|Land Grabbing: the End of Sustainable Agriculture?|
The contentious issue of ‘land grabbing’ has become the subject of numerous media reports since the global food crisis worsened in 2008 - but what are the likely consequences of the increasing trend to secure farmland abroad?
6th May 09 ~ STWR
Questions of food security and land tenure are preoccupying non-governmental organisations (NGOs) as stakeholders from food agencies, civil society and the agriculture sector met at the Wilson Centre in Washington on 5 May to discuss the ‘The Race for the World's Farmland’. Whilst some analysts remain unsure whether overseas land purchases can be viewed positively or negatively, others are expressing concern over the sovereignty of land and food supplies, as well as the impact on local communities. At least five separate studies into the new development are due over the next few months as more NGOs wake up to the potentially grave implications of 'outsourcing food production'.
The latest wave of land grabbing began towards the end of 2008 when the global food crisis generated concern over supplies in countries that consume more food than they produce. In a desperate attempt to bolster their food security, import-dependent countries including China, Saudi Arabia and South Korea have acquired acres of farmland from poorer, resource rich nations such as Brazil, Cambodia and Sudan – and especially Africa where the trend is being dubbed the “new colonialism” or a modern day version of the 19th-century scramble for Africa.
Whilst an overreliance on imports may be the primary reason for acquiring land abroad by governments, the phenomenon also has a less obvious motivation: financial return. Land is not a conventionally lucrative asset for investors, but the combined food and financial crises have turned land into a strategic investment for multinational corporations with ties to hedge funds.
The first major exposé on land grabbing was detailed in a 2008 publication by the non-governmental organisation GRAIN. In their report Seized! The 2008 Landgrab for Food and Financial Security , agribusiness development was shown to be the prime objective behind land grabbing deals, despite the ‘win–win’ rhetoric of governments and investors that promote the agreements as development opportunities for the nations which sell their land.
Promises that the deals would bring employment and a fair share of the agricultural produce to host countries has swayed a number of African and Asian governments, which have readily sold acres of arable land - and with it, the potential livelihoods of their people. As GRAIN have argued, the deals would inevitably lead to a redistribution of land ownership from smallholder farmers to large industrial estates, whilst creating comparatively few new job opportunities in the process.
The International Food Policy Research Institute (IFPRI), a US government-backed think tank, released a report in April 2009 which made an initial estimate at how much land has been sold in land deals since 2006 – estimated at 20 million hectares, or twice the size of Germany’s croplands. Although the paper acknowledges the impact of land deals on poor communities that risk losing ownership of the land on which they depend, it also embraces the ‘win-win’ interpretation of land sales between food deficient and cash-strapped countries, by suggesting that foreign investment can bring development infrastructure and jobs for local people.
For food policy analyst Devinder Sharma, however, the rewriting of the political economy of food has far more losers than winners. The losers will be those who remain hungry as the land their community has cultivated for centuries becomes a source of food security for a distant nation. Rather than jobs and a share of the produce, they will be left with the environmental tab of intensive farming - devastated soils, dry aquifers, and an ecological system damaged by chemical infestation.
This is a sentiment echoed in an article by Sue Branford which points out that in displacing local farmers, governments and investors may in fact be destroying the very solution to the interlinked climate and food crises - local farming knowledge and small-scale sustainable agriculture.
3rd May 09 - Independent (UK)
In Africa they are calling it the land grab, or the new colonialism. Countries hungry to secure their food supplies – including Saudi Arabia, the Emirates, South Korea (the world's third biggest importer of corn) China, India, Libya and Egypt – are at the forefront of a frantic rush to gobble up farmland all around the world, but mainly cash-starved Africa.
Over the past few months, Saudi Arabian investors have paid $100m for an Ethiopian farm where they hope to grow wheat and barley, adding to the millions of acres they already own in the war-ravaged country, as well as in neighbouring Sudan. The Saudis also have land in Indonesia and Thailand for growing rice.
China owns vast tracts of overseas land, mainly in Algeria and Zimbabwe, and one estimate suggests that more than a million ethnic Chinese farm workers will be living on the continent this year. Kenya and Tanzania have leased land while the Ugandans have been big sellers, allocating two million acres of land to Egypt for wheat and corn.
Further afield, the Saudi government and other Gulf States are negotiating with Pakistan to buy another million acres. The deal includes the services of a 100,000-man private army to protect the food being exported. Buyers or lease-holders have have also been promised legal cover in case a future government in Islamabad is less welcoming.
