The pace of land-grabbing in the developing world accelerated dramatically after the 2008 financial crisis. Countries panicked about rising food prices and expanded beyond their own borders, and financial companies spread their assets to reduce exposure to brittle housing markets. Cheap land in developing countries looked like a secure investment.
But the consequences have been catastrophic for the peasants, fisherfolk and small-scale farmers dispossessed of ancestral lands. Repeated promises of benefits for local people have been exposed as myths – the type of self-serving lies that have long emanated from the financial sector.
Kirtana Chandrasekaran, Friends of the Earth International’s Food Sovereignty coordinator, is one of the most vociferous opponents of land grabs.
Chandrasekaran said no report had ever found any benefit for local farmers. This was even true for the September 2010 World Bank Rising Global Interest in Farmland report; although the Bank heavily promotes the potential advantages of foreign direct investment.
The World Bank report showed that over 46 million hectares in large-scale farmland acquisitions, or negotiation, were announced between October 2008 and August 2009 alone, with two-thirds concentrated in Sub-Saharan Africa. That compared with an average expansion rate of 4 million hectares a year in the decade leading up to 2008. A more recent estimate, based on evidence presented in April 2011 at an international conference convened by the Land Deal Politics Initiative, produced a figure of over 80 million hectares.
The increasing involvement of the Western financial sector in the land grabs was exposed in a recent report from Friends of the Earth Europe - Farming Money: How European Banks and Private Finance Profit from Food Speculation and Land Grabs.
The report analysed the activities of 29 European financial institutions, including such giants as Deutsche Bank, Barclays, RBS, Allianz, BNP Paribas, AXA, HSBC, Generali, Unicredit and Credit Agricole. It showed they were all involved in the direct, or indirect, financing of land grabbing, which was especially acute in countries such as Tanzania, Ethiopia, Liberia and Uganda. The FoE report estimated that by 2017 institutional investors will increase their agricultural investment portfolios by 500 percent.
A closer look at the types of crops being grown on the grabbed land exposes the blatant lie that there will be benefits for local people. The Land Matrix – which is co-run by International Land Coalition - has tracked closely all the land grabs made since 2000. Their analysis shows the vast majority of crops are exported.
The top three crops on the purchased land are palm oil (11.9 million hectares), jatropha (9m) and maize (4.9m), all used to make biofuels. The other major crops are rice, eucalyptus, sugarcane, trees, wheat, papaya and rubber. Only rice and maize are staple foods in Africa.
A 2012 report by Oxfam said that two thirds of investors in agricultural lands in developing countries exported everything they produce. Nearly 60 percent of crops are used for biofuels, yet the vast majority of deals are in countries with serious hunger problems.
The mounting evidence of misuse of land has caused Ruth Meinzen-Dick, a researcher at the International Food Policy Research Institute in Washington, to change her perspective on the financial companies. In 2009, when she co-authored a report into land grabbing, she was willing to give them the benefit of the doubt. But not any more.
“In 2009, we wrote a balanced brief saying there was evidence of negative effects but there were potential benefits. Since then, a number of reports and two international conferences have shown a lot of negative effects.”
“I’ve been at meetings where the investors are still saying good things can happen, but when I ask them to let someone study those effects as there will be lessons for others, in every case I have been turned down, and so have my colleagues,” she said.
The “win-win” myth has many influential supporters. The most powerful is the World Bank, which has tripled its support for land projects to US$6-8 billion a year in the last decade. Since 2008 however, 21 formal complaints have been brought by communities affected by World Bank investments, in which they claim violation of land rights, according to Oxfam research.
In 2010, the World Bank co-created a set of seven Principles for Responsible Agricultural Investment that Respect Rights, Livelihoods and Resources (RAI). For investments to do no harm, they had to: 1) Respect land and resource rights; 2) Ensure food security; 3) Ensure transparency, good governance and a proper enabling environment; 4) Consultation and participation; 5) Responsible agro-enterprise investing; 6) Social sustainability and 7) environmental sustainability.
But the principles have been dismissed as a smokescreen for aggressive neo-liberal impulses. Within months of their formulation, 130 organisations, including alliances of farmers, pastoralists and fisherfolk, denounced the RAI initiative. They dismissed it as a move to legitimise land-grabbing.
One of the most damning statements came from the international non-governmental organisation Grain, which was the first campaign group to speak out about land grabbing. Grain said:
“The push for RAI is about creating an illusion that by following a set of standards, large-scale land acquisitions can proceed without disastrous consequences to peoples, communities, ecosystems and the climate. This is false and misleading. RAI is an attempt to cover up power imbalances so that land grabbers and state authorities can get what they want. Farmers, pastoralists and fisherfolk, after all, are not asking for their lands to be sold off, or leased away.
