Invest in Africa's Agricultural Future

Following the Battle of Waterloo, although Napoleon had been defeated, Baron Rothschild of the 18th century British banking family is said to have observed that the most profit can be made when there is no consensus about the future. His actual quote is believed to have been, "Buy when there's blood in the streets, even if the blood is your own." A potential Disney investor might have said the less gruesome, "Buy when Mickey is still a steamboat captain." When I lived in Hawaii, I often heard the quote, "Missionaries came to do good, and they did very well (financially)."

     The point is, now is the time to get in on Africa's future, especially the continent's agricultural potential. It takes time to develop a profitable African connection, and time is on the side of today's young people who have 40 or more years of work ahead of them. One option to explore is the process of putting together a supply chain that buys and brings processed African produce to markets in developed countries. Another is to process, brand, package and bring African products, such as Go Honey, to the growing African market.

     Shoppers in Madison, Wisconsin, now buy cassava flour from West Africa at the African & American Store on East Johnson Street. Thanks to Hugh Jackman of Wolverine and musical theatre fame, New Yorkers now drink his Laughing Man Ethiopian coffee at two cafes he opened in Manhattan. A film, "Dukale's Dream," which can be rented at tugg.com/titles/dukales-dream, tells the six-year story of how Jackman and Dukale met and how Dukale's family has prospered. The family that used to spend the day growing coffee and collecting firewood now has a gas system that provides light and a cooking flame. Dukale increased coffee production by buying more land, hiring workers, and training other farmers. His wife owns a small shop and his children attend school.

     As a growing continent which now has more than 1 billion mouths to feed, Africa also provides a healthy opportunity for future agricultural sales and profits. The roads and rails China built to move minerals and lumber to ports for export have improved infrastructure for distribution within Africa as well. Countries, such as Nigeria, that have seen falling oil and mineral export prices damage their economies, have been forced to rediscover their agricultural pasts and improve their farm to market road systems.

     Director Chris Isaac at the venture capital company, Agdevco, cautions that it can take a 10 to 20 year view to overcome barriers to big returns from African agriculture. He cites competing claims on land that make it difficult to lease or buy. Then, there are poorly educated farmers, poor quality seed and fertilizer, limited access to credit, a lack of infrastructure, an undeveloped marketing network, and a corrupt bureaucracy, especially at the local level. These barriers obviously also impede the progress of women who make up half of Africa's poor farmers. (Also see the earlier post, "Want An Exciting Career?")

     What's going on in Uganda suggests the kind of advantageous landscape agricultural investors should seek. Once in the grip of Joseph Kony's Lord Resistance Army (LRA), Uganda is on track to become a rice and maize success story. Millions of dollars of investment have come to the area north of Kampala from international private equity, global venture capital, and private companies, such as German-based Amatheon Agri. What these investors provide are land, high quality seed and fertilizer, leased machinery, training, a market for farmers' output, a grain processing facility, and an integrated value chain for selling grain nationally. Uganda's government has invested in roads and power and has given tax breaks to foreign investors.

     With $25, anyone can invest in Africa's agricultural future by going to kiva.org.

Invest in Water?

At the end of the movie, The Big Short, there was an item about Michael Burry. He was one of the investors who cashed in on the collapse of the housing market built on a shaky foundation of subprime mortgages that was doomed to fail. Supposedly, Burry now only invests in water,

     Could Burry be noticing that progress in some economic sectors is having a negative impact on water resources? When the French company, Perrier, began exporting mineral water in green glass bottles, it seemed like a hard sell. Now, the hard sell is convincing those who drink bottled water at the world rate of 30 litres per person per year that their consumption is bad for the planet. There is the fuel cost of transporting bottles from one country to another that already has its own safe, unpolluted water supply. Plastic bottles pollute the land in dumps. Insufficient recycling limits how much recycled content is used in bottled water, although efforts have been made to produce bottles out of organic sugarcane waste and to reduce the weight of plastic and glass bottles.

     Data from NASA's space observations show groundwater from 13 of the world's 37 major basins is being depleted faster than it can be restored. Not only the amount of water used by agriculture and business is a concern; water quality and contamination needs to be addressed as well.

     Alternatives to fossil fuel have increased the use of water to produce crops made into bioethanol. That adds to the nearly 70% of the world's accessible freshwater already used by agriculture. Moreover, dams used to produce hydroelectricity create reservoirs that cause the evaporation of water that farmers and others traditionally relied on downstream. Alternative energy sources, such as wind, do not require water.

