MAC/20: Mines and Communities

London Calling investigates some capital "land grab" connections

Published by MAC on 2009-07-16

A land grab, motivated by speculators, is threatening several African countries, as well as others in Latin America and Asia.

United Nations' estimates are that some 20 million hectares is currently - or about to be - under lease to foreign companies operating in Sudan, Tanzania, Cameroon, Ethiopia, Madagascar, Ghana, Kenya and Zambia.

Although some agro-industrial companies are headquartered in Europe, others come from China, Libya, the Gulf states and Israel.

According to a May 2009 report by the London-based International Institute for Environment and Development [IIED], both the motives for, and terms of, these acquisitions vary widely.

Nonetheless, says the report, while "concerns about food and energy security are key drivers ... other factors such as business opportunities, demand for agricultural commodities for industry, and recipient country agency are also at play ... [C]ontrary to widespread perceptions there is very little "empty" land as most remaining suitable land is already under use or claim, often by local people."

The report goes on to point out that: "Lands that only a short time ago seemed of little outside interest are now being sought by international investors." What's more, those investors have been looking at non-food growing opportunities - and there are several mineral and mining companies among them. In March this year, Madagascar's government axed a proposed deal with steel and engineering conglomerate, Daewoo, which envisaged no less than 1.3 million hectares of land being sequestered by the south Korean company to grow commercial maize and other crops in a biodiversity-rich region [Eco-portal, 19 June 2009].

(This isn't the only time in recent months that Daewoo has come under heavy criticism: last summer it was trounced for backing Burma's vicious military regime, when trying to access the country's gold.)

Lonrho plc, the London-based mining and industrial conglomerate, operates in several sub-Saharan states and is headed by controversial entrepreneur, David Lenigas.

According to the company, Lonrho now plans to acquire 25,000 acres of "rehabilitated" rice paddy in Angola in order to grow crops "initially to serve the domestic sector".

Note the term "initially" - it's a potentially major get-out clause.

Lenigas also has his eyes on similar takeovers in Malawai and Mali.

In October 2007, the London-based company, CAMEC - best known for its activities in the DR Congo - signed a US$ 510 million con tract with the Government of Mozambique, under which it would obtain 20,000 hectares of territory on which to promote sugar cane for ethanol. See: http://www.minesandcommunities.org//article.php?a=8261

Seven months later, Ghana's Chamber of Commerce concluded an agreement with an outfit called BioDiesel Ltd, for a "biodiesel cultivation and refining programme to enable Ghana to become a major source of biofuel in the near future", using mined-out land. See: http://www.minesandcommunities.org//article.php?a=8580

"Frankly nuts"!

While the African continent seems a prime target of such "investors" similar projects are on the drawing board elsewhere in the world. For example, London's Pacific Bio-Fields Holdings Plc says it recently received the go-ahead to plant coconut palms on 400,000 hectares in Ilocos, the Philippines,to churn out bio diesel for the Japanese auto market. This UK-registered holding company claims that: "Competition with food is not an issue for this project ... where fields are largely abandoned after once-dominant tobacco production receded."

But, comments Geoff Nettleton of Philippine Indigenous Peoples Links (PIPLinks):

"Shortage of agricultural land is a key issue in the Philippines and especially in the Ilocos. The country is traditionally the largest producer of coconut in the world. But the industry has been, like tobacco, in severe decline for years So, converting tobacco land into coconut, in a truly densely populated region, with generations of out migration as a result, is frankly "nuts." Public land is also a "flexible" concept in the Philippines. If it is used here to imply that so much productive agricultural land is not occupied and needed for food production, that clearly is evil nonsense."

Gambling with African futures

Another initiative, aimed at exploiting African land grab "opportunities" also comes out of the UK capital, where. Emergent Asset Management, backed by the Toronto Dominion Bank, partnered with Grainvest, has set up the Emergent Africa Land Fund, with offices in the UK, Kenya, the US and Tanzania.

