The new African land grab

September 7, 2010

Foreign control of African land has a long history, but the current land grab involves transfer of ownership on a vast new scale, writes Lee Wengraf.

A NEW scramble for profit is sweeping Africa--foreign investment in agricultural land on a massive scale. Referred to as a "land grab," the privatization of millions of acres of land is helping to fuel a crisis of hunger and displacement across the continent.

Nations have begun buying up large tracts of land to grow food for import back to their home countries. Saudi Arabia, Japan, China, India, Korea, Libya and Egypt have all jumped on the land grab bandwagon, but agribusinesses and private equity firms from Europe and the U.S. are also joining in.

Investors have bought land in countries like Uganda, Sudan, Sierra Leone, Tanzania and Ethiopia, among others. According to the International Food Policy Research Institute (IFPRI), foreign buyers have invested $30 billion since 2006 to buy around 50 million acres of farmland. Up to 10 million acres have been sold in Sudan alone.

Foreign control of African land has a long history, from the era of colonial plantations to multinational agribusinesses today. But the current land grab involves transfer of ownership on a new scale. As GRAIN, a non-governmental organization that supports the struggles of small farmers against the takeover of their land, put it,

A Swiss-based energy company raised sugar cane for biofuel in Sierra Leone
A Swiss-based energy company raised sugar cane for biofuel in Sierra Leone

We're not talking about typical transnational agribusiness operations, where Cargill might invest in a soya bean-crushing plant in Mato Grosso in Brazil. We're talking about a new interest in acquiring control over farmland itself...

The two big global crises that have erupted over the last 15 months--the world food crisis and the broader financial crisis that the food crisis has been part of--are together spawning a new and disturbing trend toward buying up land for outsourced food production.

THE TREND toward land privatization emerged over the past decade, but shifted into high gear with the food crisis of 2008 when soaring food prices--increases of over 100 percent for staple grains like wheat and corn--forced an additional 100 million people below the poverty line and drove importing nations to look for secure food sources. Other foreign investors have sought out overseas land to take advantage of rising commodity prices, since land in African states is practically a steal, selling for as little as a few dollars an acre.

And the land rush will only intensify as global food prices continue to jump. A UN report released in June predicts that food prices could rise as much as 40 percent over the coming decade. Prices have dropped from their high point in 2008, but they are still 70 percent above 2002-2004 averages.

Painting these investments as "win-win" for Africa is standard, as one author describes India's strategy:

The Indian government's stated goal is to limit the purchase of food grains from the international market and source it directly at much cheaper rates from poorer African countries. At the end of the last decade, prices of wheat, rice and corn increased threefold. The governments involved in large-scale land acquisitions claim that their investments will give the languishing agricultural sector in Africa the much-needed boost besides providing employment to the local peoples.

Hedge funds and other private investors are also getting in on the act. In an interview for a New York Times Magazine article in late 2009 titled "Is There Such a Thing as Agro-Imperialism?" Susan Payne, chief executive of Emergent Asset Management, made the case for Emergent's African Agricultural Land Fund, which was looking to invest several hundred million dollars in commercial farms around the continent.

"Africa is the final frontier," Payne declared. "It's the one continent that remains relatively unexploited." The New York investment firm Jarch Capital has leased over 1.5 million acres in southern Sudan near Darfur, claiming they will create jobs and put at least 10 percent of the profits back into the local community.

Other factors are also driving the land grab such as the demand for biofuel sources. The European Union (EU), for example, must expand its biofuel production by tens of millions of acres to meet its 10 percent biofuel target by 2015. According to Friends of the Earth, "Biofuel investors, mainly European and other foreign companies, have already applied for the rights to use around 4.8 million hectares [12 million acres] of land in Mozambique--nearly one-seventh the country's available arable land."

Another example is Sierra Leone, championed as an investment hot spot. In early 2010, the government signed a $400 million agreement with Addax Bioenergy Switzerland to cultivate sugar cane with the aim of producing tens of millions of gallons of bio-ethanol over the next two years.

THIS NEW scramble for African land has visited a multitude of problems on ordinary Africans and set the stage for ecological crisis and widespread hunger.

As many critics have pointed out, African governments have falsely claimed that land available for sale is unused. As journalist Joan Baxter writes:

Some defend the investors' acquisition of land in their countries, saying it is "virgin" or "under-utilized" or "uncultivated" or "degraded" land...This suggests they know precious little about the importance of fallows and the resilience and diversity of agroforestry systems, or about sustainable agriculture and the knowledge base of their own farmers.

Communal land, small farmers and even entire villages are often displaced in the drive for land purchases. The Oakland Institute think-tank released a report on the African land grab, which points out:

Experts in the field, however, affirm that there is no such thing as idle land in...Africa...Countless studies have shown that competition for grazing land and access to water bodies are the two most important sources of inter-communal conflict in [areas] populated by pastoralists.

According to Michael Taylor, a policy specialist at the International Land Coalition, "If land in Africa hasn't been planted, it's probably for a reason. Maybe it's used to graze livestock or deliberately left fallow to prevent nutrient depletion and erosion. Anybody who has seen these areas identified as unused understands that there is no land...that has no owners and users."

