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China to Buy $4.3 Billion of Soybeans in Deals With U.S. Exporters in Iowa

Feb 20th, 2012 by CleanSeed Capital

China, the world’s biggest soybean importer and consumer, signed agreements in Iowa to purchase 8.62 million metric tons of the oilseed from U.S. suppliers in a deal valued at $4.3 billion.

Soybeans will be supplied by companies including Cargill Inc., Archer Daniels Midland Co. (ADM), Bunge Ltd. (BG) and CHS Inc., Iowa Soybeans Association Chief Executive Office Kirk Leeds said today in Des Moines, Iowa, during a U.S.-China trade cooperation conference. Iowa Governor Terry Branstad is hosting a two-day visit by Chinese Vice President Xi Jinping, 58, who is slated to become president in March 2013. Iowa is the biggest U.S. producer of corn, soybeans, hogs and eggs.

“It is phenomenally important to have Vice President Xi here because it says that Iowa is an important place to do business,” Leeds said yesterday in an interview. “These agreements are the direct result of activities by U.S. soybean groups in China since 1981 to promote soybean-meal demand in livestock, chicken and aquaculture feed.”

China became the largest buyer of U.S. farm products in 2010, and last year boosted purchases to $22.17 billion, U.S. Department of Agriculture data show. The nation purchased 20.6 million metric tons of soybeans from the U.S. last year, or 60 percent of the total shipped overseas. China probably will increase purchases from all suppliers by 62 percent in the next decade to 90 million tons from a projected 55.5 million this year, the USDA said Feb. 13.

Feed Fish

“It would take half of the Iowa soybean crop just to feed China’s fish,” said Leeds, who will be traveling to China next month on a sales-promotion trip for the producer-funded organization. “Soybean profitability depends on international demand, especially from China.”

Additional sales agreements may be announced in Los Angeles on Feb. 17, bringing the total for this week above the 11.5 million tons reached during a similar trade visit in Chicago last year, Leeds said. The 2011 deals involved 21 purchase agreements valued at $6.7 billion.

Iowa farm exports to China in 2010 were 13 times larger than in 2000, data from Iowa Department of Agriculture show. Agriculture and related industries contributed 27 percent to the state economy in 2010 and 17 percent of Iowa workforce is employed in producing food.

Prices Gain

Soybeans have jumped 5.1 percent this year on the Chicago Board of Trade, partly as hot, dry weather damaged crops in Brazil and Argentina, the two biggest exporters after the U.S. last year. Today, the price reached $12.765 a bushel, the highest since Sept. 27, on speculation that China may increase purchases from the U.S. to rebuild inventories and cushion against any additional adverse global weather later this year.

Earlier today, the government reported U.S. exporters sold China 116,000 tons of soybeans for delivery before Aug. 31.

Chinese and U.S. officials will attend a symposium tomorrow in Des Moines sponsored by the USDA. Chinese companies intend to invest more on advanced agricultural technology and sustainable farming from U.S., Xinhua News Agency reported, citing an interview with Minister of Agriculture Han Changfu, who is accompanying Xi this week on his trip to Iowa.

“The conference will help to improve relationships to achieve mutually beneficial development in the future,” Bill Northey, Iowa’s secretary of agriculture, said in a telephone interview on Feb. 13. “At the end of the day, it’s all about getting business done company to company rather than government to government.”

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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Friday Agri Angle – Clean Seed Capital, by VSA Capital Limited a London based investment bank.

Feb 17th, 2012 by CleanSeed Capital

As we meet with companies in the rather ill-defined ‘agriculture’ sector we are acutely aware of just how broad-ranging the activities can be. For instance, we have recently been introduced to a small TSX-V listed company, Clean Seed Capital (CSX V), which is interested in sustainable farming practices in Africa. The company listed in September 2011, and at the time of writing has a market cap of around C$6m.

