South Africa cautions on farmland scramble

South Africa’s government will not stand in the way of its farmers investing in other African countries but cannot help protect their investments, its agriculture minister said on Tuesday.

AgriSA, South Africa‘s main farmers union, says it has been given tax breaks and rent-free access to arable, poultry and dairy farming on 10 million hectares of land for 99 years in the Republic of Congo, which plans to effect the deal after a planned July presidential election.

If the proposed deal goes through, it could be one of the biggest such land agreements on the continent and would cover an area more than twice the size of Switzerland, Reuters reports.

“If they go as a private funder, they must be willing to take the risk as any other private funder,” Tina Joemat-Pettersson told Reuters in an interview.

South Africa would not be able to protect their risk in another country, and we wouldn’t be able to provide them with any security or any insurance for their money. So if they invest, they face the risk like any other investor.”

Large swathes of arable but fallow land in Africa have prompted rich countries, such as Saudi Arabia, to buy or lease tens of thousands of hectares as they seek greener pastures to help secure food security at home.

The land acquisition phenomenon has been called exploitative by activists and prompted the World Bank and European Union to call for guidelines. Some activists have criticised the deals as “land grabs.”

Joemat-Pettersson said the plans by South African farmers were private investments, rather than government-backed.

“These are private investments and we couldn’t be able to stop them, but we couldn’t be able to guarantee them any protection from risk,” she said on the sidelines of an Africa agribusiness conference in Cape Town.

“We have also spoken about security of tenure and security of land, that they should understand the policies of the countries they are investing in, particularly around land.”

She said similar cases had turned out badly.

“We had high risk impacts in Zimbabwe, where South African farmers went to Zimbabwe, lost their farms and were looking for some form of compensation,” she said.

“We are not trying to scare away South African investments in the rest of Africa…but we caution our farmers to say that make sure that you understand what you are negotiating, what you are signing up for. You need to read the fine print.”

The new minister said one of her priorities will be to reduce production costs so that South Africa could in the next five years regain its former status as a net food exporter.

“With the current global economic crisis it is important that as South Africa we concentrate on food security,” she said.

“One of our priorities will be to reduce production costs so that instead of our country being a net importer of food, that in the next five years we regain our status as a net exporter.

South Africa has one of the continent’s strongest agriculture sectors and is Africa‘s top maize producer and third biggest wheat grower.

“Our priority is to make food available in a sustainable fashion, use sustainable agricultural methods…such as organic farming, to ensure that at the end of the day we have agro-processing and agro-industries but we do not compromise food security,” Joemat-Pettersson said.