In other words, as activist Vandana Shiva puts it, "We are seeing dispossession on a massive scale. It means less food is available and local people will have less. There will be more conflict and political instability and cultures will be uprooted. The small farmers of Africa are the basis of food security. The food availability of the planet will decline."

In fact, because much of its food is produced for export, sub-Saharan Africa is the only region in the world where per capita food production has been declining, with the number of people that are chronically hungry and undernourished currently estimated at more than 265 million.

Nations with large amounts of land sold or leased to foreign owners are often food importers, and their inability to feed their own populations is exacerbated by the displacement of food producers who grow for local use. The UN Conference on Trade and Development (UNCTAD) reports that Africa has lost 20 percent of its capacity to feed itself over the past four decades. Ethiopia alone has 13 million people in immediate need of food assistance, yet its government has put over 7 million acres of land up for sale.

And worsening hunger is still to come. This year's World Food Program (WFP) budget of $2.6 billion for sub-Saharan Africa falls short of meeting the targeted need by $1.1 billion. According to the IFPRI, climate change will sharpen food scarcities in semi-arid countries such as Sudan.

Large-scale land acquisition poses massive ecological threats to the African environment. The dangers are numerous: hazardous pesticides and fertilizers cause water contamination from their runoff, the introduction of genetically modified seeds and other problems. Land previously left to lie fallow is now threatened with overuse from intensified agricultural development, a trend further exacerbated by speculative investment and the drive for short-term profits.

Yet deals transferring vast tracts of land are typically taking place far removed from local farmers and villagers with virtually no accountability. As Khadija Sharife writes on the Pambazuka Web site:

The deals involving these concessions are often cloaked in secrecy, but African Business has learned that they are usually characterized by allowing free access to water, repatriation of profits, tax exemptions and the ability for investors to acquire land at no cost whatsoever, with little or no restriction on the volume of food exported or its intended use, in return for a loose promise to develop infrastructure and markets...

[L]eaders, and provincial and national governments have been all too willing to sell land already inhabited by citizens lacking land titles--often the product of communal customs--with the best land and water resources going free of charge to multinationals.

THE SCALE of the theft is so widespread that global leaders have raised red flags. The head of the UN's Food and Agriculture Organization, Jacques Diouf, has gone so far as to warn of "neocolonialism."

A new World Bank report, The Global Land Rush: Can It Yield Sustainable and Equitable Benefits? is due to be released soon. A draft leaked to the Financial Times in July revealed massive exploitation and manipulation of local laws by investors.

"Investor interest is focused on countries with weak land governance," the draft reads. Although deals promised jobs and infrastructure, "investors failed to follow through on their investment plans, in some cases after inflicting serious damage on the local resource base."

In addition, "the level of formal payments required was low," fueling speculation. "Payments for land are often waived...and large investors often pay lower taxes than smallholders...or none at all." Finally, it stated that "rarely if ever" were efforts made to link land investments to "countries' broader development strategy."

Despite these condemnations, the World Bank need look no further than its own policies for the source of this land theft. As the Oakland Institute report lays out,

The World Bank Group believes that "efficient land markets that allow reasonably easy access to land to run a business are key to a supportive business climate"...

[But] the underlying goals of World Bank policies--to indiscriminately encourage foreign direct investment and promote private-sector development--are leading to trends that increase instability rather than provide security and opportunity...

In many cases, farmers and pastoralists have worked this land for centuries. However, governments are claiming this land is idle in order to more easily sell or lease it to private investors.

As the report details, World Bank agencies have helped foreign investors and multinational to gain access to land and improve conditions for investment by cutting through regulatory "red-tape," revising national land ownership laws, bolstering claims that land is not under cultivation and negotiating tax exemptions.

"According to World Bank officials, changing land ownership laws is an integral target of the Bank's $1.2 billion package to deal with the food crisis in Africa," notes GRAIN. "Given the tenacity of the drive by the World Bank and others to make farmland control by hungry foreign investors much easier, as some twisted solution to the food crisis, this could end in explosive conflict."

The World Bank neglects to measure rates of poverty and employment, the Oakland Institute points out, rating success in terms of levels of investment and GDP. But many African nations heralded as leaders in "business-friendly" reforms, such as Sierra Leone, Rwanda, Liberia and Burkina Faso, are among the very lowest ranked on UN Development Program's Human Development Index measuring standard of living and other indicators.

In the face of widespread criticism, the World Bank is promoting "socially responsible" guidelines, with heightened "transparency" in land deals and full disclosure of all transactions. Meanwhile, the UN stresses that "African more proactive in the partnership process." But these approaches cannot begin to reverse the poverty and inequality faced by ordinary Africans, which is the legacy of decades of colonial and neoliberal policy.

Grassroots opposition is growing among farmers, NGOs and activists. A coalition of groups gathered in Angola in May and issued a call for African governments to protect collective land rights to land and guard communities against land grabbing and to place a moratorium on any expansion of biofuel production. And a coalition of global land rights organizations has launched a petition rejecting the entire logic of "responsible" land grabbing.

As GRAIN, an initiator of the petition, put it, "The only thing holding back this massive transfer of lands and water from local communities to foreign investors is the strong social resistance that has emerged." These struggles need our support in challenging the corporate greed and exploitation wreaking havoc on the continent.

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