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Sweet energy from sugar cane

Like other oil-rich nations, Angola has long neglected its farm sector, to such a degree that 90 percent of the food the country consumes is imported.  Matters were made worse by the civil war, which left a legacy of damaged infrastructure and land mines scattered across the countryside. The farm sector is now undergoing a rebirth, thanks to public-private partnerships and cutting-edge technology

Source: WorldFolio

Spreading out to the horizon below the towering Black Rocks of Pungo Andongo in Angola´s northern province of Malanje, tens of thousands of acres of sugar cane reach toward the sky as they ripen under the tropical sun.

If all goes according to the ambitious plans of investors, these bright green plants will soon help kick-start a reborn Angolan sugar industry. Part of the harvest will be turned into ethanol and provide biomass to produce much-needed electrical power for local residents and industry.

Begun three years ago, the 100,000-acre farm – said to equal in size the New York City boroughs of Manhattan, Brooklyn and the Bronx – is already being described in superlative terms as the country’s largest agricultural project and its biggest renewable-energy development.

The first harvest by the Angolan Bio-energy Company, known as Biocom, is scheduled for this year, with 40,000 metric tons of processed sugar destined for the domestic market. Angola, which once produced enough of the sweetener to fulfill its own needs and also export some, currently imports all the sugar it consumes.

As sugar output steadily increases, Biocom executives hope for an annual production target of 260,000 tons within four years, easily surpassing the 225,000 tons the country now imports from foreign suppliers. If world prices allow a good return on investment, Angolan sugar will join oil, minerals and other resources once again on the export market.

However, Biocom’s $500 million investment, located 200 miles east of the capital, is not just about sugar. Eventually, the company plans to convert 15 percent of production into 30 million liters of ethanol a year. If all goes well Angola could one day joining Brazil and the United States as a top producer of the renewable, eco-friendly fuel that is being used increasingly around the world.

Biomass-fed generators will also produce 28 megawatts per hour of electricity that will be pumped into the province’s power grid to benefit rural residents and local industry.

Joint-venture cooperation

Biocom is as prime example of Angola’s innovative take on boosting its agricultural sector and renewable energy production while creating technology jobs in the country’s interior. It also also reflects the country’s efforts to foster public-private cooperation in joint ventures.

Angola’s National Private Investment Agency and state-run Sonangol Holding have 20 percent of the company, while the country’s Damer and Brazilian conglomerate Odebrecht hold 40 percent each, with the latter playing a key practical role in getting the project off the ground.

Dozens of Biocom technician trainees traveled to Brazil to learn all there was to know about processing sugar and turning it into ethanol and electrical energy, an activity in which Odebrecht has long been involved.

Their six-month course included theoretical and practical classes taught by the Brazilian experts, covering everything from mechanized harvesting and sugar cane storage to the finer points of biomass energy production and ethanol use.

This mammoth project is a prime example of the Angolan government’s multi-faceted plan to open up the country’s interior to economic activity, increase agricultural production, promote alternative exports to wean itself off the almost total reliance on extractive industries for foreign exchange and create employment.

Experts say Angola has an excellent chance at meeting all those goals, due to several important factors including the country’s natural attributes and its history as a major agricultural producer.

Angola is blessed with abundant water and a climate and rich soil perfect for both tropical and sub-tropical farm products. The country has 140 million acres of arable land and the southwest plateau affords rich grazing areas for cattle and other livestock.

Angola as a major agricultural producer

The experts also note that during colonial times the country was a major producer of sugar, coffee, cotton, rubber, sisal, corn, potatoes, beans, cassava, peanuts and a wide variety of fruit for both the domestic and export markets. In those days, Angola only had to import wheat, as it was self-sufficient in every other major food crop.

But then came the chaos of the independence struggle, Portugal’s abandonment of its African colonies and, in Angola’s case, a decades-long and devastating civil war which ended just a dozen years ago.

In the conflict, much of the country’s transport and other infrastructure were heavily damaged. Peasants fled to the safety of the cities in an unprecedented internal migration estimated to have affected four million people, or a third of the population. Even worse, an estimated 10 million landmines were planted around Angola.

The government’s wrong-headed agricultural policies didn’t help matters. As Portuguese farmers and traders returned home with independence, productivity plunged. In response, authorities set up state farms, much like Soviet collectives. However, these also proved unproductive and vast swathes of farm land were turned over to the peasants.

Since peace was declared in 2012, the government, with both public and private foreign assistance, has made a concerted effort to correct the situation and put Angola’s agricultural sector back on its feet.

Flush with its billions of dollars in annual petroleum income, the government is pouring vast financial resources into upgrading or creating new rural infrastructure, including roads and bridges to improve market access for farmers. It is also providing training programs for rural residents in farming, animal husbandry, soil treatment and irrigation training programs while establishing agricultural study and research centers.