Soaring wheat and rice prices over the past two years – which have caused riots in more than 30 countries from India to Haiti – were the catalyst for the latest dash for land. But the rush really took off at the end of last year when many big food-exporting nations introduced export controls.
Food scares hit Saudi, Kuwait, Bahrain and other Arab states the hardest, because they felt particulary vulnerable as their own efforts to grow crops in the desert have proved costly and inefficient. By far the most aggressive buyer is Saudi Arabia, where the government is now actively encouraging private investors and companies to buy farmland abroad after abandoning its attempt to be self-sufficient because of worries over water scarcity. It cut its wheat production by 12.5 per cent last year, prompting the search for new land.
Not every country is opening its arms to these new landlords with as much enthusiasm as Pakistan. In Madagascar, public anger over a plan to sell more than a million hectares to South Korea's Daewoo on a 99-year lease forced the government to drop the deal and was one of the reasons for the recent change in president.
But the issue is not a clear-cut case of neo-imperialism. At the African Union (AU), the agriculture commissioner, Rhoda Peace Tumusiime, is worried that many land buyers are ignoring the interests of local farmers and communities. But the AU also recognises that bringing new capital into Africa could be positive if it is directed in the right way. Instead of purchasing land, she says, buyers or lease-holders should invest through production and trade agreements with the host country.
Deals which increased overall food production should be encouraged, a move which would bring more food to the international markets, as well as to the poorest African households, Tumusiime said. Some of the AU's new guidelines on land sales, due to be ratified in July, include recommendations that new investors should promise to help with infrastructure, such as health facilities, agree to pay local taxation and look at ways to get more involved on the food-processing side which would create more local jobs.
David Hallam, the deputy director of the trade and markets division at the Food and Agriculture Organisation (FAO), part of the UN, also cautions about making over-hasty judgements on such a sensitive issue. "This could be a win-win situation or it could be a sort of neo-colonialism with disastrous consequences for some of the countries involved. I really do have an open mind to whether this new development is positive or not."
On Tuesday, Hallam will be opening a conference at the Woodrow Wilson Center in Washington provocatively called "Land Grab: The Race for the World's Farmlands", at which some of the world's leading food experts will try to get a better grip of what is happening. Sovereignty over the land and food supplies is the biggest concern, says Hallam. "There is a danger that host countries, particularly the more politically sensitive and food-insecure, will lose control over their own food supplies when they need it most."
Imagine, he says, empty trucks being driven into, say, Ethiopia, at a time of food shortages caused by war or drought, and being driven out again full of grain to feed people overseas. "Can you imagine the political consequences? That's why proper legal structures need to be put into place to protect land rights, and why we should look at some form of international code of conduct."
Hallam is carrying out his own detailed research with FAO people on the ground because so few figures exist. The first stab at gathering numbers was made by the International Food Policy Research Institute, which reported last week. It estimated that 20 million hectares of land – twice the size of Germany's croplands – have been sold since 2006 in more than four dozen land deals, mainly in Africa. So far, most of the buyers are a mix of private investors, US private equity houses such as Sanlam Private Equity, the Saudi Kingdom Zephyr fund, the UK's CDC and sovereign wealth funds.
The institute's report will not be the last: at least five separate studies into the phenomenon are due over the next few months as international bodies and NGOs wake up to the danger. The International Institute for Environment and Development, for example, is particularly worried about the impact on local communities and the threat to local output. It will publish its latest research in the next few weeks.
Subsistence farmers and nomadic tribesmen are of particular concern, since many of them do not have titles to their land and could be easily exploited by their own governments, which are desperate to sell to boost their foreign reserves.
Ruth Meinzen-Dick, a senior research fellow at the International Food Policy Research Institute, who is due to speak at the Washington conference, warned: "The majority of agricultural land in Africa is not titled. If these rights are not respected in these transactions, the livelihoods of millions of people will be put at risk."
If the latest invasion of overseas money can be handled well, it could bring huge advantages to Africa after a generation of declining investment. "For more than two decades, we have been trying to persuade governments and investors around the world to invest in agriculture to halt the downturn in food production," Hallam says. "So it is difficult for us to turn around and argue against it now."
Much of the new money is going into capital intensive farming – and speculative bio-fuel crops – which do not bring great benefits to local farmers. Hallam's report, prepared with the UN's development agency, UNCTAD and the World Bank, will also be published later this summer.
Food security and encouraging more of the right sort of investment in agriculture was top of the agenda at the G8 agricultural summit in Italy last month. For the first time, the G8 ministers conceded that efforts to tackle hunger were failing, and that the UN's attempts to halve the number of malnourished by 2015 were way off target. Wheat and grain prices have fallen since last year's spike, but they are still high; so high that the FAO predicts the number of chronically hungry will shoot up by 100 million this year – on top of the 1.4 billion people already living on the poverty line.
