Can large-scale land initiatives fulfill their promises?

Whether large scale intervention is or is not likely to benefit African people is a sometimes circular argument and one that I am not anxious to join except to say that I generally favor the pro case.
My comment is really directed to how constraints to large scale intervention might be overcome. There are probably dozens of issues that local and foreign investors will task their due diligence team with addressing, principal amongst these will be sovereign risk issues and in particular the degree of security of tenure over both land holdings and water access.
The other, perhaps less well understood constraint is the cost of logistics. Vast continents like Africa, Russia, China, South America and Australia present immense logistical challenges when the proposed production area is thousands of kilometers from either the domestic population centers or the export points which at least in Africa are frequently in another country.
It is often the case that the potential success of a large scale land intervention is not really hindered by agronomic or sovereign risk factors but simply by the cost and difficulty of moving freight, logistics.
When we look at the costs and benefits of any particular project perhaps we should begin by analyzing possible solutions to this challenge first. When we assess benefit it is necessary to consider not just the benefit to the project itself but also to the region/country as a whole. Reliable, cheap transport is the key to opening up opportunities for everyone in the country, it lies at the very core of building supply chains and it is the absence of high quality, low cost supply chains that most disadvantages food producers whether in developed or developing countries.

large scale interventions are simply necessary .
I will not talk about the Countries I know absolutely nothing , so I'll say something about Brazil and Argentina .
So , without knocking even a simple tree , I will affirm we need immediately intervention in these two Countries .
They have very large area being abandoned and in the hands of speculators , led by pseudo- Real Estate agents .
Corruption and speculation are having a field day ; land are going to pot .
In my very modest opinion the greatest fault lies with institutions like IFAD , the World Bank , ...Google .. I have quite a list , which , according to their internet website are going to solve all these problems .
And they compete .
But then ask for some action , THEY WILL NOT ABSOLUTELY EVEN ANSWER YOU ... never mind talking ... they have all kind of funds , but they are NOT solving the
problems , look at the mess they have created in Madascar ... and I will say the situation , in Africa , will worsen .
Africa and somehow India are the darlings , they are in ... , of Investors , while a lot can easily be done if We concentrate and it necessary and possible , if we concentrate in Brazil , Argentina AND RUSSIA .
Butr those People at IFAD , world Bank , Google , MDB , AfDB , EBRD , IDB , IFC ...will take 3 pages if I mention them all ! ... to me seem to be the most conceited no good , disinterested individuals I ever have met ; lucky if you get past the switch board .
I TRIED .
I HAVE THE TRIED TO SOLVE SOME OF THESE PROBLEMS , of big , bare lands going to desertification or lying abandoned ( as in , e.g. cattle ranches ) but the big financial institution are there only for a show ... have'n't got the right people ... don't care except their pet projects ( Google & Co . ) , otherwise , I can tell You , that with simply the small projects We are interested in and for which We can't get even a simple bare dollar , some of these Nations would be humming away , solving a lot of their rural poverty and everybody would be able to eat BETTER food at lower prices .
But ask Rarobank ... GEF ..JFPR ... ADB ...FAO ...BNDES? ....EIB , CTF ...AGRICULTURAL BANK OF CHINA ....BANK FOR RECONSTRUCTION AND DEVELOPMENT ...THE ARABS MUST BE THE WORST ! TOO MANY TO QUOTE ....
Everyone has its own fiefdom , from which they;ll extract the most they can for their own selfish ...nonsense ,
while the problem gets WORSE >
I tried and my head is broken .... wall upon walls ... nobody even cares to reply ...
speculation is rampant .... and so ?

The integration of landscape components from a small local perspective to large regional or national scales entails identifying the needs and problems of the occupants or users, and in turn, seek mechanisms of interaction between the various internal and external stakeholders. Environmental and ecological, social and economic conditions, lead us to seek a turning point and consensus on the parties seeking to establish appropriate management scientifically and culturally accepted. Current and future climate extremes require using reasoned alternatives, not only from a biased, but with a real vision and survival. Urban and rural planning will be bounded by the ecological values or affected natural resources and their effect in the medium and long term. Political and ethnic conflicts are present, and claiming presence in the class definition of the geographical and political landscape.
Transnational is doubtful seeking general benefit, distribution and equity issues, and multinational agencies will be minimized in their attempts to meet national or regional needs, as well as global. The technology available is not for everyone, but can be a means to maximize resources.
The framework of understanding for the integration of landscape is complex, there are relationships to establish and depend largely on the real interests and transparent communication of the actors, time is a factor in the practical and urgent choices in highly degraded areas. The availability of financial resources by agencies or governments should be feasible to develop initiatives. The forests and related resources must be protected far as possible. looking to differentiate their potential uses, as well as water resources are vital in the production and regenerative cycles. Many challenges, companies from the base should ensure these resources and their integration in the complex task of knowing them.