Clean Seed Capital is looking to make the most of opportunities in the sustainable agricultural sector, and particularly in emerging markets. Its first investment addresses the issue of whether current agricultural techniques can keep up with the need to feed a growing global population.

What’s happening, and what is No-Till?

At present Clean Seed has a single investment in Vesco Agricultural Technologies, a company that has developed a new form of No-Till machinery. The traditional farming techniques – ploughing and tilling of the land – degrade the soil quality by disturbing the top layer. This reduces moisture retention as well as making seed and fertiliser placement harder; with a consequence of this being lower yields from crops. No-Till technology addresses this by helping to keep natural soil structures; it doesn’t disturb the top layer and allows seeds to be planted underneath, as shown below.

Source: Vesco Agricultural Technologies

Vesco has developed a new approach to No-Till planting that allows the farmer to plant and fertilise in one pass of the field by cutting in a horizontal and not vertical plane. The diagram illustrates the seed placement (yellow dots) along the shelf, while fertiliser has been applied to the bottom cut. Vesco’s No-Till machinery requires fewer passes over a field from preparation to harvesting than other forms of tillage.

At present the closest competitor to the Vesco technology is from agri-machinery powerhouse John Deere, through a small number of different machines. However, these have not been specifically designed for less-developed economies.

Recent events

Vesco’s system is due to launch in Spring 2012 and feedback gathered from prototypes and trade shows has to date been positive. The company presented at the Pacific Agricultural Show on 26 – 28 January where it unveiled its No-Till technology to the farming community at large. The product had been designed for emerging markets (it is pulled behind oxen) and the focus is presently on Ghana. However, with a minor adjustment it can be pulled by a small tractor and this is why Canadian farmers at the above-mentioned trade show are said to have taken a liking to the machine. It has also opened up market opportunities which had not previously been considered.

Next steps for its No-Till machinery

The smallholder machine is expected to be launched in the next few months, and it is hoped that production will begin in the very near future. Work has also begun on a larger beast costing in the order of $65,000 that will be pulled behind a tractor and will be more robust and heavy duty with the ability to plant three seeds at once. This product should also be launched in the spring and is designed to compete with some of the big machines in the sector – like the John Deere 1590.

The next stage will be focused on the smaller machines, which we understand will be marketed for a price of around $14,000. It looks like there will be a limited initial roll out of around 10 to local customers in North America, and after this attention will shift to Africa and this is being underlined by the work of Dr Kwesi Opoku-Debrah (a brief biography is given below) who is focusing on Ghana.

It may be worth noting that to date no units have been sold and the company has been in an extensive research and planning phase. It would appear that if and when the preparations are successfully completed then the company will be seeking funding for a proper product launch.

So where is Clean Seed going exactly?

One difficulty which we feel is strikingly obvious is that of the target market. Agriculture employs 65 per cent of Africa’s work force (Source: World Bank), but there must be questions raised in targeting the world’s poorest continent. In Ghana alone 56 per cent of labour is employed in agriculture but at the turn of the millennium subsistence agriculture accounted for 36 per cent of GDP.

This has led Clean Seed to look at itself in a broader context. It appreciates that there may be limits to the returns it can earn from selling machinery into Africa and so it is open to the idea of diversification, and not purely in the agri-machinery sector, either. Some thought is being given to  a move to the commercial crop market, like soybean, which would allow the company to utilise its own technology while moving away from being a ‘one trick pony’.

Background on some of the team

Graeme Lempriere: CEO, President and Director

A corporate and financial entrepreneur by trade, Graeme is the founder and CEO of Marvelle Capital Group which is the company that founded Vesco Agricultural Technologies Inc. Prior to this Greame has worked for and held senior executive positions on several public companies involved in a variety of sectors from mining to engineering groups, the leisure industry to real estate development.

Mark Tommasi: Director

A former investment advisor, Mark has approximately 15 years’ experience with public companies in both the United States and Canada.