     Water also is under pressure from factories that dump heavy metals and chemicals from recycled electronics into local lakes and rivers. The winner of the Stockholm Junior Water Prize, 18-year-old Perry Alagappan, does have one remedy that filters 99% of heavy metals out of water through graphene nanotubes that can be cleaned with vinegar and reused. The tubes can be fitted to the taps on sinks at home and in industry. To maximize availability of his invention, Alagappan will not patent his idea.

     Water keeps the equipment that processes data cool. Data centers that have used water-intensive cooling methods to improve energy efficiency now are looking at ways to use recycled rather than potable water in their cooling systems. Also, there is an effort to consider locating data centers in climates, such as Sweden's, where outside air can cool facilities all year.

     While fertilizers increase crop yield, they also cause nitrogen and phosphorous runoff that enables aquatic plants to deplete oxygen and create water dead zones where fish cannot survive. Palestinian farmers are attempting to deal with water shortages by building a wastewater treatment plant to provide water for agricultural use. But even with a major use of electricity, existing technology can only remove 10% to 30% of nitrogen and phosphorus from wastewater. Where 90% of sewage in developing countries is discharged without any treatment, research on algal projects that rely on sunlight to grow algae that can break down nitrogen and phosphates in wastewater and produce sludge for biofuel have promise for agricultural areas, where sun is abundant in Africa, South America, and Asia.

     Fracking, which blasts oil and gas out of shale rock, is viewed as a way to help the United States and other countries become energy independent. As the earlier post, "The Lure of Shale Oil Independence," points out, however, the fracking process is suspected of contaminating water.

     These are just some of the water projects that Burry could be eyeing for investment. By going to kiva.org, you already can invest $25 in a water project that will help a household in India, Vietnam, Cambodia, or Indonesia install a toilet and improve sanitary conditions.

(Water is also the subject of earlier posts, "A Healthy Environment," "Personal Response to the World's Problems," and "Good Works Multiply Fast.")

Can Small Farms End Poverty?

Before performers, men, women and young people gather, at the Global Citizen Festival in New York City's Central Park on September 26, for the purpose of ending extreme poverty, let's look at a few of the factors contributing to world hunger. Silo thinking, where everyone focuses on their own problems and solutions, is undermining the need to feed and employ people, provide export revenue from agriculture, and protect the environment.

     Small farms provide employment that prevents a country's rural population from flocking to urban areas that are not ready to provide sufficient jobs, sanitation, housing, transportation, and education. David Hoyle, deputy director of ProForest has pointed out how small farms would benefit from governments willing to engage in land-use planning. What governments need to do is designate specific areas where: 1) villagers can farm and live, 2) concessions are leased to large scale export producers of, for example, palm oil and timber, and 3) forested areas needed to sop up greenhouse gases are protected. Water use planning to prevent pollution and supply sufficient water for sanitation, cooking, and crops is also necessary.

     Without land-use planning, plantations governments are counting on to provide agricultural export revenue are in constant competition and conflict with local farmers. Moreover, plantation owners need government help to provide the housing and sanitation facilities, schools, and clinics that are a constant source of complaints by the laborers they employ.

     Countries have tried to coordinate local production and crop exports by providing villagers with fertilizer, seeds, technical assistance, and credit. In exchange, under contract state-owned enterprises buy, at fixed prices, what the farmers produce. As earlier posts for Nigeria, coffee, and cocoa reveal, this process has been financially unsuccessful to both governments and small growers. Modifications have led governments to provide farmers with vouchers they can use to buy their own supplies, and private companies or coops have taken over the task of buying commodities from farmers.

     Chemical companies in a position to perform research for the precision farming that provides seeds, fertilizer, herbicides, and pesticides adapted to local soil and climate conditions in global areas of extreme poverty now concentrate their efforts on profitable corn, soybean, and cotton crops important to American agriculture, not, for example, cassava, which feeds the poor in sub-Saharan Africa.

     Instead of engineering crops to provide added vitamins and minerals to first world consumers, in areas of extreme poverty the same objective could be achieved by introducing small farmers to new crops they could plant and bring to their local markets. Not only would a greater variety of produce improve nutrition, but crop rotation could improve soils and increase a farmer's income. Farmers might save money by controlling weeds with mulch rather than chemicals, and they may even be able to make additional money by using weeds to weave baskets (see baskets for sale at serrv.org) or make bio-fuel.

(Farming topics also are covered in the earlier posts, "World (Food) Expo, Hybrid Crops & New Farming Practices" and "Back to the Land.")