Pambazuka News | 1 July 2011
Food insecurity, loss of food sovereignty, the displacement of small farmers, conflict, environmental devastation, water loss, and the further impoverishment and political instability of African nations – these are among the consequences of large-scale investments in land in Africa, a special investigation by the Oakland Institute has revealed.
Pambazuka News spoke to Anuradha Mittal, Jeff Furman and Frederic Mousseau about what prompted their research and what they discovered.
PAMBAZUKA NEWS: Congratulations on the release of your recent special investigation: Understanding Land Investment Deals in Africa. It is a phenomenal achievement shedding light on how large-scale investments in land in Africa are resulting in food insecurity, loss of food sovereignty, the displacement of small farmers, conflict, environmental devastation, water loss, and the further impoverishment and political instability of African nations. Can you tell us what prompted you to look into the issue and how you went about the research in such a comprehensive way?
ANURADHA MITTAL: Land investments – the purchase or lease of vast tracts of land from mostly poor, developing countries by wealthier food-insecure nations and private investors for the production and export of food and agrofuel crops – have become a very fast-paced international phenomenon. This trend which has come to be popularly known as ‘land grabbing’ has been painted as a development opportunity for developing countries.
By referring to surging influx of capital into primarily African land markets as ‘foreign direct investment’, players in the international policy arena including Food and Agriculture Organization (FAO), World Bank, International Fund for Agricultural Development (IFAD), and UN Conference on Trade and Development (UNCTAD) have affirmed that responsible land investment is possible and imply that African nations are beneficiaries in these deals. Their hope is that land investments will presumably create what has been hailed a ‘win-win situation’ in which food-insecure nations increase their access to food resources and investors profit from exports, while ‘host’ nations benefit from improved agricultural infrastructure and increased employment opportunities.
Yet, very little is currently understood of the legal, social, and economic implications of the land deals. The Oakland Institute’s own analysis identified three major areas in need of further investigation. These include the need for (i) better data on and better understanding of the concept of ‘land availability’ (ii) better understanding of the land deals, i.e. their nature and their implications for the countries and the food insecure populations and (iii) addressing the issue of land rights.
FREDERIC MOUSSEAU: The Oakland Institute commenced this work to address this knowledge gap to answer an important question that seems to have been removed from the debate: Where does the urgent and critical task of improving food security for the world’s most vulnerable fall within the accelerating trend of commercial investment in farmland?
With this aim, we started research in seven African countries including Tanzania, Ethiopia, Sierra Leone, Mali, Mozambique, Zambia, and south Sudan. We basically had our researchers on the ground, spending months in those countries, meeting and interacting with multi-stakeholders from international financial institutions to development agencies to government officials to investment agencies as well as individual investors. And, more important, we met and interviewed the communities who are impacted, to hear and learn what they knew of the project, what their expectations were, what their experience was, recognising that we wouldn’t know of the full experience because in many cases projects haven’t even started.
JEFF FURMAN: At the same time we have been interacting with investors because we believe investment in agriculture is very important. However, to assume that investment in agriculture in itself would lead to food security, or create jobs… would be a mistake. So our effort aimed at identifying good practices that result in returns not just for the investors but have real returns for communities and national economies that could be upheld and showcased as opportunities to be supported. And in the process we learnt of such schemes that it was obvious that the information needs to be in the public realm.
In the course of our work we also realised the extent of the lack of transparency. The information that we found in the course of our research – contracts, business plans, land leases, memorandums of understanding – are often impossible to access. In many instances, local communities who are being told to move off their lands, have not even seen these land leases! And thus we have made this information available to help inform the debate and allow people to make informed decisions about the future of their land. We know that once families are displaced, once the canals are built, once the small farmers lose their livelihoods, and once the environmental damage is done there is no going back. This would not and could not be repaired.
