The Oakland Institute | 26 April 2010
(Mis)investment in Agriculture
Full report here: http://www.oaklandinstitute.org/?q=node/view/555
Foreword by Howard G. Buffett
I have never considered myself an activist. I’m a father and a husband as well as a businessman, an author, a philanthropist, and a farmer. But when most people see me with my cameras, they quickly identify me as a photographer.
My journey behind the lens began when I was fourteen- years-old. Against my mother’s wishes but with my father’s support, I traveled alone to Czechoslovakia to visit Vera, a foreign exchange student my family had previously hosted in Omaha. It was my first time out of the country and a particularly tense time for Vera’s family. Under Soviet occupation, armed soldiers policed the streets. Bullets perforated buildings. Markets were filled with lines of hungry people who spent hours waiting for small quantities of food—the Soviets seized most of the meats and vegetables. When I photographed the soldiers, my film was confiscated, but I learned a valuable lesson: in the years to come, I would hide film in a helicopter’s first aid kit at the Mexico border, in a pita chip bag in Darfur, and in my boots in the Ivory Coast. Images became my way to share my experiences with others and make sense of a world that was so different from my own.
One afternoon as I peered out my host family’s window, I witnessed a crowd of protesting students beaten with Billy clubs by secret police. I could not believe my eyes, and it was then that I decided to document what I saw—even if it was painful and sometimes dangerous. Forty years later I continue to document injustices and hardships.
As a permanent resident of South Africa and someone privileged to do a great deal of traveling, I have visited 38 of Africa’s 54 countries and made repeated trips to many of these nations. In the process, I’ve experienced countless cultures and traditions while exploring the continent’s 17 major agroecological growing zones. More than in any other place, it is on this beautiful continent that I sometimes wish I could shut my eyes, for I have experienced some difficult things: a mother who tried to hand me her dying child, a filthy HIV/AIDS clinic filled with young women infected by their husbands, and amputees who suffered horrible atrocities at the hands of vicious militias. I will never forget a trip to the Chad/Sudan border: an old man grasped my hand and with the little energy he could muster asked me not to forget him, not to let the world forget him and his people. I didn’t have the heart to tell him that most people had already forgotten.
In Africa—where I usually spend half the year—I am also reminded of what I am not. I am not, nor have I ever been poor. I have never had to look at my five children and decide which of them will eat. I have never had to choose just one of them to attend school. I have never contemplated giving one of my daughters to a much older man who would pay me a handsome price for a child bride. And I have never worried that I will be forced off my farm, evicted so that a powerful corporation or foreign investor could lease or buy it for an absurdly low price in a deal brokered by my own government.
I am forever indebted to my mother for teaching me a lesson I will never forget: “Those of us who can help others in need have an obligation to do so.” There are people who need our help. Now perhaps more than ever. This report discusses the land grabs that are quietly happening in Africa and the subsequent effect this process will have on the world’s most vulnerable people.
Proponents of land grabs do not like this moniker. They classify it as media hysteria. Activist jargon. And they claim it is deliberately inflammatory. I’m not a fan of sensational titles, but this time the title fits. There’s no disguising what is happening right now, on our watch. It is estimated that 50 million hectares have already been leased to foreign entities with at least 20 African countries considering similar deals. Some of these leases—99 years at $1.00 per hectare—are unbelievable deals. But they are only available to a select few. Local farmers—people who struggle to feed their families, gain access to fertile land and secure water for both personal consumption and agricultural activity—are not eligible for the deals being promoted in countries where millions of people remain dependent on food aid.
It turns out I’m the demographic that the host countries are hoping to attract. Just a few months ago I was personally offered an equity stake in a land deal being brokered by a hedge fund. I was assured that the partners would receive cash up-front with no personal liability. I was also promised that the host government would provide 70 percent of the financing, all utilities, and a 98-year lease requiring no payments for four years. The cost? $2.91 per acre per year after four years. Another fund provided a prospectus that claimed it would generate returns of between 15 and 20 percent. U.S. agricultural land has averaged a return of about six percent over the past thirty years. Therefore, these deals are either that good for investors, or the managers of these funds are misrepresenting the facts. If I didn’t know better, this would sound like a great opportunity! But here’s what I’m sure of: these deals will make the rich richer and the poor poorer, creating clear winners who benefit while the losers are denied their livelihoods.
