Africa's farms reap rewards as cost of raw materials soars

  • 07/05/2008

  • UNDP

Historically, there have been tenuous links between farmers and food producers, with many companies having scant knowledge of how and where their ingredients are grown. But as the prices of raw materials soar - from the barley used to make beer or the cocoa used to make chocolate - leading brewers and food manufacturers from Cadbury Schweppes to Diageo are increasingly recognising their businesses will benefit from investment in agriculture. Nicolaus Cromme, project manager for foodstuffs at the Common Fund for Commodities, a branch of the UN, says the group has received approaches from companies that want to develop projects in Africa. Multinational companies traditionally had only "so-so" interest in agricultural development, he says. "That has really changed." Mark Lundy, senior research fellow at the Consultative Group on International Agricultural Research, which was created by the World Bank in the early 1970s to find ways of producing more food, claims food producers can no longer afford to ignore farmers. "It used to be very much a buyers' market . . . now companies have to position themselves as good partners." Last month, Barry Callebaut, the Swiss group that claims to be the world's biggest maker of chocolate, bought a 49 per cent stake in Biolands, an exporter of organic cocoa based in Tanzania. Biolands runs a smallholder programme involving 20,000 farmers, paying farmers for delivering beans. It also trains them and gives them seeds. Cocoa prices are highly volatile - prices rose by almost 50 per cent between September and February - but by investing in producers, Barry Callebaut gets to control part of its cocoa supply. "We try to buy more and more cocoa directly from cooperatives or other organisations because it's giving us full control over the quality," the company says. Biolands plans to extend the Tanzanian project to other countries. Meanwhile, Cadbury Schweppes, which created the "Cadbury Cocoa Partnership" with the United Nations Development Programme this year, plans to invest