While Emergent Asset Management boasts of its corporate social responsibility to African citizens, the avowed purpose of this Fund is to "exploit the surge in agricultural opportunities across sub-Saharan Africa."

Grainvest itself is a South African brokerage and trading company which deals in farming futures and specialises in commodities derivative - in other words, betting on the rise or fall in market prices.

Confirming this as a major purpose, the Fund recently entered a partnership with the founder (unnamed) of a London-based hedge fund "incubator", (sic), in order "to capitalise on the developing HF [Hedge Fund] market."

Potash footnote:

The MAC website has pointed out for some months that, underpinning much of this land speculation is the fertiliser industry. The Potash Corp of Saskatchewan - the world's biggest potash miner - continues to warn of an impending global food crisis should states like India and China don't purchase enough of its products. See: http://www.minesandcommunities.org/article.php?a=9258

That equation is, at the very least, simplistic - if not downright deceptive. Much potash production is destined to cropping biofuels, aimed not at the growing of food but the purported requirements of a transportation sector desperately striving to square its contribution to global greenhouse gas emissions with the promotion of more and more automobiles jamming the world's roads.

Rio Tinto recently sold its phosphates project in Argentina to Vale of Brazil, which may use the output for just such a purpose. Ironically, a spokesperson for Agro Terra - a Dublin-based firm which has large scale land holdings in Argentina (and a private equity subsidiary, specialising in "unlisted investment and opportunistic listed investments") says that the country doesn't require potash, since its soils are already fertile enough.

For further regular and helpful information please go to: www.farmlandgrab.org

 

Food Security Fears Drive Fund Farm Investments

PlanetArk

3 July 2009

LONDON - Funds are increasingly looking to invest in farmland as a rising global population and changing diets lead to growing demand for food crops. But the emergence of the asset class is not without pitfalls with the provision of food always highly political and a tentative global economic recovery potentially threatened by the H1N1 flu pandemic, fund managers said.

Some international development organizations have expressed concerns that farmers' rights in developing nations could be compromised by what some see as a "land grab."

"The case for farmland can be summed up in two words as far as we are concerned, food security," Susan Payne, chief executive of Emergent Asset Management, said at three-day World Agri Invest Congress which concluded on Thursday.

Payne said there were great financial rewards from investing in farmland, citing factors such as a shrinking supply of arable land due to climate change, increased production of biofuels and the rapid rise in the global population.

Meat consumption in China is also on the rise, further straining available resources. It takes several pounds of grain to produce a pound of meat. Payne said Chinese meat consumption had risen to about 40 kg per capita from about 10 kg in the 1980s.

Craig Swanger of Macquarie Agricultural Funds Management said food security also had a flip-side and any government "lock-down" could deal a severe blow to the sector.

There were food riots last year as prices rose across the world. Several governments imposed export controls in a bid to dampen local prices and ensure there were sufficient supplies.

"If the sector hasn't established credibility as an asset class by that stage (the lock-down) it could kill it before it gets started," Swanger said.

Hot Issue

The transfer of hundreds of thousands of hectares of land in Africa, Latin America, Central Asia and Southeast Asia has raised concerns in the international community.

"Lands that only a short time ago seemed of little outside interest are now being sought by international investors," a recent report released by several international groups including the United Nations Food and Agriculture Organization, said.

"This is rightly a hot issue because land is so central of identity, livelihoods and food security," it added, noting rising agricultural commodity prices were making the acquisition of land an increasingly attractive option.

Fund managers at the conference, asked to opt for the most attractive areas to invest, mainly targeted regions with abundant resources of water. "Water is absolutely key for farming investments," Payne said, adding countries such as India and China would face growing shortages of water over the next 10 years.

Clear land title was also seen as vital with fund managers reluctant to invest in countries like Ukraine where they can only purchase limited term leases.

