April 8 (Bloomberg) -- Agriculture in Angola, once the world’s fourth-biggest coffee producer, is being held back by limited competition and processing facilities and a lack of cooperation among small-scale farmers, the head of the National Cereals Institute said.
The country, which is Africa’s second-largest oil producer after Nigeria, requires 4.5 million metric tons a year of grain, Benjamin Castello, the head of the institute, said in an interview in Luanda, the capital, last month. The country only grows about 55 percent of the corn it needs, 20 percent of rice and just 5 percent of its wheat requirements, he said. The government has spent as much as $2 billion annually for the past four years with about 75 percent borrowed from China’s Export-Import Bank while Brazil and Spain are also funding projects, Castello said.
“What is lacking is an information system for agricultural markets so the farmer knows what’s best to grow and where and when to sell, like the help he would get in a co-operative,” he said. “Produce doesn’t get the processing it needs to remain unspoiled long enough to impress consumers.”
Angola’s coffee industry collapsed during the 27-year civil war that followed independence from Portugal in 1975. The conflict, which ended in 2002, destroyed infrastructure, deterred investment and drove farmers from the countryside into cities.
The country’s eight largest industrial farms are forecast to produce 119,400 tons of corn, 31,000 tons of rice, 15,000 tons of cornmeal, 10,400 tons of soybeans and 7,900 tons of beans this year, worth a total of 7.95 billion kwanzas ($83 million), according to government documents. Small-scale producers account for a greater share of output.
Agrolider Lda., the country’s biggest food processor, and Frescangol UEE, a state-owned company that offers cold storage facilities to farmers, need competition to help lower prices and ensure unspoiled local produce makes it to shelves, Castello said.
Retailers such as those owned by Kero, a supermarket chain opened last year by a company that is a third owned by Vice President Manuel Vicente, may consider starting their own food processing units so they can buy more local produce, he said.
Farmers can’t compete against imports when it can cost a fifth as much to grow the same produce in South Africa, he said. Imported corn cost $280 a ton after customs duties last year while it cost $400 a ton to grow in Angola, he said. Electricity and grain costs push up the price of a domestic egg to 23 kwanzas while an imported egg sells for 15 kwanzas, said Castello, who farms fruit and vegetables in Malange province.
The government is investing in electricity production, irrigation and water management through dams to mitigate the impact of floods and droughts, he said. A marketing system is being developed as officials grapple with issues such as how to calibrate a scale driven from village to village on damaged roads without causing mistrust, he said.
Agro-industrial projects such as the 10,000-hectare (24,711-acre) China-funded soybean and corn growing Pedras Negras and the Spanish-backed 5,200-hectare corn and bean producing Quizenga farm in Malange province have started up while the country’s 2 million small-scale farmers operating on less than 1.5 hectares each lack tools and knowledge, Castello said.
“It would help if small farmers would organize themselves in co-operatives, but they won’t,” Castello said.
The typical farming family of six requires 800 kilograms (1,764 pounds) of its one ton annual corn crop for its own food and lacks the ability to store the harvest for more than 90 days without spoiling, he said. The harvest in February must be sold by June, and buyers wait for the price to fall in May, he said. Their plots suffer from July to February as they cope with food shortages and have to work for others to make ends meet.
Even educated farmers fear the concept of co-operatives, Castello said. They’re deterred by memories of forced collectivization during the southwestern African country’s Marxist period after 1975 until market liberalization in the 1990s, Castello said.
“The program was led by politicians and the small farmers were exploited,” he said.
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