TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

Touré, 2009). So, agricultural modernization is
seen as a policy priority at the highest level of
government.
The desire to modernize agriculture also lies at
the heart of the Framework Law on Agriculture
(LOA), which was adopted in 2006. In article 3,
the LOA states that ‘agricultural development
policy shall be based on voluntaristic promotion
of the modernization of family farming and
agribusiness, to foster the emergence of a
structured, competitive agroindustrial sector
integrated within the sub-regional economy’.
However, agricultural modernization involves
a financial cost that the country cannot meet
from its own resources. The Strategic Framework
for Growth and Poverty Reduction (CSCRP)
20072011 estimates the cost of taking action in
the agricultural sector at FCFA 153 648 000,000
(CSCRP 20072011, Annex III). At an approximate
exchange rate of 1 US$ = 500 FCFA, this is
equivalent to US$307 296 000.
A brief look at public investment in
the Office du Niger area, which is today
favoured by investors because of its enormous
hydroagricultural potential, can give an idea of
the resources required to pursue this agricultural
modernization agenda, in particular as regards
irrigation schemes. 5 The Office du Niger is one
of the oldest irrigation schemes in West Africa.
Set up in 1932 in the inner Niger delta, it was
to become, according to the original plans,
the main supplier of colonial France’s textile
industries, the rice bowl for West Africa and a
place of technical and social innovation. The
objectives were ambitious, with over a million
hectares to be irrigated over a 50-year period.
The major structures were designed and built to
meet those objectives. Using existing backwaters
and a dense network of irrigation and drainage
canals, the scheme now covers more than 87 692
hectares. Irrigated lands are used to produce rice,
vegetables and sugarcane (Dave, 2010).
Until recently, all the schemes in the ON
area were funded by the public authorities.
Between 1934 and 2009, the government
5 The name Office du Niger designates both the
irrigation scheme area and the institution set up by the
government to manage the scheme.
Part 4: Business models for agricultural
investment: Impacts on local development
developed a total area of 63 713 hectares,
including 4 653 hectares supported as of 2000
through the Special Investment Budget (African
Development Bank, 2010). To these must be
added interventions supported by donors. Donor
agencies initially funded only the rehabilitation
of older schemes, but then went on to fund
the creation of new ones. The main donors
have been the Netherlands (20 595 hectares
rehabilitated and 5 829 hectares constructed),
the French Development Agency (5 540 hectares
rehabilitated and 1 700 hectares constructed,
together with another donor), the European
Development Fund (3 650 hectares rehabilitated),
the International Development Bank (700 hectares
rehabilitated and 520 constructed), USAID (1 971
hectares new schemes, usually with the Office
du Niger or other donors), German Development
Cooperation (3 100 hectares rehabilitated and
800 hectares new).
Table 1 provides data on the substantial
volume of funding expected to be required for
new schemes in the Office du Niger area. It shows
that the irrigation of 79 865 hectares planned
for the period 20102020 requires an amount of
FCFA 266 756 291 750 (US$533 512 584), i.e.
an average of FCFA 3 340 000 (US$6 680) per
hectare, excluding costs relating to feasibility and
related studies. According to data from SEDIZON
(2010), funding for planned extensions and
studies to be conducted by a Libyan investor,
Malibya, over the same period would amount
to FCFA 85 750 million (US$171 500 000).
These figures illustrate the challenges faced by a
country like Mali in financing its plans to expand
irrigation infrastructure as a basis for agricultural
modernization at this scale.
It is for these reasons that the Malian
Government has worked to promote private
investment in agriculture. Given limited capital
availability within Mali, foreign investment is
expected to play a particularly important role.
Private investment is seen as a source not only
of capital, but also technology, knowhow,
infrastructure development and market access, and
potentially as a catalyst for economic development
in rural areas. On the other hand, family farming
is considered in public discourses as oldfashioned
and incapable of ensuring food security.
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