JOHANNESBURG, 11 May 2009 (IRIN) — Rich countries and firms are leasing or buying massive tracts of land in developing nations for the production of food or biofuel.
An area equivalent to Germany’s farmed land is at stake, and tens of billions of dollars on offer.
On the plus side, agro-industrial production could develop underused land, and broaden the world’s food production base while providing much needed resources for poor countries.
But is the land really idle and currently unused? Are small-scale farmers going to be “tractored out” in a murky neo-colonial “land grab”?
Farmers and experts in several African countries know all too well the need for higher food production, but the scale and structure of the deals gives rise to concern on many fronts, according to multiple interviews.
The food and fuel prices hikes of 2007 and 2008 and a steadily growing world population raised the immediate and strategic value of food production.
Food-importing countries that lack land and water but are rich in capital, such as the Gulf States, are initiating deals to produce food in developing countries, where land and water are more abundant and production costs much lower.
Vast tracts of land and huge amounts of money are involved: 15 million to 20 million hectares, almost equivalent to the total area under cultivation in Germany, according to analysts at the US-based International Food Policy Research Institute (IFPRI). Investment so far adds up to $20 billion to $30 billion, dwarfing foreign aid budgets for agriculture.
Murky?
Joachim von Braun and Ruth Meinzen-Dick of IFPRI point out in a new policy brief that developing countries with large populations, like China, South Korea, and India, are seeking similar deals, including growing biofuel crops.
The institute warned that there was a “lack of transparency” in many deals, with the amounts involved “often still murky.”
Land is an “emotional issue”, said Theo de Jager, deputy president of Agri SA, the South African farmers’ association. Some of the deals have already begun to ruffle feathers in developing countries, most of which are highly food insecure, and at least one has led to the overthrow of a government.
An April 2009 policy paper from the German NGO Welt Hunger Hilfe says: “States that are dependent on food imports, in particular, are surrendering more and more land to foreign investors while failing to ensure that conditions improve income and food security for their own population. Agricultural investments are rarely made in such a way that they offer the local population a genuine share of the benefits.” The paper also points out the risks of high-level corruption.
The president of the International Federation of Agricultural Producers (IFAP), Ajay Vashee, told IRIN: “Faced with a growing population, if we do not increase our global food production I can foresee another crisis, maybe in another two years.” IFAP, formed in 1946, claims to represent 600 million mostly small-scale farmers, a third of the world’s food-growers.
“We are not against the deals, as they will bring in huge amounts of money for agricultural infrastructure development, besides boosting food production globally, but we must also realize that in most developing countries, such as those in Africa, most small-scale farmers have customary rights and face the threat of being forced off their land,” said Vashee, who farms in Zambia.
IFPRI has called for a code of conduct to be drawn up, modeled on international business laws to prevent corrupt practices in the context of foreign direct investment.
So What’s the Deal?
According to von Braun, the arrangements usually involve governments, either directly or through state-owned entities and public-private partnerships, and the land was usually leased or made available through concessions, but was sometimes bought.
“The size and terms of the contract differ widely — some deals do not involve direct land acquisition, but seek to secure food supplies through contract farming [and investing in] rural and agricultural infrastructure, including irrigation systems and roads — these are the better deals.”
The concept is not new. Von Braun pointed out that China started leasing land for food production in Cuba and Mexico 10 years ago.
However, in its 2008 report on “land grabbing,” GRAIN, a Spain-based NGO that promotes the sustainable management and use of agricultural biodiversity, warned that the “very basis on which to build food sovereignty is simply being bartered away” in the deals.
“These lands will be transformed from smallholdings or forests, or whatever they may be, into large industrial estates connected to far-off markets. Farmers will never be real farmers again, job or no job,” GRAIN cautioned.
Various Gulf States have struck most of the deals in East Africa, which is facing some of the biggest food shortages globally. IFPRI’s von Braun and David Hallam of the UN Food and Agriculture Organization (FAO) told IRIN it was “too early” to assess the impact of the deals on food security and farmers in the lessor countries.
