While much of the world including Africa is understandably preoccupied by the current global economic recession, a development of potentially more lasting consequences is taking place behind the radar of public concern and scrutiny. A global land grab is underway in which rich countries and large corporations are buying up large tracts of land in poorer countries to secure food and biofuel supplies for the rich countries and multinational corporations.
Africa's underdeveloped and relatively weak countries are at particular risk. For a continent which only recently got rid of colonialism, and land struggles were central to nationalist mobilization, the current land global grab should be a subject of special concern. The following reports sketch out the scope of the new scramble for land and what is at stake. PT Zeleza, Editor, The Zeleza Post
Rich Countries Launch Great Land Grab To Safeguard Food Supply By Julian Borger
States and companies target developing nations
Small farmers at risk from industrial-scale deals
Rich governments and corporations are triggering alarm for the poor as they buy up the rights to millions of hectares of agricultural land in developing countries in an effort to secure their own long-term food supplies.
The head of the UN Food and Agriculture Organisation, Jacques Diouf, has warned that the controversial rise in land deals could create a form of "neo-colonialism", with poor states producing food for the rich at the expense of their own hungry people.
Rising food prices have already set off a second "scramble for Africa". This week, the South Korean firm Daewoo Logistics announced plans to buy a 99-year lease on a million hectares in Madagascar. Its aim is to grow 5m tonnes of corn a year by 2023, and produce palm oil from a further lease of 120,000 hectares (296,000 acres), relying on a largely South African workforce. Production would be mainly earmarked for South Korea, which wants to lessen dependence on imports.
"These deals can be purely commercial ventures on one level, but sitting behind it is often a food security imperative backed by a government," said Carl Atkin, a consultant at Bidwells Agribusiness, a Cambridge firm helping to arrange some of the big international land deals.
Madagascar's government said that an environmental impact assessment would have to be carried out before the Daewoo deal could be approved, but it welcomed the investment. The massive lease is the largest so far in an accelerating number of land deals that have been arranged since the surge in food prices late last year.
"In the context of arable land sales, this is unprecedented," Atkin said. "We're used to seeing 100,000-hectare sales. This is more than 10 times as much."
At a food security summit in Rome, in June, there was agreement to channel more investment and development aid to African farmers to help them respond to higher prices by producing more. But governments and corporations in some cash-rich but land-poor states, mostly in the Middle East, have opted not to wait for world markets to respond and are trying to guarantee their own long-term access to food by buying up land in poorer countries.
According to diplomats, the Saudi Binladin Group is planning an investment in Indonesia to grow basmati rice, while tens of thousands of hectares in Pakistan have been sold to Abu Dhabi investors.
Arab investors, including the Abu Dhabi Fund for Development, have also bought direct stakes in Sudanese agriculture. The president of the UEA, Khalifa bin Zayed, has said his country was considering large-scale agricultural projects in Kazakhstan to ensure a stable food supply.
Even China, which has plenty of land but is now getting short of water as it pursues breakneck industrialisation, has begun to explore land deals in south-east Asia. Laos, meanwhile, has signed away between 2m-3m hectares, or 15% of its viable farmland. Libya has secured 250,000 hectares of Ukrainian farmland, and Egypt is believed to want similar access. Kuwait and Qatar have been chasing deals for prime tracts of Cambodia rice fields.
Eager buyers generally have been welcomed by sellers in developing world governments desperate for capital in a recession. Madagascar's land reform minister said revenue would go to infrastructure and development in flood-prone areas.
Sudan is trying to attract investors for almost 900,000 hectares of its land, and the Ethiopian prime minister, Meles Zenawi, has been courting would-be Saudi investors.
"If this was a negotiation between equals, it could be a good thing. It could bring investment, stable prices and predictability to the market," said Duncan Green, Oxfam's head of research. "But the problem is, [in] this scramble for soil I don't see any place for the small farmers."
Alex Evans, at the Centre on International Cooperation, at New York University, said: "The small farmers are losing out already. People without solid title are likely to be turfed off the land."
Details of land deals have been kept secret so it is unknown whether they have built-in safeguards for local populations.