Africa needs investment in agriculture—better seeds and inputs, improved extension services, education on conservation techniques, regional integration, and investment to build local capacity. It does not need policies that enable foreign investors to grow and export food for their own people to the detriment of the local population. I’ll be even bolder—such policies will hurt Africa, fueling conflict over land and water. Conflict is already the single largest cause of hunger on the continent; war, fighting, and repeated disputes destroy households, pitting families against each other, even children against parents. It results in horrific crimes—genocide, displacement, infectious disease, famine, sexual and gender based violence, human trafficking, and recruitment of children in armed activities.
We need agreements that outline principles and frameworks. However, these policies must be documented and enforceable. And, whether we like it or not, history proves that codes of conduct do not always transfer from paper to people; principles do not feed children. There are some simple questions to ask. When local people lack land rights in so many places, why should foreign interests take precedence? What assurances are in place to mitigate food insecurity risks for local populations? What evidence is there to suggest that the new land deals will be transparent when previous ones have been marked by secrecy? Why should we believe that communities will be fully incorporated into the negotiation process when it is in the investor’s interest to exclude potential dissenters? How will best practices be replicated when there are no role models to follow? What type of enforcement will be established to ensure minimal environmental damage? What quantifiable social benefits will the local communities derive and what types of consequences will investors and facilitating governments face if these benefits do not come to fruition? These questions must be answered and accountability must be insured. Unfortunately, mineral extraction in Africa has been less than stellar. Soil and water are the essence of life—far more valuable than oil or diamonds—so the stakes are even higher this time around.
Proponents of the land deals will dismiss my concerns and claim that this type of foreign investment will benefit the local people by providing jobs and creating infrastructure. They will also say that the land being offered is “unused.” These are hollow arguments. Investors have been quoted as saying they will employ 10,000 people and use high-tech, high-production farming techniques. The two promises are completely incongruous. As a farmer, I can tell you that high-tech, high production devices are appealing precisely because they reduce labor. Investors will not hire significant numbers of people and simultaneously scale-up their production techniques. And if they choose the former, they are likely to create low-paying jobs and poor working conditions. I may be making assumptions, but they are based on history—a history dating back to colonialism and one that has exploited both natural resources and people.
Particularly disconcerting is the notion that the “available” land is “unused.” This land is in countries with the highest rates of malnutrition on the only continent that produces less food per capita than it did a decade ago. In most cases, this land has a real purpose: it may support corridors for pastoralists; provide fallow space for soil regeneration; provide access to limited water sources; be reserved for future generations; or enable local farmers to increase production. The fact that rich and emerging economies do not have or do not respect pastoralists or use land for age-old customs does not mean we have a right to label this land unused.
This report’s case studies section discusses three countries—Ethiopia, Liberia and Sierra Leone—currently being touted as prime for investment. I have spent time in all three of these nations and our foundation invests in each. They are filled with amazingly brave, welcoming people who have endured significant hardship and struggle to survive. I met twelve-year old Negese Feleke and his mother Adanech Seifa at a World Food Programme distribution sight in Misrak Badawacho, Ethiopia. The day I visited, 4,257 beneficiaries gathered to receive food rations. A year before my visit Negese was healthy, but when I met him he was severely malnourished. Frail. Listless. Hopelessness clouded his hollow eyes. I thought about when my son was the same age. Howie was growing quickly and was eager to see the world. When he was twelve, I told him he could accompany me on my travels as long as he kept his school grades up. Negese, I thought, will never have the same opportunities my son had. Negese wanted desperately to be in school but was forced to quit when he became sick from lack of food. His mother’s one acre of land wasn’t sufficient to grow enough food for her eleven family members so she sold her cattle and goat to buy maize and false banana. When we met, her assets were depleted and her entire family was chronically hungry. Why aren’t the land deals offered to foreign investors also available to local people like Adanech?