African Attraction

Payne said her preference was to invest in Africa with countries such as Zambia having abundant water resources.

"It (Africa) is the lowest hanging fruit, no question for me," Payne said. Mark McLornan, founder of Agro Terra, also said Africa could be attractive, although investments could face a "long, bumpy road." His company is heavily invested in Argentina.

McLornan said Argentina's advantages included soils that did not need potash, an expensive fertilizer, and there was also accurate data on rainfall dating back about 30 years.

"I know I can increase yields through accurate data," he said.

Swanger recommended investing in Australia, particularly its dairy sector, among developed countries while for a more transformational opportunity his tips included Kazakhstan and parts of Brazil.

(Editing by Sue Thomas)


Fears over new land deal

Reuters

4 July 2009

Concern is mounting in Kenya that the government has leased a big slice of agricultural land to Qatari foreign investors to produce food for export. Land rights activists are questioning the rationale of such a move, claiming the land could be used for domestic food production. The activists say that they are privy to information that the government has leased 40,000 hectares of land to the Qatari administration for cultivation of fruits and vegetables for export. The area in question is fertile land, with abundant fresh water in the Tana River delta, about 150 kilometres north of Mombasa. In exchange, the activists allege the Qatar government will construct a 2.5 billion dollar port in Lamu, which will become the country's second largest after Mombasa.

Investment... but at what price?

Some may interpret the move as one to attract vital foreign investment in line with part of Kenya's development strategy, known as Vision 2030. The port deal would be a valuable stimulus to development in a part of the country that has lagged behind. But activists are arguing that the land has potential to boost the country's declining food reserves. "We have no problem if the food was being produced for Kenya. Isn't it the height of recklessness in leadership for the government to give out land to Qatar when Kenya is food insecure and we are literally being fed? Where is the logic?" asked Odenda Lumumba, coordinator of the Kenya Land Alliance (KLA), an umbrella body of civil society groups advocating for land rights policies.

A third of Kenya's population of 34 million is facing starvation. Earlier this year, President Mwai Kibaki declared the situation a national disaster, appealing for food relief from well wishers including international donors.

Proponents of the proposed land leasing move, some in government, have defended it, saying it will create jobs and spur development, but there are fears that the local population might be displaced from the area they have lived on for years. Up to 150,000 families in farming and pastoralist communities there depend on the land which is held in trust for the people of Tana River delta by the government, according to the KLA.

Resistance

"The land has always been used by the pastoralists for grazing. They have been resisting the move because they fear they might be denied a place to graze their animals and to farm," Lumumba added.

The local community, led by the Tana River County Council, has threatened to take the matter to court, claiming the people were not consulted.

"This is land held in trust of the people of that region by the government. In giving out the land, have you consulted them? By leasing out the land which they use to feed their animals, you are making them vulnerable to drought," says Nixon Otieno, the head of policy and governance for ActionAid.

Similar concerns have been expressed by analysts who state that the local population may not have power to bargain to their advantage.

"Smallholders who are being displaced from their land cannot effectively negotiate terms favourable to them when dealing with such powerful national and international actors, nor can they enforce agreements if the foreign investor fails to provide promised jobs or local facilities," write Joachim von Braun and Ruth Meinzen-Dick in a study released in April, "'Land grabbing' by Foreign Investors in Developing Countries". The two researchers from the Washington-based International Food Policy Research Institute assert that unequal power relations in land acquisition deals places the livelihoods of the poor at risk.

Meinzen-Dick told IPS that concerns over people being displaced were justified, especially "in Africa, where much of the land is held under customary tenure. That means that, officially, the government is the "owner" of the land, and they may not always consult with or get the consent of people who will be affected."

Not a done deal

Allegations of the Kenyan authorities leasing land to Qatari emerged following President Mwai Kibaki's visit to Doha in November 2008, where he attended a development conference.

