Capital Business (Nairobi) | 19 May 2009
Kenya’s plans to lease out about 100,000 acres of land to a Gulf state for agriculture at a time when the country is facing serious food shortages has been criticised.
The deal with the government of Qatar is similar to a model that has been widely criticised by agricultural experts worldwide and mainly involves poor African countries and rich nations or corporations especially from the Middle East.
The Qatari government intends to grow "vegetables and fruit" in a project near the Tana River delta where the Kenyan government owns nearly 1.3 million acres of uncultivated land.
According to a new report by the international food agency - the International Food Policy and Research Institute (IFPRI) - the latest acquisition, among others, is an example of wealthy countries and companies trying to secure food supplies from the developing world.
Saudi Arabia and the United Arab Emirates have also been negotiating leases of large tracts of farmland in countries such as Sudan and Senegal since the global food shortages and price rises set in last year.
IFPRI’s report notes that the deal is likely to cause concern in Kenya because fertile land is unequally distributed. Several prominent political families and individuals own huge tracts of farmland, while millions of people live in small parcels.
Presently, the country is also experiencing a food crisis, with the government forced to introduce subsidies and price controls on maize after poor production and planning caused the price of the staple maize flour to double in less than a year.
Of greater concern is the fact that much of the produce by Qatar including vegetables and fruit will be exported to the Gulf State.
In the same tract of land, a separate agreement to allow Mumias to grow sugarcane and build a factory in the area has attracted fierce opposition from environmentalists who say a pristine ecosystem of mangrove swamps, savannah and forests will be destroyed.
Qatar, which has large oil and gas reserves, is a net food importer as most of its land is barren desert with less than one percent suitable for farming. It has already reportedly struck deals this year to grow rice in Cambodia, maize and wheat in Sudan and vegetables in Vietnam.
IFPRI’s report notes that one of the lingering effects of the food price crisis of 2007–08 on the world food system, is proliferating acquisition of farmland in developing countries by other countries seeking to ensure their food supplies.
The sudden rush by foreign governments and firms to secure food supplies in Africa has some experts worried including the United Nations food agency, Food and Agricultural Organisation (FAO).
Jacques Diouf, FAO’s Director General recently spoke of the risk of a "neo-colonial" agricultural system emerging.
The FAO boss said some of the first overseas projects by Gulf companies in Sudan, where more than five million people receive international food aid, showed limited local benefits, with much of the specialist labour and farming inputs being imported.
Food-importing countries with land and water constraints but rich in ‘oil capital’, such as the Gulf States, are at the forefront of new investments in farmland abroad. In addition, countries with large populations and food security concerns such as China, South Korea, and India are seeking opportunities to produce food overseas. These investments are targeted toward developing countries where production costs are much lower and where land and water are more abundant.
In 2007 alone, farmland prices jumped by 16 percent in Brazil, by 31 percent in Poland, and by 15 percent in the Midwestern United States. In many countries, developed water sources are almost fully utilized, but agricultural demand for water is expected to increase drastically in the future.
Other factors that influence investments include geographic proximity and climatic conditions for preferred staple crops. In addition to acquiring land for food, many countries are seeking land for the production of biofuel crops.
Many governments, either directly or through state-owned entities and public-private partnerships, are in negotiations for or have already closed deals on arable land leases, concessions, or purchases abroad. The size and terms of contracts differ widely. Some agreements do not involve direct land acquisition, but seek to secure food supplies through contract farming and investment in rural and agricultural infrastructure, including irrigation systems and roads.
Although additional investments in agriculture in developing countries by the private and the public sector are welcome, the scale, the terms, and the speed of land acquisition have provoked opposition in some target countries. According to news reports, the Philippines blocked a land contract with China because of serious concerns about its terms and legal validity, as well as about its impact on local food security.
Mozambicans have resisted the settlement of thousands of Chinese agricultural workers on leased lands - a situation that would limit the involvement of local labour in the new agricultural investments. In Madagascar, negotiations with Daewoo Logistics Corporation to lease 1.3 million hectares for maize and oil palm reportedly played a role in the political conflicts that led to the overthrow of the government in March, this year.
Details about the status of the deals, the size of land purchased or leased, and the amount invested are often still murky.
Foreign investment can provide key resources for agriculture, including development of needed infrastructure and expansion of livelihood options for local people. If large-scale land acquisitions cause land expropriation or unsustainable use, however, foreign investments in agricultural land can become politically unacceptable.“It is in the long-run interest of involved to ensure that these arrangements are properly negotiated, practices are sustainable, and benefits are shared. Because of the transnational nature of such arrangements, no single institutional mechanism will ensure this outcome but a combination of international law, government policies, and the involvement of civil society, the media, and local communities to minimise the threats and realize the benefits,” says the report.