Commodity cycles, economic treaties and pressures on land rights

Oil palm cultivation in Indonesia and Malaysia has seen local agricultural economies move from semi-subsistence smallholdings on customary lands to big monoculture plantations using low wage labour (Photo: Rainforest Action Network, Creative Commons via Flickr)
IIED | 25 May 2016

Commodity cycles, economic treaties and pressures on land rights
by Lorenzo Cotula

The commodity price hikes of 2007-08 and the ensuing wave of transnational land deals for agribusiness investments in low and middle-income countries placed land rights at the centre of international development discourses. 

In many agrarian societies land underpins livelihoods, social identity, political power and the collective sense of justice. Land is also a recurring source of conflict. So addressing land rights issues is a welcome development priority.

But pressures on land rights in low and middle-income countries are changing, for three reasons.

1 ‘Land grabbing’ starts at home

Recent research from SOAS reminds us that endemic land conflict in many parts of Africa cuts across families and communities, and often involves competition between siblings; women and their husbands' families; youth and elders; herders and farmers; new and longstanding settlers; and rural actors and urban elites. 

These conflicts are linked to growing land scarcity, especially in high-value areas, and profound social transformations – particularly urbanisation, agricultural commercialisation, the rise of the cash economy, changing social differentiation, the emergence of unregulated land markets, and the erosion of traditional tenure systems

These more localised land issues have received less attention in international research and media reports. Yet they affect large numbers of rural people, can undermine livelihoods and fuel violence. They are particularly difficult to address when entangled with ethnicity, politics and armed conflict. 

Interventions such as tools to secure the land rights of women and tenant farmers or locally negotiated agreements to promote peaceful management of common lands can help tackle land disputes.

But given vested interests and power imbalances, technical tools are unlikely to go far enough. Politically savvy action can empower more vulnerable groups and make state and customary authorities more accountable. Feeding lessons into national policy can help upscale impacts.

2 The commodity slide

The global land rush has slowed considerably. A slump in global commodity prices, disappointing returns on investment, policy changes and greater awareness about reputational risks associated with 'land grabbing' have led to fewer deals. 

Patterns in deal-making are also changing. Low oil prices undermined biofuel operations – previously a major driver of land acquisition – and the mirage of jatropha left many companies in tatters. On the other hand, palm oil operations still drive pressures on land, for example in West and Central Africa.

The Food and Agriculture Organization of the United Nations projects that global demand for agricultural commodities will continue to rise (PDF), albeit at a slower rate, and prices will remain higher than before 2007-08. 

Socioeconomic change at both national and global levels is driving this trend: expanding populations and rising incomes in sections of society hike demand for resource-intensive commodities, increasing urbanisation drives dependence on agricultural commodities, and climate change can exacerbate bottlenecks in agricultural supplies. 

In this context:

As a result, commercial pressures on high-value land are likely to grow in the longer term. To avoid repeating mistakes made during the height of the global land rush, these pressures must be prepared for and monitored.

While much attention has focused on developing standards of responsible business conduct, equally important is systemic action to strengthen local land rights and voices in land governance.

3 The land footprint of international economic treaties

Land rights are increasingly affected by international treaties governing investment and trade. Major negotiations for mega trade treaties are under way, or have recently been completed.

More integrated economies and more commercialised agriculture can raise land values, and land relations can in turn become more commercialised. Improved access to export markets can also drive transnational land deals, by encouraging companies from non-eligible countries to invest (PDF) in agribusiness ventures in countries with preferential access to those markets. 

International trade treaties may go hand in hand with national law reforms that open up land to foreign investment – as happened back in 1992 when Mexico joined NAFTA (PDF)

Over the past year, separate reports published by IIED, Tufts University (PDF) and the Columbia Center on Sustainable Investment have highlighted how international investment treaties can also affect local land rights.  

Investors (and in some cases governments) have invoked investment treaties in disputes where local land claims were at stake, for example land redistribution in South Africa, Venezuela and Zimbabwe (subscription required for all), indigenous peoples' land restitution claims in Paraguay (PDF), and mining projects in Bolivia and Peru.

Land rights problems in large-scale natural resource investments are often due to shortcomings of national law or governance. During the recent land rush, governments allocated many concessions with inadequate consultation, triggering grassroots reactions ranging from resistance to demands for better terms of inclusion.

But depending on how they are interpreted, investment treaties can compound shortcomings of national governance, protecting investments that caused dispossession. 

Compared to 'land grab' deals, changes brought by these international treaties are less tangible but are equally important. They shift the balance between local land rights and commercial land concessions, and between private interests and public authority.

The ongoing consultation on how international economic treaties affect indigenous peoples' rights, convened by the UN Special Rapporteur on the Rights of Indigenous Peoples and involving workshops and questionnaires, looks set to be an important step in disentangling these global-to-local dimensions. 

Further international-level action is needed to complement interventions at the grassroots. 

Lorenzo Cotula ([email protected]) is a principal researcher (law and sustainable development) in IIED's Natural Resources GroupThis blog was originally posted on RightingFinance


Foreign investment, law and sustainable development: a handbook on agriculture and extractive industries, Lorenzo Cotula (2016), IIED

Land rights and investment treaties: exploring the interface, Lorenzo Cotula (2015), IIED

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