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Corporate Farms in Africa

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December 3rd, 2009

africa_mapIn the latest issue of Business Week magazine is a very good article on the farm land rush that is occurring in Africa and other under-developed countries around the world.

There are many issues surrounding these investments in third word farming enterprises.  Although it may provide jobs for these people, it also is disturbing the economic and social structure of these societies.  It appears that with Africa being more than three times larger than the US and with lots of good farmland that has never been aggressively farmed, that this may be last land available to be developed on a large scale basis.

In the first half of 2009, more than $2 billion was raised to invest in farmland, according to Agcapita, a Calgary based ag fund.  A lot of this money will be invested into Kenya, Sudan, Tanzania and Ethiopia.  In June, 2009, the first annual Global AgInvesting was held which brought together these fund managers and investors looking to invest in farmland.

Although $2 billion sounds like a lot of money, it would only purchase about 400,000 acres of land in Iowa at $5,000 per acre.  This would be equal a county with about 625 square miles.

I personally think that we will see more of these investments over the next several years as we continue to add world population.  We have been the most technologically advanced farming country in the world, but these technologies change quickly and Africa can catch up.  However, it may take several decades.

Please read the article and let me know what you think of the issues raised.

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1 Comment

  • January 16, 2010 at 11:02 pm

    Mossi Luba

    Good comment. Nice that you take care about these important african questions. But sometimes I have the feeling that it is nonsense to think about it. Africa is somehow dead from our mindes and from news stories. There seems to be only tribal wars and frustrations in a large range of African areas. So why to look at it? … Your are right: Better to go for it than to leave African questions alone. Go on please!.

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