04 December 2008 by Debora Mackenzie
HISTORY may be repeating itself. Until the mid-20th century, many
European countries grew rich on the resources of their colonies. Now,
countries including China, Kuwait and Sweden are snapping up vast
tracts of agricultural land in poorer nations, especially in Africa,
to grow biofuels and food for themselves.
The land grabs have sparked accusations of neocolonialism and fears
that the practice could worsen poverty. Yet some organisations think
this could be a chance for poor countries to trade land and labour
for the technology and investment vital for developing their own food
and energy production.
The rush for land was triggered by this year's food crisis and the
European push for biofuels. The South Korean firm Daewoo made
headlines last week when it sought a 99-year lease on 1.3 million
hectares of Madagascar to grow maize and oil palm. The deal is far
A number of companies are growing sugar cane in Tanzania, for
example, to make bioethanol for European countries to meet European
Union targets. This year, investors from Gulf states initiated so
many farm projects in Africa and south-east Asia that the UN Food and
Agriculture Organization (FAO) urged caution to prevent a political
"Egypt is investing in Sudan; Libya in Ukraine; Saudi Arabia in
Thailand; China in Africa, the Philippines and Russia," says Joachim
von Braun, head of the International Food Policy Research Institute
(IFPRI) in Washington DC.
As population growth and dwindling oil supplies make farmland the
strategic resource that oilfields are now, the hunger for land looks
set to increase. China has 20 per cent of the world's people and only
9 per cent of the farmland, and that is dwindling. According to a
detailed analysis by the NGO Grain, Chinese companies and the
government have since 2007 leased or purchased 2 million hectares of
Financial firms have been quick to get in on the act too, and are
moving their money from food to the land that produces it. The
British hedge fund manager Dexion Capital, for instance, plans to
invest $270 million in 1.2 million hectares in Australia, Russia and
The question is whether incoming technology and investment can be
harnessed to increase food production for the poorer countries
themselves. Although the global financial crisis has halted the rise
in food prices, this week IFPRI warned that the slowdown will also
cut investment in farming, which will raise food prices by up to 27
per cent by 2020.
All foreign deals so far pledge to turn "unused" or "underutilised"
land into farmland to yield food. This might sound good on paper, but
the reality is not so clear cut.
All foreign deals so far pledge to turn 'unused' land into farmland
to yield food. But is the land really unused?
First, is the land really unused? Many analysts agree that most land
that can be farmed is already in use, but some disagree. "Africa
still has lots," says Peter Hartmann, head of the non-profit
International Institute for Tropical Agriculture in Ibadan, Nigeria.
He says for every hectare of African farmland there are around 2.5
hectares of "equivalent rainfed arable land" unused for want of
technology or capital.
But seemingly unoccupied land is probably used for at least part of
the year by someone, says Michael Taylor of the International Land
Coalition (ILC), which groups 65 agencies, from local farm groups to
the World Bank, concerned with land access. Nomadic herders, rarely a
priority for governments, are being dispossessed by bioethanol
developments in Kenya, he says, and they also depend on the "unused"
land that Madagascar offered Daewoo. Ethiopia's communal lands, such
as grazing areas, are being leased to private investors, says
anthropologist Marco Bassi of the University of Oxford. "This will
destroy shifting cultivators and pastoralists."
In many cases, land is used by such people because its soil or water
is unsuitable for intensive cultivation. The danger, then, is that
foreign leaseholders might extract what they can from these areas,
then leave once soil and water resources have been exhausted.
Some people see upsides, though. "I could imagine such land use
benefiting people," says Hartmann. Foreign investors build roads,
storage and port facilities that local farmers can also use to sell
crops - a bottleneck in much of African agriculture.
"Such investments are not to be generally condemned," says von Braun.
Leaseholders might press for better tax situations for farmers, while
host countries could insist on local hiring. Some investors are even
offering schools and healthcare facilities, although in the past such
promises have notoriously not been kept.
The best option would be for foreign firms to contract local small
farmers to grow crops for them, says Paul Mathieu of the
FAO. "Investors could say, if you use this seed and follow our advice
we promise to buy the crop. That could be a win-win situation."
German company Flora Eco Power produces biodiesel in Ethiopia in this
"These deals could provide more security and predictability for poor
farmers than just selling crops on open markets," agrees Duncan Green
However, existing arrangements of this kind are generally "between
partners with vastly unequal power", says Green, and they offer few
guarantees for locals. Hartmann and von Braun say a code of conduct
is needed, and that it must include provisions for local producers,
property rights, sustainable management and transparent rules. The
FAO is now trying to write such guidelines, says Mathieu.
They will be no good if no one uses them, though, and so far there is
little sign that investors are keen to work with locals. Many Chinese
projects, for example, bring in farmers from China. If the foreign-
owned farms simply take the crops and run, offering nothing to local
people, it could be a recipe - as Europe's colonialists discovered -
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