But Isaiah Kabira, head of the Presidential Press Service has dismissed the allegations of a land-leasing deal. "This was just a proposal, nothing has been signed yet," he told IPS, adding, "This plan is in the initial stage, and it is the first time the matter was being discussed by the two leaders."

According to Kabira, the matter is still under discussion, and details have not been finalised.

In an interview with IPS, Dorothy Angote, permanent secretary in the Ministry of Lands revealed that communication about leasing the land had not been passed on to her. "To date I have not received any official request or communication to process any lease of land to the Qatari government. I have not seen any document of any nature on any request for any land for the Qatari government. I will be happy to share such information," she stated.

Previous problems

It is not only the proposed deal to lease land in the Tana River Delta that has raised eyebrows. In 2004, Dominion Farms Limited, a subsidiary of Dominion Group of Companies, based in the US, was leased about 2,300 hectares of land which is part of the Yala Swamp, which covers an area approximately 21,800 hectares.

Despite a Memorandum of Understanding signed between the firm, the local council and the ministry of lands stipulating that the company would confine itself to the 2,300 hectares, the firm has since expanded its activities and is reportedly using 65 percent of the swamp's total area to conduct agricultural activities.

The deal, which granted the company a 25-year lease has seen community land submerged by water due to the hydro electric generation plant constructed by the company on the River Yala, according to community representatives. This has resulted into people's homes and farms being flooded, and the loss livestock. The representatives allege that over 500 families are facing forced eviction by the company which seeks to expand its activities.

But the government has dismissed such allegations saying it is not aware of any complaints from communities in the Yala River area. Besides, Angote claims that the issue is a private matter where the firm entered into deals with private land owners and therefore the question of the government being involved does not arise.

Guidelines needed

Such scenarios, analysts contend, call for an investment code that would clearly state the procedures that a foreign investor should follow and penalties to be taken in case investments affect local populations. The current investment code that came into force in 2005 has been criticised for failing to adhere to these specifications.

"Most investors have found that as a loophole and as they come in, they just engage very powerful politicians in the negotiations and very soon you find activities on the ground without considering the impact on the locals," noted Otieno.

These concerns come at a time when a National Land Policy, the first in the country, is in the pipeline. The document was approved by the cabinet June 25, after which it is expected to be discussed and finally adopted by Parliament. The instrument, among other things, gives guidance on how foreigners can access land, and ensures that land use by foreign investors complies with environmental standards. In addition, it ensures that land use benefits first and foremost local citizens.

Transparency issues will also be addressed. "The policy will remove powers of land allocation from the Executive and its cronies, making the process more transparent because another agency - the National Land Commission - will now perform that duty," Lumumba stated.

With these deals, Kenya joins the growing number of developing countries that are granting their land to rich nations seeking to boost their food security following the enduring effects of the 2007-2008 food price crises.

Similar deals have been reached elsewhere in Madagascar, Ethiopia, Sudan, Ghana and Mali, where land ranging from 800,000 to 160,000 hectares in these countries has been allocated to foreign companies, according to a 2009 study jointly by the International Fund for Agricultural Development, Food and Agriculture Organisation, and the International Institute for Environment and Development. © Thomson Reuters 2009 All rights reserved


Fears for the world's poor countries as the rich grab land to grow food

John Vidal, Environment Editor,

The Guardian

4 July 2009

• UN sounds warning after 30m hectares bought up
• G8 leaders to discuss 'neo-colonialism'

The acquisition of farmland from the world's poor by rich countries and international corporations is accelerating at an alarming rate, with an area half the size of Europe's farmland targeted in the last six months, reports from UN officials and agriculture experts say. New reports from the UN and analysts in India, Washington and London estimate that at least 30m hectares is being acquired to grow food for countries such as China and the Gulf states who cannot produce enough or their populations. According to the UN, the trend is accelerating and could severely impair the ability of poor countries to feed themselves.