PAMBAZUKA NEWS: The findings of your report parallel the historical experiences of many colonised and displaced peoples expropriated and disenfranchised in the name of ‘progress’. A major argument put forward today by governments, investors, and international institutions is that agricultural investment will spur much-needed economic development, and create jobs and infrastructure in poor countries. Your reports reveal that these largely unregulated land acquisitions are resulting in virtually none of the promised benefits for local populations, but instead are forcing millions of small farmers off ancestral lands and food-producing farms in order to make room for export commodities. What distinguishes this current wave of occupation from the acquisitions of the past, in terms of the actors involved and the actions required to stop them?
FREDERIC MOUSSEAU: It is the pace at which this trend has grown since 2008 when agricultural food prices started sky-rocketing. According to the World Bank, in 2009 alone nearly 60 million ha – an area the size of France – was purchased or leased in comparison to an average annual expansion of global agricultural land of less than 4 million ha before 2008. The International Land Coalition estimates the figure to be 80 million hectares.
ANURADHA MITTAL: Secondly, the role of foreign investors who are driving this ‘land rush’ is pretty unique.
It is not just food insecure rich nations such as the Gulf states or the Chinese. Our research exposes the role of private hedge funds and equity funds who have nothing to do with agriculture and who are rushing in creating agricultural operations and taking over large swathes of land. The list is long: Emergent Asset Management, Chayton Africa, Quifel Holdings, Pharos Fund, Altima, Duxton, Macquarie, and many others. While they have not attracted much attention, the role of speculators in food prices is big and their control over land and water resources in Africa is huge.
JEFF FURMAN: In addition, this take over of African resources is being promoted as a development paradigm by the multilateral institutions across Africa. Whether it is Ethiopia or Sierra Leone or Zambia, the same one-stop shops have been created at the advice of the World Bank group who’s focus is to promote ‘investor friendly’ climate by ensuring foreign investors access to land.
PAMBAZUKA NEWS: Much of the Western mainstream press has focused on the acquisition of land in Africa by Chinese, Indian and Saudi Arabian interests, while your report also uncovers the large-scale involvement of US and European investors including: The London-based Emergent Asset Management; the Swiss-based Addax Bioenergy; Quifel International Holdings based in Portugal; the US-based AgriSol Energy; Pharos Financial Group, a Russian hedge fund, and some prestigious American universities, including Harvard, Spellman and Vanderbilt. In your experience, are there significant differences between ‘Western’ and ‘Eastern’ investment models, or are the stakes for African peoples essentially the same no matter who’s behind them?
ANURADHA MITTAL: The question, according to us is not on who should occupy Africa. The real question at the heart of the matter is for whom are Africa’s resources and who do they benefit? Africa’s resources – land, water, minerals… are for the people of Africa. Despite its rich resources, African nations are reeling from widespread hunger and poverty. In that context, to talk about who should have strategic investor status, or export guarantees, is the wrong question to ask.
The Chinese are actively promoting their interest in Africa. However, private hedge funds and equity funds are equally scary as they eye Africa for quick returns. They search for arbitrage opportunities – money they can make off the prices of land for instance, is a real threat. According to Susan Payne of Emergent Asset Management ‘in South Africa the cost of agri-land, arable good agri land that we are buying is one-seventh of the price of similar land in Argentina, Brazil and America. That alone is an arbitrage opportunity. We could be moronic and not grow anything over the next decade and we would still be making money,’ reflects true intentions of vultures sweeping into Africa, taking over land and other resources to profiteer from it.
At the same time these hedge and private equity funds have managed to strike investment protection and promotion agreements with governments which assure them tax holidays, special status as foreign investors such as reduction of profit taxes; right to repatriate earnings; water rights. They demand the most fertile lands, lands close to transportation and other infrastructure. These are the most fertile lands that Africa has to offer so these speculators can profit while poverty, impoverishment and hunger increases in Africa. So it’s not about choosing Western over the Eastern investors. This is about food sovereignty for Africa. It is really about how (the use of) water and land and the resources of Africa for Africans should be determined through democratic processes.
