German Food Partnership brings private sector to the table

19.11.2013

The German government speaks of a paradigm shift in development policy, where the public and private sector partner with local farmers to fight hunger in the developing world. But NGOs have called the German Food Partnership (GFP) deceptive, saying it will support industrialisation without helping the poorest farmers.

"We are treading on new territory," said Friedrich Kitschelt, head of department at the German Federal Ministry for Economic Cooperation and Development (BMZ).

Kitschelt was speaking at a presentation of the first development projects adopted as part of the German Food Partnership (GFP), the federal government’s new plan to fight world hunger.

"We are putting the state-centred development hopes of previous decades behind us." Cooperation with the private sector is an essential part of the plan, which Kitschelt said provided an effective way to "promote people’s individual development chances" and to sustainably secure their access to food.

The German Food Partnership (GFP) is a flagship initiative of Dirk Niebel, the German Minister for Economic Cooperation and Development.  Its principle is simple: German companies cooperate with experts from the German Society for International Cooperation (GIZ) to expand local agri-food value chains in developing and emerging markets, with the aim of enhancing food security in the developing world.

The first four projects are expected to begin in the coming weeks and consist of €80 million to be spent over the next two years. Half of this amount will come from companies including Bayer CropScience and BASF as well as the seed producers Syngenta and Yara. The Bill and Melinda Gates Foundation and the BMZ will each contribute €20 million.

GFP not a ‘charity event’

The two biggest projects are the Competitive African Rice Initiative (CARI) and the Better Rice Initiative Asia (BRIA). Their goal is to boost the competitiveness of rice producers in developing countries in the process of industrialisation. The objective is that production, from farm to fork, should be more reliable so that farmers, millers and individual retailers all profit from additional business.

In Southeast Asia, the BRIA project functions under the leadership of Bayer CropScience. In cooperation with other firms, the company intends to invest in the Philippines, Vietnam, Thailand and Indonesia to satisfy rising demand for rice in those countries.

The involvement of private companies does not mean the project is "a charity event", said Hans-Joachim Wegfahrt from Bayer CropScience. On the contrary, the objective is that GFP project pays off in the long run.

The Philippines, for example, offers considerable market potential. According to Wegfahrt, the share of hybrid seeds produced by cross-pollinated plants represents only 6% of production, in contrast with China, where they represent nearly 70%. Harvests amount to an average of 3.8 tons per hectare.

Up till now, the Philippines has been dependent on imports. However, in light of the growing population and regular external shocks caused by natural disasters like typhoons, the Philippine government wants to cover its own demand for rice.

Hybrid rice offers an innovative and sustainable opportunity to increase crop yield by 32%, according to the Philippines ministry of agriculture’s “Go Modern Agriculture” (GMA) programme. Developed by crossing two genetically distinct parent lines, the resulting hybrid rice varieties offer greater yields and are more resistant to plant diseases.

If the agri-food value chains do function better as a result, then both Bayer and the farmers will benefit, Wegfahrt told EurActiv.de. "If a farmer has more in his pocket and produces more, then he will naturally buy more of our products," he argues.

Bayer CropScience will also conduct its own training to familiarise farmers on site with the use of hybrid seeds, to professionalise cultivation practices and to make farming a more attractive career. "In Asia, farming isn’t sexy anymore. We must make careers more interesting and keep young people from moving to the cities", Wegfahrt said.

"We want to turn the farmers into businesses. A green revolution cannot function exclusively with small farmers, large scale farmers must also be a part of the process,” Wegfahrt argued.

NGOs reject industrialisation, private sector involvement

Development aid NGOs disagree and reject industrialisation.

Oxfam criticised the use of hybrid rice, saying it "creates more problems than it solves." According to nutrition expert Marita Wiggerthale, alternatives such as the System of Rice Intensification (SRI) are able to increase yields while accommodating traditional cultivation practices, without going through an industrialisation process. She says the process allows an increase in production of 50-100%, which is far higher than hybrid rice, while using 90% less seed and half as much water.

In fact, Oxfam and numerous other NGOs oppose the GFP in its entirety. It "threatens to turn small farmers into mere appendages of the business and agriculture models of agro-business", according to the Environment and Development Forum, a broad alliance including Oxfam, the Friedrich-Ebert Foundation, Brot für die Welt (Bread for the World) and the human rights organisation FIAN.

"The attempt to integrate small farmers in global agri-food value chains is neither new nor promising. Only a small portion of better positioned farmers can profit from this," said Roman Herre of FIAN. "The poorest farmers who should actually profit from development projects fall through the cracks and discrimination on them is only intensified."

Hans-Jürgen Beerfeltz, the BMZ state secretary, hit back: "Flatly refusing participation of economic actors in development processes is Pavlovian conditioning. As a matter of fact, without economic development there cannot be any real development – no jobs, no income and therefore no chances. In agriculture we need a good mix of small farms and industrial agriculture, to achieve adequate global food security," Beerfeltz said.

Environment left aside

For the time being, it is still unclear who will profit from the GFP projects but both private sector companies and development NGOs emphasise the same goal of fighting poverty.

Private companies highlight that the scheme could benefit roughly 20% of farmers with about one hectare of land and the potential to expand, creating extra business and revenues for local communities.

But Oxfam’s Marita Wiggerthale argues that firms such as Bayer could realise their expansion plans in the developing world without the support of taxpayer money provided by the BMZ.

And she does not have high regard for the projects themselves either. Instead of helping poor farmers, companies would make them financially dependent, she argues. According to her, small farmers who initially bought their seeds from private companies would only be able to use these in the second sowing, after paying license fees for replication.

In addition, she says the projects do not give sufficient consideration to long-term sustainability issues. "Nowhere do [projects] mention environmentally compatible soil and water management that would contribute to preserving genetic diversity and soil fertility. Instead the projects focus on input-oriented agriculture," the Oxfam nutrition expert told EurActiv.de.

The Forum for Environment and Development goes a step further, calling on German political parties involved in coalition talks to "stop the GFP without delay".

But their chances of success are small. While the GFP was initiated by Dirk Niebel, an FDP-politician, it was also backed by his predecessor, the social-democrat minister Heidemarie Wieczorek-Zeul (SPD), who supported close cooperation between the public and private sectors on development aid.

Friedrich Kitschelt, the BMZ official who presented the German Food Programme, is certain that private sector interests in the GFP supports development goals. According to him, the association of private and public interests has the added benefit of offering a new philosophy in development cooperation. Instead of forcing something upon families and small farmers in developing and newly industrialising countries, they should be allowed to develop themselves, Kitschelt said.

"Instead of top-down we want freedom of choice for all,” he said.


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