Dr Kwesi Opoku-Debrah, PhD: VP, International Agricultural Development & Director, Vesco Agricultural Technologies

An agricultural scholar, Dr. Opoku-Debrah holds degrees in both agricultural economics and international agriculture. He has worked as Agricultural Team Leader of Evaluations for World Vision and USAID, local consultant to the World Bank and the International Fund for Agricultural Development and has been appointed to help progress in Africa with the Developing Nations initiative.

Agri/ Timber Research

Stuart Davidson

020 3005 5017

sdavidson@vsacapital.com

Bruce Davidson

020 3005 5006

bdavidson@vsacapital.com

#VSA Capital Limited is Corporate Broker to Phaunos Timber Fund. It is therefore classed as a connected company. Please contact VSA on mail@vsacapital.com for our policy on connected companies.

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Farmers embrace no-tillage system to improve yields

Feb 16th, 2012 by CleanSeed Capital

By AFRICAN LAUGHTER

Agricultural experts are lauding the steps Kenyan farmers are making in adopting a no-tillage system of farming that increases yields, but warn that failure to implement it quickly could lead to chronic land degradation and soil erosion that will ultimately threaten food production.

The no-tillage system entails planting crops into soil that has remained unploughed after the harvest of the previous crop.

Such cultivation has proven to have the potential, if carried out in conjunction with other appropriate farming practices, to improve food production, cut down labour cost in the farm by up to 20 per cent and stabilise threatened rural livelihoods.

Constant tillage threatens the health of the topsoil, which is paramount for better crop yield since it provides a habitat for organisms, including billions of beneficial microbes, nitrogen-fixing fungi, nutrients and earthworms whose digestive tracts transform the fine grains of sterile rock and plant waste into fertile soil.

On average, the earth is covered with little more than three feet of topsoil. Estimates from the Food and Agriculture Organisation have indicated that the world loses about one per cent of its topsoil every year to erosion, mostly caused by agriculture.

With scientists insisting that the topsoil cannot be made overnight since it is regenerated at a very slow rate of an inch or two over hundreds of years, farmers are being urged to adopt the no tilling method as a means of protecting the topsoil and improving food production.

Some Kenyan farmers plant seed directly into unprepared land immediately after the onset of rains, regarding it as a coping mechanism. Scientists are warning that failure to take up the no-tillage system could have serious repercussions for Kenyan agriculture.

“When a farmer tills, it means they are removing weeds, mixing in soil amendments like fertilisers, and shaping the soil into rows for crop plants and furrows for irrigation,” says Dr Kaheria Muriuki, a scientist from the Tegemeo Institute of Agriculture who is actively involved in pushing for no-tillage farming. “This results in adverse effects like soil compaction and death or disruption of soil microbes and other organisms, while washing or blowing away topsoil through erosion.”

“No-till farming avoids these effects by excluding the use of tillage. This way organic amenities and crop residues are retained on the surface of the soil and sowing is done with minimum soil disturbance,” he says.

The zero tillage system has become a success story in countries where it is practiced by farmers en masse. In Bangladesh, India and Pakistan, for example, zero tillage has reduced the demand for water in rice and wheat farming on almost a million hectares of land. While rice and wheat are important for southern Asia’s food security, yields had been stagnating and soil quality deteriorating.

But a ‘rice–wheat’ farming system, which has a summer ‘wet’ crop of rice — during the monsoon season — and a winter ‘dry’ crop of wheat, gave scientists the leeway to introduce no-tillage farming there in 2009.

The wheat seeds germinate in residual water left by the rice crop, saving up to a million litres of water per hectare. This farming technique has been widely hailed for cutting down land degradation by 50 per cent.

All scientists agree that the only problem with the zero tillage system is the over reliance on herbicides, as farmers try to clear weeds in otherwise untilled land, which may affect the quality of the crop.

