Bloomberg Businessweek (North America)
Des Moines Fights to Keep Its Water Clean
Environment ▶ A water utility is suing to stop nitrate pollution from upstate ▶ “We were accused of being everything but al-qaeda members”
In the early spring of 2014, two lab workers for the Des Moines Water Works climbed into a truck and drove north. They pulled over on Highway 20 where the road crosses Cedar Creek, made their way to the water’s edge, dunked a cup attached to a pole, then poured the contents into a container. It was the first of 40 outings over the next nine months to collect samples from creeks, ditches, and drainage outlets— 72 locations in all—amid the corn and soybean fields north of Des Moines.
An analysis of the samples confirmed what the utility’s employees had long suspected: Nitrate from farm fields was flowing into the Raccoon River, one of the primary sources of drinking water for Des Moines. A form of nitrogen, nitrate is a source of nourishment for plants. Farmers apply it to crops
for a knockout,” Stowe says, referring to the opponents of his lawsuit. “What we are looking for is serious accountability and recognition that this is a public health issue that will not go away based on a voluntary program.” �Andrew Martin Kenya, Mozambique, South Africa, Tanzania, and Uganda, the company— in collaboration with, among others, the Bill & Melinda Gates Foundation— is testing corn varieties that hold up better against dry weather and insects. Monsanto’s Water Efficient Maize for Africa project is as much about doing well as it is about doing good. “The long-term growth has to be looked at as a business opportunity,” says project director Mark Edge, whose work involves hybrid seeds rather than the genetically modified varieties Monsanto produces, which are controversial on the continent. “The short-term challenge is creating the market and understanding what investments can do that,” he says.
China has been driving global food trends for almost two decades, and Indian diets are beginning to move world markets. But the biggest longterm payoff for agribusiness may be in Africa. Its population is set to more than double by 2050, to 2.5 billion, according to United Nations projections.
Monsanto rival Dupont, which is bigger in Africa, has its own Advanced Maize Seed Adoption Program to shift farmers toward hardier seed varieties. Cargill, the world’s biggest grain trader, last year expanded an animal-feed facility in South Africa. Olam International, among the world’s largest food traders, is boosting its investments in branded foods, including Tasty Tom tomato paste and Pearl biscuits. Agco, the world’s third-biggest maker of farm machinery after Deere, is developing small, solar-powered cooling facilities— a huge need in Africa.
The raw ingredients for an agriculture boom are in place. Africa has the world’s most unused farmland. Crop yields badly trail those in the developed world but could be improved quickly with better seeds and fertilizers. “We see clear potential for Africa to feed its vibrantly growing population,” says Tim Bodin, an economist for Cargill.
Generations of subsistence farming have left soil depleted of nutrients. Howard Buffett, son of Berkshire Hathaway Chairman Warren Buffett, has called for a “brown revolution” to restore soil health in Africa as part of the more than $700 million he’s pledged to combat global hunger over the next decade. The Democratic Republic of Congo and Rwanda top the list of countries where his eponymous foundation is working to improve farming practices and link growers to markets.
The region also suffers an infrastructure deficit—whether it’s storage silos, properly maintained roads, or shipping terminals. Says Monsanto’s Edge: “You wouldn’t believe how difficult it is to transport 2 tons of grain 20 miles in Kenya,” one of East Africa’s more developed countries. Across the continent, the amount of grain that spoils after harvest would feed 48 million people a year.
Government rules are another obstacle to development. With global food prices at their lowest since 2009, drought- stricken African countries could ramp up imports. But in countries such as Zimbabwe, which said in February that it wouldn’t accept GMO corn for food relief, regulations designed to insulate local farmers from global competition make shipments from abroad more expensive, says Maximo Torero, markets and trade director at the International Food Policy and Research Institute in Washington.
The hurdles threaten to overwhelm investment, which is why global agriculture companies say they can’t fund Africa’s farm boom on their own. “You need each piece of the puzzle to fit correctly,” Edge says. “It’s not only going to come from agricultural companies, though we are a piece of that puzzle.”
The bottom line Des Moines’s water utility is suing upstream counties to recoup the $7,000 per day it sometimes spends to filter out nitrate.
Companies weighing whether to invest in Africa may be tempted to wait until higher prices justify it, rather than plowing money in now, when lower commodity prices make riskier investments less attractive. The patience of early investors will be rewarded, says Paul Schickler, president of Dupont Pioneer, the company’s seed division. Agribusiness’s biggest contribution is to blend global resources with regional needs, so the problem of climate change can be managed on the ground by the farmers affected by it. “You won’t be able to import enough food to feed Africa sustainably,” Schickler says. “We can help develop local solutions.” �Alan Bjerga
Farmer-owned agricultural cooperative
Founded
Headquarters Inver Grove Heights, Minn.
$781 million The bottom line Global food and agriculture companies are turning toward Africa, whose population is expected to double by 2050.
One of the co-op’s fuel refineries
in 1931