Green gold in Tanzania
Lots of examples of opportunity cost and market failure in this video report from Africa about jatropha, a crop that can be used to produce biofuels. It has a number of advantages; it can’t be used for food, so avoids the dilemma of competing demand or supply suffered by crops like maize and soya, it grows naturally in tough conditions and is fairly drought resisitant so can be cultivated in areas which won’t support other crops, and is poisonous to animals so crops are unlikely to be spoiled by animals looking for food. On the other hand it takes some years to reach productive maturity, so requires investment, and time and money put into producing it could be used to grow food crops for people and livestock in exceptionally poor areas of Africa. There are a number of small scale european businesses trying to invest in this part of the world by setting up plantations on a commercial scale, but they face a long timescale to receive any payback on that investment, once they have negotiated with government and local tribes for access to the land and local labour supply and developed the infrastructure to support transport power and irrigation. How should the government intervene, in order to ensure short term provision of food and facilities for local people living on a dollar a day, and also long term potential for inward investment in infrastructure and jobs? What are the advantages and disadvantages of allowing this to be developed by outside investors rather than by local co-operatives?
