20.04.2012 - Natural Sciences Sector

Madiodio Niasse on the risks associated with large-scale foreign land aquisitions

© Madiodio Niasse

From Sudan to the South Pacific, the rush for land is on. In a growing trend, foreign interests are acquiring vast expanses of farmland to feed their populations back home and produce biofuels. Jacques Diouf, former Director-General of FAO, has evoked a risk of agrarian neocolonialism. Just how big a threat does the phenomenon pose to national sovereignty and how can its excesses be avoided? We spoke to Madiodio Niasse, Director of the International Land Coalition based in Rome (Italy) and one of the contributors to the Fourth World Water Development Report.

Are governments selling large tracts of land to foreigners in most cases or leasing them?
In most cases, they are leasing the land. In the 28 land deals totalling 2.64 million ha covered in a survey carried out last year by Norwegian People Aid1 in what is today largely South Sudan, there were no land sales with transfer of full ownership rights but rather long-term leases of between 30 and 60 years.

Similarly, a 2011 review by the International Institute for Environment and Development of the terms of 12 contractual land deals in Africa showed that none of these agreements were about land sales per se but rather about long-term leases, concessions and contract farming2.

Even in Ethiopia, one of the prime recipients of land-based foreign direct investment in Africa, the law does not allow private ownership of the land, which belongs to the State. The investor therefore typically accesses the land on the basis of lease agreements. I think the notion of concession is more accurate than lease contract here. This is because, in a normal lease agreement, the lessee is expected to use the land more or less as it is with minimal investment in the land itself, while paying rent to the lessor.

In the case of large-scale land deals, one of the primary justifications given by governments in developing countries is that they need investments in order to develop the land and make it more productive. The recipient is therefore expected to invest in the land, in the form of water and irrigation infrastructure, roads, storage facilities and so on. This is more or less made explicit in the agreement between the State and the investor, known as the concessionaire. Concessions vary in duration from 15 to 99 years and are often renewable. The sale of freehold land rights is more common in contexts where the land is already under private ownership, which is the case in many Latin American countries.

This begs the question: is there a fundamental difference between granting concessions to investors or selling the land with freehold rights? I think not. Where heavy physical investments are foreseen, the concessionaires demand that the agreement with the host government include types of guarantee and levels of tenure security that are very similar to those associated with freehold rights, at least for the duration of the concession. Even when such guarantees are not explicitly given, the profound transformation of the land and the heavy investments made by the concessionaire are such that the host government often has no option but to keep the land in the hands of the concessionaire or transfer it to another investor under similar contractual terms. Land given for a 99-year concession is land almost lost for good.

Therefore, decisions to give away the land either through sales or concessions should never be taken lightly by governments. Unfortunately, this advice might fall on deaf ears, as many of the large-scale land acquisitions take place in countries with very weak governance. Reading a 2011 World Bank study3 on this phenomenon, one has the impression that the weaker the governance, the more attractive the country to large-scale land-based foreign land investments. This means that corrupt practices, behind-the-door negotiations, illegal evictions of traditional land-owners and violence against communities are all common features of the current phenomenon of large-scale land acquisitions.

Do you know of cases where foreign ownership has deteriorated the environment or otherwise penalized the local population?
As the phenomenon of large-scale foreign land acquisitions is very recent, it is difficult to assess their full environmental and social impact at this early stage. The land deals we are talking about often relate to hundreds of thousands of hectares each. Developing the acquired land takes many years. Many land deals are only at the stage of negotiations or basic infrastructure development, such as canals and roads. In a few cases, farming has begun on small portions and we are already seeing rivers being diverted through the construction of canals. This is the case of the 100 000 ha Malibya farm project promoted by a Libyan sovereign wealth fund in the Inner Delta of the Niger River in Mali.

Another type of early impact relates to dispossession and forced displacement of small farmers, pastoralists and indigenous peoples. According to the USA-based Oakland Institute, the 325 000 ha investment scheme in Tanzania by US company AgriSol Energy is expected to displace more than 160 000 people, posing extremely complex resettlement challenges4. Large-scale land concessions often generate a planning blight effect, which here refers to the uncertainty and deleterious effects on the social fabric and economic activities in targeted areas once a land allocation decision is made, or once negotiations between government and prospective investors have begun.

