* Private equity scouring continent for opportunities
* Small farmers struggle for financing
* Swathes of arable land lie fallow
By Helen Nyambura-Mwaura
JOHANNESBURG, Sept 28 (Reuters) – African agriculture has a
big investment problem: lots of private equity interest but few
opportunities because most farms and companies are too small to
absorb the cash or provide attractive returns.
With only a third of its 630 million hectares of arable land
under cultivation and large quantities of water flowing
untapped, Africa is the last great agricultural frontier, its
soil coveted by Asian giants such as China and India.
Soaring grain prices and global food inflation are spurring
investor interest in African farming, trends that are also
eating into household income on the world’s poorest continent
and threatening food riots like those seen in 2008.
The stakes are high in a region where agriculture still
accounts for about a third of gross domestic product but remains
undeveloped and rain-fed, with most farms tilled by peasants for
subsistence instead of sale.
“What Africa has going for itself is that it has the land
availability and space to grow agricultural production in a much
more significant manner,” said Joseph Rohm, a portfolio manager
at Investec Asset Management, which oversees some $3 billion in
Africa.
Continued…
