Call for GCC 'land grab' policy to stop - experts

FOOD SECURITY: The Gulf is buying up large chunks of farm land abroad to provide food basics such as rice. (Getty Images)

Arabian Business | Monday, 07 September 2009

by Joanne Bladd

Agricultural experts have called for a halt to moves by Gulf investors to snap up foreign land, amid claims that poor nations are losing much-needed farmland in a calculated land grab.

According to the International Food Policy Research Institute (IFPRI), a Washington-based think-tank, up to 20 million hectares of cultivable farmland – roughly a fifth of all the agricultural land in the European Union – has been acquired since 2006, at a value of up to $30bn.

The land grab is being blamed on wealthy countries with concerns about food security, said David Hallam, deputy director of trade and markets at the Food and Agricultural Organisation (FAO), part of the UN.

“What’s different this time is that these [deals] are part of government-led policies. This is very much investing to produce food to ship home, rather than as a general investment policy,” he said.

Saudi Arabia is one of the largest buyers of agricultural land, followed by the UAE, Qatar, Bahrain, Kuwait and Libya. All are reliant on massive food imports.

“It’s moved from being a few select land deals to being, in the case of many countries and Saudi is one, a coordinated effort to buy farmland overseas,” said Devlin Kuyek of GRAIN, an international non-profit group that supports small farmers. “It’s absolutely a land grab. If the term has any application at all, it’s here.”

Some of the largest deals include Saudi’s acquisition of 500,000 hectares of land in Tanzania, and the UAE’s purchase of 400,000 hectares in Sudan. Last December, Qatar took 40,000 hectares of land from Kenya in exchange for a $2.5bn loan to allow the African country to build a second deep-water port.

“Many of the countries that are being targeted have major hunger issues,” said Kuyek. “They [Gulf states] are using their wealth to look after their own needs when there are much bigger issues out there.”

According to the World Food Programme, Sub-Sahara Africa alone received $2.1bn in food aid last year.

In many cases the deals have sparked public outrage from local smallholders who claim they are being thrown off land they have farmed for decades.

The Saudi Binladin Group has been forced to scrap a $4.3bn project to grow rice in Indonesia after violent protests, while in Kenya, Qatar is facing an uprising hands from local farmers who claim the land is theirs.

“A lot of smallholders don’t even know their government is negotiating these contracts for land,” Kuyek says, “so the anger is understandable.”

According to Hallam, developing countries typically reap few benefits from these deals – despite promises of infrastructure, jobs and joint ventures by investors.

“Developing countries are not in a strong position compared to the investors,” he said. "Those broader benefits only appear if you have a good, strong contract with the investor and the laws to support it. And both of those elements are usually missing.”

The FAO is now pushing investors to back joint ventures with local farmers in poor nations, rather than leasing or buying land outright. Farmers then remain in control of their land, but sell their produce on to shareholders at guaranteed prices.

“It’s working at arm’s length with smallholder groups, still putting in infrastructure and so on, and it’s just as reliable with less of the political problems. You get the same results for your food supplies,” said Hallam.

Qatar is one country taking a second look at the value of such programmes. Hassad Food, an agricultural firm owned by the Arab state’s sovereign wealth fund, last week said it would buck the land grab trend in favour of taking stakes in farming firms.

“We are not deleting the option of buying farmland but we don’t feel like it is the right strategy,” said chairman Nasser Mohamed Al Hajri. “In many cases these deals are not win-win situations and we don’t want to be in a situation where the rich are taking away food and land of the poor.”

A number of developing nations are also reviewing the benefits of land deals. Thailand’s agricultural ministry last week said it is reviewing new laws that would prevent farmland being switched for new uses, such as leasing or exporting to specific countries.
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