Steve Wiggins, a rural development expert at the Overseas Development Institute, said: "There are very few economies of scale in most agriculture above the level of family farm because managing [the] labour is extremely difficult." Investors might also have to contend with hostility. "If I was a political-risk adviser to [investors] I'd say 'you are taking a very big risk'. Land is an extremely sensitive thing. This could go horribly wrong if you don't learn the lessons of history."
From The Guardian November 22, 2008
Global Land Grab By Alexandra Spieldoch
Governments and corporations looking to outsource food and energy more directly themselves are promoting a new wave of land acquisitions, also known as "land grabs." Persian Gulf states are working out land deals in Africa, Asia, and Eastern Europe. India has set up agricultural projects in Brazil. South Korea recently tried to buy up nearly half of the island of Madagascar.
"If food was ever a soft policy issue before," editorializes The Financial Times, "it now rivals oil as a basis of power and economic security." Control over the land that produces this power remains as critical today as it was in the past.
The Real Deal
Among the extraordinary number of new land deals, some have resulted in contracts while others have fallen through. Journalists have reported on the details of the deals, but so far there is little solid research from which to draw. Still, the deals are happening to such a degree that the World Bank and the UN are developing Codes of Conduct for Foreign Land Acquisition. The African Union will also publish investment guidelines in July, and Japan is pushing the G8 to get behind them.
New websites tracking these land deals include the international land coalition and GRAIN.
Foreign investment deals in agriculture are nothing new. In colonial times, European countries established plantation economies in Africa, Asia, and Latin America to export food. Today there is large-scale investment in mining natural resources and contract farming as a means to source global supply chains. Yet these new land grabs are mammoth. The Economist reports that whereas land deals in Sudan used to be around 240,000 hectares, today's deals are three times as large. Before it fell apart, the proposed land deal between Madagascar and the South Korean company Daewoo would have included nearly half of the country's arable land. The lease would have lasted 99 years, with virtually no required taxes or other benefits flowing back to Madagascar or to the local community. Not surprisingly, the public in Madagascar rose up in protest, which contributed to the overthrow of the government.
During colonial times and in the recent past, developing countries exported cash crops such as cocoa and coffee. Now they are now exporting basic food staples. In many developing countries where land acquisition is taking place, the populations are already food insecure. So why are they exporting food crops instead of feeding their populations? For example, Ethiopia is the largest recipient of food aid from the World Food Program, but is also outsourcing food to Saudia Arabia. Cambodia, Niger, Tanzania, and Burma are other examples of countries receiving aid and also serving as host countries for foreign land Contrary to past trends, countries in the Global South are initiating much of the investment. The Persian Gulf States, including Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates, are investing in many parts of Africa, as well as Asia and Eastern and Central Europe. These countries are rich in energy but lack arable land and water. For example, Saudi Arabia has acquired land in Sudan to plant wheat, which is inefficient to grow at home. China is also buying up large tracks of land throughout Africa to produce biofuels and to produce food. India's companies have formed a consortium to invest in corporate farming of oilseeds in Latin America, most notably Uruguay and Paraguay.
Companies seeking more stable long-term profits are investing in agricultural land. In countries that already have shaky governments or civil war, foreign corporate investment may not end up being that stable or even profitable. Deals have already fallen through because of the risk. Others firms like UK Sunbiofuels are ignoring the risks and moving full-steam ahead with investment in crops such as sugarcane for ethanol in Tanzania.
From the land deals, developing countries hope to gain more investment in infrastructure such as roads, ports and other facilities. They hope to acquire more technology, research and science. Their farmers need jobs and a place in the global market. Over the past few decades, as part of structural adjustment requirements and other domestic measures to facilitate trade, many developing countries have disinvested from their agriculture. International investment flows into these countries have also declined.
The result is that today, many countries lack productive capacity to grow and provide food for their populations. For example, most Least Developed Countries are now dependent on food imports and lack capacity to be self-sufficient in food production.
To countries starved of investment and with little except natural resources to offer the global market, land deals are deceptively attractive.
Struggle for Land
The operative word in all of this is "land." Countries are diverting high-quality land from production for local and national economies to create large-scale plantations focused on feeding other nations. What governments might deem as marginal or unused land to sell may very well be meeting an important share of rural people's household needs, especially in the poorest households. Uncultivated land has many uses such as for animal grazing, wild foods, medicinal plants, and even water.
