Land Inc.

Via the Terra Project, a look at the global fight for land control:

Since the food crisis in 2008, food security and sovereignty had become a key target for many countries. A global growing demand for food, especially meat, and fuel, drives government and companies to invest in land, leasing or purchasing vast agricultural areas in order to produce crops, often to be later imported back to their domestic markets. While the phenomenon is often regarded as “land grabbing”, its reasons and dynamics are more deep and complex than such a simple formula might infer, each country showing different historical and regulatory specificities of land deals.

Uncontrolled large-scale land speculations can be a threat for biodiversity and can trigger human-rights violations at the expense of some of the 1.5 billion local rights-holders and indigenous people whose life is based on small-scale farming and who are denied tenure or access to their lands. This form of competition for land is dramatically unbalanced, with low-income producers on one side, and foreign governments or large corporations, backed by local and national authorities, on the other. All this is happening regardless of the wide knowledge that small-scale producers can instead play a pivotal role in reducing poverty and food insecurity.

In 2012, our collective started a long term documentation on this phenomenon, investigating the drivers, the trends, the mechanisms and the impacts of land acquisitions across the world. The first chapters, in Brazil, Ethiopia, The Philippines and Ukraine, revealed a variety of historic and socioeconomic forces behind land investments and acquisitions, making it hard to label it with a simple definition, but also highlighting how the end result, in all these different scenarios, is often the same.

Within the general golden age for the whole Brazilian economy, agricultural exports have been a surprising development. In the last years, exports to China, European Union, Russia, many other countries remarkably increased. The states of Mato Grosso and Mato Grosso do Sur are among the first producers of agricultural commodities. Historically, in the XX century these territories have been deforested and most indigenous lands have been seized. Local landowners and foreign investments have increased in recent years, while indigenous ethnic groups are fighting to maintain or return to their lands. Since the 1980s, with the sugar cane industry boom in the region, the conflict has increased. The INCRA, the National Institute for Colonization and Agrarian Reform, provides disturbing data: 1,6% of owners with properties in excess of one thousand acres have 46.8% of the total land in the country. Since 2005, the number of companies investing in Mato Grosso do Sur have doubled and the land prizes have often tripled.

The current Brazilian economic policy aims at increasing land concentration by targeting “unproductive” estates which can then be expropriated.

The Movimento Sem Terra (a landless farmers movement) identifies unproductive rural land and occupies it. Born in 1984, the MST operates in 24 states of the country and involves 1,5 million people. Thanks to its struggles, 350,000 families have won back their land, while 150,000 are still struggling.

Ethiopia is ranked 157 out of 169 countries in the 2010 United Nations Development Program Index. It is one of the world’s largest recipients of humanitarian food and development assistance, it received more than 700,000 tones of food and £1.8bn in aid last year, but the country has given three million hectares of land to foreign corporations.There are not only mechanisms in place to ensure that these investments contribute to improve food security, but there are also numerous incentives to ensure that food production is exported out of the country, providing foreign exchange for the country.

In lowland areas on the border with South Sudan, in the Gambella region, displacement from farmlands is widespread and the vast majority of locals receive no compensation.
With water being of critical importance in the country and considering Ethiopia’s critical location at the headwaters of the Nile, it is alarming that investors are free to use water with no restrictions.

At the moment, the strategic position of the country, between Europe and the Middle East, and the government’s incentives, make Ethiopia the centre of global farmland rush.

After Indonesia, the Philippines is the most targeted country for land investments in Asia. Foreign and national agribusiness enterprises claim that their investments bring wealth, infrastructure and new farming techniques, while civil society organizations argue that such practices have a serious impact on local farmers and indigenous people, who lose land tenure and often get displaced. In many cases, farmers are promised new jobs, but the compensation they receive is not enough to buy new land and people often remain jobless. The root cause of this situation is the fact that farmers often only have temporary, individual land rights, and their owner certificates, if assigned during previous governments, are made invalid. In this charade, large land investors, with their high-located connections, are able to move into inhabited and cultivated lands. Changes in land ownership and land conversions not only have an impact on the local communities residing in the grabbed areas (for which human rights abuses have been filed) but also affect the economic balance of the country.Although the Philippines is one of the world’s major rice importers, conversion of cultivated lands to other non-feeding crops such as sugarcane for bioethanol and products for export only still goes on. With the creation of the Philippine Agricultural Development and Commercial Corporation, the central government took a clear stand in the agribusiness sector. Although land-lease agreements are set for 25 years, the Philippine government is said to be looking at increasing them to 75 years, close to most African countries.

Ukraine started its land reform in 1991, after the collapse of the USSR. In the Soviet era practically all agricultural land belonged to kolkhozes and sovkhozes (respectively, collective and state farms) and was state-owned. During the post-1991 land reforms the former employees became shareholders of the reorganized farm enterprises. Just a few shareholders withdraw their shares and established private family farms, most of them rented out their shares to the reorganized enterprises. Since the early 2000s, land shareholders are increasingly selling or leasing their shares to farm managers and outside investors. As a result, the rural dwellers become landless workers on their former land. Currently, large farm enterprises, the reorganized successors of the state and collective farms, are bought up by foreign or domestic investors and merged into even larger agricultural companies consisting of multiple LFEs (the so-called agroholdings) of a scale probably unmatched in the world.

Foreign investment in the agricultural sector hit a high point of $3.2 billion in 2008 and then dipped after the world financial crisis but is picking up again, spurred by rising world food prices. In 2011, Ukrainian food exports reached $12 billion, an increase of 28% over 2010. As in many post-Soviet countries, Ukraine’s agriculture sector needs further reforms. The government is pushing through a land law that will allow agricultural land to be sold, although foreigners will still be barred from purchasing land, but it is not expected to come into effect before 2013.

This entry was posted on Thursday, August 30th, 2012 at 8:50 am and is filed under Uncategorized.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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About This Blog And Its Author
Seeds Of A Revolution is committed to defining the disruptive geopolitics of the global Farms Race.  Due to the convergence of a growing world population, increased water scarcity, and a decrease in arable land & nutrient-rich soil, a spike of international investment interest in agricultural is inevitable and apt to bring a heretofore domestic industry into a truly global realm.  Whether this transition involves global land leases or acquisitions, the fundamental need for food & the protectionist feelings this need can give rise to is highly likely to cause such transactions to move quickly into the geopolitical realm.  It is this disruptive change, and the potential for a global farms race, that Seeds Of A Revolution tracks, analyzes, and forecasts.

Educated at Yale University (Bachelor of Arts - History) and Harvard (Master in Public Policy - International Development), Monty Simus has long held a keen interest in natural resource policy and the geopolitical implications of anticipated stresses in the areas of freshwater scarcity, biodiversity reserves & parks, and farm land.  Monty has lived, worked, and traveled in more than forty countries spanning Africa, China, western Europe, the Middle East, South America, and Southeast & Central Asia, and his personal interests comprise economic development, policy, investment, technology, natural resources, and the environment, with a particular focus on globalization’s impact upon these subject areas.  Monty writes about freshwater scarcity issues at and frontier investment markets at