GRAIN | 6 June 2018
Failed farmland deals: a growing legacy of disaster and pain
"The project seems ‘failed’ from the outside, but there's a need to keep up the pressure and demand that the land be returned to the people − not just for the company to pull out their investment."
Premrudee "Eang" Daoroung of Project Sevana, Thailand, reflecting on Mitr Pohl’s sugar plantation in Cambodia 
2017 went down as one of the deadliest years ever for land defenders.  It was also a pretty bad year for several land grabbers. A significant number of big farmland deals collapsed, adding to a growing list of projects that have backfired over the past few years. While this is good news for affected communities, many of them are now left dealing with the fall-out and still struggling to get their lands back. We may have made some gains in stopping the projects, but have urgent work to do to address what happens when they fail. 
What we are seeing
When GRAIN last updated its database of land deals in the food and agricultural sector, we identified 135 deals covering 13 million hectares that had been cancelled or abandoned or seemed to have disappeared or collapsed. We put these in a separate table, outside our field of vision. That was in 2016.
In 2017, we were struck by the number and importance of failed farmland deals that were being announced. Many of them were emblematic projects that had made global headlines or captured imaginations earlier on. The Indian agribusiness investor Karuturi proclaimed he was leaving Ethiopia. The French government announced its decision to pull out of the G8 New Alliance for Food Security and Nutrition (NAFSAN). The president of Senegal told Anas Sefrioui, Morocco’s third richest billionaire, who got a 10,000 ha concession to produce rice in Dodel, the deal was off. We wondered if we should celebrate but decided instead to take stock of what was going on and what it meant. In that process, we consulted allies and partners for their views. 
Looking at the hard data available, several comments can be made: 
What we bundle under the term “failed” deals covers different realities. In some cases, investors lost their land because the government cancelled or severely scaled back a permit or concession, as happened to Herakles in Cameroon. In others, investors pulled out because they were losing money or facing other negative consequences, such as with the Italian Tampieri Group's Senhuile project in Senegal. Other cases can be classed as failures because there is so much grassroots opposition to them that they are blocked or stalled. Further cases fall in this category because they are not meeting expectations. In yet other cases, the investor went bankrupt.
One aspect that is extremely important to stress is that these are not failed farmland deals in the sense that the land has gone back to the communities who were there before. On the contrary. The projects are often passed on to other investors or to the state. In that sense, the land grabbing itself does not fail! It is the investors and their projects that fail. That is why we do not talk about failed farmland grabs, but failed farmland deals. We cannot emphasise this enough.
Why are so many farmland deals failing?
The case of the World Bank’s PDIDAS project in Senegal offers an important insight into the recent failure of some of the farmland deals and projects. The acronym PDIDAS stands for "Inclusive and sustainable agribusiness development project" in French. It was launched in 2014 for a five-year period, with a loan of $80 million from the World Bank. The idea was to promote big commercial export-oriented farm operations in Senegal without wiping out small farmers and herders who are the backbone of the country's economy. Foreign investors, like domestic ones, would get access to land that would be divided 50:50 between their companies and surrounding family farmers. This way, infrastructure developed for the project (roads, irrigation, electricity, fencing, etc.) would be available to and used by all.
In essence, the project aimed to set up parallel tracks of agricultural “development”, big business alongside family farming, in a fiercely ideological drive to demonstrate that we shouldn't have one without the other. The investors would be free to produce their own crops for export or contract out production to the small farmers. In the process, certain elements of Senegal's land law would be skirted to permit the leasing of lands to both the investors and the communities without making changes to it, maybe even providing a new “model” for the land reform process then under way.
So much for the theory.