Land investments are also being stimulated by the United States and the European Union which have set targets to replace 30 per cent and 10 per cent, respectively, of their gasoline with agrofuels. Many European companies are thus involved in this new flourishing business, often with support provided by their governments and embassies in African countries. For instance, Swedish and German firms have strong interests in the production of biofuels in Tanzania. Major investors in Sierra Leone include Addax Bioenergy from Switzerland and Quifel International Holdings (QIH) from Portugal. Sierra Leone Agriculture (SLA) is actually a subsidiary of the UK based Crad-l (CAPARO Renewable Agriculture Developments Ltd), associated with the Tony Blair African Governance Initiative.
PAMBAZUKA NEWS: The publicity around your report emphasises investors ‘get[ting] what they want in exchange for giving a poor, tribal chief a bottle of Johnny Walker’. Did your research also note rising local resistance to the external acquisition of land? What strategies are those communities using to protect their homes and livelihoods?
ANURADHA MITTAL: Yes often we were told that in countries like Zambia, a gesture of gifts such as a whisky bottle for the tribal chief, along with some ‘promises’ of ‘ending poverty’ would get you approval for your land lease from the chief. And while there is a dearth of extension services and credit schemes for smallholder farmers, we were also told that once the tribal chiefs sign over the land to you then the credit schemes, banks and everyone moves in. The same institutions who believe that small farmers are un-bankable. So the whole system is set up to be against the small farmers, whereas suddenly if you come in with your plans and schemes of large industrial agriculture, especially if you are a foreign investor, everyone lines up to support you.
FREDERIC MOUSSEAU: In terms of resistance, as the reports indicate, communities are upset and organising. In places like Ethiopia where you have such high extent of political repression, we were struck by the bravery of people who came forward to still speak to our researchers and share their stories. It takes a lot of courage for them to have been able to do that and for security reasons we could not name them in the reports.
JEFF FURMAN: In Matuba, Mozambique where EmVest has taken over a thousand hectares of land, local villagers told our research team, ‘The white man came with the local officials and there was much pressure to give up the land.’ They couldn’t fight back while the white man promised, ‘we are here to end your poverty.’ While they wait for the promise of ‘ending poverty’ to come true, there is pressure on them to give another thousand hectares. The villagers and the chief that we met were very clear in the message: All we want is our land where we grow our food, shelter our family, and there is food for our cattle. We don’t want to be plantation workers because we can have better life on our one or two hectares than if we are plantation workers.
PAMBAZUKA NEWS: The reports state that major African rivers, including the Nile, the Niger and the Zambezi, are tapped by these land grabs. Hence, the land grabs are actually often ‘water grabs’ intended to stabilise not only food supplies but also water access in other countries. What can be done to protect watersheds and ecosystems that often cross national boundaries and jurisdictions from this assault?
ANURADHA MITTAL: We tend to talk about investments in land as just land grabs but what our research shows is that it is really about resource grabs and especially water grabs. For instance, the CEO of a fund operating out of South Africa boasted at an agricultural investment conference in Geneva, ‘Internally we call our land fund/water fund.’ This fund is active in Zambia that has 54 per cent of the SADC region’s water. Or Emergent’s EmVest project in Mozambique; they can use as much water as they want. They don’t have to pay for the amount of water used. The payments are minimal based on the acreage that they have. In Mali, Malibya has the assurance of the government to have access to all the water they need, while only 5 per cent of the country’s land is arable.
JEFF FURMAN: Agreements are being negotiated where the host countries are being obliged to provide water to foreign investors. And that is when you have to question, in terms of economic development, what do these countries and regions get back? And when you do the cost benefit analysis for the resources that have been offered to the foreign investors, it’s a win-win for the investor, not for the country or the communities.
PAMBAZUKA NEWS: You have posted announcements on your website for conferences for investors at which high-level officials from the FAO and UNEP are making presentations. In what ways are United Nations agencies and aid institutions facilitating or hindering the Great Land Grab?
FREDERIC MOUSSEAU: Yes, FAO officials, UNEP officials, World Bank officials are at these meetings. And it’s not about food, it’s not about communities. It’s about markets, it’s about arbitrage opportunities. It is about promise held by the ‘ag fundamentals.’