Land disputes for control of natural resources and food are inevitable. Land struggles have been and still are violent and destabilizing. Identity, culture, justice, and governments' legitimacy are closely tied to these power struggles. To superimpose foreign investment on areas that are already fraught with violent land disputes requires a great deal of sensitivity. This isn't a situation that can be captured in a simple cost-benefit analysis. Many of these deals reinforce the existing imbalances between haves and have-nots. Few of the deals acknowledge the poverty and power discrepancies that mar the context in which the deals are made.
A Better Deal
Foreign direct investment could provide all kinds of new opportunities for developing countries in need of resources. Such investment can help them achieve food sufficiency and food security within their borders, to restore the land with sustainable practices, and to promote long-term development. If the end goal is really to resolve the food and climate crises, all investment flows should be assessed based on their ability to achieve this.
Governments should articulate a national vision based on these goals. All investment measures should be transparent, participatory and accountable to those who will be most impacted, such as smallholder producers. A mandatory review of land use and land rights would be essential to understanding potential impacts and how to promote investment that makes sense for communities and their culture and environment. All national investment plans should be assessed based on international human rights obligations.
The convergence of the energy, land, and climate crises serves as a reminder of the limits to growth. The majority of these land deals could worsen the food crisis and the struggles associated with land use, human rights, and environmental degradation.
To bring us back from the edge of resource depletion, governments need to increase aid for investment in small-scale producers and also regulate all investment so that it meets food security goals and promotes the realization of people's rights.
This means promoting democratic consultation and transparent contracts. And it means promoting climate-friendly production methods based on smaller-scale, diversified planting systems rather than large plantations growing one commodity for export.
From Foreign Policy in Focus June 18, 2009
Africa Becoming A Biofuel Battleground By Horand Knaup
Western companies are pushing to acquire vast stretches of African land to meet the world's biofuel needs. Local farmers and governments are being showered with promises. But is this just another form of economic colonialism?
Everything will turn out alright. Correction: everything is going to get better. There will be new roads, a new school, a pharmacy, even a proper water supply. Most of all, there will be jobs -- 5,000, at the very least. "If there are jobs for us, then it's a good thing," says Juma Njagu, 26, who hopes to be able to leave his meager existence as a planter and charburner behind soon.
Njagu lives in Mtamba, a village of about 1,100 souls in Tanzania's Kisarawe district, about 70 kilometers (43 miles) south-west of Dar es Salaam, the capital and largest city. Mtamba, accessible by dirt road, is a place where people scrape by on a bit of farming, a bit of fishing and the production of charcoal. There isn't much else in Mtamba.
That could change if the British firm Sun Biofuels goes ahead with plans to produce biodiesel fuel from "Jatropha curcas," an energy plant with a high oil content, which it hopes to plant on Kisarawe's farmland.
The Tanzanian government has granted the British firm the use of 9,000 hectares (22,230 acres) of sparsely populated farmland, or enough land to cover about 12,000 soccer fields, for a period of 99 years -- free of charge. In return, the company will invest about $20 million (€13 million) to build roads and schools, bringing a modicum of prosperity to the region.
Sun Biofuels is not alone. In fact, half a dozen other companies from the Netherlands, the United States, Sweden, Japan, Canada and Germany have already sent their scouts to Tanzania. Prokon, a German company known primarily for its wind turbines, has already begun growing jatropha curcas on a large scale. It expects to have 200,000 hectares (494,000 acres) -- an area about the size of Luxembourg -- under cultivation throughout Tanzania soon.
A gold rush mentality has taken hold -- not just in East Africa but across the entire continent. In Ghana, the Norwegian firm Biofuel Africa has secured farming rights for 38,000 hectares (93,860 acres), and Sun Biofuels is also doing business in Ethiopia and Mozambique.
Kavango BioEnergy, a British company, plans to invest millions of euros in northern Namibia. Western companies are turning up in Malawi and Zambia, where they plan to produce diesel fuel and ethanol from jatropha curcas, palm oil or sugar cane. Foreign investors have their eye on 11 million hectares (27 million acres) in Mozambique -- more than one-seventh of the country's total area -- for growing energy plants. The government in Ethiopia has even made 24 million hectares (59 million acres) available.
