What is land grabbing?

This paper we aim at providing a view over land grabbing in the World as well as answering the concrete questions, firstly: which differences can we find on land grabbing occurring in different parts of the World? And secondly: can it be considered as an opportunity or as threat?

It is organized in three different parts and a conclusion. In the introduction we will try to explain the bases of land grabbing, but without going into detail: what is land-grabbing, the reasons why it is taking place nowadays, which are the actors involved in land- grabbing. In a second part we will analyze individually the different ways in which countries are facing land grabbing and their particular circumstances. We will differentiate between Land grabbing in Africa, Land- grabbing in Asia and finally land grabbing in Ex soviet countries. In the last of our sections we have made a compilation of the opportunities and threats that we have found through the reference review. And we will conclude the papers with the conclusions obtained throughout the research.

INTRODUCTION:

– What is land grabbing?

Land grabbing is the term used to describe the acquisition (leasing or purchasing) of arable lands in developing countries by other countries or public or private companies aiming at food security in their home countries, fuel supplies or as investment.

This practice is not new along the history; the same aims have induced developed countries to attend the demand in their low- resources home countries using resources allocated in developing countries rich in resources. We can name for example the European colonialism era in the 19th century where the farmland was globalised. Or the 20th century where companies based in developed countries took over huge fruit plantations in Central America and Southeastern Asia.

– Reasons behind land grabbing.

In this aspect we have to distinguish between the reasons leading developed countries to acquire lands in developing countries and the reasons why developing countries are not only willing of leasing or selling these lands but also sometimes even promoting it.

1. – Why is land grabbing interesting for the investors.

To find the reasons we have to look at the current situation in the World in three fronts:

Food security: In a World where the food prices are reaching historical maximums and the populations is doing nothing but growing continuously, resources such as land and water start to be scarce. That is why export food dependant countries try to reach stability in their food supplies by acquiring lands in other countries.

Bio fuels supply: As well as food, fuel is getting more and more scarce and expensive. Furthermore, in developed countries there is an increasing demand of bio fuels, sometimes even supported by policy for example in Europe.

Safe investments: The global crisis taking place has brought lack of confidence into the financial market. In this rarefied atmosphere investments in agriculture provide certain stability due to the ineslicity of the agricultural commodities.

2. Why is land grabbing interesting to host countries?

There are a number of benefits or better said promised and expected benefits which render land- grabbing interesting to developed countries governments. These expected benefits are causing that countries like Pakistan are offering their lands to the rich countries.

Public and private investment in developing countries it is very low, and provokes that the developing process it is slow. Investments of developed countries then it is seen as a repulsive to improve this situation.

Also, these countries usually have lack of technological solutions and infrastructures which could help them to increase their productions several times. Helping also to assure food security.

Most of the times, the agreements are made for lands that governments classify as degraded or not suitable for agriculture but with the appropriate technology approved by the investors these lands could be productive providing to the country food and employments.

– Actors involved.

The more evident actors in land grabbing are the both mentioned above, the investors and the governments. The first one counts with the funding and the second one has the last word to accept or reject the land acquisition proposal and is the one negotiating the conditions under which the deal will take place.

But we cannot forget that underlying these actors we also have the population living in the land which will be directly affected by the agreement and of which they will be deprived. Also the global market will be affected by these agreements, since host countries will start to produce more and investor countries will demand less.

PROS AND CONTRAS OF LAND GRABBING:

For investors:

As we have already mentioned, from the investor’s part the pros would be depending on their particular interest: Food security, bio-fuels supply and safe investments. But these investments have some risks, because in most of the cases the host countries suffer from inestable governments and frequently not sufficiently supported by the popular masses. Also popular riots against these operations are commonplace, caused by the lack of information on rural issues that most of host governments have which lead them not to take into consideration rural inhabitants’ needs in their agreements. An example is the agreement reached by the government of Madagascar with the South Korean company Daewoo which was followed by popular riots against it and provoked the change of the government and the cancellation of the agreement.

For host countries:

On the side of the host countries the pros expected from these international agreements are foreign investments which would beneficiate the country in the fields of technological and infrastructures development, food security, increasing the employment in rural areas.

The potential of these agreements is very important for the host countries, in most cases suffering from lack of national and international investments. But the reality is that most of these exchanges are unequal since the investors are big powerful companies or rich countries and the host countries are on the contrary countries with plenty of needs and not with many internal political problems.