In my text on smallholder agriculture I attempted to address this issue from the well being of the smallholder farmers that could be displaced by large scale land development. That section of the text is excerpted below but I fear minus the photos

------------------------

EXCERPT FROM:
Developing Smallholder Agriculture: A Global Perspective
R.L. Tinsley

Chapter 3

Land Tenure, Labor And Efficiency
Of Production

THE ROLES OF PLANTATIONS AND ESTATES

Plantations do co-exist and interact with smallholders and thus have to be considered within the scope of this text. Plantations and estates are large farms employing many laborers under a single management, usually concentrating on a single commercial crop. Plantations and estates often co-exist with smallholders, even when producing the same cash crops in direct competition.
This is economically viable because the lower overhead costs for the smallholder make economic returns per Ha considerably higher than for plantations. The total returns and total profits are obviously higher for the plantations. This can be particularly true for sugarcane, even in more developed areas such as Puerto Rico. In other cases, the smallholder will satellite on the plantations, selling their crops directly to the plantations for processing and marketing as part of out-grower schemes.
Plantation crops are often tropical crops intended for markets in temperate countries. The origins were often in colonial periods and part of the economic incentive for European colonization of African and Asian countries. They are often considered to be exploitative of both land and labor. While this may have been true during the period of colonial exploitation, most current plantation owners or managers would disagree. They correctly point out that they are carefully operating, well within the economic and social conditions of the respective host country, which after independence would most likely have passed legislation to remove any exploitative labor practices, at least on paper.

Plantation Crops

Tea, rubber, and oil palm are normally produced as plantation crops (Photo 3.3). A major exception is rubber in Indonesia. Here rubber is promoted for both smallholders and estates, but with reduction in quality for smallholders relative to plantation rubber. Pineapples and bananas for export to temperate areas are also often plantation crops. Smallholder bananas and pineapples are mostly for local markets. Coffee, coconut, sugar, and tobacco tend to be more mixed between plantation and smallholder producers.

Photo 3.3 Rubber Plantation in Vietnam

Plantations normally use capital-intensive production methods. There is always a need to recover their capital investment and overheads, particularly the processing facilities. This means that they have the economic time frame and vested interest to be more environmentally conscientious than smallholders with their more restrictive economic time frames. Particularly, plantations committed to long duration tree crops such as tea, rubber, oil palm, and coconuts, have little environmental impact compared to subsistence smallholders with their manual annual crops cultivation.

The Need for Rapid Processing

The primary reason the plantation crops were developed into large operations was the need for rapid processing after harvest, which can be better coordinated through consolidated management than individual smallholders. Smallholder producers surrounding estates can contribute to the total supply of produce and many estates are looking progressively to smallholders for expansion. However, co-ordinating smallholder production and processing facilities can be difficult.
An example of the coordination problems, of what is normally a plantation crop, is sugar production in Tarlac, Philippines. Here, trucks of cut cane from sharecropping tenants will queue outside the mill for several days, with drivers camping under them waiting to off-load. Meanwhile, the burnt and freshly cut cane, which is best if processed within 24 hours of burning, continues to lose sucrose content with a corresponding increase in lower valued molasses. It represents a very inefficient use of both transportation and manpower. Farmers also have to avoid newer higher yielding canes in which the sucrose content will deteriorate even more quickly than the current variety. The older varieties also result in larger amounts of bagasse to be burned or otherwise disposed of.

Comparison between Plantations and Smallholders

From the smallholders’ perspective, plantations may be considered as an alternative source of employment. Unless employees are recruited from afar, as the British did in bringing Tamils from Southern India to work on tea plantations in Sri Lanka during the colonial period, the employees of a plantation are typically recruited from the neighboring smallholder communities (Photo 3.4).
Thus, most plantation employees volunteer to work on the plantation with the expectation that the plantation will offer a better alternative to smallholder production. Therefore, plantations cannot be excessively exploitative, or the employees will simply return to their respective villages. Instead, plantations may provide employees with a more stable, less risky living, even if receiving near-minimum wages, than the uncertainty of a smallholder farming operation. Plantations may also provide employees with social services such as housing, health care, and perhaps education.
Companies providing extensive social benefits are often owned and managed by multinational companies such as Firestone and Unilever, which are more interested in preserving their worldwide reputation for good employee relations than are locally-owned and managed estates. Such international companies are also very careful to operate well within the local labor and tax laws.
Laws that can come close to consuming most of the company profits and place the international estates at a financial disadvantage to more locally-owned estates, which may circumvent legal requirements with informal arrangements with the authorities.