The consequences of this boom are dramatic. Experts agree that the worldwide push to grow energy plants is on overwhelming factor in the global explosion of food prices. According to one study by the World Bank, as much as 75 percent of the increase could be attributable to this change in the types of crops being farmed. Many farmers in industrialized countries are more than happy to accept government subsidies for corn or rapeseed, but this comes at the cost of the cultivation of wheat, potatoes and legumes.
Oil plants are not competing with intensively farmed land in Africa -- yet. Investors argue that the land they are using is uncultivated or underused. But rising food prices and population growth will also increase pressure in the southern hemisphere to convert unused land to agricultural use.
For investors, growing energy plants in Africa is highly profitable. Crude oil will become scarce in the foreseeable future, so that easy-to-produce biofuel comes at just the right time. At an estimated annual yield of 2,500 liters per hectare, Sun Biofuels is in it for the long haul in Tanzania. Production becomes profitable as soon as the price of a barrel of crude oil exceeds $100 (€69) on the world market. A barrel currently goes for just over $100.
Africa offers oil farmers virtually ideal conditions for their purposes: underused land in many places, low land prices, ownership that is often unclear and, most of all, regimes capable of being influenced.
The land is unusable, says the Ethiopian energy and mining minister in Addis Ababa, the country's capital. "It's just marginal land," say officials at the Ministry of Energy and Mineral Resources in Dar es Salaam. "The whole thing is nothing but positive," says the district administrator of Kisarawe, who is responsible for the Sun Biofuels project. "We have convinced the people." In his rudimentary office, which lacks both a computer and a copy machine, he leafs through the planning documents.
In none of these places are the needs of local residents taken into account. In Ghana, BioFuel Africa wrested away land clearing and usage rights from a village chief who could neither read nor write. The man gave his consent with his thumbprint. The weekly newspaper Public Agenda felt reminded of the "darkest days of colonialism." The Ghanaian environmental protection agency eventually put a stop to the clear-cutting, but only after 2,600 hectares (6,422 acres) of forest had been cut down.
In Tanzania, while there are hopes, there is also plenty of reason to be skeptical about promises that everything will improve. In April 2006, Sun Biofuels claimed that it had received formal approval for cultivation from 10 of the 11 affected villages. At that point, however, several communities were not even aware of the plans, while others had attached conditions to their consent. A village head complained, in writing, to the district administration that Sun Biofuels had cleared and marked off land without even contacting the village elders.
In Dar es Salaam, Peter Auge, general manager of Sun Biofuels Tanzania, sits in his office. He is a casual, straightforward South African. "It is true," he says, "that we were a little reserved with our information policy." There are still many unknowns, says Auge, adding that he doesn't want to read in the paper that "the project is two years behind schedule."
Auge promises social investments, although they are not part of the agreements at this point. Even when it comes to compensation for the people living on the land, which the government insists must be paid, the investors are getting an exceedingly good deal. They offered the equivalent of about €450,000, a ridiculous price for the 9,000 hectares (22,230 acres) that they can now use for almost a century.
Seventy kilometers (43 miles) farther south, on the Rufiji River, thousands of residents are being forced to move to make way for the Swedish company Sekab's plans to grow sugarcane, a highly water-intensive crop, on at least 9,000 hectares (22,230 acres) and then distill it into ethanol. Five thousand hectares (12,350 acres) have already been approved.
The river and the wetlands along its banks are the only source of drinking water for thousands of people, especially during the dry season. Sekab also plans to tap this reservoir to irrigate its plantations. Transparency? Nonexistent. Compensation? None whatsoever. Information? A scarce commodity. When residents attending an informational event asked about compensation payments, they were told curtly: "You will get what you are entitled to."