This year, authorities also moved to raise farm productivity and reduce the country’s dependence on food imports, which make up some 90 percent of all food consumed.  New import duties were levied on a range of food items such as eggs, fruits and vegetables.

Angolan trade officials say they hope the measures will slowly lower food costs, especially for the two-thirds of the population who live on less than two dollars a day, and go a long way towards slashing the country’s annual food import bill which is estimated at around $5 billion.

At the local level, government officials and Angolan and foreign experts are giving small farmers a hand up through a variety of programs funded domestically and internationally.

Agricultural processing plants such as grain mills and juice production facilities are being set up, as are agri-business training programs and micro-credit schemes. With the beginning of each growing season, central government authorities and provincial officials purchase and distribute vast amounts of starter supplies for small landholders.

Depending on the province and its special needs and climate, these could include thousands of tons of seed corn, beans, sorghum, fertilizer, pairs of oxen and other livestock as well as tens of thousands of farm implements such as hoes and ploughs.

For example, officials in Benguela province are working to transform it into the country’s biggest production center for tomatoes and bananas through training schemes and massive investment to upgrade local irrigation systems.

At the same time, more than a dozen agricultural development centers are being established for this year’s growing season with starter supplies being provided to some 100,000 peasant farmers and their families.

Land mines are also being cleared. With foreign financing and guidance, Angolan teams are disarming and destroying land mines littering the countryside. Apart from the danger they represent, the mines also hinder the planting of crops and grazing of livestock.

Targeting needs

In another agreement highlighting cooperation between Angola and foreign and multinational organization partners, Brazil and the Food and Agricultural Organization of the United Nations (FAO) are targeting the need for agricultural and veterinary research.

Under the terms of the deal signed this year, more than 100 Angolan researchers will receive technical and short-term training at the Brazilian Agricultural Research Corporation, as part of the $3 million program.

“The availability of highly qualified researchers and innovators who understand the complexity of development challenges is key to making great strides in agriculture and food security in Angola,” said FAO Assistant Director-General for Technical Cooperation Laurent Thomas at the time the program was launched.

Also active in Angola is the U.N. Industrial Development Organization, or UNIDO, which has launched a project to rehabilitate Angola’s agricultural machinery manufacturing industry, one of the sector’s most basic activities.

Before the civil war, five local firms were major contributors to agricultural production by manufacturing farm tools and implements for the individual farmer but are now largely dormant.

In its bid to jumpstart the industry, UNIDO is engaged in pilot projects such as replacing machinery, providing spare parts for existing machinery, raw materials and product components and manufacturing consumables.

There is also assistance in marketing the finished products, technical knowhow, mechanical engineering, machine tool electronics, induction furnaces and business management.

Coffee as an example

Coffee alone is an excellent example, not only of Angola’s agricultural heritage, but of the current challenges facing the sector, its tremendous potential and the opportunities for foreign investors.

Coffee beans were a major source of revenue for the colony before independence, when Angola was the third largest producer in the world. But just four years ago, coffee growing accounted for only 0.6 percent of the total area under production.

Angola’s robusta beans are highly prized by traders and consumers alike and are used primarily in espressos, the most popular brew of choice in hip coffee shops around the world.

But Angolan officials are also keen to expand Arabica coffee production in Huambo province where hundreds of acres of greenhouses have been built and tons of special fertilizer are distributed.

In one promising case of foreign involvement in the coffee industry, a Vietnamese company which is the largest robusta producer in the world has signed on to a ten-year project to rehabilitate and restore almost 250,000 acres of coffee plantations. Funding is being provided through a credit line from Brazil.

Although it shares linguistic and cultural ties with Angola, Brazill isn´t the only player; U.S., Canadian, Portuguese, Spanish and Japanese investors are backing agri-business projects around the country, while the ubiquitous Chinese are involved in a rice-growing scheme in Kuando Kubango province.

Major potential

All this effort appears to be paying off, according to a recent World Bank report.

Agriculture, which employs two-thirds of the Angolan labor force, has posted respectable growth rates over the past several years despite a slight downturn triggered by a drought in 2012 that cut the yields of many food crops in ten of the country’s 18 provinces. The World Bank describes the sector as having “significant potential,” but cautions that challenges remain.

“Improving the productivity of the agricultural sector is critical to reducing poverty,” the World Bank report said. “However, less than 30 percent of Angola’s arable land is currently under cultivation and per-acre productivity is among the lowest in the region.”

The bank said Angola’s recent efforts to facilitate access to markets through improvements in infrastructure in rural areas have improved agricultural output, with crop production in Angola growing faster than the regional average. However, it counseled that much remains to be done to raise the country’s agricultural productivity to the level of its regional competitors.

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