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April 15, 2009

The growing global lust for agricultural land

by Marie-Béatrice Baudet and Laetitia Clavreul

Not a day goes by without new acreage being signed over. "For Sale" ads for agricultural property are now featured in the international financial press. And there's no dearth of clients.

"At the end of 2008," Jean-Yves Carfantan, author of "Choc alimentaire mondial, ce qui nous attend demain" ["Global Food Shock: What's in Store for Us Tomorrow"] (Albin Michel, 2009), observes, "five countries stood out for the extent of their foreign arable land acquisitions: China, South Korea, the United Arab Emirates, Japan, and Saudi Arabia. Together, they control over 7.6 million cultivable hectares outside their national territory, or the equivalent of 5.6 times the utilizable agricultural surface of Belgium." The phenomenon of land grabs is certainly not new, as it goes back to the first colonizations. However, in the opinion of many observers, economists and NGOs, it is now accelerating.

The explosion of agricultural commodity prices in 2007 and 2008, following the example of the same phenomenon in the 1970's, made many investors decide to turn to land. The fall in prices has not made them run away. As GRAIN - an international NGO which seeks to promote agricultural biodiversity - notes in a report published in October 2008 and entitled, "Seized: The 2008 landgrab for food and financial security," given the present financial debacle, all kinds of actors from the financial and agribusiness sectors - pension funds, hedge funds, etc. - have abandoned derivative markets and consider that agricultural land has become a new strategic asset."

They are not alone. Many countries have made the same analysis, not to find sources of surplus value, but for reasons of food security. "The objective is clearly to parry the consequences of stagnation in their domestic production, induced by unrestrained urbanization and the reduction of water resources," Mr. Carfantan explains. Arable land is becoming ever more rare in the Middle East, for example. So, the petro-monarchies have been investing the last three years in the creation of extraterritorial annexes. Qatar controls lands in Indonesia; Bahrain in the Philippines; Kuwait in Burma, etc.

"Agricultural Outsourcing"

It's not at all surprising that the Chinese government should, for its part, make a policy of agricultural land acquisition abroad one of its priorities: the country represents 40 percent of the global active agricultural population, but possesses only nine percent of Earth's arable land, Mr. Carfantan remarks. As for Japan and South Korea, they already import 60 percent of their food from abroad.

The canvassing of Southern countries' political officials is intensifying. At the end of 2008, Moammar Kaddafi, Libya's head of state, came to the Ukraine to propose an exchange of oil and gas for (local) fertile land. The business is about to be concluded. Thursday, April 16, a Jordanian delegation will go to Sudan to strengthen its agricultural presence there somewhat - a presence initiated already ten years ago. But the movement also concerns Europe. According to the weekly, La France agricole [Agricultural France], 15 percent of the total surface of Romania - or over 15 million hectares - is in the hands of owners from other European countries.

This strategy of "agricultural outsourcing" is not without consequences. What about local populations directly threatened by this commoditization of the land they live from? Today, the planet contains 2.8 billion farmers (out of a population of 6.7 billion people) and three-quarters of those who are hungry live in the countryside. Land registries are often nonexistent. How are and how will those who till and live from the land be indemnified if they have no property titles?

"Producers' organizations are alerting us more all the time about the question of land concentration and about conflicts between small peasants and agribusiness that cultivates for export," explains Benjamin Peyrot des Gachons, from the NGO, Peuples solidaires, which has chosen to organize an international forum on land access (in Montreuil, April 18 and 19) to celebrate the World Day for Peasant Struggle April 17. Farmers from India, Ecuador, Brazil, Burkina Faso and the Philippines will come to bear witness.

The NGO militates for the development of usage rights - with land remaining in the government's hands - not for property rights, which the World Bank favors. Although the attribution of property titles may allow the coexistence of family agriculture and the presence of foreign investors to occur, Peuples solidaires "deems that peasants will not have the means to acquire land." And even if land is attributed to them, "they will rapidly be forced to sell it, should they get in trouble." According to the NGO, property rights will consequently benefit big operators, whether foreign or not.

Another problem provoked by this race for arable land: cohabitation between investing countries and the local population. "Look at what happened in Madagascar after the announcement of the rental of 1.3 million hectares to the South Korean Daewoo Group," resumes Mr. Carfantan. "It was an explosion. I believe tensions will be inevitable wherever this occurs, making foreign agricultural enclaves veritable besieged fortresses." Unless, he argues, harvest sharing and technology transfers are organized so that all may bank on the long term.

A Million Chinese Peasants in Africa by 2010

In 2006, Beijing signed agricultural cooperation agreements with several African countries that allowed the installation of 14 experimental farms in Zambia, Zimbabwe, Uganda and Tanzania. "We believe that between now and 2010, a million Chinese peasants could be installed on these lands," explains economist and agricultural consultant to Brazil, Jean-Yves Carfantan. Candidates for expatriation are found among the peasants affected by the present crisis.

The Official Objective: to help the receiving countries increase their production, thanks to Chinese technologies: "The hybrid rice varieties created by Beijing allow improvements in yield of 60 percent compared to the global average," Mr. Carfantan notes. However, also according to him, it's clear that a good part of the harvests will be exported to China, in order to guarantee that market's long-term supplies.

Truth Out

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