In reality, the project was and is a flop, groups in Senegal say. According to Ardo Sow, a civil society activist who hails from the project area, of the 20,000 hectares identified and made available for the project, only 200 ha (the pilot site itself) had been developed and put into production as of early 2018.  Why? Local mayors say the project got stuck in its own rigidity, bureaucracy and lack of clarity. "Zero benefit," they cry. "Dysfunctional", others say. "Unsatisfactory", the World Bank puts it, knowing that when the project ends in 2019 there won’t be much to show for it.  And yet, as Sow points out, Senegalese tax payers will have to pay back the loan.
The fundamental flaw with PDIDAS is that its overall plan to push consensual agribusiness as a strategy is and was oriented towards making things work for the investors, by winning over local communities. The idea is not to strengthen peasant farming, but to move agribusiness forward, internalising peace-building with communities who have been living on the land for generations and who are reluctant to cede their lands to agribusiness. Ultimately this also explains the collapse of the ambitious Nacala Corridor Fund, that was supposed to generate multiple agribusiness projects between foreign companies and small farmers in northern Mozambique, and the G8's NAFSAN in Africa. Both sought to impose agribusiness blueprints onto the realities of African peasants.
Another factor in the failure of many deals is the incompetence of the companies. Often the businessmen (yes, men) behind the projects have little to no experience in agriculture and little knowledge of the places where they've acquired farmlands. Karuturi's farmland deal in Ethiopia is one emblematic case (see box on Karuturi: the neverending pendulum). Calvin Burgess, a businessman from the United States who made his fortune in private prisons, failed badly with his large-scale rice farming endeavours in Kenya and later Nigeria, known as Dominion Farms. Several major ventures financed by Saudi business groups have also flopped, such as the Foras 7x7 programme that was supposed to convert 700,000 hectares of land across West Africa into rice plantations or the Arafco sugar cane project in Kenya, backed by a Saudi prince, which has gone nowhere and is now under investigation by Kenya's anti-graft commission.  And there's also the oil palm plantation empire that Indian IT billionaire Sivasankaran amassed in a few years, stretching from Papua New Guinea to West Africa. All of his plantation projects, which add up to over 500,000 ha, have been at a standstill since he filed for bankruptcy in the Seychelles in August 2014. 
A final, key factor that cannot be overlooked in explaining the growing number of failed farmland deals is the opposition to them. Local resistance movements have challenged and helped numerous land deals to stall, fail or be revamped. This is clear in many cases and needs to be recognised. In Cameroon, the Herakles land concession was downsized to a quarter of its original scale due to intense campaigning from community organisations and NGOs in the country supported by international groups. In Senegal, persistent pressure at the local level buttressed by research from international allies helped castrate the Senhuile project which is still there, sort of, but in a severely shrunk form.  In Mozambique, strong resistance from peasant organisations backed by Japanese and Brazilian colleagues has put the trilateral Prosavana project on life support and killed off its foreign investment component, the Nacala Corridor Fund. In Argentina, it was massive social resistance that stopped Beidahuang, a huge Chinese agribusiness group, from getting 320,000 ha in Rio Negro. Just like what happened in Madagascar against Daewoo, who tried to get 1.3 million ha of the country’s farmland.
More recently, it was the people's resistance in Dodel that brought about the cancellation of the Afripartners project in Senegal. It was intense pressure by French NGOs together with outcries from African colleagues that brought the French government to question and pull out of the G8 New Alliance, based on risks it came to understand about land grabbing. Large NGO campaigns have succeeded in stopping sugar producer Mitr Phol in Cambodia or Cargill in Colombia, while persistent community organising helped drive Dominion Farms out of Kenya.
In Mali, grassroots leaders point out that a failed land deal like the Malibya project, although it did not fall apart because of local resistance, helped ignite a movement of popular resistance that is now a powerful social force in the country and that has influenced a rewrite of the national land law.
What can we learn from these failed deals to stop others?
The failure of so many farmland deals makes it obvious that governments are not doing their job to properly screen would-be investors. Fraud, including false claims about investors' abilities to engage in agribusiness, abounds. These days, all companies claim to have some sort of standard for responsible investing but this rarely seems to matter, as internal standards are often violated by companies acquiring farmlands. 
