Cargill among agribusinesses to invest $3B in African food program

  • Article by: JIM SPENCER , Star Tribune
  • Updated: May 18, 2012 - 5:08 PM

WASHINGTON - Cargill will invest in a five- to 10-year program with the government of Mozambique as part of an emerging international effort to make farming in Africa commercially successful.

The giant agribusiness based in Minnesota is among 45 companies collectively committed to invest more than $3 billion to the New Alliance for Food Security and Nutrition that President Obama announced Friday at a symposium on global food security.

Cargill and other multinational corporations will team with small African businesses, advocacy groups, banks, African governments and the rich, developed nations of the G8 to try to raise 50 million Africans out of poverty in the next decade. The plan envisions a slew of programs and partnerships that will help make farmers capable of feeding the continent's millions of starving and malnourished people.

More boldly, the initiative hopes to transform Africa into a major food exporter.

"History teaches us that one of the most effective ways to pull people and entire nations out of poverty is to invest in their agriculture," Obama said. "And as we've seen from Latin America to Africa to Asia, a growing middle class also means growing markets, including more customers for American exports that support American jobs. So we have a self interest in this."

Cargill's specific role will be to increase the soybean or corn production of roughly 16,000 farmers operating on small land holdings in Mozambique. The company is still negotiating with the government and declined to say what the project will cost. The company did commit to a $1.35 million separate vocational education program in northern Mozambique farming communities.

Whatever the cost of the multi-year production improvement program, its aim stretches far beyond filling outstretched hands with charity.

"It can't simply be to grow [food] and feed people in that locale," said Michael A. Fernandez, Cargill's vice president for corporate affairs. "This isn't about subsistence. This isn't about eking by. This is really about: how do we bring them into the worldwide food chain? Hopefully, this will be run like a business so that ultimately, someday these people will export to neighboring countries and beyond."

The move into Mozambique is a first step for Cargill. The company currently employs about 5,000 people in nine other African countries in operations focused mostly on growing or processing cocoa, grain, oil seed and cotton. Cargill chose to focus its food alliance efforts on new crops in a new country as a "next logical step" to expand its African presence. Mozambique's political stability made the country an attractive place to set up shop.

"There's arable land," Fernandez said. "There are small [land] holder farmers that clearly aren't getting the yields that we believe that they can get ... We're in a position where we could buy some of this stuff from the farmers and thereby create an instant market."

That's the kind of thing that answers Obama's call for a food security strategy that makes emergency aid "less and less relevant." Officials at Cargill, which has been doing business in Africa since 1981, say they understand the need to overcome what can too easily become a culture of charity.

"Those things have been hindrances [to investment] in the past," Fernandez said. "We're optimistic. We've seen lots of change both in the countries in which we're operating, as well as in Mozambique and some other places. To the extent that this works it will encourage us to make other investments in Africa."

In November 2011, Cargill made the largest single food gift in history to the Horn of Africa. It sent 10 metric tons of rice on a ship and tracked it from its port of departure to the mouths of the starving. But like the president and other leaders at Friday's symposium, Fernandez drew a distinction between crisis intervention and problem solving.

"Giving relief is great," he said. "We're still going to have to do some of that. But the real goal has to be the old story about giving people fish or giving them the tools to fish. That's really what we're about."

Jim Spencer • 202-408-2752

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