Unease, Resistance, and Protests
Farming and pastoralist communities in the delta of Kenya’s Tana River have reacted strongly to reports of government’s intention to lease a chunk of this rich coastal land to Qatar. Kenya is facing huge food shortages and high prices after a third consecutive year of drought.
Mohammed Mbwana, who farms in the area and is an official of the Shungwaya Welfare Association, a local NGO, said the agreement would displace thousands of locals. At least 150,000 families in farming and pastoralist communities depend on the land in question, said to be part of Kenya’s biggest wetland.
Tana River County councilors have threatened to go to court and block government’s plans to lease the land. The council’s vice-chairman, Gure Golo, told IRIN they were opposed to the project because local communities used the delta for produce and livestock farming.
During drought periods, pastoralists from as far as Garissa, the capital of neighboring North-Eastern Province, and other arid regions, came to the delta in search of pasture and water, he said.
According to media reports, Mozambicans have resisted the settlement of thousands of Chinese agricultural workers on leased land.
In Madagascar, negotiations with the South Korean Daewoo Logistics Corporation to lease 1.3 million hectares to grow maize and oil palms played a role in the political conflict that led to the overthrow of the government earlier this year, the IFPRI brief said.
In Malawi, Chinese investors were allocated land, used by locals for agriculture in the southern town of Balaka, to construct a cotton processing plant. When protests followed, local traditional leaders were taken to neighboring Zambia to see what the Chinese might deliver in terms of development. When they came back they relented and opted to move to another area “because the Chinese would create jobs for their subjects,” a government official told IRIN.
Victor Mhone of the Civil Society Agriculture Network (CISANET), a grouping of individuals and NGOS in Malawi, said: “What we need as a country is to improve on food production, and that can be done if we empower local farmers by giving them the best land for cultivation. Foreign companies are here to make profits and there is little that we can benefit from, whatever they will be growing here.”
Sudan, which has received some of the biggest foreign investments in agriculture in Africa, dismissed notions of the emergence of a new form of colonialism.
Abdeldafi Fadlalla Ali, the Federal Agriculture Commissioner at the Sudanese Ministry of Investment, told IRIN that they always ensured local interests were taken care of in the deals — the produce was sold locally and local people “become the highest beneficiaries.”
Sudan, Ali said, has 84 million hectares of arable land, of which only 20 percent is under cultivation, and had registered 75 deals worth $3.5 billion in eight years. Almost $930 million of this was already invested. Eight countries, including Saudi Arabia, United Arab Emirates, Kuwait, Egypt, Jordan, China, and India are involved.
Ali reasoned that in the face of limited domestic capital, foreign investment seemed to be a “better strategy” to achieve agricultural targets, and expected that produce from the deals would be exported in future.
Millions of Sudanese require food aid, according to the UN. However, Ali claimed food insecurity was more related to transport and marketing than absolute production shortfalls.
Safeguards
IFPRI recommends transparency, respect for existing land rights, sharing of benefits, environmental sustainability, and adherence to national trade policies as key elements to be incorporated in a proposed code of conduct. This could include foreign investors being denied the right to export during an acute national food crisis.
Farmers and think-tanks talk about turning this “opportunity” into a “win-win” situation. While the agriculture sector in most poor countries grapples with the impact of the economic slowdown, deals for arable land continue to prove attractive.
Rwanda recently announced a new program to identify “unexploited” arable land for foreign investors. On the other hand, the Republic of Congo announced it would lease 10 million hectares of farmland to individual foreign farmers to boost its food security.
“This is a better option — leasing out land to farmers who will transfer skills to local farmers, boost the country’s production, and care about the land,” said Agri SA’s de Jager. South African farmers have helped improve production in Zambia, Botswana, Mozambique, and Nigeria, among other countries he said.
But IFAP’s Vashee pointed out that farmers cannot bring in the huge investment needed to build or rebuild infrastructure.
IFPRI is working with the African Union to develop guidelines on how to negotiate with foreign investors, which will be presented to African leaders for ratification at a summit in July.
This article was first published by IRIN on 11 May 2009.