This makes due diligence by host states and requirements for investors to actually cultivate the land more necessary than ever. The problem, though, is that due diligence in many cases goes no further than a superficial check of the Internet to see that no red flags appear. Civil society groups and journalists are often doing more to catch corruption involved in land deals than the authorities. And this is a problem everywhere -- including in Australia, France, the US and Canada, where foreign companies are acquiring farmlands with hardly any oversight and often totally under the radar.
We need to use this accumulated evidence of failed deals to press more urgently for moratoriums, bans or stricter controls on the acquisition of farmlands by foreign companies, and even domestic companies. This is not easy work. Some governments refuse to budge from their land investment policies, even in the face of numerous failed deals, mass opposition and violent conflicts, such as in Ethiopia, Papua New Guinea and Cambodia (see box on Land grabbing as state policy is also a failure).
Another important take away is the need to hold companies and their investors accountable. Companies and governments make all kinds of promises to communities to get them to give up their lands -- jobs, schools, health clinics, etc. When projects collapse and fail to deliver on those promises, the communities rarely get their lands back and are not compensated for what they were supposed to receive. The Addax case in Sierra Leone is one clear example, but there are many others (see box on Addax).
Some of the groups involved in the struggle against the Addax project argue that it's not enough for investors to express commitment to or prove compliance with this or that standard, be it the International Finance Corporation’s performance standards or the UN Committee on Food Security’s voluntary guidelines on land tenure, to name the two most respected ones. Actual funding needs to be set aside for possible failure, as a part of a serious “exit strategy”, they say. Money is not the answer, of course, but the material needs of the communities who were left worse off because of the project cannot be ignored.
This is true. But a perhaps larger problem demonstrated by the Addax case is that, in the end, no one was held responsible. There was no actionable liability held by either Addax or the development finance institutions to remedy the situation that arose as a result of the project backfiring. This cannot be. We need investors, public or private, to be legally responsible for their failures.
As it stands, such remedies only exist for the companies, who can sue governments under provisions of bilateral or multilateral trade and investment treaties when their projects fail (see box on ISDS). This is a backwards and fundamentally unjust situation that must be urgently reversed.
But perhaps the most important message is that these and other farmland deals should never have been allowed to happen in the first place. Investment is needed in policies and initiatives to support food production by local communities, not opening the doors to agribusiness.
What do we do when projects fail?
As we've already underlined, when farmland deals fail, the land does not necessarily go back to the communities. It would be wrong to assume that as soon as a deal is cancelled or abandoned, the land is returned to those who were there before the investor came. This rarely happens and is a big part of the overall problem of farmland investing in general.
In numerous cases, the initial company is replaced by another, often without the community's knowledge. This company can be worse than the first and it may refuse to honour engagements that the initial company made to the communities. Concessions can also be reallocated or sold to new companies. In other cases, states take back the land for other uses. It is even possible that that company has only temporarily left the scene, waiting in the shadows for a better time to restart the project.
Whatever the case, the aftermath of a failed farmland deal is usually devastating for communities. Even if they do get back some of their lands, these lands have likely been deforested or exhausted, and traditional sources of water may no longer exist. This makes it hard for them to farm, hunt and harvest as they once did to ensure their food and livelihood needs. There may also be lingering social tensions between those in the community who fought against the project and those who accepted it.
The communities may also find themselves suddenly isolated, without the national and international support networks they had when they were struggling against the project or the initial investor.
The failure of a farmland deal is not a time to relax. For the alliance of groups that opposed the project, it is a time to ramp up the work, and shift to a new phase. The focus now has to be on supporting the affected communities to get their lands back and to restore them to suitable conditions. The land grabbers and their financial backers need to be held liable for the damages, and this requires creative strategies and on-going support from allies, at home and abroad.
