05 July 2012 - Private sector-led agribusiness brings with it opportunities but also dangers.
The G8 summit last May ended with a pledge to end hunger in Africa and a plan to inject $3 billion into African agriculture with the aim of “catalysing private sector investment in African agriculture”. This record investment, derived entirely from the private sector, appears to stem from a realisation that previous aid commitments have failed, as well as perhaps an assessment of government priorities in an environment of Western austerity.
The G8’s position represents a significant leap of faith in market-friendly agriculture four years after the 2008 global food crisis when increasing food prices led to unrest in a number of developing countries. For its alleged ability to promote business opportunities in low income markets, offer inputs and links to markets for small-scale producers, agribusiness was recently elevated by the International Fund for Agriculture and Development as a key driver of hunger reduction. The primary objective of the G8’s New Alliance for Food Security and Nutrition is a shared commitment to increase investment into African agriculture, luring investors to Africa’s food markets on the premise of favourable returns and low tax rates. It will initially be launched in Ethiopia, Ghana, and Tanzania.
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