The PR machine is all the more active, even in poor countries like Tanzania. Naturally South African national Josephine Brennan, who is in charge of public relations for Sekab in Dar es Salaam, sees only good things for Tanzania's future. Farming for biofuel will enable the country to build new schools and new roads, which translate into better opportunities for Tanzanians, says Brennan. According to Brennan, small farmers will also be able to earn more money in the future by growing biofuel-ready plants, and up to three million people in Tanzania alone will be lifted out of poverty. With its two million hectares of potential cropland, Tanzania, says Brennan, has as much growth potential "as the Celtic Tiger, Ireland." Finally, she is convinced that "the world needs Tanzania."
But Brennan's rosy predictions do not reflect opinions in East Africa. A study on energy plants in Tanzania, conducted by the German Agency for Technical Cooperation, lists a host of negative side effects. What is more, this is not the first time that white investors have promised prosperity for Tanzania.
With similarly enticing promises, small farmers were talked out of their land several decades ago to make way for coffee plantations. In the 1990s, foreign mining companies arrived in Tanzania to dig for gold. "They promised us jobs, new roads, new wells and schools," says journalist Joseph Shayo. "And what happened? No schools, no wells and few jobs, which were low-paying jobs, to boot." To make matters worse, large mining zones were fenced off and became inaccessible to the original residents.
In a recently published study on the "Biofuel Industry in Tanzania," journalist Khoti Kamanga of the University of Dar es Salaam warns against the side effects of energy plantations. The population, Kamanga writes, is usually uninformed, while the cultivation of energy plants usually goes hand-in-hand with forced resettlement. According to Kamanga, it is very likely that ethanol production will also affect food prices in Tanzania, with the country's dependency on food imports growing even further.
In Dar es Salaam, the government has now recognized that the boom also comes with problems. "Energy plants cannot be an alternative to food production," said President Jakaya Kikwete, responding to widespread resentment in his country over high food prices.
But the energy farmers remain unimpressed. Sun Biofuels and Sekab each want to expand their production to 50,000 hectares (124,000 acres) -- as soon as possible.
-- Translated from the German by Christopher Sultan
From Spiegel Online International May 5, 2009
Land Grab or Development Opportunity? Agricultural Investment and International Land Deals in Africa By Lorenzo Cotula, Sonja Vermeulen, Rebeca Leonard and James Keeley
Over the past 12 months, large-scale acquisitions of farmland in Africa, Latin
America, Central Asia and Southeast Asia have made headlines in a flurry of media reports across the world. Lands that only a short time ago seemed of little outside interest are now being sought by international investors to the tune of hundreds of thousands of hectares. And while a failed attempt to lease 1.3 million ha in Madagascar has attracted much media attention, deals reported in the international press constitute the tip of the iceberg. This is rightly a hot issue because land is so central to identity, livelihoods and food security.
Despite the spate of media reports and some published research, international land deals and their impacts remain still little understood. This report is a step towards filling this gap. The outcome of a collaboration between IIED, FAO and IFAD, the report discusses key trends and drivers in land acquisitions, the contractual arrangements underpinning them and the way these are negotiated, as well as the early impacts on land access for rural people in recipient countries. The report looks at large-scale land acquisitions, broadly defined as acquisitions (whether purchases, leases or other) of land areas over 1,000 ha. While international land deals are emerging as a global phenomenon, this report focuses on sub-Saharan Africa.
The report draws on a literature review; on qualitative interviews with key informants internationally; on national inventories of approved and proposed land acquisitions since 2004 in five African countries (Ethiopia, Ghana, Madagascar, Mali and Sudan), as well as qualitative case studies in Mozambique and Tanzania; and on legal analysis of applicable law and of a small sample of land deals.
The Emerging Picture
Primary and secondary data on land acquisitions in Africa is scarce and often of limited reliability. This means that evidence and the conclusions drawn from the study need to be treated with caution. Nevertheless a picture is emerging of large-scale land acquisitions in Africa. Key features include:
*Significant levels of activity - the quantitative inventories have documented an overall total of 2,492,684 ha of approved land allocations since 2004 in the five study countries, excluding allocations below 1000 ha;
*Rising land-based investment over the past five years, with an upward trend in both project numbers and allocated land areas in all quantitative study countries and anticipated growth in investment levels in future;
*Large-scale land claims remaining a small proportion of total suitable land in any one country, but most remaining suitable land is already under use or claim, often by local people, and pressure is growing on highervalue lands (e.g., those with irrigation potential or closer to markets);
*Possible increases in the size of single acquisitions, though with considerable variation among countries - approved land allocations documented here include a 452,500 ha biofuel project in Madagascar, a 150,000 ha livestock project in Ethiopia, and a 100,000 ha irrigation project in Mali;
*Dominance of the private sector in land deals, though often with strong financial and other support from government, and significant levels of government-owned investments;
*Dominance of foreign investment, though domestic investors are also playing a major role in land acquisitions - a phenomenon that has received far less international attention so far.