“You see even if you tell farmers to go weed out manually, it is almost impractical for farmers to do it all in their big pieces of land,” says Zipporah Ndeti, another scientist pushing for the adoption of no-tillage in Kenya. “We are still looking for innovative and less laborious ways of doing away with weeds. We crack that and zero tillage farming will define farming in Kenya.”

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Vesco Agricultural Technologies, a Clean Seed Capital Company, launches new website.

Feb 14th, 2012 by CleanSeed Capital

Vesco Agricultural Technologies, a Clean Seed Capital company launches new website in preparation for the Spring 2012 launch of the company’s advanced No-Till precision planting system.

Click image to visit Vesco:

Vesco Agricultural Technologies has developed an advanced No-Till precision planting system comprised of individually patented technologies. These technologies include All-Cast opener assembly systems, in-ground openers, proprietary seed and fertilizer metering, and electronic control systems that combat soil erosion, reduce seed and fertilizer use, and nurtures the subsurface biodiversity vital to producing healthy and sustainable crops.

Conventional agriculture (plowing – tilling) is a significant contributor to the environmental degradation of farm land. Our technology significantly reduces soil disturbance resulting in the elimination of soil erosion, provides for high moisture retention and superior seed and fertilizer placement resulting in improved yields, less tillage also means fewer passes therefore greatly reduced fuel requirements.

In addition, No-Till farming practices can sequester as much as a half-ton of carbon per acre per year and have become widely accepted as a cost-effective large scale method for addressing GHG emissions. The pressure to improve crop efficiencies in a sustainable manner is expected to continue to receive significant global attention and investment.

Our Technology can deliver measurable financial and ecological benefits to the world of agriculture – a world that has been thrust into an era where true conservation of the world’s farmlands using sustainable agriculture methods is no longer an option, but a necessity.

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UN calls for science-led ‘ever-green’ agricultural revolution.

Feb 2nd, 2012 by CleanSeed Capital

1 February 2012 | By Alistair Driver

THE UN has called on international Governments to create a 21st Century ‘ever-green revolution’ for agriculture that would aim to double production, while protecting the earth’s resources.

In a new report on global sustainable development, the UN highlights the importance of international investment in agricultural science, including biotechnology, to achieve these goals.

“Governments and international organizations should work to create a new green revolution — an “ever-green revolution” — for the twenty-first century that aims to at least double productivity while drastically reducing resource use and avoiding further loss of biodiversity, topsoil loss and water depletion and contamination,” the report’ ‘Resilient People, Resilient Planet: A Future Worth Choosing’, recommends.

It says this should be achieved partly through the ‘scaling-up of investment in agricultural research and development, to ensure that cutting-edge research is rapidly moved from laboratory to field’.

“The new agricultural revolution should focus on sustainable intensification (practices with low external inputs, emissions and wastes) and on crop diversification and resilience to climate change,” the report says.

It  adds that ‘new green biotechnologies’ could play a ‘valuable role in enabling farmers to adapt to climate change, improve resistance to pests, restore soil fertility and contribute to the diversification of the rural economy’.

The report says the task should be co-ordinated by the UN’s Food and Agriculture Organisation (FAO).

With three-quarters of the world’s poor living in rural areas and 2.5 billion rural inhabitants involved in agriculture, it says an ‘immediate push on sustainable agriculture would yield enormous social, economic and environmental dividends’.

But the report, compiled by a 22-member panel of sustainable development experts, including former heads of state and ministers, warns that current efforts to achieve sustainable development lack political will and are neither fast enough nor deep enough.

The report is published ahead of the UN Conference on Sustainable Development (Rio+20) in Brazil in June.

Crop Protection Association (CPA) chief executive Dominic Dyer urged EU leaders to respond to the report by recognising the ‘critical role of plant science innovation in boosting crop yields, preventing harvest losses and enabling more efficient use of key resources such as land, energy and water’.

