Mostly, the deals fly under the radar. Sometimes, their size or sheer audacity triggers attention—like former AIG trader Philippe Heilberg’s deal to lease one million acres in Darfur. When it emerged that Daewoo, the South Korean giant, had signed a 99-year lease granting it close to half of Madagascar’s arable land, protests broke out in Antananarivo, the country’s capital, eventually sinking both the deal, and the president.
Why Africa? Not only is land roughly one-tenth the price of land in Asia, it’s likely the “final frontier,” says Paul Christie, marketing director at Emergent Asset, a London investment firm investing several hundred million dollars in commercial farms in Africa. Some 90 per cent of the world’s arable land is thought to be in use. Also, as Heilberg told the German magazine Der Spiegel after closing the deal in Darfur, “When food becomes scarce, the investor needs a weak state that does not force him to abide by any rules.” Sudan, a dictatorship ranked among the five most corrupt countries on the planet, certainly qualifies. Heilberg’s deal was approved by the deputy commander of Sudan’s People’s Liberation Army (SPLA), the official army of semi-autonomous southern Sudan. “This is Africa,” he recently told Rolling Stone. “The whole place is like one big mafia. I’m like a mafia head. That’s the way it works.”
He’s now looking to double his Sudanese holdings. In so doing, he’ll also gain access to hundreds of million of gallons of scarce water resources—the hidden impulse behind this new play on Africa, says Michael Taylor, with the Rome-based International Land Coalition. “Saudi Arabia has no shortage of land.
Its interest in Africa,” he says, “is water.” What we tend to think of as a dry continent actually has more water resources per capita than Europe, and drought-ridden countries from the Persian Gulf to Asia want in. In places, Taylor warns, investors are walking away with two-page contracts covering 99-year leases. No matter what the harm—over-consumption of water, over-fertilization, deforestation—“governments will be powerless to make changes.” South Korea’s Sudanese plantation will draw from the Nile, threatening Egypt’s food security downstream. Already experts warn of a brewing conflict between the nine Nile states—including favourite destinations for foreign farms: Sudan, Ethiopia, Tanzania and Kenya. Can the region shoulder the added water strain?
But the land deals also offer a chance to reverse decades of under-investment in Africa—which was bypassed by the Green Revolution that, in the ’60s and ’70s, transformed India and China. In much of the poor world, “land is not primal forest,” says Oxford economist Paul Collier; “it is just badly farmed.”
Collier, among the best-known voices on global poverty, argues that the West’s “love affair with peasant agriculture” is clouding the development debate on Africa. “Our peasantry vanished for a simple reason—it was inefficient,” says the author of The Bottom Billion, pointing to emerging market successes like Brazil, where large-scale industrial farms have replaced small holdings. “Commercial farms innovate,” he writes, “because scale helps to overcome the impediments faced by the small.” Some African intellectuals bridle at Western criticism of the play on Africa. “They’re here because we want them here,” says Teshome Gabre-Mariam, one of Ethiopia’s top lawyers. “We can’t ignore the development potential of this venture. We have everything to gain, nothing to lose.”
These days the severity of the food crisis has eased, but not forever. By 2050, when the global population tips nine billion, demand for food will have risen by as much as 70 per cent, according to the UN Food and Agriculture Organization. Food commodity prices continue to climb alongside rising energy prices and desertification is accelerating from Australia to China to Spain; the rising temperatures are predicted to slash yields. In places, that’s already begun. Like it or not, hungry eyes will increasingly zero in on Africa. The world, it seems, may come to depend on it.
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