Wealthy foreigners taking over huge tracts of African land
Globe and Mail | May 5, 2009
Resentment of 'global land grab' contributed to the change of government in Madagascar
ANTANANARIVO, MADAGASCAR — When the new Land Reform Minister rummaged through his office in Madagascar's capital, he was shocked to discover the documents for a $2-billion deal to lease huge tracts of farmland to an Indian entrepreneur.
Just weeks earlier, his military-backed government had swept to power on a pledge to cancel a massive $6-billion agreement to lease 1.3 million hectares of farmland, about half the size of Belgium, to a South Korean company. And now, just as the furor was dying down, here was another massive farmland deal, negotiated with even more secrecy than the South Korean one.
It's unlikely to be the last. Many of the world's biggest and richest countries are buying or renting huge swaths of farmland in the world's poorest countries. Under pressure from growing populations and climate change – and worried by the food crisis of 2007-08, when prices soared and exporting countries halted food exports – the rich are seeking food security by acquiring land in Africa and Asia.
Wealthy foreign investors have acquired, or begun negotiating for, an estimated 15 to 20 million hectares of farmland in the developing world – equal to roughly half the size of Newfoundland and Labrador – since 2006. Most of this is in Africa, where the soil is fertile, costs are low and the owners are weak.
Critics are calling it a “global land grab” with neocolonial overtones. The African Union has warned that Africans could be exploited by the massive farmland deals because of their weak bargaining position. Overwhelmed by the rapidly developing trend, they are failing to get sufficient benefits in return, the AU says.
The buyers and leasers of African farmland are the rich and powerful (Saudi Arabia, Qatar, South Korea and the United Arab Emirates) or the hugely populous and land-hungry (China and India). For all of them, Africa is the jackpot, a region where vast tracts of land are cheap and underutilized.
Madagascar, one of the poorest countries in the world, is a prime target of those hungry for land. But there are plenty of other African targets, too. China is seeking 2 million hectares in Zambia to grow crops for biofuels. Saudi Arabian investors are spending $100-million to acquire land in Ethiopia, $45-million for land in Sudan, and millions more for 500,000 hectares in Tanzania. Libya has secured 100,000 hectares in Mali to grow rice. Qatar has obtained 40,000 hectares in Kenya.
The land deals are a sign of a shift in the world's priorities. Farmland is becoming as much of a strategic resource as oil fields.
But the farmland deals are increasingly controversial, sparking a nationalist backlash in some countries. Millions of peasants and nomads could be dispossessed by the land acquisitions. There are fears that food could be exported from countries that are suffering drought and hunger.
“These land acquisitions have the potential to inject much-needed investment into agriculture and rural areas in poor developing countries, but they also raise concerns about the impacts on poor local people,” says a new report by the International Food Policy Research Institute.
“Unequal power relations in the land acquisition deals can put the livelihoods of the poor at risk,” the institute said. “Since the state often formally owns the land, the poor run the risk of being pushed off the plot in favour of the investor, without consultation or compensation.”
The report lists 50 examples of farmland deals by foreign investors since 2006. Most were on a huge scale, and Africa was the biggest single target.
In Madagascar, there was an uproar when a South Korean company, Daewoo Logistics, announced a 99-year deal to lease 1.3 million hectares of land. South Korea is already the world's third-biggest corn importer, and it planned to grow half of its corn requirements in Madagascar.
The deal sparked such fury among the Malagasy people that it fuelled the rise of opposition leader Andry Rajoelina, who seized power in the island nation in March. “Madagascar's land is neither for sale nor for rent,” vowed Mr. Rajoelina, who promptly cancelled the deal.
The Daewoo deal shocked people in Madagascar because of its massive scale, its secrecy and the perception that the Koreans would be shipping food out of the country at a time when many of its people are malnourished and hungry. Some felt that the Daewoo deal had echoes of the colonial era, when Madagascar's French masters took huge swaths of farmland for themselves.
“The land is sacred for the Malagasy people,” said Hajo Andrianainarivelo, the Land Reform Minister in the new military-backed government. Even the country's national anthem sings of the need to protect “the land of our ancestors,” he noted.
The Malagasy people were never consulted on the Daewoo land deal, he said. “It led to a lot of frustrations, and we can understand that.”
Alain Andriamiseza, leader of a political party that favoured the Daewoo deal, says the land lease would have created 70,000 jobs on land that is mostly uncultivated now. The opposition to the deal was “an extremist nationalist viewpoint,” he said. “This is our island mentality; they don't want to give any land to foreigners.”
After the Daewoo deal was cancelled, it emerged that local officials had negotiated to lease 465,000 hectares of Madagascar farmland to an Indian company, Varun International of Mumbai, to grow rice for India's needs.
The minister, Mr. Andrianainarivelo, had denied the existence of the Indian deal when he was asked about it. “So far we have no dossier on it,” he insisted.
But when he was persuaded to forage through his new office, he opened a glass cabinet and suddenly found a thick book of documents on the deal.
He pulled it down and leafed through it in surprise. “They have all these signatures, but nothing is official,” he said, trying to recover his composure. “It's only an application.” Yet the documents clearly stated, on their front page, that the deal involved the “acquisition” of land for “contract farming.”
The foreign land investors are keeping a low profile in Madagascar now, worried about potential attacks from the enraged population. After spending millions of dollars on the aborted deal, Daewoo is winding down its operation in Madagascar, keeping its remaining staff in an unmarked office in a building with tight security. Varun's local office is equally difficult to find, with even the Indian embassy refusing to reveal its location.
Mr. Andrianainarivelo noted that the Indian entrepreneur signed his deal with regional leaders, not the central government. But he admitted that the regional officials could have signed other land deals, too.
“That's why we will change all of the regional bosses,” he said grimly.
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