Wealthy Countries and Investors Buying Up Farmland in Poor Countries

Lopiso Lagebo, 25, comes from Kambata, a small town 800km away from Metahar. He starts working at 0500, cuts up to 5 tons (5,000 kg) of sugar cane a day and earns $0.8. The company recruits most of the work force around his home town, where land shortage drives the workers to emigrate. Caption and Photo: Alfredo Bini/Cosmos  http://www.facebook.com/alfredobini

[I wrote this article three years ago revealing a global land grab by rich investors that is now estimated to be more than 200 million hectares – my recent update here – Stephen]

By Stephen Leahy*

ANCHORAGE, Alaska, USA, May 5 , 2009 (Tierramérica)

More than 20 million hectares of farmland in Africa and Latin America are now in the hands of foreign governments and companies, a sign of a global “land grab” that got a boost from last year’s food crisis.

Rich countries that are short on land or water at home are looking to secure food-producing lands elsewhere as a way to ensure food security for their populations, said Joachim von Braun, director of the International Food Policy Research Institute (IFPRI).

“There is a major lack of transparency in these land deals,” von Braun said in a telephone press conference from Washington.

The IFPRI study, “‘Land Grabbing’ by Foreign Investors in Developing Countries,” by von Braun and Ruth Meinzen-Dick, which was presented last week, estimates that 15 to 20 million hectares have been acquired or are in the process of being sold.

Von Braun pointed out that this is equivalent to about 25 percent of all the farmland in Europe.

Because hard data is difficult to come by – the study was based primarily on information from press reports – IFPRI conservatively estimates that the deals represent 20 to 30 billion dollars being invested by China, South Korea, India and the Gulf States, mainly in Africa.

“About one-quarter of these investments are for biofuel plantations,” von Braun said. 

In Awash, central Ethiopia, sugar cane cuttings are planted. This territory is included in the government-owned Metahara Sugar Factory’s 20,000 hectare expansion plan for boosting sugar and biofuel production. Photo: Alfredo Bini/Cosmos

China started leasing land for food production in Cuba and Mexico 10 years ago and has extensive holdings in Africa, including pending or attempted deals for millions of hectares in the Democratic Republic of Congo, Zambia, Zimbabwe, Uganda, and Tanzania, with many thousands of Chinese workers brought in to work on these lands, according to the report.

The largest foreign ownership or control of African farmland is in Sudan – in this case a group of Gulf States, including Saudi Arabia. Last year, the United Arab Emirates negotiated several farmland deals with Pakistan. Qatar has agricultural land in Indonesia, the Philippines, Bahrain, Kuwait and Burma.

The huge Korean company Daewoo Logistics Corporation signed a deal to lease 1.3 million hectares in Madagascar to grow maize and oil palm, which reportedly played a role in the political conflicts that led to the overthrow of the government in 2009, the report noted.

“The number of land deals is much higher than the IFPRI numbers. No one is monitoring all the private land deals,” says Devlin Kuyek, a researcher at GRAIN, a Barcelona-based non-governmental organisation dedicated to global agricultural issues.

GRAIN published its own “Land Grab” report six months ago, concluding that rich countries are buying poor countries’ soil fertility, water and sun to ship food and fuel back home, in a kind of neo-colonial dynamic.

Kuyek told Tierramérica that this 21st-century land rush is driven in part by countries that no longer want to be held hostage by the big, multinational food trading companies.

But increasingly the private capital is coming from pension funds, which are staking their bets on farmland as the next profitable commodity to invest in after the collapse of the global stocks and financial sector and continuing weak prices for oil and metals.

“A huge chunk of the Australian cattle industry is now owned by a private equity firm. The two biggest pork producers in China are owned by Goldman Sachs (a private investment firm),” Kuyek said.

As a result, he noted, ranchers and farmers have turned into employees.

But it could be far worse than that for hundreds of millions of small landholders, pastoralists and indigenous people who do not hold formal land titles, because they are at risk of being driven off their land, he said.

Most of African farmland is under local customary land holding, without formal land title, acknowledges IFPRI researcher Meinzen-Dick.

“When outsiders come they don’t recognise those customary land rights. Such rights must be respected,” she told Tierramérica.

IFPRI is calling on the international community to develop a code of conduct that would uphold local peoples’ rights to their land, guarantee transparency, share benefits, foment environmentally sustainable production and ensure local food security.

Von Braun sees great potential in such land deals because they bring badly needed capital to the agricultural sectors of poor countries, contributing to infrastructure and research. “China is creating several research stations in Africa to boost yields in rice and grain,” he said.

Kuyek disagrees: “These investments are not about agricultural development. This is all about making money and shipping food back to home markets.”

Food processing companies and even food retailers are involved in this because they are anxious to ensure “security of supply” as efficiently as possible, says Janice Jiggins, of the International Institute for the Environment and Development, in London. One of the world’s biggest banks, the Netherlands’ Rabobank, is one of the main financiers for these kinds of deals, Jiggins told Tierramérica via e-mail.

The 2009 report from the United Nations Special Rapporteur on Food Sovereignty, Olivier de Scutter, detailed the legal implications of the farmland deals, warning that they completely override existing rights, enshrined in laws, constitutions, and customs, Jiggins wrote.

First published as:  AGRICULTURE: Foreigners Lead Global Land Rush – IPS ipsnews.net.

3 thoughts on “Wealthy Countries and Investors Buying Up Farmland in Poor Countries

  1. is there any reason why land will be left uncultivated when people are hungry and we have people who are willing to invest in millions in food production.,we are providing several hectares of farmland for investors willing to invest to buy land from us for food production

    • In most cases the land is already being used by local people often herders. The second point is that up to half of the land is acquired for biofuels not food. And some of the farmland is being bought by land speculators who are not interested in growing food.

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