Lonrho joins scramble for African agricultural land

CAPE TOWN – UK-based Lonrho has signed a joint venture agreement with the Angolan government to farm 25 000 ha of idle soil in the country as fears of a global food shortage prompt a scramble for land on the continent.

Africa, with among ‘the lowest cost and best soil’, could be a bread basket to the world, David Lenigas, the company’s executive chairman, said yesterday.
While the deal is relatively small – 25 000 ha is no bigger than a district of maize farms in South Africa’s Free State – it indicates the increasing risks investors are prepared to take, given growing demand for premium foods in emerging markets such as Angola and China.
Despite a fall in grain prices, in part due to dramatically slower economic growth, the expectation is that over time many consumers will resume the trend of buying up.
Last week the Financial Times reported that former Wall Street banker Philippe Heilberg’s company had gained leasehold rights to 400 000 ha of fertile land in Sudan.
Lenigas said the joint venture would lead the firm to rehabilitate colonial rice fields and put virgin land under vegetables in the provinces of Uige, Zaire and Bengo for the local market.
At present food imports into the country are plagued by slow offloading times from container ships and poor road links with southern Africa.
Lonrho had opted for a joint venture with the state, paying it royalties, as it wanted to ensure the deal would survive a change in government.
The company was wary of investing in the underfarmed former homelands of South Africa because of uncertainty over land rights and the possibility that black empowerment rules could change.
John Purchase, the chief executive of the Agricultural Business Chamber, said that not only were the Angolan highlands fertile, they were also sparsely populated compared with the former South African homelands. – busrep.co.za