Today it emerged that world leaders are to discuss what is being described as "land grabbing" or "neo-colonialism" at the G8 meeting next week. A spokesman for Japan's ministry of foreign affairs confirmed that it would raise the issue: "We feel there should be a code of conduct for investment in farmland that will be a win-win situation for both producing and consuming countries," he said.

Olivier De Schutter, special envoy for food at the UN Office of the High Commissioner for Human Rights, said: "[The trend] is accelerating quickly. All countries observe each other and when one sees others buying land it does the same." The UN's food and agricultural organisation and other analysts estimate that nearly 20m hectares (50m acres) of farmland - an area roughly half the size of all arable land in Europe - has been sold or has been negotiated for sale or lease in the last six months. Around 10m hectares was bought last year.

The land grab is being blamed on wealthy countries with concerns about food security. Some of the largest deals include South Korea's acquisition of 700,000ha in Sudan, and Saudi Arabia's purchase of 500,000ha in Tanzania. The Democratic Republic of the Congo expects to shortly conclude an 8m-hectare deal with a group of South African businesses to grow maize and soya beans as well as poultry and dairy farming. India has lent money to 80 companies to buy 350,000ha in Africa. At least six countries are known to have bought large landholdings in Sudan, one of the least food-secure countries in the world. Other countries that have acquired land in the last year include the Gulf states, Sweden, China and Libya.

Those targeted include not only fertile countries such as Brazil, Russia and Ukraine, but also poor countries like Cameroon, Ethiopia, Madagascar, and Zambia. De Schutter said that after the food crisis of 2008, many countries found food imports hit their balance of payments, "so now they want to insure themselves".

"This is speculation, betting on future prices. What we see now is that countries have lost trust in the international market. We know volatility will increase in the next few years. Land prices will continue to rise. Many deals are even now being negotiated. Not all are complete yet." He said that about one-fifth of the land deals were expected to grow biofuel crops. "But it is impossible to know with certainty because declarations are not made as to what crops will be grown," he said.

Some of the world's largest food, financial and car companies have invested in land.

Alpcot Agro of Sweden bought 120,000ha in Russia, South Korea's Hyundai has paid $6.5m (£4m) for a majority stake in Khorol Zerno, which owns 10,000ha in Eastern Siberia, while Morgan Stanley has bought 40,000ha in Ukraine.

Last year South Korea's Daewoo signed a 99-year lease for 1.3m hectares of agricultural land in Madagascar.

Devinder Sharma, analyst with the Forum for Biotechnology and Food Security in India, predicted civil unrest.

"Outsourcing food production will ensure food security for investing countries but would leave behind a trail of hunger, starvation and food scarcities for local populations," he said. "The environmental tab of highly intensive farming - devastated soils, dry aquifer, and ruined ecology from chemical infestation - will be left for the host country to pick up."

In Madagascar, the Daewoo agreement was seen as a factor in the subsequent uprising that led to the ousting of the president, Marc Ravalomanana. His replacement, Andry Rajoelina, immediately moved to repeal the deal.

Concern is mounting because much of the land has been targeted for its good water supplies and proximity to ports. According to a report last month by the London-based International Institute for Environment and Development, the land deals "create risks and opportunities".

"Increased investment may bring benefits such as GDP growth and improved government revenues, and may create opportunities for economic development and livelihood improvement. But they may result in local people losing access to the resources on which they depend for their food security - particularly as some key recipient countries are themselves faced with food security challenges", said the authors.

According to a US-based thinktank, the International Food Policy Research Institute, nearly $20bn to $30bn a year is being spent by rich countries on land in developing countries.


Food crisis and the global land grab

Governments and corporations are buying up farmland in other countries to grow their own food - or simply to make money

The Telegraph

28 June 2009

By Dean Nelson in New Delhi

Indian farming companies have bought hundreds of thousands of hectares in Ethiopia, Kenya, Madagascar, Senegal and Mozambique, where they are growing rice, sugar cane, maize and lentils for their own domestic market back in India.

