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August 30, 2008

Angolan agricultural prospects attract international investors

For the past 30 years, Jose Vilomba, 47, has walked barefoot on one of Africa's most fertile valleys using his hands and a shovel to plant vegetables to feed his family. "I've been doing this for years," said Vilomba. "It's what I do for a living."

But if post-civil war elections in Angola end well, the state-owned land Vilomba is working on could soon be sold to major food producers and the expiration date on his small harvest could equally apply to his own way of life.

U.S.-based Dole Food Co, the world's largest fresh fruit and vegetable producer, and Chiquita Brands International, owner of the namesake banana label, are in talks with local authorities to help recover this valley's once prosperous banana industry.

Brazilian building giant Odebrecht recently announced plans to invest in Angola's sugar and ethanol sector and other foreign companies are expected to invest millions of dollars in the war-shattered coffee, sugar, cassava and palm oil industries.

"All I can say is that there is massive foreign interest. Many European, U.S. and Asian companies have knocked on my door to say they want to invest in our land," said Abrantes Carlos, director for rural development in Benguela province.

Angola was the world's fourth biggest coffee producer and a top exporter of sugarcane, bananas, sisal and cotton before a 27-year civil war after independence from Portugal in 1975 led to a mass exodus of farmers to the cities.

The oil- and mineral-rich nation has since become one of Africa's fastest growing economies, on the back of record oil exports, but has so far failed to kick-start its farming industry, importing over half of the food it consumes. But as world food prices rise and unemployment in Angola hovers around 40 percent, the government is trying hard to attract foreign investors to its farming sector in a bid to improve the lives of ordinary Angolans.

"Agriculture is key because it will increase jobs and help our economy grow as a whole," said Joaquim Duarte, a senior official at Angola's Ministry of Agriculture, referring to the government's strategy for the sector.

Farmers use less than 10 percent of 35 million hectares of arable land in Angola, which makes the country one of the most promising agricultural nations.

New infrastructure projects are also underway to improve road and rail links between the capital city, Luanda, and the countryside to enable farmers to market their products.

Manuel Monteiro, who started with a plot of land in a valley in Benguela and has since become Angola's biggest banana producer, is a case in point. Once a small-time farmer, he has taken advantage of new road links to make a fortune selling bananas from the Vale do Cavaco in Benguela to Luanda, 400 kilometers (250 miles) away.

"I started with nothing. Just a small plot of land in the Vale do Cavaco some years ago," he said. "But I am now selling 4,000 tonnes of bananas each year to Luanda and in two years this number should double."

Only a small fraction of Angolan farmers sell their products in Luanda; 98 percent survive on subsistence farming. But Monteiro said new investments in the industry will help Angola regain its agricultural glory. "This is just the beginning of a revolution in the farming sector. We need new players to teach Angolan farmers the technology and know-how to increase much-needed production," he said.

However, most investors will only place their bets after landmark parliamentary elections on September 5 .

"There are still some that fear the elections, especially after what happened in Zimbabwe and Kenya, but if the September vote goes well, I have no doubt we will be bombarded with projects," said Jose Lopes, a senior official at Angola's central bank, BNA.

Analysts expect the ruling MPLA party to retain or increase its majority in parliament against a divided and underfunded opposition. That will further increases the likelihood of a rise of foreign investment in agriculture.

The country's last elections, in 1992, led to the return of a civil war between government forces and the opposition UNITA party that claimed over one million lives. Most political leaders expect the upcoming election to be carried out peacefully.

"This time there is no way the elections will lead to warfare," Angolan Prime Minister Fernando Dias dos Santos said. "Angolans have suffered too much get here. Nobody wants violence."

For Vilomba, the subsistence farmer, a peaceful election will likely bring change as foreign companies move in. But he may continue to farm: Angolan law requires foreign companies that buy land for agriculture to either train and employ local farmers or help them relocate to other land.

Reuters

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