Liberia is still recovering from a brutal twenty-three year civil war that displaced a staggering 86 percent of the population. Many people left their villages and headed to the capital, Monrovia, where there were camps for internally displaced people (IDPs). Others fled to neighboring countries. Helena and her seven children headed to a refugee camp in Guiglo, Côte d’Ivoire where she survived by cooking and providing day labor. Helena is something of an anomaly. Unlike thousands of displaced people who are still unable to return home, Helena made it back to Liberia. When we met, she was growing corn, white pumpkins, squash, eggplant, rice, beans, and bitter ball on a 20 acre plot with 13 other farmers. Yields were too low to provide enough food for the entire year; lack of storage facilities only exacerbated the situation, creating postharvest losses as high as fifty percent. Helena and the other farmers dream of owning land, which is controlled by a tribal chief. How can foreign investors’ interests be placed above the dual priority of repatriating displaced Liberians and equitably distributing the small amount of arable land to this disenfranchised population?
Sierra Leone is a portrait in contrasts. About seventy- five percent of the population lives on less than $2 a day, but each year the country exports millions of dollars of diamonds to rich nations. During the eleven-year civil war—from 1991 to 2002—the Revolutionary United Front (RUF) earned notoriety by forcibly recruiting child soldiers, chopping off peoples’ hands, and trading diamonds for guns, grenades, and drugs. The last time I was in Sierra Leone, the war was over but the diamond mining business was alive and well. In Kenema, I met a ten-year-old boy who was hauling dirt to sort for diamonds. His compensation? $0.12 a day and a cup of rice. Some people call mining development, but in this case, I call it disgrace. The history of mining in Africa—whether it is for diamonds, copper, gold, uranium, oil, or tin—is not pretty. When will we learn that when Africa is mined for its natural resources—including soil and water—local people rarely benefit?
There are so many disheartening statistics—1.5 billion of the world’s most impoverished farmers struggle to feed their families; 24,000 children die each day from poverty; over 1.1 billion people have inadequate access to water, and 1 billion people go to bed hungry—that it’s easy to be overwhelmed by numbers. We can become convinced that we can’t do anything to change the world into which we were born. But complacency is a luxury we cannot afford. Not when people like Negese Feleke have shared their stories with me. Not when former child soldier Little Cromite showed me the scar he incurred at age nine after his commander repeatedly cut open his chest and inserted cocaine to keep him “pumped up” and energized enough to drag the AK-47 he wasn’t big enough to carry. Not when I have met farmers who work from morning until night and still cannot save their children from malnutrition.
African land grabs are nothing new, but the scale at which they are occurring is unprecedented. We are at a crossroads. Everything our foundation and myriad development agencies have worked to accomplish will be undone if we stand by idly and watch governments and business people arrange African land leases and purchases that lack transparency, wreak of corruption and make the poorest populations more vulnerable. This report explains the gravity of the situation and proposes solutions. Its authors—self-proclaimed activists, who aren’t my usual bedfellows—have asked for my help and by way of this foreword, I am asking for yours. If you are reading this report it means that you enjoy some amount of privilege. And if you are in this position, you must remember that Africa is not a commodity. It must not be labeled “open for business.”
HOWARD G. BUFFETT
Mr. Buffett manages the Howard G. Buffett Foundation, a private foundation that primarily supports humanitarian initiatives. He operates a 1,240-acre family farm in central Illinois, manages a 400-acre family-owned farm in eastern Nebraska, and oversees two foundation-operated research farms: 1,300 acres in Illinois and 9,200 acres in South Africa.
Mr. Buffett currently serves on the Corporate Boards of Berkshire Hathaway, Inc., an investment holding company; Lindsay Corporation, a world-wide leader in the manufacturing of agricultural irrigation products; and Sloan Implement, a privately owned distributor of John Deere agricultural equipment in North America. Mr. Buffett has served on the boards of Archer Daniels Midland, a leading world food processor; Coca-Cola Enterprises, Inc., the largest Coca-Cola bottler in the world; and ConAgra Foods, one of North America’s largest food service manufacturers and retail food suppliers.
In 1997, Mr. Buffett became a member of the Commission on Presidential Debates; he received the Aztec Eagle Award from the President of Mexico in 2000; he has been recognized by the Inter-American Institute for Cooperation on
Agriculture as one of the most distinguished individuals in agriculture in 2002; and in 2005, he received the Will Owen Jones Distinguished Journalist of the Year Award.
He has authored seven books on conservation, wildlife, and the human condition.