The Global Farm Grab Is On

Via CNN World, a report on the trend of global acquisition of farmland:

This week in Washington, the World Bank is hosting its annual conference on land and poverty. The Bank has identified improved land governance as this year’s theme. It’s a wise decision, given that poor land governance in developing world agricultural settings has spawned a destabilizing global trend – one fueled, in part, by financial support from the Bank itself.

In recent years, food-importing regimes from Asia and the Gulf, spooked by high food prices and lacking the land and water resources to grow crops at home, have obtained land overseas to use for agriculture. Private investors from the U.S., Europe, and Asia, recognizing the profit potential of precious agricultural land, have joined this scramble for the world’s soils. Nearly $30 billion in private capital is projected to be invested in farmland by 2015, and pension funds and asset managers have recently joined forces to attract even more capital for farmland financing.

Weak land tenure in target countries – mostly poor and in sub-Saharan Africa and southern Asia – hastens the ability of foreign investors to secure land used, even if not formally owned, by local communities. Host governments, poor and desperate for capital, have no compunction about relinquishing precious farmland – and they go to extraordinary lengths to court deep-pocketed investors. Pakistan’s government has reportedly offered a 100,000-person-strong security force – roughly a sixth the size of its entire army.

The results have been staggering. Credible estimates conclude that about 50 million hectares have figured in deals since 2000 – equivalent to more than half the area of the combined farmland of Britain, France, Germany, and Italy.

Investors promise employment, better farming technologies, and greater food security for local communities. Unfortunately, few of these benefits are materializing. Many investors use their own labor force, few share their inputs with locals, and – most controversially – many operating in developing nations plan to export their harvests elsewhere. In some cases, speculators obtain high-value land with no intention of farming it.

Predictably, these deals have sparked unrest. In 2009, South Korea’s Daewoo corporation reportedly leased 1.3 million hectares in Madagascar – half the island nation’s total arable land – to grow a variety of crops. The mammoth deal, later annulled, triggered widespread protests that helped bring down the Madagascar government. Most acquired land is in regions already embroiled in or prone to conflict, such as Ethiopia’s Gambella state, Kenya’s Tana Delta, and Indonesia’s Papua province. Large-scale land acquisitions are also powder kegs because they evoke explosive memories of colonialism and dispossession. Kenyans displaced today to accommodate British-funded sugar plantations likely recall how, decades ago, European investors converted 3 million hectares of Kenyan farmland into tea estates – which displaced locals and helped spark the Mau Mau rebellion against British rule.

Violent consequences of foreign land deals have generally been contained. Yet this could change. Seven of the most food insecure countries in the 2012 Global Hunger Index (published by the International Food Policy Research Institute) have each relinquished more than 10 percent of total agricultural area. Imagine that a famine hits one of these countries, and leaders continue to allow foreigners to snap up land, harvest crops, and – perhaps with armed escorts – truck the harvests away for export back home. Such a scenario could trigger civil war, given that many deeply food-insecure governments courting land investors preside over frail and fractured states.

Host governments must make land deals less prone to conflict. They should establish and enforce laws that crack down on displacement; provide legal assistance to vulnerable communities; and, most importantly, strengthen land registries and help people obtain land titles.

Meanwhile, international NGOs can help people obtain land titles; Concern Worldwide has already done so for several thousand people in Tanzania. Global media outlets can use shaming campaigns to induce financiers to rein in predatory investments; bad PR can have a powerful impact on investors.

Finally, the World Bank wields considerable leverage because it funds many deals through its private lending arm, the International Finance Corporation. The Bank should stipulate that funding is contingent on investors hiring x number of local laborers, or selling y percent of yields back to local markets. Its Washington conference this week – replete with presentations on the imperative of land rights, better land titling and registration mechanisms, and more transparency in land investment deals – gives cause for hope that the Bank will use its leverage to ensure outcomes that protect local communities and thereby reduce conflict risks.

The stakes are high. Food demand, volatile commodities markets, population growth, and climate change aren’t going away, and they all imperil the supply of the world’s farmland. Land hunters could soon be tempted to take more desperate – and violent – measures, and local communities could be compelled to resist more forcefully.

First it was gold. Then oil. Now the race is on for the world’s precious farmland – with alarming implications for global stability.

This entry was posted on Monday, April 15th, 2013 at 10:11 pm 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