(COURTESY OF ZHANN MEYER )

Despite agriculture being historically largely neglected across Africa and lack of investment hampering agricultural development across the continent, that trend is changing. Zhann Meyer, regional head of Commodity Traders and Agriculture, Africa, Standard Chartered Bank, believes that opportunities to invest in agribusiness in Africa are beginning to attract increasing international interest, most notably from Asia, and China in particular. He shares his views on why Africa could be of vital significance to agricultural investment and global food security in the 21st century. Excerpts follow:

The vast economic potential of commercial agriculture in Africa is taken for granted. Local productivity has declined and foreign investors have largely ignored the sector, whilst revenues have been ploughed into other parts of national economies, not back into the land.

Yet commercial agriculture presents Africa with one of the continent's most exciting opportunities, a unique chance for Africa to capture a significant share of global trade, despite the current economic conditions. Similarly, land investment in Africa also presents international investors with significant opportunities, both in terms of food security and value-add agribusiness.

The rest of the world increasingly needs a developed, sophisticated, transparent and reliable commercial agricultural sector in Africa. It is estimated that the world population will increase by 2.5 billion over the next 40 years – from the current 6.7 billion to 9.2 billion people in 2050. This population growth will not be evenly distributed across the globe; the majority will occur in emerging economies. At the same time, many of these same countries will be experiencing strong economic growth. Population growth and an increasing number of middle class consumers, demanding a wider variety, and more complex food products are already placing a strain on markets as diverse as China and the United Arab Emirates – both of whom are net food importers.

The strongest demands on Africa's agricultural sector could come from China. China remains the global driver of agricultural production, consumption and trade, consuming 16 percent, 30 percent and 20 percent of global wheat, rice and corn resources, whilst 50 percent of all global soybeans are exported to China. China's population is also growing by an additional 18 million per annum, whilst per-capita consumption of corn, sugar, palm oil and soybeans has been similarly increasing, as rising income levels equate to a rising demand for higher protein meals and more vegetable oils. These trends are likely to continue, especially since China currently consumes only half as much meat per capita as Singapore for example.

As China continues to grow both socio-economically and demographically, the opportunities for investment in African agriculture and agribusiness will become even more attractive.

 Despite the opportunities afforded by these prevailing conditions in China and elsewhere, Africa has so far not capitalized, and there remain huge challenges facing Africa's agricultural sector. Although there have been some improvements in production over the last decade, following acute food-supply scarcity in the 1980s, productivity is still very low: cereal production averages a mere 300-500 kg per hectare, compared with 2,500 kg per hectare in the United States.

Agriculture has been largely neglected across Africa, with a continuing urban bias of industrialization policy. This lack of investment has been the key impediment to agricultural development across the continent – currently less than 17 percent of Africa's arable land is cultivated relative to Asia and the Middle East.

Low use of fertilizers and pesticides, a continued dependence on rain-fed agriculture, minimal investment in research and development and infrastructure and a generally poor investment climate have all exacerbated the problems of low productivity.

In addition, much of the food that is produced is wasted, with farmers losing between 15-25 percent of their crop in the field due to pests and disease, and another 15-20 percent after harvest to degradation due to lack of storage facilities and infrastructure. The access to infrastructure and materials to mitigate these losses are simply not available to many farmers across Africa.

Set against the backdrop of low productivity, it is hardly surprising that international investment in African agriculture has been minimal. Yet this trend is changing. Opportunities to invest in agriculture and in agribusiness in Africa are beginning to attract increasing international interest, especially from Asia.

Large-scale cross-border farmland purchases and usage agreements are increasing worldwide. Africa is a principal focus of this global trend. Since 2006, deals have been concluded in at least 12 African host countries, with sovereign or private sector counterparties in 14 investor countries.

The growing trend of foreign land investment in Africa could enhance progress in agri-supportive infrastructure, create local employment, the transfer of skills and technology – all as part of a transparent, sustainable return for local communities. And this is already going beyond food security. For example, many private-sector-driven foreign investments in biofuel production are currently underway.

As long as the international policy environment continues to evolve favorably and a meaningful return delivered to local communities, the growth of opportunities for international investment in agriculture and agribusiness is set to grow.

With the likely increase in the global price of soft commodities as population growth continues and more land becomes utilized, Africa will need to seize the opportunity to build capacity in its agricultural sector. Agricultural production and enhanced agribusiness will be crucial for sustainable economic development across the continent and must become a central pillar of economic strategy and investment within Africa. Similarly, the currently underestimated opportunities for international investment in Africa's agricultural sector should provide important economic impetus for future growth.

There are good reasons to suggest that Africa may well hold the key to agricultural investment and global food security in the 21st century.