vast tracts of land.

Done well, this can be an amazingly good thing, breaking a lot of bad cycles and triggering needed migration from underemployed and undermechanized ag areas to cities that, hopefully, provide low-end manufacturing jobs of the sort one likes to see when industrialization kicks in.

Gives you a sense that India, China and Arab wealth funds will be involved on both ends of the process.

But, as an emerging rule set, this can equally go quite badly, and hence, it needs to be a profound focus of inquiry.

More to the potential downside:

The scale and pace of the land scramble have alarmed policymakers and others concerned about the implications for food security in countries such as Ethiopia, where officials recently appealed for food aid for about 6 million people as drought devastates parts of East Africa. The U.N. Food and Agriculture Organization (FAO) is in the midst of a food security summit in Rome, where some of the 62 heads of state attending are to discuss a code of conduct to govern land deals, which are being struck with little public input.

"These contracts are pretty thin; no safeguards are being introduced," said David Hallam, a deputy director at the FAO. "You see statements from ministers where they're basically promising everything with no controls, no conditions."

The harshest critics of the practice conjure images of poor Africans starving as food is hauled off to rich countries. Some express concern that decades of industrial farming will leave good land spoiled even as local populations surge. And skeptics also say the political contexts cannot be ignored.

"We don't trust this government," said Merera Gudina, a leading opposition figure here who accuses Ethiopian Prime Minister Meles Zenawi of using the land policy to hold on to power. "We are afraid this government is buying diplomatic support by giving away land."

But many experts are cautiously hopeful, saying that big agribusiness could feed millions by industrializing agriculture in countries such as Ethiopia, where about 80 percent of its 75 million people are farmers who plow their fields with oxen.

"If these deals are negotiated well, I tell you, it will change the dynamics of the food economy in this country," said Mafa Chipeta, the FAO's representative in Ethiopia, dismissing the worst-case scenarios. "I can't believe Ethiopia or any other government would allow their country to be used like an empty womb. The human spirit would not allow it."

Since it'll be rising New Core powers that do most of this, just watch how the whole anti-globalization thing becomes less about the West and the U.S. in particular and more about China. Then we'll see what "non-interference" means.

And yet, look at Ethiopia and tell me this isn't better than the status quo of underutilization?

Few countries have embraced the trend as zealously as Ethiopia, where hard-baked eastern deserts fade into spectacularly lush and green western valleys fed by the Blue Nile. Only a quarter of the country's estimated 175 million fertile acres is being farmed.

$4.2B so far committed by Indian companies in Africa.

So yeah, Africa will be ground zero for globalization's integration processes in the coming years--without a doubt.

I am psyched to finally be heading to South Africa next Feb to address this issue at a big mining conference.