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Africa: FAO Paper On Land Grab is 'Wishy-Washy'

Julio Godoy

9 July 2009

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Berlin — The boom in the acquisition of arable land in Africa by foreign companies and governments has stirred an international debate between international institutions such as the United Nations' Food and Agriculture Organisation (FAO) and non-governmental groups and independent experts.

The debate centres on whether the transfer of land from local farmers to foreign investors represents a development opportunity for the continent.

In a paper on the issue, entitled "Land grab or development opportunity? Agricultural investment and international land deals in Africa", released last month, the FAO reviews the present trend of foreign land purchases, leases and other transactions and weighs both the risks and the economic opportunities that such acquisitions represent for African countries.

For the FAO, foreign investments in African farmable land "could be good news if the objectives of land purchasers are reconciled with the investment needs of (the hosting) countries".

But independent experts consider the measures proposed by the FAO and the modalities of their implementation too ambiguous to fulfil their goals. Uwe Hoering, a German development expert who has been following the debates on the land grab in Africa, called the FAO paper "wishy-washy".

Hoering, who has called such investments "a new form of agrarian colonialism", complained that the FAO report tries "to manoeuvre between critique and praise of the present land grab trends in Africa, and calls it a development opportunity for the continent.

"The FAO paper emphasises the macro-economic advantages that the foreign grab of African land could represent, such as higher state revenues, and new chances of development in rural areas," Hoering told IPS.

"But when it comes down to formulating norms to be applied to guarantee that African national interests are respected, it can only provide weak suggestions which, in addition, (it says) should be voluntarily applied and not too restrictive for the foreign investors," Hoering added.

"What the FAO also seems to ignore is that many African countries do not have the human capacity, neither the legal structure, to implement such norms or to control their application," Hoering insisted. "It is easy to foresee that the voluntary schemes the FAO is proposing will never be applied."

Ruth Meinzen-Dick, researcher at the Washington-based International Food Policy Research Institute, and co-author of a study on the land grab in Africa, told IPS that the legal and negotiating issues are of utmost importance in the deals.

"The bargaining power in negotiating these agreements is on the side of the foreign investor, especially when its aspirations are supported by the host state or local elites," Meinzen-Dick explained.

"Smallholders who are being displaced from their land cannot effectively negotiate terms favourable to them when dealing with such powerful national and international actors, nor can they enforce agreements if the foreign investor fails to provide promised jobs or local facilities," she added.

Thus, unequal power relations in the land acquisition deals can put the livelihoods of the poor at risk.

For Meinzen-Dick, if large-scale land acquisitions cause land expropriation or unsustainable use, "foreign investments in agricultural land can become politically unacceptable".

It is therefore in the long-run interest of investors, host governments and the local people involved to ensure that the arrangements are properly negotiated, practices are sustainable and benefits are shared.

"Because of the transnational nature of such arrangements, no single institutional mechanism will ensure this outcome," Meinzen-Dick added. Rather, a combination of international law, government policies and the involvement of civil society, the media and local communities is needed to minimise the threats and realise the benefits.

The FAO calls attention to the fact that the agricultural sector in developing countries is in urgent need of capital. "Decades of low investment have meant stagnating productivity and production levels," the FAO said in a communiqué announcing the study.

"In order to halve the world's hungry by 2015, as targeted by the 1996 World Food Summit, FAO calculations show that at least 30 billion dollars of additional funds are required annually."

The document establishes that between 2004 and early 2009, at least 2.5 million hectares were transferred from local users to foreign investors in five African countries alone. These were Ethiopia, Ghana, Madagascar, Mali and Sudan.

The paper also estimates that investments of some 1,000 million dollars were agreed upon in the contracts in question. These figures do not include transactions relating to land surfaces smaller than 1,000 ha, or the land acquisitions in countries such as Congo Brazzaville and Angola.

The study confirms the dominance of foreign private investors in land deals in sub-Saharan Africa, "though often with strong financial and other support from government, and significant levels of government-owned investments".

The study also finds that where governments are acquiring equity stakes in land, the most common arrangements happen via state-owned enterprises and minority shares in private companies.

In order to reconcile the investors' and the countries' interests, the FAO suggests measures to be taken in order to regulate the land acquisitions and guarantee a minimum benefit for African citizenries.

"The risks attached to international investments have led to calls for a binding code of conduct," the FAO says in the paper. The agency regards the enforcement of rules of conduct as "likely to be problematic".

The FAO study admits that most African countries do not have in place legal or procedural mechanisms to protect local rights and take account of local interests, livelihoods and welfare. By the same token, African processes to negotiate land access with communities "remain unsatisfactory", the paper says.

The list of shortcomings does not end there, with most being to the detriment of local communities. For instance, lack of transparency and of checks and balances in contract negotiations create a breeding ground for corruption and for deals that do not maximise the public interest.

In addition, insecure use rights on state-owned land, inaccessible registration procedures, vaguely defined productive use requirements, legislative gaps and compensation limited to loss of improvements like crops and trees (thus excluding loss of land) all undermine the position of local people.

The FAO paper confirms that food security concerns and attractive rates of return, in particular agricultural business fields (for instance, agro-fuels), are the main drivers of the land grab in Africa.

"Food security concerns, particularly in investor countries are a key driver of government-backed investment," the FAO points out.

It recalls that "food supply problems and uncertainties (have been) created by constraints in agricultural production due to limited availability of water and arable land; by bottlenecks in storage and distribution; and by the expansion of bio-fuel production, an important competing land and crop use."

With regard to bio-fuels, the FAO says that government consumption targets (in the European Union, for instance) and financial incentives have transformed agriculture in Africa into an attractive investment.

"Given the projections of diminishing supplies of non-renewables (that is, fossil fuels), agro-fuels are likely to remain and increase as an option in the longer term, unless policies shift in response to concerns about the impacts of agro-fuel expansion on food security," the paper says.

The FAO also points out that the size of single acquisitions is increasing, though with considerable variation among countries. It mentions a 452,500 ha bio-fuel project in Madagascar, a 150,000 ha livestock project in Ethiopia and a 100,000 ha irrigation project in Mali.

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