“The EU-27 is one of the world’s major food producing economies, yet current policies on issues such as CAP reform, research investment and access to agricultural innovation do not reflect the pressing global need to produce more food.

“Even by 2030, less than 20 years away, this latest UN report estimates that the world will need 50 per cent more food, 45 per cent more energy and 30 per cent more water. However much we strive to reduce waste, improve distribution or change consumption patterns, there is no escaping the urgent need to boost agricultural productivity – especially in regions expected to be less vulnerable to the production-limiting effects of climate change, such as northern Europe.

“European agriculture can be a key player in the new political economy called for by the UN’s high-level panel – but only if EU leaders wake up to the urgent need to embrace developments in agricultural science and innovation,” said Mr Dyer.

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Howard W. Buffett interview: How Warren Buffett’s grandson developed a passion for agriculture

Feb 1st, 2012 by CleanSeed Capital

By , Published: January 29

Howard W. Buffett, the grandson of Warren Buffett and son of Howard G. Buffett, has a passion for agriculture.

It may not be as heart-stirring for the average person attending the World Economic Forum’s annual meeting in Davos, Switzerland, as, say, yachts, fine wines and shopping. But the junior Buffett would really rather talk about where your food comes from and why the way it gets to your plate needs to be changed.

Buffett was in Davos as a “Global Shaper,” the forum’s newest group of those between 20 and 30. Buffett, who has worked with the White House and Defense Department, is the executive director of the Howard G. Buffett Foundation.

An excerpt of our conversation:

You get to pair passion with access. What role does that play for you ?

I think that it allows us — and when I say “us,” I mean my Dad and me — to look for creative solutions that others might not have the opportunity to seek out and, as an example, we want to look to convert as many regular till farmers to no-till farmers in the U.S.

We’re able to say: What are all the key inhibitors — obviously the barriers for farmers to make this change, and one of them is a perceived cost of purchasing new equipment — of either adding or supplementing existing planters?

We want to go to someone who has a huge amount of capital. We mean much bigger than what the foundation has potentially. And we will put first-loss capital for anyone who wants to provide a fund that will provide low- or no-interest loans to farmers to convert over to no-till. This is a creative idea, but it’s also simple. And all it is saying is that somebody who has a ton of money — we will underwrite you doing this. We will basically eliminate the risk.

What got you to care about these issues ?

When I was 5, my father was very much my hero. And he ran for political office in a very thankless campaign for a very thankless position. And he did it because his mother had instilled in him, if you are someone who has the capacity to make a great change, you have the responsibility. So, taking that advice to heart, taking the incredible wisdom my grandfather imparts on anyone who will listen, taking this concept of what I call the “lottery of life” — my grandfather calls it “the ovarian lottery” — my dad made the decision he would dedicate his life to helping others.

And, as a 5-year-old running around campaigning with him, it was very inspiring.

It is impossible to interact with folks whose daily life is farming and who are poor — who can’t even produce enough food to feed themselves and their families, which is so antithetical to farming when you’re in the United States, right, because all we do is grow a ton of food and sell it all — it’s, in my mind, impossible not to be passionate about it.

I started completely on my own, farming 400 acres — a no-till farm — last year. Literally working the land myself and understanding the entire system and process has been a fantastic growth opportunity.

What will you be doing in five years?

Well, the little that I can say for sure is that I will be living in Omaha with my wife.

You know, I was pulled out of Omaha when I was younger because my father started to work, when he was done serving as county commissioner, at Archer Daniels Midland. When I left the White House, and I was working — we worked remotely for the Defense Department, so we commuted to Afghanistan and Iraq and back — I started the process of moving back to Omaha. And it was like this enlightening experience, like I am finally coming home.

If I’m home, I’ll be happy. And if I’m around family and if I’m working on projects with friends, I don’t know what else I’d want to be doing.