Its government has given soft loans as aid to support the overseas ventures in what has been described as a challenge to China and Saudi Arabia in the new scramble for Africa. China, South Korea, and a several

Arab countries have led the way in creating new African mega-farms to outsource domestic food production and use cheaper labour.

Critics have described the development as modern "piracy" and "land grabbing" from countries that have in the past been blighted by famine and severe food shortages.

South Korea has bought just under 700,000 hectares in Sudan, while Saudi Arabia has signed a deal for 500,000 hectares in Tanzania.

India is now catching up fast with its government offering financial incentives for companies to produce food in Ethiopia and other African countries. Pulses, cooking oils and maize are in short supply in India.

More than 80 Indian companies have invested an estimated £1.5 billion in buying huge plantations in Ethiopia. The largest among them is Karuturi Global, one of the world's largest producers of cut roses. It has signed deals for just under 350,000 hectares to create what it claims is the world's largest agricultural land-bank. The Bangalore-based company, which has also bought farm land in Kenya, is growing sugar cane, palm oil, rice and vegetables.

Indian farming is dominated by small, family-run holdings, bullock cart transport, and legions of middlemen. The slow, cumbersome system is cited as the main reason why a large proportion of Indian produce rots before it ever reaches the market - the annual loss is valued at up to £6 billion.

So Indian companies see in Africa the possibility to build more efficient and far larger agricultural operations. This is an separate motivation from that of many Arab countries that buy African land to produce food that their homelands cannot.

Raju Poosapati, Vice President of India's Yes Bank, which advises investors in Africa, said a government ban on non-Basmati rice exports had driven Indian companies to grow it in Africa to sell overseas. Indians are now eating more meat and that has led many companies to grow maize animal feed in Africa as there are no government incentives for Indian farmers to grow it at home.

Sharad Pawar, India's agriculture minister, rejected claims that the government supported a new colonisation of African farmland. "Some companies are interested in buying agricultural land for sugar cane and then selling it on the international markets. It's business, nothing more," he told The Daily Telegraph.

Government documents meanwhile show the details of official support, and just of under £500 million in soft loans to encourage African countries to export food to India. New Delhi has also cut import duties for food produced in Ethiopia.

A report by the UN Food and Agriculture Organisation said more than 2.5 hectares of African land had been bought by foreign companies since 2004 and voiced concerns that poor villagers might be ousted to make way for investments. It also said it feared some of the deals may be open to corruption.

Devinder Sharma of India's Forum for Biotechnology and Food Security said the companies buying up land to export food from Africa were "food pirates" and compared them with the English companies that shipped food from Ireland during the 19th century potato famine.

"There are 80 Indian companies trying to get land in Ethiopia, and it's all to be imported back to India. The government of India has been encouraging them," he said, and warned of danger if famine returned to Africa.

"If food is being shipped out and poor people are dying, what will happen? There would be riots," he said.


Manila OKs Foreign Firm To Plant Biofuel Coconut

PlanetArk

19 June 2009

TOKYO - Pacific Bio-Fields Holdings Plc said it has received approval to use 400,000 hectares of land to plant coconut trees in the Philippines to make alternative auto fuel, which it aims to sell to Japanese users in five years.

The company, which plans to list on the London Stock Exchange's Alternative Investment Market (AIM) later this year, said on Thursday the agreement allows it exclusively to cultivate unused public land on the northern main island of Luzon for free for up to 50 years.

The project will provide local jobs and involve the construction of local refinery infrastructure. "It is the first time the Philippines' government has allowed any local or foreign company to use land for a coconut oil-made biodiesel project," Yuji

Taniguchi, head of the U.K.-based holding company with its main operations in Japan and the Philippines, told a group of reporters.