We can project ourselves into the future on the basis of experience with existing agrobusiness schemes. The likely impact includes forest conversion to agricultural land, a drop in biological diversity as a result of monocropping and the massive use of chemical fertilizers, pesticides and herbicides, unsustainable levels of water abstraction and a greater risk of water-related conflicts with local communities and neighbouring States sharing the same transboundary river systems.

Ethiopia has sold more than 1 million ha of fertile land to foreign investors from India, Saudi Arabia and elsewhere, displacing tens of thousands5 of subsistence farmers. The government argues that the investors will grow more food, not all of which will be exported. What is your view?
Let me start by recognizing that Ethiopia, like many other sub-Saharan countries, including mine – Senegal –, faces serious development challenges. Subsistence family farming, which is the backbone of Ethiopia’s rural economy, is essentially rainfed, as only about 10% of the cereal cropland is irrigated. Farming is thus highly vulnerable to climate variability and change. Frequent rainfall deficits have translated in recent years into severe droughts and famine. Ethiopia is the world’s biggest recipient of food aid.

I think any responsible government facing a problem of this nature is compelled to act. But governments have several options. The Ethiopian government seems to have elected to bet on large-scale concessions of fertile arable lands to foreign investors. This option carries risks, while it remains to be seen if the expected benefits will materialize, such as rural infrastructure, jobs and the contribution to domestic food needs.

One of the less risky but not fully explored options is for the government to invest in modernizing family farming. This will require devoting a substantial share of public resources to the agricultural sector and improvements to the legal and institutional environment to encourage Ethiopian farmers to invest in their land and innovate. As this option has worked in countries like Vietnam, why couldn’t it work in Africa? In instances where foreign investment is justified, priority could be given to arrangements that do not imply transfer of arable land to foreign investors. These arrangements – which include contract farming and joint ventures − pose their own challenges but at least allow farmers and government to keep their destiny in their own hands.

How can indigenous populations secure their claim to land without property deeds?
Indigenous peoples tend to be disproportionately affected by dispossessions resulting from large-scale land acquisitions. There are many reasons, including the fact that they occupy and use land that is often considered by governments as vacant, unowned and/or underexploited. Indigenous peoples also tend to be politically marginalized and thus not in a position to oppose government decisions. What can be done? Firstly, push governments to recognize as indigenous peoples all communities meeting the criteria that define indigenous peoples under international law. Secondly, promote full respect of the land-related provisions of the ILO 169 Convention on Indigenous and Tribal Peoples, notably the general principle that indigenous people should not be removed from the land they occupy and, in the exceptional cases where their relocation is considered, that it should be conditioned to their free prior informed consent.

Last December, Argentina’s Senate voted 62-1 to limit land ownership by foreign individuals or companies to 1000 hectares and foreign land holdings to 15% of farmland. Currently, an estimated 7% is in foreign hands. What is your view of this development?

As I said earlier, in Argentina, as elsewhere in Latin America, most of the arable land is privately owned by individual farmers and corporations. Large-scale farms are an integral part of the rural landscape.
The fear of large-scale farms is real, however, among small farming communities and indigenous peoples in Latin America. The process of land concentration tends to be amplified by large-scale foreign land acquisitions, resulting in growing inequalities in farm size.

An even bigger concern in Argentina and the rest of Latin America seems to about the extranjerización de la tierra, or foreignisation of the land. In the current global context, which has seen land prices soar, international land transactions could easily get out of hand and result in foreign interests taking control of most of the land in Latin America, threatening the national sovereignty of States over their territory. This has driven Argentina, Bolivia, Brazil, Paraguay and Uruguay to enact a series of laws preventing or limiting the sale of land to foreign investors.

Interview by Susan Schneegans
Published in A World of Science, Vol. 10, No. 2    

1. Norwegian People Aid Survey (.pdf)
2. Crop production purchase agreement between the investor and farmers, who continue to own and farm their land.
3. Deininger and Byerlee (2011) Rising Global Interest in Farmland: Can it Yield Sustainable and Equitable Benefits?
4. See Oakland Institute brief (.pdf)
5. According to Human Rights Watch

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