And I’ve spent so much time with my dad traveling and seeing the ground-level change that we’ve been able to make through philanthropy and trip over trip, time over time, country over country, home after home we’ve been invited into, given tea, given food that people didn’t have to give us, I mean all of these things. It’s time for me to take all of that as fuel and really put it toward understanding how we can make some positive improvements to the different systems that we have in society.

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Africa, Bill Gates and Agriculture

Jan 27th, 2012 by CleanSeed Capital

27 January 2012

Africa, Bill Gates and Agriculture

During the past year as we have been building up our research and knowledge on investor opportunities in the agriculture sector there have been a striking number of projects emanating from Africa. Responses from fund managers are mixed, depending upon the country concerned, but we had the impression that attitudes were warming towards Africa.

More institutional funds to be allocated to Africa

Indeed, this was the result of a recently published report from the Economist Intelligence Unit, Into Africa, based on a survey of over 150 institutional investors. Amongst the findings it gathered were:

  • Over the next five years the bulk of investors will have an allocation to Africa and about a third will have more than 5% of funds allocated.
  • Interest is shifting from commodities to other sectors because of themes like urbanisation, greater consumer spend and the rise of the middle classes.
  • There is more optimism about the Dark Continent because of greater political stability, consistency in government policy and greater governance.
  • Frontier and emerging markets like those in Africa are likely to deliver annual growth averaging between 4% and 6%. At a time when Europe and North America are still struggling to deal with the consequences of the global financial crisis these growth rates are particularly appealing.

It has to be said that Africa has disappointed in the past but there is clearly a greater sense of optimism than has been the case for some time. We might just see VSA testing this investor optimism with new companies or projects in the coming year.

Less aid – is it good or bad?

So, how does this lead on to Bill Gates? Well, he has just published his annual letter for 2012 from the Bill and Melinda Gates Foundation in which he discusses the crisis in agriculture and what is being done about it. He expresses concern that agricultural aid from rich countries fell from 17% of the total in 1987 to 4% in 2006. We wonder if, in fact, the reduction in aid has been a benefit in the way that Dembisa  Moyo would suggest in her book Dead Aid, because the industry has had to become reliant on its own resources and foreign direct investment based on commercial principles, rather than hand-outs that often get siphoned off into the wrong hands?

Whatever the relevance of agricultural aid it seems reasonable to place importance on agricultural research particularly where it is directed towards the priorities of small farmers in Africa and South Asia. At present some of this is being conducted in scientific institutes and government laboratories. Researchers in Kenya and Ethiopia, for example, are now making progress in developing new varieties of wheat that are resistant to Ug99 a particularly virulent form of wheat rust.

The optimists who believe that we will not face a population bomb where the globe’s agricultural resources will be unable to produce enough food talk about the need to raise food productivity. An example is developing seed varieties that are more effective at dealing with the heat and rain that is a consequence of climate change. Companies like Syngenta, DuPont and Bayer are already working on this; but the Gates Foundation is also working with research institutes in Brazil and China to find solutions to the challenges being faced by their agricultural industries.

Very interesting but so what?

Readers might be forgiven for thinking that this is all very interesting, but what is the relevance to them as fund managers or investors. The answer is that we would expect to see more agricultural research – it could be for seeds, it could be for affordable forms of no-till technology – being conducted by the corporate sector and, as with the tech boom of the 1990’s we might even see another boom in agri-research sometime in the coming years.

For more information visit: www.vsacapital.com

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Vesco Agricultural Technologies, a Clean Seed Capital Company, will be exhibiting at the Pacific Agricultural Show January 26th – 28th from 9.00am – 4.00pm daily. We look forward to seeing you there!

Jan 24th, 2012 by CleanSeed Capital

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‘Climate farmers’ highlight green agriculture practices

Jan 11th, 2012 by CleanSeed Capital

Breaking with an older generation of agricultural practices, a group of young European farmers is encouraging a shift to sustainable agriculture and hopes Brussels policymakers take note.

