Superfarms

A 'superfarm' deal, according to the FAO, is when a foreign government, or company acting on their behalf, takes a very long lease on a huge area of land. Superfarms can be problematic in a number of ways: firstly, they can encourage dramatic consumption of natural resources, particularly water for overhead irrigation or livestock farming. Secondly, they can create a 'monopsony' in the local or regional factor market; the market for production inputs like natural resources and labour. A monopsony occurs when a single buyer interacts with multiple sellers. While it can be advantageous for the superfarm leaseholder, as prices are driven down, it is neither beneficial nor efficient for smaller businesses or local people. Finally, the FAO condemns superfarms as having fundamentally geopolitical aims, rather than concerned with agricultural growth or poverty reduction. It hypothesises that superfarms emerged as a reaction to the 2008 global food crisis, where droughts in grain-producing countries resulted in export bans; a lack of produce entering the world food market drove prices sky-high, causing shortages and riots. Consequently countries that rely heavily on food imports, such as China, have endeavoured to secure a "major source of supply": huge swathes of African land. 

The article by the FAO focussed on crop superfarms; I came across an example of a 'dairy superfarm' in Namibia, which seems to avoid many of the aforementioned issues. The !Aimab farm is a Namibia Dairies project, owned by the African company Ohlthaver & List, and is 'super' in the sense of its size, housing around 2000 cows, and its integrated network of supply, production, and processing. The farm has heavily invested in technology, such as computerised milking reports, and has features that protect the cows against Namibia's variable climates, including dry, hot winds and mudslides from excess rainfall. A 'closed cycle' waste management approach has also been adopted; following the farms construction in 2009 manure was used to fertilise the pastures (the cows are free range) but subsequently an attached biogas plant has been constructed. The farm sources the majority of its fodder from local producers, exemplifying one of the ways a large commercial enterprise can be compatible with local smallholders. Of key significance is the farm's focus on the full value chain. Value is added by processing into a wide variety of products, including long-life powder mixes and traditional fermentation. Raw milk is also purchased from local producers, to satisfy the demand for these different products. There has also been investment into the infrastructure of cold chain distribution, to ensure safety and minimise waste. This recalls much of what I mentioned in my previous post about the potential of agricultural value chains in Africa. One issue is the intensive water consumption inherent to dairy farms, for the cows to drink as well as for cleaning and processing. Despite this, efficient use is compatible with many features of the farm. For example, the sourcing of fodder from local farmers where it may be a waste product, rather than growing it specifically for the cows. Also important is that the farm has lined their manure pits to prevent contamination of groundwater. 

Superfarms are not the solution for agricultural growth in Africa, in part because of their dramatic use of water and other inputs. However, the Namibian dairy superfarm provides an example of how commercial enterprises can be compatible with small-scale farms, by linking them to the value chain and, potentially, national or international markets. 

¹ Collier P & Dercon S, 2009. African Africulture in 50 Years: Smallholders in a Rapidly Changing World. FAO Expert Meeting on How to Feed the World in 2050. Accessed 8/1/17 from http://www.fao.org/3/a-ak983e.pdf

² Ohlthaver & List Group, 2009. Namibia Dairies- Profile. Accessed 9/1/17 from http://www.ohlthaverlist.com/o-l-companies/namibia-dairies.php#.WHTWOrF0fBI

³ Food Processing Africa, 2008. Namibia Gets a 'Superfarm' Dairy. Accessed 9/1/17 from http://www.foodprocessingafrica.com/namibia-gets-a-superfarm-dairy/

⁴ New Era Newspaper Namibia, 2016. O&L committed to reducing carbon footprint. Accessed 10/1/17 from https://www.newera.com.na/2016/04/19/ol-committed-reducing-carbon-footprint/