It is also important to recognise that leaders from communities that have stopped land deals have valuable experiences that need to be shared with other communities. These leaders should be encouraged and supported to participate in movements against land grabbing, especially at the national and regional levels. Greater awareness and stronger unity among communities is the most important defence against future land grabs.
1 Personal communication with GRAIN, April 2018.
2 Matthew Taylor, “2017 on course to be deadliest on record for land defenders”, The Guardian, 11 October 2017, https://www.theguardian.com/environment/2017/oct/11/2017-deadliest-on-record-for-land-defenders-mining-logging
3 By “fail” we generally mean projects that are abandoned, withdrawn from, cancelled, suspended, scaled down or not performing.
4 Groups we consulted shall go unnamed, but we are very thankful to all of them! Many of their points are incorporated here.
5 Drawing from the data GRAIN has been compiling publicly through farmlandgrab.org, validated by direct contact with journalists and local groups.
6 Personal communication with GRAIN, 3 April 2018.
7 “PDIDAS : Entre tâtonnements, déceptions et contestations”, NDAR Infos, 27 September 2017, https://www.ndarinfo.com/PDIDAS-Entre-tatonnements-deceptions-et-contestations_a19998.html
8 Kinyuru Munuhe, “Mystery as Sh2b Malindi sugar ‘plant’ probe stalls”, Mediamax, Nairobi, 29 April 2016, http://www.mediamaxnetwork.co.ke/people-daily/217075/mystery-as-sh2b-malindi-sugar-plant-probe-stalls/
9 See GRAIN, “Feeding the one percent”, 7 October 2014, https://www.grain.org/e/5048 and Surajeet Das Gupta et al, “C Sivasankaran: Once the country's most astute deal maker, now a bankrupt entrepreneur”, Business Standard, 6 September 2014, http://www.business-standard.com/article/companies/c-sivasankaran-once-the-country-s-most-astute-deal-maker-now-a-bankrupt-entrepreneur-114090501264_1.html
10 In early 2018, it appears that the land has changed hands again from the Italians who handed it off to their Senegalese partner who has now passed it on to... Russians?
11 This has been particularly well documented in the case of the members of the Roundtable for Sustainable Palm Oil (RSPO). See for example, Friends of the Earth Europe, “External concerns on the RSPO and ISP certification schemes”, 2018, http://www.foeeurope.org/sites/default/files/eu-us_trade_deal/2018/report_profundo_rspo_ispo_external_concerns_feb2018.pdf
12 Papua New Guinea’s “Special Agriculture and Business Leases” programme, as a state policy, could be considered a failure in itself. See Act Now PNG for more information: http://actnowpng.org/campaign/sabl
13 Open Development Cambodia has data accounting for 257 ELCs granted up to 2012, while the Cambodian League for the Promotion and Defense of Human Rights has data on 274 ELCs covering 2.1 million ha.
14 Personal communication with GRAIN, March 2018.
15 For more on this, see Anywaa Survival Organisation, “It’s time to end land grabs and establish food sovereignty in Gambela”, May 2018, http://www.anywaasurvival.org/wp-content/uploads/2018/05/ASO_Report_May_2018.pdf
16 See in particular Swedwatch, "No business, no rights", 6 November 2017, http://www.swedwatch.org/en/regions/africa-south-of-the-sahara/swedfund-fmo-lacked-responsibility-leaving-project-without-exit-strategy/ and Brot für Alle & Brot für die Welt, "The weakest should not bear the risk – The case of Addax Bioethanol in Sierra Leone", September 2016, https://brotfueralle.ch/content/uploads/2017/07/1609_Addax_The-Weakest-Should-not-Bear-the-Risk.pdf
17 Brot für alle & Brot für die Welt, “The weakest should not bear the risk”, 2016, https://brotfueralle.ch/content/uploads/2016/06/The-Weakest-Should-not-Bear-the-Risk.pdf