The Climate Farmers campaigners are promoting farming practices that conserve resources, reduce emissions and improve the land through less intensive chemical use. They also seek to influence the future of European Union’s farm support programme, the Common Agricultural Policy (CAP).

Policy debates and research into what can be done to reduce the environmental footprint of food production often do not translate into useable information for farmers, said Sander Kerkhoffs, one of the leaders of the Climate Farmers project.

“A lot of research is done by universities and other institutions, but a lot of those results from the research don’t fit to the practical circumstances at the farm level,” Kerkhoffs said.

“So we wanted to look at practical measures which are already implemented on some farms which have proven their effect in lowering emissions, for example, or can be further introduced to colleague farmers.”

Climate Farmers has produced information on sustainable farming methods in Ireland, Spain, the Netherlands and Sweden and wants to share their recommendations across Europe. A website supported by the European Council of Young Farmers and the Dutch Young Farmers Organisation was launched at the end of 2011.

The campaigners use case studies to show that farmers can play a role in trimming carbon emissions, cutting pesticide and fertiliser use, and reducing their water footprint while improving crop output and animal husbandry.

The methods are as basic as reducing ploughing, mixing cover crops to raise organic matter in soil, and letting animals graze more to cut the reduce the need for imported feeds. At one farm, manure is being used to create biogas to run tractors and generate electricity while reducing methane pollution that is a byproduct of animal waste.

Kerkhoffs, 31, said in a telephone interview that sustainable methods pay off for his family dairy and pig farm in the eastern Netherlands town of Braamt. Animals spend more time grazing to reduce the need for imported feeds and the family has improved the efficiency of milking operations to cut refrigeration and energy consumption – “it’s harder work of course, but productive”, he said.

Sustainability vs. production

Sustainability is emerging as a contentious topic in EU discussions on the 2014-2020 CAP policy and budget. The Commission is pushing proposals to encourage more organic farming and crop rotation to reduce fertiliser use. Proposals unveiled by the Commission in October also seek to reward farmers who leave land fallow and increase buffer areas.

But some farm organisations argue that at a time of growing global food needs and high commodity prices, moving land out of production and jeopardising yields is counterproductive.

Talks over the future CAP will intensify this year as the European Parliament and national governments press for changes to the EU executive’s proposals.

Still, there is support for greener policies.

“The greatest challenges we face in the future are developing a sustainable food production system and ensuring global food security and the solutions to both these challenges are completely interlinked,” said MEP George Lyon (Liberal Democrats), a Scottish farmer and member of the European Parliament’s agriculture committee.

“Europe cannot duck the challenges,” Lyon told the Oxford Conference on Farming last week. “We have a major role to play in finding the answers to the sustainability question and we must continue to make a contribution to global food security.”

Speaking from his farm in the Netherlands, Kerkhoffs says Climate Farmers’ studies show that sustainability and greener farming don’t undermine productivity. He said older farmers accustomed to routines of ploughing and applying chemicals to nurture plants and soils will need to be persuaded to change, but he insists the sustainability measures he advocates save money and increase productivity.

Leaving cultivated crops in the soil until the next growing season, for example, increases organic content without the need for fertilisers – and saves ploughing time, he says. Ploughing also releases carbon trapped in soils, so reducing time spent churning earth cuts greenhouse gas emissions.

Kerkhoffs says the Climate Farmers recommendations could serve as a compromise in the EU debate. The Commission, for example, has called for leaving 7% of farm land fallow or reserved for buffers, yet Kerkhoffs says the sustainable methods he promotes can do both: improve the environment without taking land out of cultivation.

“Maybe we can stimulate a solution that still uses this land, but tries to raise organic matter and use less fossil fuel than our ordinary agriculture production”, he said.

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A new optimism is permeating much of Africa.

Jan 4th, 2012 by CleanSeed Capital

A new optimism is permeating much of Africa. The past 10 years of unprecedented growth in sub-Saharan Africa has helped fuel this positive attitude even when most of the rest of the world faces global economic crisis.

