President Barack Obama will announce an alliance Friday with nearly 50 companies to boost productivity among small farmers in Africa with the goal of lifting 50 million people out of poverty.
Business executives from agricultural giants such as DuPont and Monsanto will join Obama, along with the leaders of three African countries who have pledged policy changes that U.S. officials say will improve business climates and encourage investment.
“We believe we’re really unlocking business investment in African agriculture in a way that will transform that sector and support improved outcomes for small farmers,” said Raj Shah, the administrator of the U.S. Agency for International Development.
The plan comes as aid groups are calling on the U.S. and members of the G-8 nations gathering Friday at Camp David to renew a pledge they made at their 2009 summit to spend $22 billion on efforts to alleviate global hunger. Advocates said they hoped the largely private effort would complement, not replace, a public commitment from the countries, which gather amid worries over the troubled European economy.
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“We welcome a more robust private presence, but it can’t be an excuse for the G-8 to slow down and stop public investments,” said Adam Taylor, the vice president of advocacy for World Vision, a U.S.-based Christian aid agency. “We’re hopeful the G-8 will demonstrate the political will.”
Obama administration officials said the U.S. would look at the summit to keep the same level of commitment as agreed to in 2009.
“It’s not about replacing aid, it’s about combining aid with private capital and tools for innovation,” said Michael Froman, the deputy national security adviser for international economic affairs.
Shah said the U.S. thought that a significant public-sector commitment was required, but he said the private companies were able to share “incredibly unique technologies and business models that simply can’t be replicated” by the public sector.
He said, for example, that the United Kingdom telecommunications company Vodafone planned to connect 500,000 small-scale farmers in Tanzania, Mozambique and Kenya with local market prices via mobile phone, allowing them to negotiate for better prices.
“It’s highly unlikely that there’s a public-sector solution that could fill that gap,” Shah said. Another company, Norway’s Yara International, plans to build what would be Africa’s first fertilizer-production facility. “We need both public and private partnership in order to achieve these extraordinary results,” he said.
Obama, who pressed world leaders at the 2009 summit to make food security a focus, has invited the leaders of Ghana, Tanzania and Ethiopia to attend the Camp David summit, along with African Union President Yayi Boni of Benin.
The program includes investments from as many 45 companies worth as much as $3 billion, Shah said. The plans call for improving and increasing the production of crops such as cashew and cassava, along with improving irrigation systems and seed stock.
Participants include multinational giants such as Cargill, Monsanto, DuPont and the British brewer SABMiller, along with African companies such as Ghana Nuts and Agrica/KPL, a commercial rice producer in Tanzania.
Aid groups expressed concern about the emphasis on the private sector, saying the neediest subsistence farmers could be overlooked.
“The rhetoric is all about small-scale producers, but they haven’t yet been a part of the G-8’s conversation,” Oxfam’s Lamine Ndiaye said.
Ndiaye said that without a strong commitment from government, private investment was unlikely to help the smallest farmers, who feed the bulk of the continent.
“Their objective is not to fight against hunger; their objective is to make money,” he said of private-sector companies. “If the foundation is not strong, the private sector will probably not come.”
Shah said the private partnership took into account a “tough fiscal environment” for the U.S. and the other G-8 countries and that the plan allowed for extending dollars “as far as possible.”
“We know these types of partnerships tend to stretch our dollars,” he said. “If we’re ever going to succeed in tackling hunger and poverty on a scale like this, it’s going to be through these kinds of partnerships.”
He said the plan included a commitment to tracking the results: “Instead of doing scattered projects all over the place, we’re really focusing on a handful of countries,” he said.
Shah noted that the 2009 G-8 commitment had netted results, but that chronic hunger still exists. A drought in east Africa last year put 13 million people at risk and prompted a massive infusion of food aid and emergency humanitarian assistance.
“We’re trying to move to a proactive effort that helps countries modernize their food economies, address malnutrition and withstand difficult instances so they don’t need food aid and food assistance,” he said.
The presidents of Ethiopia, Tanzania and Ghana have agreed to policy changes aimed at improving the business climate, Shah said, such as tackling corruption and reforming access to landownership.
The reforms vary by country, Shah said. For example, in Ethiopia, reforms will allow more private-sector access to land and better titling of land, especially for female farmers, who represent more than half the farmers in Africa. Knowing they have legal title to their land could give small farmers the security to invest in upgrading their irrigation systems and soil, Shah said.
“We believe those kinds of reforms will help hundreds of thousands of small holder farmers improve their standing,” he said.