This is only the first phase of the release of our reports. Our work, which is based on documents that come from these agencies and foreign investors, demonstrates that though land deals are being promoted as a development paradigm, after you add up the benefits that are provided to investors – tax holidays, the right to repatriate their earnings, the right to hire ex-pats in countries, or the right to have all kind of holidays from paying profit taxes, (and taking into consideration) the price of land, and the water rights, basically the numbers don’t add up to provide concrete gains for people on the ground.
ANURADHA MITTAL: I was in Zambia in February where the government is launching a farm block scheme that is being touted as a scheme to end poverty and bring economic development. In a meeting with a very high official in the ministry of agriculture, I asked what the purpose of the scheme was and he said, ‘Economic upliftment and poverty alleviation.’ And I asked, ‘How do you plan to do that? Are you asking investors for a lot of money for the land?’ And he said, ‘No, you have to put in $5,000 for putting in your tender; the land is really cheap.’ So I asked him, ‘Are you asking to put in infrastructure?’ ‘Oh, no, the government is putting in the necessary infrastructure.’ ‘OK, are you asking for a specific number of jobs that need to be created by these investors so we know that livelihood expansion happens?’ And he said, ‘No you can put in some general language around employment creation. We don’t ask for hard numbers’. So I asked him, ‘Will you help me understand how you will meet this objective of poverty alleviation and economic upliftment of the country when you are not asking investors for anything.’ And he comes close to me, smiles and says, ‘You and I both know that there is no such thing as a good foreign investor.’
FREDERIC MOUSSEAU: Malybia in Mali took over 100,000 hectares of land. They say they will provide jobs for a thousand people. Research has showed that when using irrigation in this region of Mali, two hectares of land are enough to provide for a family that depends on agriculture for their livelihood. So if it is 100,000 hectares it means 50,000 families, and if you count at least four or five people in a family, you can do the math. How many people can be sustained? And we know over and over again from UNEP and other UN agencies that the way to improve food security for Africa is through smallholder agriculture. If the kind of support and investments that are being provided to foreign investors was provided to African farmers, we would have a very different Africa.
We also know that industrial agriculture is responsible for anywhere between 16 to 30 per cent of the greenhouse gas emissions. And instead of dealing with climate change what we are doing is rushing to Africa to set up the same huge industrial style agriculture.
And in some cases, like in Mozambique and Zambia there is funding from UNFCC to ostensibly combat climate change because the projects are for biofuels.
PAMBAZUKA NEWS: What does your experience with the reaction to the launch of the report tell us about strategies needed to confront the Great Land Grab?
What actions would you recommend that farmers and peasants in Africa take in the light of your findings? And what kind of actions would you want of the readership of Pambazuka News?
ANURADHA MITTAL: Communities on the ground who are being impacted by these land grabs have been fighting back in ways they can. In some places they can be very vocal in other places they cannot. The Oakland Institute took on the task of getting this information out because we believe information is knowledge and knowledge is power. What is evident however is that this issue confronts all civil society groups working on climate change, water issues, land rights, hunger, GMOs,etc. We can no longer stay focused on one single issue without working on the larger political environment.
FREDERIC MOUSSEAU: Our partners amidst the Ethiopian diaspora, in Sierra Leone, Mali, Tanzania, and other countries are taking on the biggest challenges, taking on their local and national leaders. It is important for the international civil society to push and support those national mobilisations. National groups in these countries are demanding public hearings, moratoriums on these deals. And internationally we need to be backing and supporting those efforts.
JEFF FURMAN: And we need to determine where our pension funds and university endowments, sovereign wealth funds invest. These cannot be guided by merely high returns; it has to be about quality of life, and livelihoods of people. This has to be about not once again colonisers rushing in to Africa to colonise at the expense of the people and environment of Africa. We simply must say we cannot invest in schemes like this that are promising 25 to 40 per cent returns. Student groups, faculty organisations, pension funds should be saying, ‘no way!’
By Pambazuka News