Nowadays there is a complete lack of legislation on land grabbing agreements, and furthermore are rather not transparent being quite difficult to really know the extend and conditions on such agreements.

Also the misbehavior of the investor may provoke an end list of contras in the host countries such as environmental problems derived of the intensive use of soil, overuse of water supplies, food insecurity if all the food produced it is send back to their home countries or to the international markets in search of broaden the benefits, worsening of unemployment situation if the technology used it is low labor- intensive, new technologies not accessible to locals …

The host governments due to the lack of information on the rural areas give to lands officially classified as low productive but without taking into account the current uses of them. Examples of those uses ate collection of medicinal plants, provision of wild food, water supply,…

International code of conduct:

As explained in the above paragraphs, the potential benefits are quite important for either investors or host countries but the risks are much more evident for host countries. That is why in the international community it is appearing the need of encouraging transparency and assuring that the potential benefits expressed in the agreements become a reality for the host countries. In this sense, there is a proposal of creating an international code of conduct leading these exchanges.

This code of conduct would seek for:

– Transparency in the negotiations, meaning make information and involvement available to locals.

– Respecting customary and property rights.

– Benefits for locals, the agreements undermine the potential benefits of the locals from the land use. That is why they should be compensated and getting a part of the benefits.

– Environmental sustainability, through impact assessments and monitoring.

– Respect of national trade policies, for example bans of exports in case of domestic food crisis.

Although, there are critics to the application of this Code of conduct due to the fact that it does not solve certain problems concerning the land grabbing agreements such as how identify the customary property lands when governments do not have this information available and have no resources to get it, in some host countries the land property rights are not clear and there a high risk of dispossess locals of their land without any compensation, groups of elites claim to be representants of poor- groups accumulating the benefits but in reality they are not. Also the code of conduct it is criticized by land grabbing opositors because it assumes that land grabbing is impossible to prevent and contrary to that facilitates it and does not give room for the developing of other policies potentially more beneficial and sustainable for host countries.

LAND GRABBING IN EX SOVIET COUNTRIES:

After Soviet Union collapse there was a wild fight for what before was public owned land. But the process of acquiring land by foreign investors in this part of the world has continued and now is still happening through land grabbing agreements. Regarding to FAO’s research, Russia, Ukraine, Kazhajstan are three of the four with significant potential to have an impact in food supply in the world.

So, why are ex soviet countries’ land (especially Russia, Ukraine and kazhajstan) interesting for international companies and rich countries?.

– Low price of the land: It has a competitive advantage over other developing countries like Argentina and Brazil.

– Infrastructure: It is more developed than in African countries.

– Resilience in crisis times: the impact on agricultural is smaller than in other sectors thanks to the inelasticity of food prices.

– Climate change benefits: It is forecasted the improvement of their conditions for agriculture.

Although investing in these lands have a number of risks:

– Political inestability.

– Lack definition of the property rights.

– Frecuent restrictions to sales.

– Power of the local elites.

It is difficult to know or even estimate the quantity of land and sometimes even the identity of the investors. But it seems that companies from western countries and more recently other countries from the Middle east are the main investors in the western part of Russia, Ukraine and kazhajstan.

Whereas some Asian countries are investing in the eastern parts, thus China is acquiring vast territories in kazhajstan and Siberia. Japan and South Korea are also engaged in getting lands from Siberia.

There are two main differences between Western influenced investments and Asian investment:

– Investments from Western countries are mostly undertaken by private companies, whereas Asian investments are more likely done by countries.

– Western companies in most of the cases import to the host country the technology and hire labor from the host countries. Contrary to that the Asian investors take technology as well as labor of their own.

Although the countries as a whole are getting some benefits from the foreign investments such as development of infrastructure, increasing of grain production, access to the last technologies. The local individuals are being harmed in many aspects: Powerful local elites favor foreign companies and countries investing, the investments are highly technological and labor- extensive worsening the employment conditions in the area, lost or sell of the farms at loss by local farmers in favour of foreign investors, judges have been action in favor of foreign investors.

