Law and political economy of commodity rushes: Reflections on “land grabbing” in the Global South

A rice farmer in Northern Ghana (Photo: Isaiah Esipisu/IPS)
Law and Political Economy |5 September 2019
Law and political economy of commodity rushes: Reflections on “land grabbing” in the Global South

By Lorenzo Cotula
A few years ago I travelled to central Ghana, in the fertile farmlands west of Lake Volta. A global land rush was in full swing: large agribusiness plantation deals – “land grabs” for the critics – were announced at a dizzying pace in many low- and middle-income countries. This transition belt between Ghana’s forest zone and the northern savannah proved popular with international agribusinesses, and I came to understand the deals’ local impacts.
One day I spoke with a farmer who, until then, had made a living growing maize and yam. Shaded by a rough straw hat, the grey-bearded man retraced how a jatropha plantation took much of his land. He thought the compensation was not enough to get land elsewhere, and felt too old to establish a new farm anyway – or take a job with the plantation. He had some land left but knew they would come for that too. When that happens, he concluded, he would just stay at home.
I asked him how he felt about these developments. “I am unhappy about what happened”, he said, “but there was nothing I could do”. As a long-term migrant, he did not own the land: the power to allocate land rested with the traditional chief, who signed a lease with the company. Behind the farmer’s life-experience lay the way law structures property, territory and decision-making power. Confronting the issue alone seems impossible: it calls for a bold agenda of action and research that ties the global with the local.
The Multiple Dimensions of Global Commodity Rushes
The farmer’s response illustrates the different ways in which he and many people across the global South experience dispossession. One is the material dimension associated with setting up a large agribusiness plantation. A contract is signed, transferring control over a piece of land to a commercial operator. The land is cleared, and industrial monoculture displaces a diverse mosaic of small-scale farms.
But the commodity rush also exposed far-reaching changes in property systems. “Customary” systems evolve over time: in Ghana, political elites since colonial times have redefined customary rules to further their own interests, often strengthening the powers of traditional authorities and dispossessing rural people. And around the world, national and international law has also evolved – from business-friendly land law reforms to international treaties that protect foreign investment.
These two dimensions – the tangible and the intangible – reflect different time horizons: the tangible dimension is partly linked to short-term, cyclical factors such as fluctuations in commodity prices that create new incentives for commercial cultivation, while evolutions in property systems are driven by longer-term processes of socioeconomic and political change. But the two dimensions are interlinked, as evolutions in property systems can facilitate land clearances.
Understanding the Legal Structures of Dispossession
While deal making has now considerably slowed, the deeper-level factors that facilitated the deals and favored exclusionary outcomes are still at play. This includes powerful economic forces, such as changes in the structure of commodity chain relations. But law plays a key role in shifting control over the world’s natural resources.
To start with, legal technique converts natural resources into commercial assets: land cannot be physically removed, but long-term, transferable land rights can be traded, as can shares in landholding companies. And while contexts differ widely, and the relevant legal arenas are many and diverse, four recurring trends illustrate how law underpins commodity rushes:
The extensive land allocation powers of the state, and in places such as Ghana of traditional authorities, make it easier for companies to obtain concessions over vast areas claimed by large numbers of people. This applies in jurisdictions where the state owns all or most of the land – but also where unchecked powers of eminent domain enable authorities to expropriate privately held resources and reallocate them to commercial operators.
Many states have enacted pro-business reforms to compete for mobile international capital, making resources available to companies on favorable terms – from land tenure reform to tax incentives, all the way to stabilized contractual regimes.
While evidence shows that many traditional land use practices are resilient and sophisticated, rural people’s resource rights enjoy variable but often limited legal protection – including in jurisdictions where legislation or even the constitution formally recognizes those rights. For example, many land laws condition protection to proof of “productive use”, and skewed notions of productivity undermine the resource claims of shifting cultivators, pastoralists and hunter-gatherers.
A global network of international investment treaties has emerged that allows foreign investors to bring arbitration claims against states, and seek compensation for state conduct adversely affecting their business. Often described as instruments of the rule of law, the treaties can protect foreign investors’ resource rights, and even their expectations, against public action to withhold, reopen or revoke commercial concessions in the face of local opposition.
Taken together, these features mobilize the coercive powers of the state to transfer land from the public to businesses. They enable the national elites that control state institutions to partner with companies and capture benefits from resource extraction. Weak protection of rural resource rights facilitates these strategies, while investment treaties can protect exclusionary deals that favor international capital.
Towards a Holistic Action-Research Agenda
I have not seen that farmer again or learned about how he and his family and community coped with the longer-term changes. Many jatropha ventures around the world have since failed, and the commodity boom and bust has run its course. But on the ground, pressures on the world’s valuable lands continue to mount, often in shrinking political spaces. Demand for commodities is expected to increase in the future. Now is the time to act.
Long-term reconfigurations of property – from changing customary tenure to the negotiation of investment treaties – affect how low- and middle-income countries are integrated into global commodity chains. This interplay between local to global legal arenas requires responses at multiple levels.
There is a need to secure local land rights at scale, but achieving sustainable results also requires addressing the global dimensions. Similarly, ongoing debates about reforming the international investment regime must be informed by a fine-grained understanding of how this regime intersects with local natural resource relations, and a more comprehensive rethinking of the wider national and international legal frameworks governing foreign investment.
Historical legacies, vested interests and power relations stand in the way of real reform. And where reforms are enacted, tensions arise between the formal “social contract” reflected in the law, and the informal sociopolitical processes that determine how authority is exercised in practice – so implementation is often undermined by a de facto policy thrust that favors elite interests. These pervasive politics raise difficult questions about the role of evidence in processes of change, and what complementary actions are needed to bring the evidence to bear.
Rising to the challenge transcends conventional disciplinary boundaries – between national and international lawyers, between experts specialiZed in different field of international law, and between lawyers and political economists. It calls for transdisciplinary action-research methods that can interrogate the interplay of national and international law in sensitive sociopolitical terrains, and for new forms of local-to-global collaboration between research and activism in different geographic and policy spaces.
Lorenzo Cotula (@LCotula) is a Principal Researcher in Law and Sustainable Development at the International Institute for Environment and Development (IIED), a Visiting Professor at Strathclyde Law School, and a Visiting Research Fellow at Warwick Law School’s Centre for Law, Regulation and Governance of the Global Economy (GLOBE).
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