IPS | 13 April 2010
By Hilaire Avril
PARIS - A year after the purchases of vast swathes of farm land in Africa first drew public attention, transactions remain as opaque as ever.
Private companies are resisting a global code of conduct that would ensure transparency and local elites continue to benefit from deals that encourage corruption and increase food insecurity.
The hunger riots witnessed in parts of the developing world in the past two years were the most visible and direct effect of sky-rocketing food prices. Simultaneously, international investors started purchasing agricultural land in some of the most fertile regions of the world, particularly Africa.
Often described by recipient governments as "agricultural investments", many such ventures were decried by sections of African and western civil society as "land grabs". Some of these million-dollar projects have pitted host countries and corporations against local subsistence farmers.
South Korean firm Daewoo’s announcement that it had leased some 1.3 million hectares of land in Madagascar in November 2008 sparked furious opposition, contributing to riots which toppled the government.
In 2009, the arguments in the raging controversy were soberly analysed by the London-based International Institute for Environment and Development (IIED), an independent organisation that aims at infusing national and international policy with the agendas of marginalised people.
In its report, titled "Land grab or development opportunity? Agricultural investment and international land deals in Africa", the institute concluded that "these investments can either create new opportunities to improve local living standards, or further marginalise the poor".
The deals could indeed work for development, it argued, as "increased investment may bring macro-level benefits (GDP growth, greater government revenues), and create opportunities for raising local living standards. Investors may bring capital, technology, know-how, infrastructure and market access". (GDP stands for gross domestic product.)
But, "as governments or markets make land available to prospecting investors, local people could lose access to the resources on which they depend – not just land, but also water, wood and grazing," the report cautioned.
Almost a year on, the debate persists. Non-governmental organisations insist there are few reasons to be optimistic.
"Tanzania, for instance, has declared a moratorium on investments in biofuel plantations last November, due to pressure from small tenure farmers," says Antoine Bouhey, who follows the issue for Peuples Solidaires and ActionAid, two organisations campaigning for farmers’ rights in developing countries.
"But we still lack a binding regulatory framework compelling investors to account for local populations’ interests," he adds.
The United Nations Food and Agricultural Organisation, the World Bank and other concerned institutions convened in New York last September to sketch principles for such agricultural investments.
But according to a close observer who spoke on condition of anonymity, "the topic is still very sensitive: some donor countries would like to draft a code of conduct, but the private sector has been very difficult to engage".
The report by the IIED observed that "effective safeguards in national law, and skilfully and transparently negotiated contracts, are key to securing local land and water rights."
But according to Camilla Toulmin, who heads the institute, "a lot of these contracts are being negotiated behind closed doors. Some are pathetically thin and a few grant substantial preferential rights to access water to the investors."
Despite some national laws requiring investors to consult with local populations before land is allocated, as in Mozambique, "lack of transparency and of checks and balances in contract negotiations encourages corruption and benefits ending up with the rich and powerful," says Toulmin.
Fatou Mbaye has monitored the issue in Senegal for ActionAid. She is disillusioned: "In theory, all land allocation is supervised by local officials, but in practice national authorities assign them to investors by means of all-powerful injunctions, without ever engaging with local residents," she says.
"Some 320 thousand hectares have been assigned to the production of biofuels, mostly by foreign investors who sometimes use local shell-companies to navigate regulations," she explains. "And yet, Senegal imports about 60 percent of its food, and these land purchases keep farmers from expanding their food production," she says.
The issue regularly makes the headlines in many sub-Saharan countries. But figures are scarce and trends hard to quantify. "The reality on the ground is not as simple as some media reports would have it," says Toulmin.
"There is evidence of speculative claims to agricultural lands, but many of these deals do not go through in practice," she observes.
"Still, if I were a small farmer, I would be increasingly nervous, having limited access to water and markets as governments are gradually tempted to take land away from what they deem to be customary, traditional and unproductive use," she adds.
The IIED recently published a guide detailing how to draw up contracts for fairer and more sustainable natural resource investments.
"Government capacity to negotiate and manage contracts and civil society capacity to scrutinise government dealings can make a real difference to getting a better deal from natural resource investment," it argues."The real question is how we can persuade governments and the private sector that it’s in their best interest to have a broader social consensus as agricultural land is vulnerable to sabotage and, if the local population is not on board, it is not an easy asset to protect," Toulmin concludes.