Financial Times | April 28 2009
By Javier Blas, Commodities Correspondent
Foreign investors in overseas farmland “should not have a right to export” during a food crisis in the host country, a government-backed think tank is to propose on Thursday, in the first code of conduct to address the so-called land grabbing trend.
The International Food Policy Research Institute will say in a policy paper on Thursday that while “land acquisitions have the potential to inject much needed investment into agriculture”, they raise concerns due to their impact on local people, who risk losing access to “land on which they depend”.
In addition, the think tank will call for “transparency” during the negotiation of deals; “respect for existing land rights, including customary rights”; “sharing of benefits” from deals; leases rather than farmland purchases; and “environmental sustainability.”
The code of conduct proposal comes as food deficit countries – those that consume more food than they produce, such as South Korea and Saudi Arabia – have in the last few months launched massive investment programmes to secure overseas farmland and export back the crops to feed their own populations.
The World Bank aims to publish as soon as next month guidelines to ensure that the farm deals benefit both the investors and the host countries.
Joachim von Braun, Ifpri director, told the Financial Times in an interview that current investments in farmland, including those pending a final agreement, could amount to 15-20m hectares – more than twice the cropland area of Germany.
“The trend to secure farmland is strong and remains secretive,” he said. “The international community needs a code of conduct to regulate the investments.”
The “land grabbing” trend has alarmed some agricultural diplomats and food aid officials, particularly because some countries aim to export their crops from countries suffering from food shortages – such as Ethiopia – regardless of the food situation in the host country.
When United Arab Emirates negotiated last year several farmland deals with Pakistan, Abu Dhabi asked for a blanket guarantee to export all the harvest. Islamabad refused to grant such an assurance and the deals collapsed.
“If large-scale land acquisitions cause land expropriation or unsustainable use, however, foreign investments in agricultural land can become politically unacceptable,” the think tank will say. “It is therefore in the long-run interest of investors, host governments, and the local people involved to ensure that these arrangements are properly negotiated, practices are sustainable, and benefits are shared.”
The pursuit of foreign investment in agriculture signals how countries are seeking to boost food security after last year’s spike in agricultural commodities prices and trade restrictions led them to believe they could not rely on the global food market.
Jacques Diouf, United Nations’ top agriculture diplomat, has warned about signs of “neo-colonialism” on some of the overseas farmland deals, even though he is a strong advocate of foreign investment in agriculture, particularly in Africa. “We are making a bad use of a good idea,” Mr Diouf told the Financial Times on the sidelines of last week’s Group of Eight ministerial meeting on agriculture.
The G8 agriculture ministerial meeting called in a communiqué for increased “public and private investment in sustainable agriculture”, but warned that “attention should be given to the leasing and purchase of agricultural land in developing countries, to ensure that local and traditional land use is respected.”
By Javier Blas, Commodities Correspondent
Foreign investors in overseas farmland “should not have a right to export” during a food crisis in the host country, a government-backed think tank is to propose on Thursday, in the first code of conduct to address the so-called land grabbing trend.
The International Food Policy Research Institute will say in a policy paper on Thursday that while “land acquisitions have the potential to inject much needed investment into agriculture”, they raise concerns due to their impact on local people, who risk losing access to “land on which they depend”.
In addition, the think tank will call for “transparency” during the negotiation of deals; “respect for existing land rights, including customary rights”; “sharing of benefits” from deals; leases rather than farmland purchases; and “environmental sustainability.”
The code of conduct proposal comes as food deficit countries – those that consume more food than they produce, such as South Korea and Saudi Arabia – have in the last few months launched massive investment programmes to secure overseas farmland and export back the crops to feed their own populations.
The World Bank aims to publish as soon as next month guidelines to ensure that the farm deals benefit both the investors and the host countries.
Joachim von Braun, Ifpri director, told the Financial Times in an interview that current investments in farmland, including those pending a final agreement, could amount to 15-20m hectares – more than twice the cropland area of Germany.
“The trend to secure farmland is strong and remains secretive,” he said. “The international community needs a code of conduct to regulate the investments.”
The “land grabbing” trend has alarmed some agricultural diplomats and food aid officials, particularly because some countries aim to export their crops from countries suffering from food shortages – such as Ethiopia – regardless of the food situation in the host country.
When United Arab Emirates negotiated last year several farmland deals with Pakistan, Abu Dhabi asked for a blanket guarantee to export all the harvest. Islamabad refused to grant such an assurance and the deals collapsed.
“If large-scale land acquisitions cause land expropriation or unsustainable use, however, foreign investments in agricultural land can become politically unacceptable,” the think tank will say. “It is therefore in the long-run interest of investors, host governments, and the local people involved to ensure that these arrangements are properly negotiated, practices are sustainable, and benefits are shared.”
The pursuit of foreign investment in agriculture signals how countries are seeking to boost food security after last year’s spike in agricultural commodities prices and trade restrictions led them to believe they could not rely on the global food market.
Jacques Diouf, United Nations’ top agriculture diplomat, has warned about signs of “neo-colonialism” on some of the overseas farmland deals, even though he is a strong advocate of foreign investment in agriculture, particularly in Africa. “We are making a bad use of a good idea,” Mr Diouf told the Financial Times on the sidelines of last week’s Group of Eight ministerial meeting on agriculture.
The G8 agriculture ministerial meeting called in a communiqué for increased “public and private investment in sustainable agriculture”, but warned that “attention should be given to the leasing and purchase of agricultural land in developing countries, to ensure that local and traditional land use is respected.”
