Sanne van der Wal SOMO (Centre for Research on Multinational Corporations) ‏

1. Advancing African Agriculture THE IMPACT OF AGRIBUSINESS ON AFRICAN AGRICULTURE AND AFRICAN FARMERS Sanne van der Wal SOMO (Centre for Research on Multinational Corporations)‏

2. Objectives of this presentation Raise awareness of issues related to agribusiness that need to be further explored and/or dealt with to promote sustainable agriculture and food security in Africa.

3. Presentation structure Introduction Admitting market failures…by agribusiness Foreign investment vs. the development agenda in agriculture Trade facilitation with focus on quality is export oriented Sector governance (why needed)‏ Conclusions

4. Introduction SOMO Presentation of Agribusiness chapter in Monitoring Report European CSOs Agriculture again high on the development agenda & AAA Agribusiness? Focus on foreign agribusiness

5. About SOMO • SOMO combines research with action • Research on practices of multinational corporations • SOMO supports civil society actions, CSR coalitions, and awareness raising campaigns • CSR Networks:SOMO is co-founder and host of the Dutch CSR Platform, OECD Watch and GoodElectronics • SOMO is co-founder of the European Coalition for Corporate Justice

6. Admitting market failures…by agribusiness Failing to provide services and support by agribusiness Failing to create value added upstream in commodity export > no diversification, mostly primary production, oversupply, low prices... Record profits downstream > upstream? Power asymmetries: undermining domestic production of seeds and agrochemicals?, concentration in retail (effects of buyer power)....

7. Foreign investment vs. the development agenda in agriculture Competition for scarce means and unfair competition Foreign investors in agriculture seem to be more export orientated which might undermine agricultural production for domestic consumption. Restriction on regulation to promote SME or sustainable production

8. Trade facilitation with focus on quality is export oriented Exports > economies of scale > not necessarily more positive economic impact Adapt standards to local realities

9. Sector governance (why needed)‏ Equitable distribution of benefits and risks Protection of labour rights (and the environment)‏

10. Conclusion Business investment and EU policies are mostly supporting export-oriented, large-scale and foreign agribusinesses, with their large financial, human and technical resources, at the expense of small-scale family farming, local seeds development, diversification and local value-adding processing. EU/EC agricultural policy makers should be conscious of such impacts and whether they bring desired outcomes of sustainable food production and development in Africa. Increased regulation is essential with improved governance in the agribusiness sector to deal with: equitable distribution of benefits and risks, labour rights, environmental protection, political influence, hedging and speculation in food.

11. Recommendations The EU should orient its aid programmes, its own trade and agricultural policies and its negotiations with African countries on trade and investment (in EPAs, WTO) towards support of family farming as well as local or regional processing of African farm products. For example: Providing budgetary support to be particularly spent on infrastructure that benefits family farm products Support for accessible and cheap financing of agricultural production. Support domestic and regional processing and marketing of African farm products;

12. Recommendations Support for governments in order to review their investment incentives for foreign agribusiness and evaluate whether the costs of such incentives should be better spend to support African family farming. Design competition policy and cooperation that effectively deals with concentration in commodity markets and its abuses Prohibit and sanction abusive buyer power practices by supermarkets buying African products for European markets or by European supermarkets operating in Africa; Promote locally appropriate standards, and provide appropriate means to producers to adopt to new standards;