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Foreign buying of farms explosive

26 March 2012, 08:01

Paris - Is it investment? Or a land grab?

Within a few years, acquisition of foreign farmland has become an issue with plenty of explosive potential for the environment and security.

Priming it is a rush by China, India, South Korea and Gulf petro-economies to snap up land abroad to secure their food supplies. Western countries are following suit in a bid to meet their targets for biofuels.

According to a respected monitor called the Land Matrix Project, 203 million ha of land were transferred to foreign control from 2000 to 2010, either through purchase or long-term lease.

To put this figure into perspective: that is eight times the size of Britain.

Africa, led by Ethiopia, Liberia, Mozambique and Sudan, accounted for 66% of the transfers, and Asia 14%.

But who is buying land where - and what they are doing with it - may never be fully answered, for many transactions are never publicly announced.

Paul Mathieu, an expert with the UN's Food and Agricultural Organisation (FAO), said the craze peaked in 2008 or 2009 on the back of the world food crisis and has probably drifted down a little since then.

But over the long term, demand will remain high, buoyed by the world's surging population, higher prices for fossil fuels and spiralling demand for food, he said.

Time bomb

"I saw the land issue emerge before I came to the FAO 15 years ago. It is a bomb that can explode if it is not addressed," Mathieu said.

Land has always inspired sentiment and attachment, although economists tend to argue it should be treated like any asset - a truck, an airliner or a factory, for example - that exists to make money.

And, in theory, land deals offer a poor country with lots of space and a low-density population a great chance to acquire new skills, technology and capital.

But a flurry of published investigations, while incomplete, suggests relatively little of this investment is actually happening.

And from corruption to environmental abuse, there are plenty of other things to worry about too.

In a 2010 report, the World Bank looked at 14 countries and discovered that actual farming had begun on only 21% of the land in the deals.

Intertwined with the emotional question of land tenure is how water is used for these big deals.

The UN's Fourth World Water Development Report, published two weeks ago, describes this as a very big unknown.

It especially sounds the alarm for the dry regions of West Africa, saying biofuels could be "particularly devastating" there. To make just one litre of ethanol from sugar cane takes 18.4 litres of water, and 1.5m².

Countries exploited

The risk from poorly supervised land acquisitions is that a wealthy economy simply exports its water "footprint" elsewhere, said Anders Jaegerskog of the Stockholm International Water Institute (SIWI).

If there are inadequate safeguards and poor governance in the host country, the richer nation gets its rice, corn and biocrops on the cheap - but at the cost of adding to local water stress, he said.

"This is the great danger, that the weaknesses in the systems of these countries are being exploited," he said.

In an interview with AFP last December on the sidelines of the UN climate talks in Durban, Minister Tina Joemat-Pettersson blasted land acquisition as "a new form of colonisation".

She cited the new country of South Sudan, where she said 40% of the farmland had been sold to foreign interests.

"They bring in their own labour, they bring in their own equipment, soil, seeds, they use the soil of the host country and then they move off. They leave very little behind or they may leave depleted land."

Some say growing crops for foreigners can dangerously inflame tensions if deals are corrupt, local interests ignored and pressure on resources escalates.

"Controversial land acquisitions were a key factor triggering the civil wars in Sudan, Liberia and Sierra Leone, and there is every reason to be concerned that conditions are ripe for new conflicts to occur in many other places," said Jeffrey Hatcher of the Rights and Resources Initiative, a Washington-based coalition of NGOs.

Seeking to address such issues, the FAO's Committee on World Food Security (CFS) last month agreed on guidelines for land acquisition.

It is a benchmark designed to involve and protect local people but also reassure investors, said Mathieu, who helped craft the recommendations over three arduous years.

But the guidelines are voluntary.

And African countries will need time and resources to beef up their administration of land, moving from rights that often are customary, informal or even undocumented to formalised rights that can be enforced in a fair judicial system.

"These are transitions that took a century in western Europe. In some African countries, it will have to be done in 20, 25 years, with all these risks in attendance," he said.



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