Stop the global land grab!

GRAIN statement at the joint GRAIN-La Via Campesina media briefing

16 November 2009 by GRAIN

For over a year a half now, we have been watching carefully how investors are trying to take control of farmland in Asia, Africa and Latin America as a response to the food and financial crises. In the beginning, during the early months of 2008, they talked about getting these lands for “food security”, their food security. Gulf State officials began flying around the globe looking for large areas of cultivable land that they could acquire to grow rice to feed their burgeoning populations without relying on international trade. So too were Koreans, Libyans, Egyptians and others. In most of these talks, high-level government representatives were directly involved, peddling new packages of political, economic and financial cooperation with agricultural land transactions smack in the centre.

But then, towards July 2008, the financial crisis grew deeper, and we noticed that alongside the “food security land grabbers” there was a whole other group of investors trying to get hold of farmland in the South: hedge funds Hedge funds Unlisted investment funds that exist for purposes of speculation and that seek high returns, make liberal use of derivatives, especially options, and frequently make use of leverage. The main hedge funds are independent of banks, although banks frequently have their own hedge funds. Hedge funds come under the category of shadow banking. , private equity Equity The capital put into an enterprise by the shareholders. Not to be confused with ’hard capital’ or ’unsecured debt’. groups, investment banks and the like. They were not concerned about food security. They figured that there is money to be made in farming because the world population is growing, food prices are bound to stay high over time, and farmland can be had for cheap. With a little bit of technology and management skills thrown into these farm acquisitions, they get portfolio diversification, a hedge against inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. and guaranteed returns — both from the harvests and the land itself.

To date, more than 40 million hectares have changed hands or are under negotiation — 20 million of which in Africa alone. And we calculate that over $100 billion have been put on the table to make it happen. Despite the governmental grease here or there, these deals are mainly signed and carried out by private corporations, in collusion with host country officials. GRAIN has compiled various sample data sets of who the land grabbers are and what the deals cover, but most of the information is kept secret from the public, for fear of political backlash.

Nothing in this race for farmlands in the South is in the interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. of local communities, whether you’re talking about Pakistan, Cambodia, the Philippines, Madagascar, Kenya, Sudan, Ethiopia or Mali. Many of these countries are tremendously food insecure themselves. And these land grabs are designed to do away with small scale farming, not to improve it. If only for that reason alone, this new global land grab has been quickly seen by social movements as a recipe for profound conflict — over not only land, but water as well.

Today in Rome, we have a microcosm of this conflict. Over at the FAO, governments, international agencies (like the World Bank World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

) and private companies (like Yara, Bunge and Dreyfus) are trying to work out what they call codes of conduct or voluntary guidelines to make these deals “win-win”. Their main concern is the money. They don’t want the dollars and the dirhams being put on the table for farmland acquisitions to run away. So they have constructed an opportunistic response: to make these land deals “work” by managing the risks involved. And we know why. After 50 years of agricultural modernisation schemes like the Green Revolution and biotechnology, and the last 30 years of broader structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

programmes, we have more hungry people on the planet than ever. It’s plain knowledge that all these programmes to supposedly feed the world have backfired. Unfortunately, the World Bank and others have now decided that the best option is to fly forward, follow the money and install large scale agribusiness operations everywhere, particularly where they have not taken root yet, in order to fix the problem. That is the essence of the land grab paradigm: to expand and entrench the Western model of large scale commodity value chains. In other words: more corporate-controlled food production for export.

Social movements see things quite differently. For us, all this talk of “win-win” is simply not realistic. It promises transparency and good governance as if foreign investors would respect communities rights to land there when the local governments don’t. It speaks of jobs and technology transfer when those are not the problem (not to mention that little of either may materialise). It is shrouded in words like “voluntary”, “fear” and “could” instead of “guaranteed”, “confidence” and “will”. And the win-win camp is itself divided about what should happen in case of food pressures in the host countries, a more than likely scenario. Should countries be allowed to restrict exports, even from foreign investors’ farms? Or should so-called free trade and investors’ rights take precedence? No one that we have talked to among concerned groups in Africa or Asia takes this “win-win” idea seriously.

Today’s global farmland grab, where foreign investors take control of land and water in developing countries, has nothing to do with strengthening family farming and local markets, which in our view is the only way forward to achieve food systems that actually feed people. It must be stopped. There is no win-win possible because those pushing these investments are asking the wrong question. The question we should be asking is not “How do we make these investments work?” It is “What farming and food systems will feed people without making them sick, keep farmers on the farm instead of the city slums, and allow communities to prosper and thrive?” Once we agree that the real question is what agriculture we want, then we can talk about what investment will get us there.

At GRAIN, we are extremely concerned that today’s global land grab is only going to make the food crisis worse. For it pushes an agriculture geared toward large scale monocultures, GMOs, throwing farmers off the land in favour of machines, and lots of chemicals and fossil fuels. This is not an agriculture that will feed everyone. It’s an agriculture that feeds speculative profits for a few and more poverty for the rest. Of course we need investment. But investment in food sovereignty, in a million local markets and in the four billion rural people who currently produce most of the food that our societies rely on — not in a few mega-farms controlled by a few mega-landlords.

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