Recipes against grabbing foreign land

Pepo Hofstetter, Alliance Sud

It was wealthy Arab oil states and emerging economies such as China and South Korea that were initially the driving forces. To secure their own supplies of basic foodstuffs and plant-based commodities, they began buying up or securing long-term leases on tens of thousands of acres in Africa and Asia, in countries of the former Soviet Union and in Latin America. Since the onset of the financial crisis, more and more financial funds have discovered farmlands as a very promising object of speculation and investment. In October, the specialized non-governmental organization Grain listed 140 hedge funds, private equity groups and other financial agencies that are staking their bets on rising prices and returns, given the predictable shortage of food, water and energy sources. These include Swiss institutions such as UBS Agrivest and the PF (LUX) Agriculture Fund set up in 2009 by the Geneva private bank Pictet (see page xy).

Sorghum from Sudan for camels in the Gulf

The (mostly authoritarian) governments of the target countries are welcoming investors with open arms, despite the often precarious food situation in their own country. They are hoping for the modernization of their agriculture, the expansion of rural infrastructure, foreign exchange and jobs. It matters little that what is designated as «undeveloped» land is passing to investors for 50 or 99 years, despite often being used by small farmers, gatherers and livestock farmers. Formal land titles are something of a rarity in African countries, where the land is mostly state-owned.

Three examples:
•    In the Sudan, the United Nations World Food Programme (WFP) is carrying out its largest aid programme (USD 635 million in 2008). At the same time, the Sudanese government has leased 1.5 million ha of prime farmland for 99 years to various countries and firms. That land is now being used to grow wheat for Saudi Arabia, tomatoes for the Jordanian army and sorghum (a staple in Sudan) for camels in the United Arab Emirates.
•    Ethiopia is the WFP's second best client (USD 287 million in 2008). Yet the government wants to lease altogether 3 million ha of land to states and foreign companies by 2013. By way of incentives it is offering low land and water prices, tax exemptions as well as unlimited scope to export products and repatriate profits. Misereor and the Heinrich Böll Foundation observe in a country study that: «For a country like Ethiopia where more than 45% of the total population are food insecure and one of the main reasons is the low availability of fertile land […] this development seems to drive rural development in the complete wrong direction.»
•    In Mali, one-third of children under five years are malnourished. Owing to advancing desertification, population growth and competition from foreign investors, more and more farming families are suffering from land shortages. In 2008, a Libyan state investment fund secured 100,000 ha of irrigable land (Malybia Project) from the Office du Niger (inner Niger Delta). It will be producing hybrid rice as well as meat and tomatoes for consumption in Libya. The Dutch development organization Oxfam Novib reports that 150 farming families were resettled (but only 58 compensated), many women in neighbouring villages lost their vegetable plots, and transit routes used by livestock farmers were cut. The Libyans contracted a Chinese firm to build a huge irrigation canal. Neither the regional authorities nor the population were consulted. The deal was signed by the two Heads of State.

World Bank betting on «win-win» outcome

Two years ago the World Agricultural Council published a World Agriculture Report commissioned by various United Nations organizations. The study concludes that to effectively combat hunger and secure long-term food supplies, a radical change is needed in international agricultural policy. There has to be a shift away from huge industrial projects towards more small-scale farming, which is just as productive but more socially oriented and environment-friendly.
«Land grabbing», as the acquisition of lands by states and companies is often called, leads in the diametrically opposite direction. Investors are banking on large acreages that can be exploited industrially. Despite this, multilateral organizations such as the World Bank and United Nations Food and Agriculture Organization (FAO), as well as donor countries speak of possible «win-win situations». If properly implemented, they claim, these urgently needed investments could help boost productivity, develop rural infrastructure, create jobs and meet the growing demand for food. Consequently, World Bank Group member International Finance Corporation (IFC), which specializes in promoting private investment, has massively expanded its Global Agribusiness Department and is pressing governments to make investor-friendly reforms.
The World Bank is currently working together with FAO, the United Nations Conference on Trade and Development (UNCTAD), the International Fund for Agricultural Development (IFAD) and Japan to draw up guidelines for «responsible investors». They are intended to regulate matters like transparency, respect for land rights, the inclusion of local populations and the fair distribution of profits. At the urging of the world's largest net food importer Japan, the 2009 L'Aquila G8 Summit too threw its weight behind the project. The Japanese Foreign Minister’s view, however, is that the guidelines should be voluntary so as not to scare investors.

Strengthening grassroots organizations

The reaction from rural grassroots organizations and development NGOs ranges from scepticism to rejection. Uwe Hoering, who has intimate knowledge of World Bank agricultural policy, is convinced that «Voluntary guidelines and appeals for good behaviour will not be enough to prevent countless smallholdings from having to make way for investors.» What is needed is not investment in «mega-farms by a few mega-owners», but «investment in food security, in the countless local markets and in those 4 billion people who produce the bulk of the food.» At the FAO World Food Summit in Rome in November 2009, farmers' organizations (including Via Campesina) and NGOs issued a joint declaration calling for the rejection of massive investment projects and the strengthening of smallholder structures and the rights of rural populations.
In so doing they are supporting a process launched by the FAO in 2006 and are taking a broader view of the problem. The goal is to draw up guidelines for land ownership and leases and natural resources, central to which will be the rights of small and landless farmers as well as the food security of the country concerned. Switzerland too supports this initiative (see interview on page XY). This year, the FAO and IPC – an international NGO network for food security – will jointly be organizing nine regional meetings to discuss the content and scope of these guidelines.
For Miges Bauman, Head of Development Policy at Bread for All, it is important at the same time to support local grassroots organizations that are campaigning against land grabbing. Bread for All and Helvetas are setting a good example by concretely supporting the Synergie paysanne farmers union (SYNPA), which advocates for poor farmers and against large-scale biofuel cultivation in Benin. Swiss Catholic Lenten Fund supports grassroots organizations in the Philippines that are defending themselves against land grabbing.

Pepo Hofstetter, Alliance Sud
Further information:
Interview with SDC
Grain
International Land Coalition

Article published in: Alliance Sud News No. 63, Spring 2010