Welcome to New Alliance

The New Alliance for Food Security and Nutrition was born back in May at the G8 Summit.

It joins a prestigious family of worthy initiatives, such as the Comprehensive Africa Agriculture Development Programme (CAADP), Global Agriculture and Food Security Program (GAFSP) and Committee on World Food Security (CFS).

At the L’Aquila summit three years ago, G8 pledged US $22 billion over three years as aid for food security and agriculture in some of the poorest countries on the planet.

Well, that was the plan. Before the sovereign debt crisis elbowed to the front of the stage. Reading the small print of the New Alliance declaration, you notice that one of the action items is to “promptly fulfill outstanding L’Aquila financial pledges…” In clear, pay what you promised!

Nevertheless, intentions are good. To mobilize private capital for food security, for example, New Alliance will “support the preparation and financing of bankable agricultural infrastructure projects, through multilateral initiatives including the development of a new Fast Track Facility for Agriculture Infrastructure.” There are also plans to involve the private sector (multinationals), civil society (as opposed to the uncivil elements) and of course, women, children, minorities, ….

While the declaration was being declared over in Chicago, where the futures market had the good grace to fall back after reaching record highs just before the guests arrived, one of my customers in West Africa was calling his bank.

A different reality here, and a far cry from the noble plans of world leaders.

You see this customer needs a loan of $300,000 to install a soybean processing plant. His core business is poultry and fish, but due to irregular local supplies and quality issues, he presently has to import soybean meal – that vital protein ingredient – from South America via Belgium. In containers. After every grain trader and freight forwarder has taken his cut, my customer’s chickens are eating gold dust.

With a small-scale processing plant, however, he can buy soybeans from local farmers and process himself. Everyone gains. The local farmer gains a regular market for his soybeans, the chickens and fish get to eat quality meal processed without chemicals, feed costs drop, profits increase.

The bank had even agreed to my customer’s loan, and they all signed the papers. But then the bank’s lawyers in head office saw the file and said they needed a Certificate of Ownership, a property title proving that my friend had indeed purchased his 110 hectares from the state. The problem is, the state office responsible for delivering this document is, well, let’s say they are having trouble delivering the certificate and require a little encouragement. That’s a game my customer refuses to play. Once you start paying, the word gets around and you’re marked forever as a soft target.

Don’t misunderstand, I commend G8 leaders and their staff for creating New Alliance. But will it solve problems on the ground, in Africa…?

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