“Land grabbing forecloses vast stretches of lands and ecosystems for current and future use by peasants, indigenous peoples, fisherfolk and nomads, thus seriously jeopardising their rights to food and livelihood security. It captures whatever water resources exist on, below and around these lands, resulting in the de facto privatisation of water.
Months after it announced the seven principles, the World Bank’s own report, Rising Global Interest in Farmland, admitted they were hardly ever followed.
“These large land acquisitions can come at a high cost. The veil of secrecy that often surrounds these land deals must be lifted so poor people don’t ultimately pay the heavy price of losing their land,” said World Bank Managing Director, Ngozi Okonjo-Iweala.
Yet, the World Bank’s ongoing support for land grabbing is not in doubt. For example, the International Fund for Agricultural Development (IFAD) accused the Bank of being involved in the massive expansion of palm oil plantations in Uganda.
IFAD said the Bank helped to design the project, gave technical advice and played a key role in facilitating negotiations between the Government and private investor BIDCO. IFAD said “the Bank was able to use its influence to push forward negotiations on the selection of the private investor and it performed an important mediating role”.
American multi-billionaire Bill Gates is trapped inside the same exploitative neo-liberal world view as the World Bank, according to Chandrasekaran. The Gates Foundation’s brainchild, AGRA (Alliance for a Green Revolution in Africa), is controlled by donors representing the interests of biotechnology corporations. They favour technological farming solutions, including patented seeds, fertilizers and lobbying for genetically modified crops. The result is profit-based, corporate-led farming rather than policies that benefit the local community.
“His budget runs to millions of dollars which is larger than virtually every African country,” said Chandrasekaran. “Gates has so much power that his methods are very effective and very damaging.”
Friends of the Earth has detailed some of the worst recent examples of land grabbing. In Liberia, for example, a quarter of the country, including vast tracts of fertile land, has been handed to palm oil, rubber and logging companies. Between 2009 and 2010, the Liberian Government allocated more than a million acres to transnational palm oil producers Sime Darby and Golden Veroleum Liberia without the consent of those living on and using the land.
Similarly, in Ethiopia, more than 3.6 million hectares of land has been allocated to foreign investors since 2008. In the Gambela region, the Indian company Karuturi Global has been sold 300,000 hectares of land, depriving indigenous people of access to water, fishing and grazing grounds.
Also in Ethiopia, the controversial Gibe III dam is being constructed on the Omo River. The dam is central to the Government’s project to lease out huge swathes of tribal land to state and private enterprises, including international investors from Europe and Asia, to grow cotton, sugar, and palm oil and jatropha for biofuels. The dam will regulate the flow of the Omo and end the natural flood, ensuring irrigation canals provide constant water to these plantations. But it will also destroy the natural supplies of water that allow so many tribes to cultivate their crops.
In each of these examples, the same picture emerges of autocratic governments getting in to bed with big business. There are no consultations with indigenous communities, nor is there any attempt to obtain tribal peoples’ free, informed and prior consent. Protests are met with brutality. Dozens of individuals from the Ethiopian tribes of Bodi, Mursi and Suri have been jailed for protesting against the dam.
Similar examples can be found throughout the developing world. According to Land Matrix, some of the worst afflicted countries are Indonesia, Malaysia, India, Brazil, the Philippines, Sudan, Ethiopia, Madagascar, Mozambique and Argentina. The biggest investor countries include Indonesia, Malaysia and India themselves, as well as the US, the UK, UAE, China, Australia South Africa and Canada.
“We support the UN food reports which say we must keep subsistence farmers as they are impossible to replace. Small-scale farmers can recycle resources, produce food cheaply and focus on feeding themselves and the local population rather than exporting to the West.”
Chandrasekaran admitted, however, that is was difficult to battle against the globalised financial system.
“It’s very difficult as there’s no political will and so much vested interest against it. But there are a lot of social movements fighting the land grabs. La Via Campesina, or The International Peasant Movement, is one of the biggest social movements in the world. They have been calling for a different policy framework based on food sovereignty rather than the voluntary principles of the World Bank,” she said.
Related: Capitalistic Farming
The principles of The Right to Agrarian reform for Food Sovereignty Campaign sets out to prioritize the rights of small-scale farmers and farm workers to agrarian reform and food sovereignty.
“It’s not about saying no to trade, but changing where the focus lies,” Chandrasekaran said. “The new principles have been hugely successful. They have been taken up in the constitutions of a number of countries – and been debated at the Committee on World Food Security. Increasingly, there is a big movement against land grabbing. “