Framework needed for land deals in developing world

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Photo: Wheat field in Portugal (photo by Wikimedia user Faisca, licensed under the Creative Commons 2.0 License).

World Politics Review | 05 Aug 2009

Sahiba Trivedi

Driven by food security concerns, governments around the world have begun purchasing land in developing nations for agricultural purposes. Foreign land acquisition -- known by critics as "land grab" -- responds to worries over global problems that include growing water scarcity, teeming populations, increasing demand for food and bio-fuels, and climate change impacting arable land and its productivity.

This trend necessitates an international framework or code of conduct that can protect small local farmers as well as the economy and the ecology of the host country from potentially negative impacts. Such a code would seek to resolve the question of food security so that the host country and its people are neither exploited nor marginalized. The World Bank, the U.N. and the African Union are all working on developing codes of conduct and guidelines for foreign land acquisition. But the conditions surrounding this trend and the parties involved make the measures taken so far inadequate.

Although the practice of buying up tracts of arable land in Africa, Asia and Eastern Europe is not a new phenomenon, the food crisis of the last few years and growing water scarcity has accelerated the trend. Countries like South Korea, Saudi Arabia, India, and China are now buying or leasing hundreds of thousands of hectares in Sudan, Ethiopia, Kenya, Mozambique, Nigeria and elsewhere to meet food demand back home.

Economically speaking, foreign land acquisition makes good sense. It is logical to grow food where the production cost is lower and then repatriate it home. In exchange, the host countries receive technology, infrastructure, and employment opportunities, making such deals seem like harbingers of opportunity. But although the arrangement might appear to be a win-win situation for both countries involved, a deeper analysis reveals something totally different.

Usually, "land grab" deals are not transparent at all, and the host nation's civil society is not involved in related decision-making. Many times, the host government is willing to sell its land to the highest bidder, despite the fact that the land is already being used by local small farmers, creating alienation and resentment. This expropriation of a common good is often carried out with little thought to the consequences, of which six, in particular, deserve attention.

First, some critics, including the FAO, have argued that instead of bolstering food security, such deals might actually worsen the food supply in developing continents by diverting high-quality land from production for the domestic economy. In many host countries, the local population is food insecure. As an example, even though Ethiopia is the biggest recipient of food aid from the World Food Program, it is leasing away most of its scarce arable land to Saudi Arabia. Similar trends have emerged in Tanzania and Burma. Foreign land acquisition in countries like these make international food aid ineffectual.

Second, most of the nations investing in agriculture in developing countries are ignoring governance issues in the host country. Some of these host countries have very poor human rights records, and investing in them may bolster their rogue regimes. Also, the profits from such deals are unlikely to trickle down to the people of the country.

Third, without a proper code of conduct or environmental impact laws in place, these hurriedly hashed-out deals severely jeopardize the environment and ecology of the host nations. Countries buying up foreign land may show less concern for stewarding resources and environment compared to their best practices at home.

Fourth, the companies involved in these deals may try to take advantage of the political turmoil in host countries to further their own interests. The ensuing risk of interference with the sovereignty of the host country could lead to tensions and conflict between stakeholders to the deal.

Fifth, even if a privately agreed-upon code of conduct addresses issues that, in theory, would assure a win-win situation for the countries in question, in practice, most of the host countries lack a legal system to enforce these deals. In the absence of such a system, the code of conduct just becomes a voluntary set of principles, to be followed at the discretion of the foreign companies concerned.

Sixth, investment in land and agriculture is aimed at stable, long-term profits. But in countries that have shaky governments or are in the midst of civil wars, foreign corporate investment may not be that stable or even profitable. This could result in interventions designed to safeguard investments, to the detriment of lasting solutions for the host country.

Even though the trend of foreign land acquisition is a present and future reality, much needs to be done before it can become an area of true cooperation. To avoid the risks of political and social conflict and instability in the future, it is essential that governments and international agencies act now to create not only a uniform code of conduct guiding foreign land acquisitions, but also an enforcement mechanism. Without the latter, any code will serve as mere guidelines, while doing little to actually safeguard the interests of poor nations.

Sahiba Trivedi is a senior research analyst with Strategic Foresight Group, Mumbai, India. Her area of expertise is South Asian politics. She is currently working on water security issues in Asia.

Original source: World Politics Review
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