Photo 3.4 Plantation laborers plucking tea in Sri Lanka. Are they better off than smallholders?

A Tea Estate as an Example

An example of a major plantation is the Brook Bond Tanzania tea estates owned by Unilever, a large multinational corporation specializing in consumer goods of which tea is a major component of their beverage sector and marketed under the Brook Bond brand (Kelly, 1999). Unilever owns tea estates in several countries, and ships most of the processed tea to England for blending into their final products and re-exporting throughout the world.
Brook Bond manages 3,000 Ha of tea in the Southern Highlands of Tanzania as part of a 20,000 Ha land concession dating back to the 1940s. It employs some 6,000 individuals, including both workers and supervisory staff to operate the estate and two factories. This would provide a land to labor ratio somewhat less than most smallholder operations, assuming only one working person per family.
Of these employees, some 4,000 families, equaling 70% of the labor force, actually live on the estate in company housing provided free. The quality of the housing depends on the employee’s position. Housing comes with water and electric power where available. Since the estate is stretched over 50 km, to have staff commute daily over unpaved roads from off-estate villages would add considerable time to the workday as well as requires some form of company or private commuter transportation service. Given the extended number of dependents typical of African families, there are an estimated 40,000 individuals living on the estate.

Income and Social Services

The salary scale at the plantation starts at roughly $40 per month for a 5.5-day workweek. This compares favorably to $25 per month minimum wage for Tanzania. However, the pickers are on piecework, which allows them to earn up to twice the basic wage. This might be a paltry wage by any international standard, but compares favorably to the $30 per month for casual agricultural laborers employed irregularly for piecework by smallholders to work in rice paddies in Madibira some 120 km from the estate.
In addition, the estate provides free medical care through 11 dispensaries, and a hospital with a reputation that extends beyond the estate to attract private patients, including some expatriates. The estate also maintains two primary schools for dependents’ education for which the government provides the teachers. There is also an English language primary school for supervisory staff. All three schools are fully owned and operated by the company. There are also 44 daycare centers. Finally, the estate maintains a supply of maize purchased shortly after harvest when the prices are low. The maize is then sold to the laborers at cost as needed when the open market price of maize increases as supplies become scarce prior to the next harvest.
All of this represents a fairly heavy social cost that must come from the company profits. However, it does result in a fairly stable work force with an estimated 10% annual employee turnover implying average employee tenure of 10 years. New workers can normally be recruited from communities of smallholder farmers and logging companies within 100 km of the estate. There are very few layoffs even for those classified as seasonal casual laborers, as normally there are enough occasional jobs on the estate to keep most workers occupied the entire year.
It would take an above-average smallholder to have a standard of living equal to that offered by Brook Bond. The major drawback is that, upon retirement, an employee may be without house and no place to go. Also, smallholders acting as individual entrepreneurs may have a better opportunity to expand their production and accumulate more personal wealth than the limited promotion opportunities for estate laborers. While this might be the dream of many smallholders, realization of the dream is restricted to the few highly motivated and lucky individuals.

Contributions of a Smallholder to an Estate

Brook Bond purchases approximately 5% of their tea leaf from a limited number of smallholders who manage close to 100 Ha each, which is considerably more than most smallholders. With only 5% of the leaf coming from smallholders, there is little difficulty integrating the smallholder deliveries into the overall factory processing even when operating at near capacity. The quality of the smallholder tea tends to be as good as, or better than, the estate tea. This is largely attributed to better quality control resulting from the family operation. Brook Bond pays the smallholders an initial flat fee per kg of cut leaf. This is then supplemented by an annual profit sharing policy depending on the overall profit made per kg of cut leaf.
In addition, Brook Bond used to provide technical support for the smallholders in the form of management advice, credit, planting material, etc., before this function was taken over by the Tea Research Institute of Tanzania located only 30 km away. If Brook Bond were to expand its current operations, it would be more through smallholders than additional estate lands, because it would reduce the capital cost of land development. It is expected that, in the future, Unilever will drift away from direct production to concentrate on processing and relying on smallholders or independent growers for leaf production.

