TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

BOX 4
The conclusions of the feasibility study for the CENSAD project
greater security, motivation and a more rational
approach to farming.
The ON management, PNIR and World Bank
set up a committee to review applications. The
results bear witness to the failure of the initiative.
The committee was supposed to select candidates
on the basis of criteria drawn up by the three
organizations, but an initial session held in July
2005 only found one candidate who had met all
the financial criteria. A new call for expressions
of interest to make up the number was issued
by the ON management in October 2006 and
Part 4: Business models for agricultural
investment: Impacts on local development
As CENSAD did not have the necessary expertise to analyse and react to the proposals from the Malian
side, it sought assistance from the FAO to advance the project. A consultancy took place from 21 July –
12 August 2005. After visiting Rome, Tripoli, Bamako and the Office du Niger area, the consultant made
some important observations and recommendations which cast doubt on the project’s viability. First of
all, the consultant’s report confirmed that development of the land offered to CENSAD would require
extending the hydraulic infrastructure of the Office du Niger. It also noted the need to enlarge the intake
canal and the second to the necessity of funding ancillary infrastructure, particularly roads and social
facilities (education and health).
The report then tackled issues relating to seasonal water availability, which could seriously threaten the
profitability of commercial farms. Building the Fomi dam was seen as the only way to increase availability
during the low-water period and to facilitate dry-season cropping in the CENSAD project area.
Finally, the consultant looked at production systems and economic considerations, noting that the reasons
for high yields (an average of 6 tonnes paddy/hectare, with peaks of more than 8 tonnes/hectare) and low
production costs in the ON area include the modest size of farms (an average of around 3 hectares), local
farming techniques and almost exclusive use of animal traction for soil preparation. He observed, however,
that the planned farms on the land made available to CENSAD would be run in a radically different
way, with a preference for large-scale mechanization, despite there being no convincing evidence of its
effectiveness under the operating conditions of the Office du Niger area. The consultant drew attention to
the 30-year lease granted by the ON in 1998 to the Chinese company COVEC to set up a 1000 hectare
experimental farm using large-scale mechanization. The experiment failed and the company rented the
land out to small-scale producers who, because of the shortage of irrigated land, agreed to pay a higher
rent than the water charges that farmers using state land must pay.
The report also mentioned the cost implications of large-scale mechanization, which would make the
scheme very expensive. Finally, in the conclusions and recommendations, the consultant suggested
beginning work as a trial on 10,000 hectares within the schemes covered by the Development Master
Plan. The findings would be used to inform feasibility studies on the remaining areas.
Source: Aw, 2005.
the stakeholders jointly drew up a new scoring
grid. Of the 16 applications received, 11 were
deemed admissible and 5 inadmissible (due to
noncompliance with procedures, particularly
failure to provide required documentation). Of
the 11 admissible applications, 6 received low
scores against indicators like solvency, track record
and ability to pay a share of development costs.
These six applications were therefore rejected
pursuant to article 4(2) of Decision No. 05-0187/
MA-SG of 2005, which regulates the operation of
the Committee. Only five applicants have scores
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MALI