In the Philippines, the world's biggest coconut oil exporter, local biodiesel producers have increasingly been using coconut oil as feedstock now that a 2 percent mixture of plant-origin fuel in diesel for auto use is mandatory.

Coconut and coconut oil production have been centered in the southern part of the Southeast Asian island nation.

Coconut oil is traditionally used in food and cosmetics.

Competition with food is not an issue for this project, whose location is in the northern part of Luzon, where fields are largely abandoned after once-dominant tobacco production receded, Taniguchi said.

Also, coconut trees do not require particularly fertile land, like palm trees do, he said.

"Coconut trees can grow on wasteland, and we rely on DENR where to plant them," he said, referring to the role of Department of Environment and

Natural Resources of the Philippines, which gives approval of areas to plant after environmental assessment by another government agency. The IPO in the second half of 2009, arranged by Arbuthnot Securities of Britain, is set to raise an estimated 5 billion yen ($52 million), the proceeds to be used for investment in coconut tree planting.

The company, now with capital of 30 million yen, plans to start operations at its first crushing plant with capacity of 2,000 metric tons of oil per month in northern Luzon by August, with oil initially for sales to local biodiesel makers.

By 2014, the company plans to build five other crushing plants with similar capacity each as well as a refinery plant to turn the feedstock into 300,000 metric tons of biodiesel a year, part of which is targeted at exports to Japan, Taniguchi said.

The project of building these facilities and needed infrastructure is partly financed by loans from government-backed Japan Bank for International Cooperation, he added.

(Editing by Keiron Henderson) © Thomson Reuters 2009 All rights reserved


Land acquisitions in Africa pose risks for poor

First detailed study of phenomenon warns of impacts to rural communities, but notes possible benefits as well Many countries do not have sufficient mechanisms for protecting local rights and interests during large scale land acquisitions.

UNFAO

25 May 2009 Rome - Land acquisitions are on the increase in Africa and other continents, raising the risk, if not made properly, that poor people will be evicted or lose access to land, water, and other resources, according to the first detailed study of the trend.

The study has been realized by the International Institute for Environment and Development (IIED) at the request of FAO and the International Fund for Agricultural Development (IFAD). It warns that such deals can bring many opportunities (guaranteed outlets, employment, investment in infrastructures, increases in agricultural productivity) but can also cause great harm if local people are excluded from decisions about allocating land and if their land rights are not protected.

The report highlights a number of misconceptions about what have been termed land grabs. It found that land-based investment has been rising over the past five years. But while foreign investment dominates, domestic investors are also playing a big role in land acquisitions.

Private sector deals are more common than government-to-government ones, though governments are using a range of tools to indirectly support private deals.

Concerns about food and energy security are key drivers, but other factors such as business opportunities, demand for agricultural commodities for industry and recipient country agency are also at play. Although large-scale land claims remain a small proportion of suitable land in any one country, contrary to widespread perceptions there is very little "empty" land as most remaining suitable land is already under use or claim, often by local people.

The report found that many countries do not have sufficient mechanisms to protect local rights and take account of local interests, livelihoods and welfare. A lack of transparency and of checks and balances in contract negotiations can promote deals that do not maximize the public interest. Insecure local land rights, inaccessible registration procedures, vaguely defined productive use requirements, legislative gaps and other factors too often undermine the position of local people.

It calls for carefully assessing local contexts, including existing land uses and claims; securing land rights for rural communities; involving local people in negotiations, and proceeding with land acquisition only after their free, prior and informed consent.

A complicated picture

Co-authors Sonja Vermeulen and Lorenzo Cotula of IIED caution that land acquisitions vary greatly and that blanket statements about land-grabbing are highly misleading.

"Ultimately, whether international land deals seize opportunities and mitigate risks depends on their terms and conditions - what business models are used, how costs and benefits are shared, and who decides on these issues and how," says Cotula. "This calls for proper regulation, skilful negotiation and public oversight."

