African farm land has become the last fron­tier for coun­tries that have many mouths to feed. But, we’re talk­ing about coun­tries that are not in Africa.

Com­pa­nies from and the gov­ern­ments of China,India and oth­ers have been buy­ing farm land in Africa for grow­ing crops to bring back home. How­ever, many observers are sur­prised that the com­pa­nies doing this are still pay­ing below poverty level wages to the Africans work­ing the land. There are also many con­cerns of the food going else­where when there are so many hun­gry locally.

From Bloomberg, writer Jason McLure goes into detail on the com­pa­nies mak­ing invest­ments in Africa.

Com­pa­nies and gov­ern­ments are buy­ing or leas­ing African land after cere­als prices almost tripled in the three years ended April 2008. Ghana, Mada­gas­car, Mali and Ethiopia alone have approved 1.4 mil­lion hectares of land allo­ca­tions to for­eign investors since 2004, accord­ing to the Inter­na­tional Insti­tute for Envi­ron­ment and Devel­op­ment in London.

Emer­gent Asset Man­age­ment Ltd.’s African Agri­cul­tural Land Fund opened last year. On Nov. 23, Moscow-based Pharos Finan­cial Advi­sors Ltd. and Dubai-based Miro Asset Man­age­ment Ltd. announced the cre­ation of a $350 mil­lion pri­vate equity fund to invest in agri­cul­ture in devel­op­ing countries.

‘Last Fron­tier’

“African agri­cul­tural land is cheap rel­a­tive to sim­i­lar land else­where; it is prob­a­bly the last fron­tier,” said Paul Christie, mar­ket­ing direc­tor at Emer­gent Asset Man­age­ment in Lon­don. The hedge fund man­ager has farm hold­ings in South Africa, Mozam­bique and Zimbabwe.

“I am amazed it has taken this long for peo­ple to real­ize the oppor­tu­ni­ties of invest­ing in African agri­cul­ture,” Christie said.

Mon­soon Cap­i­tal of Bethesda, Mary­land, and Boston-based Sand­stone Cap­i­tal are among the share­hold­ers of Karu­turi Global, Karu­turi said. The com­pany is also the world’s largest pro­ducer of roses, with flower farms in India, Kenya and Ethiopia.

One advan­tage to start­ing a plan­ta­tion 50 kilo­me­ters (31 miles) from the bor­der with war-torn South­ern Sudan and a four– day drive to the near­est port: The land is free. Under the agree­ment with Ethiopia’s gov­ern­ment, Karu­turi pays no rent for the land for the first six years. After that, it will pay 15 birr (U.S. $1.18) per hectare per year for the next 84 years.
…

Work­ers in Elliah say they weren’t con­sulted on the deal to lease land around the vil­lage, and that not much of the money is trick­ling down.

At a Karu­turi site 20 kilo­me­ters from Elliah, more than a dozen trac­tors clear newly burned savan­nah for a corn crop to be planted in June. Omeud Obank, 50, guards the site 24 hours a day, six days a week. The job helps sup­port his fam­ily of 10 on a salary of 600 birr per month, more than the 450 birr he earned monthly as a sol­dier in the Ethiopian army.

Obank said it isn’t enough to ade­quately feed and clothe his family.

“These Indi­ans do not have any human­ity,” he said, speak­ing of his employ­ers. “Just because we are poor it doesn’t make us less human.”

One Meal

Obang Moe, a 13-year-old who earns 10 birr per day work­ing part-time in a nurs­ery with 105,000 palm seedlings, calls her work “a tough job.” While the cash income sup­ple­ments her family’s income from their corn plot, she said that many days they still only have enough food for one meal.

The fact that the project is based on a wage level below the World Bank’s poverty limit is “quite remark­able,” said Lorenzo Cotula, a researcher with the London-based IIED.

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