The Mufundi Tea Company

The Mufundi Tea Company is a somewhat smaller tea plantation, not far from Brook Bond. It is a subsidiary of a company headquartered in Zimbabwe, without the international reputation of Unilever. They are currently rapidly expanding in both their tea and coffee production, primarily by buying financially-troubled State Farms throughout Tanzania.
They operate in a similar manner to Brook Bond in terms of providing educational and health benefits to their employees, the cost of which represents a fringe benefit package of some 220% of the salaries. This compares to a typical 35% fringe benefit for most USA organizations. The Mufundi Tea Company is more directly involved with smallholder production. In this case the smallholders are the more typical 2-3 Ha producers.
Mufundi obtains 15% of their leaf from smallholders and is interested in increasing this to 30% to avoid the 220% fringe benefit costs. With this level of smallholder tea coming into the factory, it is necessary to carefully organize the flow. This is done by contracting with villages rather than individual farmers. The villages are then responsible for keeping the accounts for individual producers. Also, it is necessary to send trucks to each village on a highly specified schedule and not accept any direct deliveries.
This is a good example of how estates can operate for the mutual benefit of themselves and neighboring smallholders. It constitutes a substantial improvement over the smallholder sugar marketing problems of Tarlac, Philippines mentioned earlier.

The Phillips’ Farm as an Example

The Phillips’ Farm constitutes another example of the relations between smallholders and other types of farming.

Farming Operations

An example of a large family farm, rather than estate, is the Phillips’ farm outside Iringa, Tanzania, part of the Southern Highlands of that country. It is managed by two generations of the Phillips. The founder originally came to Tanzania as an agriculturalist with the British colonial administration. After Tanzania’s independence, the family remained and started a dairy farm, which was recently expanded to include other enterprises. The farm now comprises 450 Ha of dairy land plus 320 Ha for coffee and tourist campgrounds. They manage some 500 head of dairy cows of which 150 to 170 are milking, which is a milking to total cow ratio similar to that of the USA. In addition, they have 50 head of beef cattle and 200 head of sheep.
The Phillips’ farm is in a semi-arid area with only 900 mm of rain per year. Consequently, they have to rely heavily on stored forage, which is usually done with “standing hay” rather than silage or baled hay. Standing hay is a process of allowing forage to dry down in the field during the dry season without harvesting, baling or ensilaging. It can be effective in areas where the dry seasons are highly pronounced with essentially no off-season storms that would spoil the hay. It also requires forage that remains palatable when naturally dried without cutting. Their forages concentrate on Bermuda and Napier grass. Most of this is cut and carried to the cows rather than freely grazed. This does, however, limit the overall carrying-capacity of the farm.
Because of unreliable power supply, they prefer to hand milk rather than mechanically. The milk is then processed on the farm. For milk consumed within the Iringa area, the processing is a simple heating in sealed containers placed in a water bath over a wood fire. This milk is normally consumed within 24 hours. For milk delivered to Dar es Salaam, some 500 km away in the hotter tropics, they use the Hoffe-Rising process. After heating the milk in pressure cans, they introduce oxygen under 1,200 psi. The oxygen serves as an oxidizing agent against any remaining bacteria. The milk can then be cooled and retained at ambient temperature for up to 10 days. This appears to be an ideal low-tech method particularly effective for a developing environment with limited resources, unreliable power supply, and without assured refrigeration. However, the use of UHT milk with its unrefrigerated shelf life of over six months could make this process obsolete. UHT milk does require a substantially larger operation than the Phillips’ manage. The smallest UHT milk processing equipment requires an output of 70,000 l/week, considerably more than a family operation could undertake even if purchasing milk from neighbors.

Labor Relations

The Phillips’ employ 120 casual laborers for a land to labor ratio of 4-6 times that of the surrounding subsistence farmers. Of these, only six families live on the farm. The rest commute daily from neighboring villages, where they maintain some land for personal cultivation. Most receive the minimum legal wage. The obligation to raise the minimum wage recently has caused some layoffs and reduced some of the effort for good pasture management.
The workday typically runs from 7:00 in the morning to 3:30 in the afternoon. This allows those interested workers to return home after work and still have 2.5 hours of daylight left for personal cultivation. They do have a fairly substantial employee turn-over, but this maybe largely mandated by local labor laws. Casual laborers can only work 290 days, after which they have to take at least one month off. The Phillips’ have retained some employees on this system for over 20 years.
The Phillips’ farm may be somewhat unique as an ethnic European dairy farm in Africa. There are larger dairy farms in the area, but they tend to be under the management of church missions. There are also some dairy farms in the 250 - 300 Ha range owned by ethnic Asians and Arabs. In addition, there are some Tanzanian-owned farms in the 120 – 250 Ha range, but these tend to be one of several enterprises of their owners and are often not directly managed.
Finally, there are numerous 5 - 10 cow dairy operations but these are really in a separate economic class from the Phillips’ farm. Recently, NGO dairy projects began in the area that promoted additional milk production by smallholders with some considerable subsidies on the production. The result has been some severe competition that has lowered the milk prices and rendered the Phillips’ milk production only marginally profitable. It is one reason for their recent diversification into coffee and other enterprises, including a riverside campground.