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Decision and Policy Analysis Research Area – DAPA

Land Grabbing

The New York Times (NYT) last month published an article discussing the displacement of small farmers in Africa as a result of land grabbing. Since the 2007/08 food crisis, the acquisition of land in developing countries by other nations has been on the rise and in this post I discuss these new developments.

There are two main motivations to buy land in another country. Firstly, private companies can exploit business opportunities and create supply chains catering to their consumers’ needs. Secondly, by buying land in another country, other nations are able to secure their own food security. I will concentrate on the latter as this is what has been hotly debated over the last two years.

The place that has seen the largest investment has been Sub-Saharan Africa (SSA). Leading the investments abroad have been the capital rich Gulf States, which face water and land constraints. China and India follow with the need to feed their burgeoning populations. The green revolutions in these countries were remarkable. However, their environments’ have taken a hit as a result. For example, China has reached physical water scarcity and industrial farming methods have turned 18.1 % of the country’s formerly productive lands into desert. Apart from factors relating to land and water constraints, investments are also driven by lower production costs and climatic conditions for preferred staple crops. Other than maintaining food security, countries are also keen to invest in land for bio-fuels.

The decline of state led spending in rural development makes a valid argument for large scale land acquisitions, as they can bring a number of benefits to resource scarce developing countries: foreign aid for agriculture has dwindled from about 20 percent of all aid in 1980 to about 5 percent now, creating a need for other investment to bolster production.’ Advocates of such investments argue that some of the advantages include; creation of farm and off-farm jobs, improvement of rural infrastructure, development of schools and health services. By far some of the most significant are spill-over effects from access to new agricultural technologies, which can transform regions producing low yields to food hubs. Let us look at Mali for example. Approximately 3million acres along the Niger River and its inland delta are managed by a state-run trust named the Office du Niger. In around 80 years, only 200’000 acres of the area has been irrigated. Therefore, the government considers new investors as a miracle, with even the Abou Sow, the executive director of Office du Niger, stating, “Even if you gave the population there the land, they do not have the means to develop it, nor does the state.”

Benefits aside, large scale land acquisitions have been termed ‘land grabbing’ by populist media and the phenomena is often described as a form of neocolonialism. There are obvious drawbacks to these types of investments but some news articles have had a tendency to over-exaggerate their implications. There is now even an anti-land grabbing website continuously updating all articles on the issue. A closer look at facts on the ground can reflect another picture. Although news articles have helped shed light on land grabbing, the exact details of deals, amount of land purchased and price paid are not very clear and have not been widely documented.

Undoubtedly, problems have arisen with overseas land acquisitions. The impact on food security is one of the most widely talked about. Land acquisitions have taken place in many countries from Cuba, Mexico, Philippines and Pakistan but those in Africa have been the most severely criticized. As domestic production is weak and hunger widespread through SSA, it remains contradictory that countries are making food for other countries: It is ironic that some farms in Ethiopia produce food for other countries when it needs more than $116 million in food aid itself’, says Jose Cendon from Bloomberg.

The other major issue is the displacement of people once the takeovers take place, which the NYT article looks into. According to IFPRI, this issue is exacerbated by problems related to inequalities in bargaining power. Smallholders may not have formal titles to land but often use it under customary tenure agreements. Since, governments formally own farm land, when foreign investors come; the rural poor often get displaced in favour of the investor. However, land acquisitions have not taken place so easily because of considerable bottom-up resistance. In 2009, a South Korean conglomerate was about take over half of Madagascar’s arable land. However, an opposition movement formed, which ended the deal when the president was overthrown. Furthermore, Mali saw angry protests in its capital last month, with people demanding the government to stop selling land to investors.

IFPRI makes a number of suggestions of how the land investments can be made fairer with greater effects for the communities involved. In my opinion, three of the most important are:

  1. Transparency in negotiations- actors driving the deals must involve all those people that are likely to be affected in the negotiation process.
  2. Sharing benefits- local communities should benefit from foreign investment and conditions need to be enforced in a pro-poor context should deals take place.
  3. Commitment to national trade: if domestic food security is at risk, production for local markets must take priority.

Overall, we need to take a balanced approach to large scale land acquisitions and not been drawn into the populist rhetoric that mainstream media portrays. There are both advantages and disadvantages to be found in these investments. To negate the disadvantages, civil society, governments and the private sector need to work towards developing more transparent and fairer deals.

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