Why The Growing Interest In Large-Scale Land Acquisition?
Several factors seem to underpin these land acquisitions. These include food security concerns, particularly in investor countries, which are a key driver of government-backed investment. Food supply problems and uncertainties are created by constraints in agricultural production due to limited availability of water and arable land; by bottlenecks in storage and distribution; and by the expansion of biofuel production, an important competing land and crop use.
Increasing urbanisation rates and changing diets are also pushing up global food demand. The food price hikes of 2007 and 2008 shook the assumption that the world will continue to experience low food prices. While grain and customs regimes or other aspects.
Mitigating Risks, Seizing Opportunities
For people in recipient countries, this new context creates risks and opportunities. Increased investment may bring macro-level benefits (such as GDP growth and improved government revenues), and may create opportunities for economic development and livelihood improvement in rural areas.
But as governments or markets make land available to prospecting investors, large-scale land acquisitions may result in local people losing access to the resources on which they depend for their food security - particularly as some key recipient countries are themselves faced with food security challenges.
While there is a perception that land is abundant in certain countries, these claims need to be treated with caution. In many cases land is already being used or claimed - yet existing land uses and claims go unrecognised because land users are marginalised from formal land rights and access to the law and institutions. And even in countries where some land is available, large-scale land allocations may still result in displacement as demand focuses on higher value lands (e.g. those with greater irrigation potential or proximity to markets).
Ultimately, the extent to which international land deals seize opportunities and mitigate risks depends on their terms and conditions: how are risks assessed and mitigated - for instance through considerations in project location? What business models are favoured in project implementation (from plantations to contract farming, purchase agreements, policy incentives, or joint ventures)? How are costs and benefits shared - for example, in terms of safeguards against arbitrary land takings, or revenue-sharing arrangements?
And who decides on these issues and how?
Unpacking Land Deals
Although the terms and conditions of investment display a huge diversity among countries and even individual projects, the main findings of this study,based on a small number of international land deals, include the following:
*Land deals must be assessed in the light of the often complex overall package they are part of, including commitments on investment, infrastructure development and employment - the "land grab" emphasized by some media is only part of the equation;
*Land leases, rather than purchases, are predominant in Africa, and host country governments tend to play a key role in allocating them;
*Land fees and other monetary transfers are not the main host country benefit, not least due to the difficulty of setting land prices in the absence of well-established formal land markets;
*Host country benefits are mainly seen in the form of investor commitments on investment levels, employment creation and infrastructure development - though these commitments tend to lack teeth in the overall structure of documented land deals.
Although on paper some countries have progressive laws and procedures that seek to increase local voice and benefit, big gaps between theory and practice, between statute books and reality on the ground result in major costs being internalised by local people - but also in difficulties for investor companies.
Many countries do not have in place legal or procedural mechanisms to protect local rights and take account of local interests, livelihoods and welfare. Even in the minority of countries where legal requirements for community consultation are in place, processes to negotiate land access with communities remain unsatisfactory. Lack of transparency and of checks and balances in contract negotiations creates a breeding ground for corruption and deals that do not maximise the public interest. Insecure use rights on state-owned land, inaccessible registration procedures, vaguely defined productive use requirements, legislative gaps, and compensation limited to loss of improvements like crops and trees (thus excluding loss of land) all undermine the position of local people.
Virtually all the contracts analysed by this study tend to be short and simple compared to the economic reality of the transaction. Key issues like strengthening mechanisms to monitor or enforce compliance with investor commitments, maximising government revenues and clarifying their distribution, promoting business models that maximise local benefit (such as employment creation and infrastructure development), as well as balancing food security concerns in both home and host countries are dealt with by vague provisions if at all.