LAND GRABBING IN AFRICA:

Population increase, changes in eating habits and demand for bio-fuels are putting farmland at a premium worldwide, this is specially proven in case of many African countries which depend on developed countries for food supplies and other needs. An example of one of such cases is widely seen in Ethiopia and the target regions are the fertile lands of Gambella, Afar, Ogaden and Benshangul-gumuz in particular and all arable lands in general. The people from these areas will be resettled not too far from the lands they have been dispossessed of, so that they will be an ideal resource for cheap labor if need arise. Any land there, which investors have not been able to buy, is being leased for approximately $1 per year per hectare. Saudi Arabia, along with other Middle Eastern emirate states such as Qatar, Kuwait and Abu Dhabi, is thought to be the biggest buyer.Many Punjabi farmers migrated from India long ago are heading to Gambella and other regions for settlement. They and their descendants have every right to farm these lands and live on them for the next 70 to 99 years and beyond. Moreover, they will export every grain they harvest to India or to wherever they generate hard currency best. Nothing is left for Ethiopia farmers. China also has a huge vested interest in Ethiopia. India and China seek for sparsely populated and fertile areas to settle their overcrowded peoples. Other countries like Sudan, Kenya, Nigeria, Tanzania, Malawi, Congo, Zambia, Uganda, Madagascar, Zimbabwe, Mali, Sierra Leone, Ghana are under the trap of land grabbing where British firms have secured tracts of land in Angola, Ethiopia, Mozambique, Nigeria and Tanzania to grow flowers and vegetables.

Land to grow biofuel crops is also in demand. “European biofuel companies have acquired or requested about 3.9m hectares in Africa. This has led to displacement of people, lack of consultation and compensation, broken promises about wages and job opportunities,” said Tim Rice, author of an Action Aid report which estimates that the EU needs to grow crops on 17.5m hectares, it is to meet its 10% bio fuel target by 2015.

Production of liquid biofuels is a key driver of much recent land acquisition. Compelling reasons include

– Energy security: with fluctuating global oil prices, countries are seeking alternative energy sources to increase long-term energy security and reduce energy import bills.

– Rural development: a new and profitable land use will provide better opportunities and long-term security for farmers and employees.

– Export development: for countries with favorable endowments of land, labor and trade conditions, bio fuels are an opportunity to develop new export markets and improve the trade balance.

LAND GRABBING IN ASIA:

Land-grabbing is currently being carried out by domestic and transnational companies, often with encouragement and support from central governments in most of the Asian countries. Most of the products produced – food, feed and fuel are exported or are planned to be exported to other countries, within the circuit and logic of the global industrial agro food-feed-fuel complex, with trade policies such as those by the EU having important implications.

Rice is an important export commodity for a number of South East Asian states such as Thailand, Cambodia, Vietnam and Laos. Naturally, SEA is an attractive region for any land acquisition projects as pointed out by observations made by The International Food Policy Research Institute (IFPRI) in Developing Countries.

Developing economic powers such as China, India, South Korea, and oil-wealthy Middle Eastern countries have joined the international ‘treasure hunt’ for rich and fertile agricultural lands in a bid to secure their food supply. Lack of good agricultural land and water in home countries for food production, the increasing distrust of global markets, as well as a race to compete with others to control land lead to this consequences, The “solutions” to address the current global financial and food crises have provided opportunities for governments, business and capital alike, to make profits. The IFPRI estimates that land grabbing deals from 2008 to 2009 are between US$20and 30 billion. Whereas before companies may have engaged in deals to purchase agricultural products from other countries, there has been a wave of interest in owning or leasing for a long term the means of production in foreign countries. China, with their “Going Out” strategy, has been leasing lands in the Philippines and other countries in Asia and Africa through free trade and investment agreements.

List of the countries in Asian under the trap of land grabbing

– Burma: Kuwaiti government representatives were in Burma to finalize the terms and conditions of a contract growing arrangement of rice and palm oil.

– Cambodia: A technical assistance for oil exploration and proposal to exchange for an undisclosed large plot of land to grow food for export, mainly rice, to Kuwait.

– Indonesia: Qatar Investment Authority, the state investment fund, had signed a memorandum of understanding with Indonesia to attract more Qatari investments in agriculture.

– Philippines: The Saudi Arabia government has an investment agreement with the Philippine government involving food for export production of bananas, pineapples, mango, and papaya to Riyadh.

– Pakistan: United Arab Emirates government was in bilateral talk’s with Pakistan to purchase farmland to produce food for export.