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Recapturing Africa
For most Indians Africa is a destination both distant and irrelevant. Despite the fact that Africa is endowed with rich mineral resources as well as some of the world’s highly prized cash crops like cocoa, coffee and tea, the people in the continent’s 53 countries continue to live in drudgery. Too much dependence on the export of primary products has been noted as one of the reasons why Africa has not made any significant gains from globalisation. And this is again precisely the reason why Africa is unable to increase agricultural productivity.
How Africa is being systematically looted by the global mining giants while continually fuelling civil and ethnic strifes is an old story. Now Africa’s poor and small farmers are threatened by agri-business. They are coming in a big way to tap Africa’s palm oil, not natural oil. Scramble for land coupled with large scale eviction of small farmers is nowhere as rapacious as in West Africa where palm oil opens enormous business opportunities for multinationals engaged in agro-industry. Palm oil these days is used extensively for cooking and other industrial purposes. In West Africa it is traditionally produced by small peasants, providing jobs to millions. With the rising demand of palm oil across the globe, the situation is changing rapidly tilting the balance in favour of big business and systematic job-annihilation.
There is a ready local market for palm oil in Africa. Compared with Asian plantations, big customers in the USA and Europe are close. Palm oil is the cheapest and most widely used edible oil. Elements of palm oil can be found in about half of all packaged super market products, from biscuits to soap and lipstick. Demand has doubled since 2000. Prices for palm oil have tripled to more than $930 a metric ton for Malayasian palm oil. Of the $20 billion-a-year production value of palm oil, around 87% comes from Indonesia and Malaysia. Planters are looking for minimum environmental standards and suitable agricultural land. And West Africa foots the bill.
Governments from Sierra Leone to the Democratic Republic of Congo, have awarded concessions for some 1.5 million hectares of land since 2008, for commercial palm oil plantations, mostly to foreign companies. Only a small part of this land is under cultivation. In 2009, the Malaysian company Sime Darby, one of the world’s largest palm oil producers, secured 220,000 hectares of land in Liberia on a 63-year-old lease, marking its first expansion outside south-east Asia.
Recent years have witnessed deals signed by Asian Palm oil companies, such as Golden Agri-Resources, Wilmar and Olam, as well as US funds and European companies, across West Africa. Even though only a small part of this land is under cultivation, a further 1.3 million hectares is being reportedly being sought. While Palm oil production could be a boost to economic growth, job creation and even food security, poor farmers are threatened with losing their land very cheaply and livelihoods as well. There are risks of environmental damage too. Real concerns are felt in some countries over security of title, and in respect of the environmental and social impact. The global rush to increase food supply is causing a scramble for land.
Land ownership is complex in Liberia. Government land and communally-owned land has been used for subsistence farming for generations. When Singapore-listed companies started clearing land to plant, local communities protested that their crops and sacred sites had been destroyed. The companies are hiring additional permanent workers from the local communities. The lowest paid staff receive $5.51 an hour. Local communities are not anti-development, but if they give up their land for palm oil, the leases are for so long that they are basically giving it up for ever. Herackales Capital, a New York based investment fund, plans to plant oil palms on 60,000 hectares in Cameroon of its 99-year-old concession, which is surrounded by national parks and protected zones. Small palm oil producers are facing challenges in Africa, as the rush for acquiring land for palm oil has affected African Villages.
Frontier
Vol. 45, No. 32, February 17-23, 2013
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