World Bank policies "enabling" African land grab

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Bretton Woods Project | 14 September 2011
Robin Heighway-Bury/Thorogood.net

New research accuses the World Bank Group's policies of facilitating land grabs in Africa and favouring the interests of financial markets over food security and environmental protection.

Agriculture and the food crisis are a high-profile agenda topic at the upcoming World Bank annual meetings, and critical voices are growing on the Bank's approach to food price volatility (see Update 77, 76). Recent in-depth research by the US-based Oakland Institute raises further difficult questions on agriculture policy for Bank officials. The report implicates the World Bank Group (WBG) in the increasing acquisition of farmland in the developing world by private investors and wealthy nations, which critics are calling a global 'land grab' (see Update 76, 72, 71, 68). The investigative research, published between March and June, analyses a series of land deals in countries across Africa and finds that the purchases of land, often by large institutional investors, are mainly unregulated, produce few of the promised benefits to local people, and instead are forcing thousands of small farming communities off ancestral land, creating serious food insecurity and driving environmental destruction.

Writing in a blog for Reuters, Joan Baxter, a research fellow at the Oakland Institute, said that "more than any other institution or agency, the World Bank Group has been promoting direct foreign investment in Africa, and enabling the farmland rush." Their in-depth reports on Mali and Sierra Leone reveal how the WBG "has shaped the economic, fiscal, and legal environment … in a way that favours the acquisition of vast tracks of fertile lands by few private interests instead of bringing solutions to the widespread poverty and hunger."

The Oakland Institute finds that the WBG has, through an array of different policies, overseen a shift towards prioritising large-scale commercial agribusiness, achieved by attracting and promoting foreign agricultural investment. The Foreign Investment Advisory Service and the Remove Administrative Barriers to Investment program, both projects of the International Finance Corporation (IFC), the Bank's private sector arm, have "been working - often behind the scenes - to ensure that African countries reform their land laws and fiscal regimes to make them attractive to foreign investors" (see Update 68). The Bank has financed legal reform mechanisms that are promoting rapid changes in land tenure laws, "driven by a desire to facilitate large-scale agricultural investment".

The Bank has also been funding investment promotion agencies in African countries that place private sector advisors in key governmental ministries, including presidential offices. This was a key part of the Growth Support Project for Mali, financed by a loan from the International Development Association (IDA), the Bank's low-income country arm. The salaries of the directors of the Malian investment promotion agency are covered by the IDA loan. The agency also includes IFC consultants, and guarantees investments through the Multilateral Investment Guarantee Agency (MIGA), the Bank's risk insurance arm.

Baxter observes that these agencies "are developing and advertising a veritable smorgasbord of incentives not just to attract foreign investment in farmland but also to ensure maximum profits to investors. These include extremely generous tax holidays for 10 or even 30 years, zero per cent duty on imports, and easy access to very large tracts of land, sometimes over 100,000 hectares. Investors may pay just a couple of dollars per hectare per year for the land, and in Mali, sometimes no land rent at all."

RAI principles found wanting

The reports from both Sierra Leone and Mali also argue that the land deals facilitated by the Bank's investment promotion policies fail to comply with it's own large-scale responsible agricultural investment principles (RAI, see Update 76, 71). The report on Sierra Leone says the RAI principles are "vague and minimal", and are "based on the controversial assumption that industrial-style agriculture and land use can increase food production and fuel economic growth in host countries", and "do not consider the overall questions about the enormous risks and inherent injustices of the global rush by investors and nations for farmland". It argues that that land deals in Sierra Leone do not conform to the RAI principles, while the Mali report argues that the "Bank ignores its own principles by supporting institutions and policy reforms that disregard them."

The RAI's have also come under fire for legitimising corporate land grabs in a recent press statement by social movement Via Campesina. Released before the meeting of G20 agriculture ministers in June, it states that the "World Bank initiative to make land grabbing more socially acceptable is no solution at all. The Principles for Responsible Agricultural Investment (RAI) are set up to legitimise land grabbing from small holders."

Meanwhile, the IFC has dropped a controversial proposed investment in a company accused of land grabbing. It had planned to lend $30 million to Calyx Agro Ltd, an Argentinean subsidiary of a French owned commodities trading company. Calyx Agro holds farmland across South America. In June a group of NGOs and social movements, including Via Campesina and Focus on the Global South, sent a letter to IFC head Lars Thunell opposing the investment. The letter states that "at a time when social movements in Latin America and around the world are calling for a stop to the 'farmland grab' and where many of the region's governments are pursuing measures to restrict foreign investment in their farmland, it is unacceptable for a multilateral institution like the World Bank to be offering direct support to some of the world's leading actors involved in land grabbing."

Original source: Bretton Woods Project
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1 Comments


  1. Dr. Olaseinde Makanjuola Arigbede ---- USMEFAN
    19 Sep 2011

    The King is naked and has been for a long time indeed, but only those who are not afraid of being labelled as extremists, promoters of autarky, pipe dreamers, irresponsible utopians, etc., etc., can boldly assert this fact and call on others to wake up from their fatal slumber. Is anyone still deceived that the so-called World Bank is so, only to the extent that it helps to domesticate the impoverished 'South' in favour of the domineering 'North' and to shackle those who must be exploited by Capital, on a WORLD SCALE. The Con-Mechs called World Bank, IMF,WTO and their numerous tentacles, are only there to serve those who have made themselves Masters of the World -- and this is, by now, an elementary piece of information. Perhaps the so-called 'International Community' still deceives some who have been in the longest deep sleep of over a century. Nobody should still be deceived that the Bretton Woods-sprung global control institutions of the 'North' are anything but globally supportive. It is therefore no surprise to focussed analysts of global politics and debauchery, that the World Bank has always been the midwife of farmlandgrab, at least, in so far as countries of the South are concerned. Unfortunately, the 'South' has, so far, been unable to make truly common cause, strike out in bold strides in pursuit of its own agenda, even if a lot of work has to be done to overcome the myriad obstacles and divisive schemes thrown in its way by governments of the 'North' and their elites at the head of their business empires. Minuscule steps timidly taken by our leaders in the South, often as 'one step forward two steps backward' will prove incapable of rescuing us from the land grabbing talons of 'international investors', before we are rendered a 'collection of races and peoples without land-based validity'. However, the struggle must go on, not by allowing ourselves to be seduced or blackmailed into joining the charade of conferences in pursuit of the mirage called 'ARI', but on our own terms, in pursuit of concrete agenda of our own designed to halt this colossal pillage in its tracks -- never mind that we are starting rather late and with a large handicap.

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