24th November 2008 - Devinder Sharma, India Together
24 November 2008 - At the 150th commemoration of the Irish Famine held at Cork, Ireland, I vividly recall the mayor of the city telling the audience: "How barbarian was the society then that at a time when people were dying of hunger and starvation, corn was being loaded in ships for export to neighbouring Britain."
Nearly 160 years after that great tragedy, the world is preparing a fertile ground for yet another, more sinister and barbaric act. This time, the world is witnessing a race to invest in overseas farmlands and turn them into food estates.
In the name of food security, what is worrisome is that the global food production and distribution channel is actually getting into the hands of a few international agribusiness companies with ties to hedge funds.
With large populations being displaced world over from such land takeovers, and with World Bank aggressively promoting it, control over the food chain is increasingly being passed into the hands of private investment. Many of the food and financial companies investing in farmlands around the world are also bringing in their own farm workers, production technology and equipment.
It is happening around the world. In India, Karnataka is preparing to lift restrictions on purchase of farm land in what appears to be a misguided attempt to attract investments.
Meanwhile, about 15 companies, led by the public-sector State Trading Corporation (STC), and including Gujarat Ambuja, Ruchi Soya industries and Jhunjhunwala Vanaspati Ltd., are in the process of leasing 10,000 hectares of productive farmlands in Paraguay, Uruguay and Brazil in Latin America, mainly to cultivate soybean and oilseeds.
Indian companies are also moving into Burma to undertake production of pulses, and buying palm oil plantations in Indonesia. Australia and Canada are next on the land shopping list.
National laws are being suitably amended. The Indian Ministry of Food and Agriculture is backing the outsourcing initiative. The Reserve Bank of India through the Exim Bank is contemplating a change in the existing laws to provide loans to these companies to purchase land abroad.
Not only in India, national laws are also being rewritten elsewhere - in Argentina, Mongolia, Australia, Russia, and many other nations - to facilitate the purchase of land overseas or allow foreign companies to buy land within their own borders.
In Pakistan, now in the throes of a food crisis, Prime Minister Yusuf Raza Gilani showed exuberance after his return from a state-visit to Saudi Arabia in mid-June.
After all, in exchange for the desperately needed foreign investment, he had reportedly offered to sell thousands of hectares of productive farmlands. Meanwhile, Qatar is preparing to outsource its food production to Pakistan's Punjab, where nearly 25,000 villages are faced with displacement. Saudi Arabia is also planning to acquire a 1.6 million hectares food estate in Merauke in Indonesia to produce rice for export back home.
Saudi Arabia is not the only Gulf country looking for land elsewhere. A Gulf Cooperation Council (GCC) has been constituted - with membership from Saudi Arabia, Bahrain, Kuwait, Qatar, Oman, Jordan and the United Arab Emirates - scouting for overseas land in return for investments.
Land deals have already been struck with Laos, Indonesia, the Philippines, Vietnam, Cambodia, Pakistan, Thailand and Burma in Asia; Ukraine, Kazakhstan, Georgia, Russia and Turkey in central Asia/Europe; and Sudan and Uganda in Africa. Realising that oil revenue alone cannot feed their populations, as seen in the recent global food crisis when food disappeared from the supermarket shelf, Gulf countries are investing for future food security needs.
China is emerging as a major player in this land grab. After having increasingly divested its farm population from agriculture and moving them into the cities, China is now on a land buying spree.
With some 30 land deals already known to have been signed, mostly in Africa, Central Asia, Australia and the Philippines, China has also prepared an agricultural policy on outsourcing food production. Most of these deals are being executed in a hush-hush manner. Interestingly, while China is looking for land outside its territory, agribusiness companies from Japan, South Korea and America are taking control over its own agribusiness activities.
The population shift in China - pushing farmers out of agriculture and moving them into the cities - has taken a heavy toll of the social fabric, marred by social unrest, often bloody. China Daily, the official organ of the Chinese government, had reported a massive increase in rural protests - from 10,000 a year some 11 years back to over 75,000 in 2005-06, which means roughly 250 protests a day.
Rapid industrialisation in the countryside had played havoc with a sustainable farming system, thereby necessitating the search for farmland outside the country. India too, in a blind race to catch up with China, is following the same faulty prescription.
