Maputo – Three years ago, Mozambique had high hopes for a $510m biofuel project, meant to create 7 000 jobs and create a vibrant new industry by transforming 30 000 hectares of fallow land.
But in December, the government revoked the license granted to ProCana, a private firm with British and South African interests, which in two years failed to plant a single crop.
ProCana wasn’t the only company to fail to meet its promises in the wave of foreign investment in farming across Africa – a trend that activists say is driving up food prices and forcing the eviction of local farmers.
After Mozambique’s 16-year civil war ended in 1992, the government sought private investment to revitalise farming in a country with rich land and ample water that was once a major exporter of cashew nuts and sugar.
But foreign investment in agriculture has proved a tricky balance between the need to attract money and know-how from overseas and the rights of sustenance farmers, who make up 80% of the population.
The problem isn’t the land – the UN Food and Agriculture Organisation (FAO) estimated in 2002 that only 12% of Mozambique’s 36 million hectares of potential farmland was actually being planted.
When deals are struck, activists complain that large tracts of land can be sold from under communities, with protocol ignored and promises broken.
Mozambique has a well-developed land law which requires companies to win the consent of communities to use the land, but these agreements are often vague.
“The communities don’t understand that by giving them such amounts of forest they’re losing their own livelihoods because they’re hunting there, they collect fruit, they collect traditional plants, among other building materials,” said Mozambican environmental activist Joao Nogeiro.
Companies often offer jobs as compensation for leases and communities jump at the opportunity for a stable income, he said.
But workers often find their salaries are too low or discover the jobs are only short-term, Nogeiro said.
Many of the projects focus on crops for bio-fuels or for exporting foods to countries from China to the Middle East, doing little to improve the food supply in a nation that depends on imports to feed the population.
No development strategy
Rising food prices sparked deadly riots in September as Mozambicans took to the streets to protest the price of bread, forcing government to scale back its price hikes.
Despite the risks, economists say land deals offer a valuable way for Africa to attract investment.
“We see (a)significant upside for agriculture from increased investment,” Standard Chartered Bank said in a recent study, but added: “We share the view that such projects would need to be accompanied by a comprehensive development strategy.”
That’s something Mozambique doesn’t have.
The country signed deals for 2.7 million hectares of land between 2004-2008, which should have expanded the country’s farmland by more than 50%, according to a World Bank study last month.
A 2009 audit found that more than half of those investments were lagging in production – one third hadn’t even started farming, the Bank said.
Meanwhile, poor boundary marking for land meant the government was allocating land to investors that was already being used by local communities, the report added.
The problem is partly because “the institutions tasked to process these ventures were ill-equipped and (unprepared) to deal with the sudden influx of interest,” the Bank said.
In one case, a company consulted a community on land that actually belonged to their neighbours, said Nogeiro.
“But because the company was in a hurry, they decided to do the process with these communities and not with the owner of the lease,” he said. “They don’t even know what they sign.”