Cooperating with the private sector is now very popular in international development policy. The World Bank is not alone in asserting that it will take trillions to realize the UN Sustainable Development Goals (2030 Agenda) in the poorest countries. Donor countries like Switzerland too believe that the enormous leverage to be had from the use of private funds will be indispensable to that end. There is glowing talk of a win-win-win scenario that will benefit investors, governments of developing countries and their people alike. Public-Private Partnerships (PPP) – sometimes also called Public-Private Development Partnerships (PPDP) – have long been a reality especially in the agriculture sector. A closer look at their outcomes to date is therefore warranted.
These partnerships take various forms. In some cases, a development authority directly co-finances a private sector agricultural investment, in others, the money goes into well-capitalized funds, which pass them on to private companies. What these agricultural companies all have in common is that they make glowing promises of sustainability, they insist that their investments in the particular regions of the South are a blessing, in that national and global food security, the advancement of women and job creation will go hand-in-hand.
The case of GADCO
In 2011, a Nigerian and a British investment banker set up the Global Agro-Development Company (GADCO). Neither one knew anything about agriculture, but in the wake of the 2008 global financial crisis they were looking for a new field of activity. They managed to win over a number of development-oriented investors to their idea of setting up West Africa's biggest rice producer. Among them were the Syngenta Foundation for Sustainable Agriculture, the Alliance for a Green Revolution in Africa (AGRA), the Agricultural Development Company (AgDevCo), the Acumen Fund, as well as the Africa Agriculture and Trade Investment Fund (Aatif).[1] GADCO garnered much positive press coverage both internationally and in Ghana – not least of all based on its professed commitment to sustainability, community development and women's economic empowerment. Despite this initial success, the company declared bankruptcy just three years after launching its business operations. It was taken over in 2015 by the Swiss company RMG Concept, itself headquartered in Delémont (canton of Jura), and previously a supplier of pesticides and fertilizers to GADCO. RMG Concept, which also advertises itself on its website as a pioneer of sustainable agriculture and a reliable partner to smallholders, operates a massive rice plantation in Ghana's Volta region with an associated contract farming project that still goes by the name GADCO.
The majority get nothing
Eight months of research on the ground in 2014 and 2016 for the purposes of a dissertation on the sustainability of private sector investments[2] revealed that the local chiefs had been the key contact persons for GADCO from the very beginning. In Ghana, some 80 per cent of all land is managed by chiefs – whose extensive powers were largely created by the English colonial masters and are today enshrined in the Constitution. Although there are family landowners in the Volta region, in which cases the role of the chiefs is merely one of oversight and arbitration, the company negotiated exclusively with chiefs from the very beginning. The company drew up a community-private partnership contract together with the chiefs, most of whom have had the benefit of higher education. Under its terms, the community made 2000 ha of land available to the investors free of charge, and in return would receive a 2.5 per cent share of the company's turnover (raised to 5% after five years), earmarked exclusively for development projects in local villages.
So far, however, hardly any such profits have made it down the grassroots. On that subject, one young lady said the following: "I have no idea what they are using the money for – to this day we do not even have good drinking water in the villages". In Bakpa Adzani, the village hardest hit by the loss of farmland to the new monoculture project, most of the residents have an internal migration background, and the population was not consulted, informed or compensated for the land. An elderly widow confirms this: "We were not informed. We were actually on the farm when company representatives arrived and told us that they were now going to plough up our land. We begged them to wait at least until after the harvest."
The chiefs obviously make arbitrary decisions on compensation. It is therefore no surprise that those receiving compensation were mostly members of their own clan, who are also the main beneficiaries under the local contract farming project called Fievie Connect. It had been promised that half of all “outgrowers” would be women. In 2014 and 2016, most of these outgrowers were well-to-do older women and men, many of whom did not themselves go to the fields but instead employed poor women on low wages, who worked for them. And the men who registered for the outgrower scheme often sent their wives to the fields, thereby substantially increasing their overall workload. In addition, there is the persisting lack of transparency on the part of the contracting firm GADCO, which is constantly raising the prices of the fertilizers and pesticides it supplies; there is a corresponding decrease in profit going to the outgrowers.
GADCO also has a poor job creation record. In 2014, only a minority of the roughly 150 employees had a work contract, wages were so low that respondents were seriously considering a return to a meagre subsistence farming existence. Moreover, women were employed almost exclusively as day labourers to spread manure, for which they earned the equivalent of US$3 per day. Against this backdrop, talk of women's empowerment is a mockery.
The poorest are the losers
Those paying the highest price for the transformation of collectively exploited land into a rice monoculture have been the poorest, especially migrants and single women. More specifically, the loss of huge tracts of collectively used land, which government and company representatives are given to describing as "unused" land, affected the poorest most severely. GADCO destroyed a number of fish ponds and small streams which not only had contributed substantially to the food security of the local people, but were also the sole source of water for many villages. The numerous trees all over the land had been a source of firewood for people’s own use and constituted the livelihood of many poor women, who processed wood into coal, which they then sold. One of them recounts: "In the past we would trim the trees in order to produce coal, but they (GADCO) have now cut them all down and we are finding it difficult even to buy something to eat."
The village of Kpevikpo was entirely surrounded by the rice plantation. GADCO widened the access roads to the village so that its tractors could use them, and an irrigation canal was built right in front of the entrance to the village. During the rainy season or whenever the company irrigated its fields, the villagers were effectively cut off from the outside world. Children could not go to school, and in the rainy season, women going to the market had to remove their clothes at the edge of the canal and wade through chest-high water to leave the village. To cite one woman from Kpevikpo: "I don't see anything positive about the company. They have only destroyed our land. We asked them if they could build a little bridge over the canal, but they refused to do so."
When GADCO causes damage, it innocently washes its hands of the matter; negotiations generally take place through the chiefs; instances of opposition and protests by the local people are suppressed by the chiefs as they arise, including by violent means. The manager of GADCO is perfectly aware of the various problems. Former manager Adidakpo Abimbola even admitted that a pick-up truck is regularly lent out to chiefs when there are problems with the local people. The chiefs then arm some young people with sticks that serve to beat and frighten off the protesters.
Asked whether GADCO was aware that funds promised in the name of sustainable development were being misused for personal gain, the new manager Satyendra Kumar Singh had just this to say: "How the local people handle the money is no concern of ours. We have our business structures and they have theirs. We do not get involved."
The case described and scientifically documented is a highly-charged one – not only because GADCO fervently proclaims its commitment to sustainability, but also because it received financial support from various development players for that purpose. Alliance Sud deems it imperative, if Switzerland intends to rely more on private capital for development cooperation in the future, that this commitment is based on clear criteria as well as a detailed context analysis and for it to be regularly reviewed through rigorous and independent monitoring.
[1]Various GADCO donors are themselves supported by governmental development players: AgDevCo is funded mainly by the UK's Department for International Development (DfID); AGRA receives funds from the DfID, the German Federal Ministry for Economic Cooperation and Development (BMZ), USAID and various other development players; Aatif is an initiative of the BMZ and the KfW Bankengruppe (banking group).
[2] PhD dissertation in Social Anthropology entitled: “Institutional Change, Gender and Power Relations. Case study of a ‘best practice’ large-scale land acquisition in Ghana.” University of Berne, 2018.