Egypt, which recently was faced with food riots, stirred a hornet's nest, when it was divulged that a deal was underway to lease 840,000 hectares - amounting to 2.2 per cent of Uganda's farm land - for wheat and maize production to be shipped back.
Ironically, at the same time, Egyptian farmers in Qena district were fighting a long-drawn battle to recover 1600 hectares of land owned by a Japanese agribusiness giant, Kobebussan. Many other countries face the same dilemma - while they are looking for land elsewhere, their own farmlands are being taken away by foreign companies.
According to a report, Seized: The 2008 Land Grab for Food and Financial Security prepared by the Barcelona-based GRAIN, food corporates from Japan - including Asahi, Itochu, Sumitomo and Mitsubishi - have between 2006-08 leased and purchased land in China, Brazil, Africa, and central Asia for organic food production.
No wonder, with Japan not allowing corporates to own farmland, these companies are looking for greener pastures everywhere. South Korea, where the government is supporting outsourcing, is buying land in pristine Mongolia, thereby threatening one of the world's naturally endowed ecosystems.
Financial companies and others have even been using bailout packages from various governments to move into this land grab. Goldman Sachs and Deutsche Bank are eyeing a takeover of China's livestock industry. Morgan Stanley has purchased 40,000 hectares in the Ukraine, where Landkom, the British investment group has also bought 100,000 hectares.
The two Swedish investing firms, Black Earth Farming and Alpcot-Agro, have purchased 331,000 hectares and 128,000 hectares of farm land in Russia, respectively. South Korean giant Daewoo has brought in the mother of all land-grabbing deals; this month it unveiled a plan to farm some 1.3 million acres in Madagascar - half the size of Belgium - to produce corn and palm oil.
The political economy of food is certainly being rewritten, with grave implications in store. The global financial meltdown had privatised the profits, and socialised the losses.
Outsourcing food production will ensure food security for the investing country, and leave behind a trail of hunger, starvation and food scarcities for the native populations. Only the environmental tab of the highly intensive farming - devastated soils, dry aquifers, and an ecological system runied by chemical infestation - will be left for the host country to pick up.
22nd November 08 - Sue Branford, Guardian (UK)
The world map is being redrawn. Over the past six months, China, South Korea, Japan, Saudi Arabia, Kuwait and other nations have been buying and leasing huge quantities of foreign land for the production of food or biofuels for domestic consumption. It's a modern day version of the 19th-century scramble for Africa.
This year's bubble in food prices – driven by financial speculators, biofuels and compounded when some countries halted food exports to ensure their own supplies – led to pain for nations dependent on imports.
Alarm bells rang, with many governments alerted to what might lie ahead as climate change and soil destruction reduce the supply of food on the world market. The result, a huge international land grab, raises many troublesome issues.
Although governments are encouraging the trend, the acquisitions are generally made by the private sector. Along with agribusiness, corporations and food traders, investment banks and private equity funds have been jumping on board, seeing land as a safe haven from the financial storm.
Indeed, with the supply of the world's food under long-term threat, investment in land may prove a more solid bet than earlier speculation in dotcoms and derivatives.
Yet from a global perspective, it is difficult to see how such investments can deliver long-term food security. The investors will want a quick return. They will practise an industrial model of agriculture that in many parts of the world has already produced poverty and environmental destruction, as well as farm-chemical pollution.
Furthermore, many local communities will be evicted to make way for the foreign takeover. The governments and investors will argue that jobs will be created and some of the food produced will be made available for local communities, but this does not disguise what is essentially a process of dispossession. Lands will be taken away from smallholders or forest dwellers and converted into large industrial estates connected to distant markets.
Ironically, these very small communities may have a key role to play in helping the world confront the interlinked climate and food crises. Many such communities have a profound knowledge of local biodiversity and often cultivate little-known varieties of crops that can survive drought and other weather extremes.
Scientific studies have shown that farming methods that are not based on fossil-fuel inputs and are under the control of local farmers can be more productive than industrial farming and are almost always more sustainable.
The reason why this year's food crisis had such a harsh impact, particularly in Asia and Africa, was that many countries had been pushed by the International Monetary Fund (IMF) and other institutions to produce food crops for external markets. They would have been far less vulnerable if they had concentrated first and foremost on feeding their populations through local production.
Many of the countries that are rushing to outsource their food supplies should perhaps be looking first to see if they can produce more of their food locally, even if it means carrying out difficult measures like land reform.
By seeking a quick fix to their food shortage, they may well end up without a long-term sustainable solution. And even if they succeed in generating a steady stream of food imports, they may simply be exporting their food insecurity to other nations.
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