"In many countries, provisions for including local people in decision-making are usually absent or poorly implemented and this increases the risk of them losing access to land and other resources," adds Vermeulen.

"The scale of land acquisitions has been exaggerated but in many countries the agreements that allow foreign ownership of land can be very problematic," she adds.

Alexander Mueller, Head of the Environment and Natural Resources Department at FAO stresses the need to see foreign investment and large-scale land acquisitions in the context of global food security challenges. "This new trend is a result of the recent food crisis and volatility of food prices, among other factors. The new challenges of global food insecurity and global investment should be addressed through appropriate regulations, and well-informed agricultural and food policies. The study should help to link decisions on investment with an awareness of all implications, including social and environmental ones. Developing guidelines for land governance, or a code to regulate international investments might be useful to improve decision making and negotiations. FAO and its partners are currently working together to develop such guidelines, and this study is a first step in this process," Mueller said.

"I would avoid the blanket term ‘land-grabbing'," says Rodney Cooke, IFAD Director, Technical Advisory Division. "Done the right way, these deals can bring benefits for all parties and be a tool for development."

"The poor women and men that IFAD works with every day must not be sidelined," adds Cooke. "Their input and their interests must be central, and we must ensure that any benefits promised, such as employment, infrastructure, agricultural know-how, do materialize."

New research

The study, Land Grab or Development Opportunity? Agricultural Investments and International Land Deals in Africa, includes new research from Ethiopia, Ghana, Kenya, Madagascar, Mozambique, Sudan, Tanzania and Zambia.

It was undertaken by an IIED team with inputs from, and in close collaboration with, FAO and IFAD. It was funded by FAO, IFAD, IIED and the UK Department for International Development.


Congo delays South African farm deal

Reuters

6 July 2009 The Republic of Congo will delay finalising a multi-million hectare land deal with South African farmers until after a planned July presidential election, Congo Republic's minister of agriculture said.

AgriSA, South Africa's main farmers union, has said it had been given tax breaks and rent-free access to arable, poultry and dairy farming on 10 million hectares of Congolese land for 99 years in what would be one of the largest such deals in Africa. Congo Republic's President Denis Sassou-Nguesso is likely to win re-election for another seven years at the head of the central African nation that, apart from a bloody five-year period of conflict in the 1990s, he has dominated since 1979. "At this stage, we have not sold a single square metre to the South Africans," Rigobert Maboundou, Congo Republic's minister of agriculture said over the weekend. He said the agreement his government had signed with AgriSA was not legally binding but it was "simply a declaration of intention". The minister also put the amount of available land at just over eight million hectares, not 10 million hectares, and said the South Africans had been joined by farmers from Italy, France, Turkey, China and Israel in the hunt for farming deals. "The date of the signing (of the final agreement) has been delayed and we have proposed that the signing ceremony should take place after the presidential election that is due in July," he added.

Promised a tax holiday

South Africa has one of the most developed agriculture sectors on the continent and is Africa's top maize grower and No. 3 wheat grower. South African farmers are also looking to farm in numerous other countries across the continent. The Congo Republic has long exported oil from its shores on the Gulf of Guinea but, like most other sectors in the country, agriculture remains chronically under-developed and large amounts of foodstuffs are imported, making them expensive. Despite grinding poverty Sassou-Nguesso has a tight hold on the country and, analysts say, there is little chance of him being dislodged during the elections, which are due in July.

As well as free land, AgriSA said last month that it had been promised a tax holiday for the first five years and agricultural inputs and equipment would not be taxed on import. For its part, the government aimed to become self-sufficient in food production within five years, the company said. The Congo Republic land deal is part of a trend that international agricultural organisations estimated last week had seen 2.5 million hectares of farmland in five sub-Saharan countries bought or leased over the last five years. Advocates of the deals say they can be motors for development at a time of rising fears over food security. Critics, however, warn of a "land grab" and have called on African countries to defend local people's rights.

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