The global farm grab is on
April 11th, 2013
08:55 AM ET

The global farm grab is on

By Michael Kugelman, Special to CNN

Editor’s note: Michael Kugelman is the senior program associate for South and Southeast Asia at the Woodrow Wilson International Center for Scholars and lead editor of The Global Farms Race. You can follow him @michaelkugelman. The views expressed are his own.

This week in Washington, the World Bank is hosting its annual conference on land and poverty. The Bank has identified improved land governance as this year’s theme. It’s a wise decision, given that poor land governance in developing world agricultural settings has spawned a destabilizing global trend – one fueled, in part, by financial support from the Bank itself.

In recent years, food-importing regimes from Asia and the Gulf, spooked by high food prices and lacking the land and water resources to grow crops at home, have obtained land overseas to use for agriculture. Private investors from the U.S., Europe, and Asia, recognizing the profit potential of precious agricultural land, have joined this scramble for the world’s soils. Nearly $30 billion in private capital is projected to be invested in farmland by 2015, and pension funds and asset managers have recently joined forces to attract even more capital for farmland financing.

Weak land tenure in target countries – mostly poor and in sub-Saharan Africa and southern Asia – hastens the ability of foreign investors to secure land used, even if not formally owned, by local communities. Host governments, poor and desperate for capital, have no compunction about relinquishing precious farmland – and they go to extraordinary lengths to court deep-pocketed investors. Pakistan’s government has reportedly offered a 100,000-person-strong security force – roughly a sixth the size of its entire army.

The results have been staggering. Credible estimates conclude that about 50 million hectares have figured in deals since 2000 – equivalent to more than half the area of the combined farmland of Britain, France, Germany, and Italy.

Investors promise employment, better farming technologies, and greater food security for local communities. Unfortunately, few of these benefits are materializing. Many investors use their own labor force, few share their inputs with locals, and – most controversially – many operating in developing nations plan to export their harvests elsewhere. In some cases, speculators obtain high-value land with no intention of farming it.

Predictably, these deals have sparked unrest. In 2009, South Korea’s Daewoo corporation reportedly leased 1.3 million hectares in Madagascar – half the island nation’s total arable land – to grow a variety of crops. The mammoth deal, later annulled, triggered widespread protests that helped bring down the Madagascar government. Most acquired land is in regions already embroiled in or prone to conflict, such as Ethiopia’s Gambella state, Kenya’s Tana Delta, and Indonesia’s Papua province. Large-scale land acquisitions are also powder kegs because they evoke explosive memories of colonialism and dispossession. Kenyans displaced today to accommodate British-funded sugar plantations likely recall how, decades ago, European investors converted 3 million hectares of Kenyan farmland into tea estates – which displaced locals and helped spark the Mau Mau rebellion against British rule.

Violent consequences of foreign land deals have generally been contained. Yet this could change. Seven of the most food insecure countries in the 2012 Global Hunger Index (published by the International Food Policy Research Institute) have each relinquished more than 10 percent of total agricultural area. Imagine that a famine hits one of these countries, and leaders continue to allow foreigners to snap up land, harvest crops, and – perhaps with armed escorts – truck the harvests away for export back home. Such a scenario could trigger civil war, given that many deeply food-insecure governments courting land investors preside over frail and fractured states.

Host governments must make land deals less prone to conflict. They should establish and enforce laws that crack down on displacement; provide legal assistance to vulnerable communities; and, most importantly, strengthen land registries and help people obtain land titles.

Meanwhile, international NGOs can help people obtain land titles; Concern Worldwide has already done so for several thousand people in Tanzania. Global media outlets can use shaming campaigns to induce financiers to rein in predatory investments; bad PR can have a powerful impact on investors.

Finally, the World Bank wields considerable leverage because it funds many deals through its private lending arm, the International Finance Corporation. The Bank should stipulate that funding is contingent on investors hiring x number of local laborers, or selling y percent of yields back to local markets. Its Washington conference this week – replete with presentations on the imperative of land rights, better land titling and registration mechanisms, and more transparency in land investment deals – gives cause for hope that the Bank will use its leverage to ensure outcomes that protect local communities and thereby reduce conflict risks.

The stakes are high. Food demand, volatile commodities markets, population growth, and climate change aren’t going away, and they all imperil the supply of the world’s farmland. Land hunters could soon be tempted to take more desperate – and violent – measures, and local communities could be compelled to resist more forcefully.

First it was gold. Then oil. Now the race is on for the world’s precious farmland – with alarming implications for global stability.

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Topics: Africa • Ethics

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soundoff (16 Responses)
  1. rightospeak

    Corporations and investors are not concerned with people and hunger. Through debt all farmlands will be in a few hands till people rebel. With our bankrupcy the Chinese will buy the US farms and starve the rest of us because the dollar will be worth nothing. Globalism is about the very rich and if half the population of the world starves, what do they care ?

    April 11, 2013 at 1:10 pm | Reply
    • Vince

      I agree our US dollar will be worth nothing and the ones with all the money will also be broke. Have nothing. I told a person that if someone left me a major business I would have to hire someone to run it. The person I hire would most probably make twice as I would. But me getting something is a lot better that nothing.

      April 11, 2013 at 11:03 pm | Reply
  2. 100 % ETHIO

    It seems, modern thieves or Highway robberies are coming through different ways, unlike the old Days. Jewish are among them.
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    April 11, 2013 at 2:46 pm | Reply
  3. krenzny

    With all the greed and greedy individuals and corpoprations in America and around the world, I can foresee a day when american farms are owned by foreign countries, leaving AMERICA starving and 'importing its own produce.

    April 11, 2013 at 4:01 pm | Reply
  4. Milo

    Uggg, all the animals that are going to be wiped out for profit. It all boils down to greed. The wealthy will buy up land, kill all the animals, native plants and hold locals and the world hostage for products. Everyone wants food cheap, available and easy, these poor countries will pay the price. Peruvians who need Quinoa now can't afford to buy it for themselves because they have to send it abroad for wealthy health conscious foreigners. The people and animals are suffering because of this.

    April 11, 2013 at 10:56 pm | Reply
  5. Vince

    What everyone is saying about greed is so true

    April 11, 2013 at 11:04 pm | Reply
  6. Homer10

    One thing big agro business doesn't understand is that a lot of people are growing food in their back yards. I am. The only reason why we shop at a grocery store is it's easy. If the food gets too expensive, all those little back yards (100s of millions of them) start to produce food, and suddenly nobody is buying that expensive super market food. It's already happening right now. Look at all those farmer's markets out there. Those aren't farmers at those markets, those are regular people with a small gardens (farms) in their back yards. GO ahead bit agro. Try to corner the market, and watch what happens.

    April 11, 2013 at 11:14 pm | Reply
    • Cha Li

      I like your "Think Global, Act Local," idea. Besides, there are all kinds of other benefits to growing your own garden. For one, you know what's in and on your food. I'd recommend people buy organic seeds, and stockpile some. It seems like this next year is going to be drought ridden too.

      April 12, 2013 at 1:48 am | Reply
  7. j. von hettlingen

    Very often these unscrupulous investors, who have laid hands on farmlands somewhere, use up most of the water for irrigation, endangering the water supply of the local population. It's really deplorable, how greed motivates.

    April 12, 2013 at 8:41 am | Reply
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    April 12, 2013 at 10:55 am | Reply
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