As more Africans move out of poverty and become middle-class consumers, they are increasingly in a position to drive investment, support entrepreneurship, and improve education.

In the latest issue of the IMF’s quarterly magazine, Finance & Development (F&D), articles by a range of African experts confirm the upbeat outlook for the continent and, while acknowledging continued and deep-rooted poverty, spell out what Africa needs to do to further spur opportunities for growth.

IMF Managing Director Christine Lagarde will visit Nigeria and Niger from December 18–22, on her first trip to Africa since her appointment earlier this year. Lagarde will hear from policymakers, the African private sector, and civil society about the challenges facing African countries, and underline the IMF’s commitment to further reinforce the IMF’s partnership with sub-Saharan Africa.

Middle-class engine

Harvard professor Calestous Juma writes in F&D’s cover story that a growing middle class—now over one-third of the population according to the African Development Bank (AfDB)—is shifting global perceptions about Africa’s prospects. The traditional focus on eradicating poverty in Africa “distracted both African authorities and international donors from serious consideration of ways to promote prosperity infrastructure development: technical education, entrepreneurship, and trade,” says Juma.

The African middle class still has comparatively little to spend by Western or Asian standards. But better economic policies, governance, and use of natural resources, coupled with more business-friendly policies and stronger demand for Africa’s commodities from emerging economies such as Brazil, China, India, and South Africa have led to Africa’s consistently high growth levels.

The new middle class is young—nearly 70 percent under the age of 40—and in the acquisitive stage of their lives, spurring consumer spending.

Across Africa, says Juma, change is in the air.

Growth for the poor

The story is not all rosy of course. Poverty will be a fact of life in Africa for a long time: one-third of all Africans will still be extremely poor in 2060, living on less than $1.25 a day, according to the AfDB. While it helps those who are in immediate need, an emphasis on aid does not encourage Africa to aspire to higher economic performance, according to Juma. The change in focus that Africa watchers are noticing—from poverty to gradually growing prosperity—represents a deep shift in the perceptions of Africa’s economic future, with profound policy and practical implications.

Ngozi Okonjo-Iweala, Nigeria’s colorful economic czar profiled in F&D’s “People in Economics” column, notes that Africa is projected by the IMF to grow faster than Brazil between 2010 and 2015. She cautions that lack of adequate infrastructure is now one of the big factors holding Africa back. Africa’s poor roads, ports, and communications isolate it from global markets, and its internal border restrictions fragment the region into a myriad of small local economies. It is neither regionally nor globally integrated. But with better underlying economic policies, Okonjo-Iweala predicts, a rising middle class in Africa will fuel growth.

It’s one thing to bring prosperity to a region, but Antoinette Sayeh, head of the IMF’s African Department, says what counts is growth that benefits the poor and the young, and growth that lasts. In our Straight Talk column, Sayeh presents IMF research that shows Africa is indeed enjoying inclusive and sustainable growth. She cautions though, that “growth is not enough. . . . For young people in particular school plus experience is essential for true inclusion in society.”

African outlier

IMF economist Abebe Selassie explains that South Africa is the outlier in the Africa story. The emerging economy that traditionally led Africa’s growth has struggled with a hesitant and incomplete recovery since 2008. It suffered serious job losses after a trifecta of shocks–electricity shortages, surging food and fuel prices, and the global economic crisis. Selassie says the government already had implemented appropriate policies in reaction to these shocks but also needs to align productivity and wage increases and encourage increased competition.

Oxford professor Paul Collier says that strengthening the continent’s railway network would encourage the regional integration that Okonjo-Iweala and Juma agree is needed, increasing the potential for further resource discoveries and more efficient use of agricultural land.

The executive director of the United Nations World Food Program, Josette Sheeran, explains that the international community can prevent future famines in Africa and elsewhere by using global risk management to enhance food security.

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