October 20, 2009 / 1:03 PM / 10 years ago

S.Africa farmers sign Congo farmland deal

JOHANNESBURG (Reuters) - South Africa has signed a deal with the Republic of Congo that will give South African farmers access to up to 10 million hectares (24.7 million acres) of farmland, the country’s biggest farmers’ union said on Tuesday.

Farm workers are seen at a farm in Eikeihof outside Johannesburg September 30, 2008. REUTERS/Siphiwe Sibeko

The deal, potentially one of the largest land agreements on the continent and part of Congo’s plan to improve food security, will allow South African farmers to lease land for maize, soy beans, poultry and dairy cattle among other produce.

“It’s 10 million hectares of under-utilised land that have been made avaliable to us,” Theo de Jager, deputy president of union Agri SA, told Reuters. “We have signed the agreement and it’s initially for a 30-year renewable lease.”

South Africa has one of the most developed agriculture sectors on the continent and its farmers are looking to expand into other countries.

They are joined in the scramble for land abroad by countries including China, South Korea and European and Middle East nations after steep food price inflation last year highlighted the need to achieve greater food security.

De Jager said the South African deal included tax exemptions on importing agricultural inputs and equipment and full expatriation of profits.

Some 200,000 hectares of state farms would be immediately available for South African farmers, De Jager said, but added: “It’s not limited to those farms...There’s no limit on the land you can get (up to 10 million ha)...it’s whatever you need in terms of your business plan.”

De Jager said about 1,700 South African farmers had enquired about farming in the Congo. “I don’t think all of them will eventually go out there, but there has been huge interest in this,” he said.

ACTIVE USE OF LAND

Renewing the 30-year lease would be decided by a committee, and conditions would include farmers actively using the land, he said.

“If you’re not producing then this evaluation committee can decide to terminate the lease agreement,” he said.

The land deal was announced in April, but was delayed by general elections in the Congo in July, and then by revisions to the lease period to 30 years from 99 years.

Analysts point to potentially huge rewards in investing in farmland as the world population grows, while many see climate change and biofuels choking off the supply of arable land.

While some development organisations have expressed concerns about an erosion of local farmers’ rights by such deals, the public reaction to the long-flagged deal in Congo has seemed to be broadly positive so far.

“We have at our disposal a lot of uncultivated land because we lack the material and financial means,” said 65-year-old Paul Nkounkou, a retired agricultural engineer.

“These South African investors are welcome, they will spark off a new dynamic in the the sector, as long as they respect the laws of our country,” Nkounkou added.

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