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Tuesday, 28 December 2010

Land: The New International Strategic Asset. How Africa is losing big time

By Lord Aikins Adusei

There are credible reports that big multinational corporations like Biofuel Africa Ltd in cahoots with corrupt politicians and traditional leaders and with the backing of global financial institutions are buying large tracts of land in parts of Africa, under bizarre circumstances, displacing rural farmers, destabilising rural communities and slowly building up chaos that is further aggravating the poverty situation in Africa.

The international craze for a reduction of carbon dioxide emission from fossil fuel guzzling cars and industries has led to an intense focus on biofuel as the solution to the pollution and associated global warming. But the production of biofuel is not taking place in the sky, it is taking place on land and is leading to a new social cancer that is slowly beginning to emerge. The focus on biofuel as alternative to oil, gas and coal has put new and unrealistic demand on land, and it is on record to make land the most strategic commodity in the 21st Century. The history of land as a strategic asset dates back to the 18th Century. During that period Physiocrats considered land the ultimate source value and all attempt was made to secure it. However, in the 19th Century labour became the most important factor of production as new factories competed aggressively for that resource. Then the importance of labour as the most important factor of production was replaced by capital in the 20th Century. Access to money was considered the ultimate source of value in production. However, in the 21st Century land is coming back as the most strategic asset.Evidence of this can be seen in the scramble for land not only in Africa but also in Latin America and Russia [1]

Driven largely by a global cartel of land speculators, many energy and agro-multinational corporations are strategically acquiring agricultural lands in poor countries of the global south particularly Africa at a rate never anticipated by land economists. The 2007 and 2008 food crisis and its associated price hikes have forced rich but food insecure countries in the Middle East and the Gulf Region to scrounge for lands in Africa further complicating matters. Jeffrey D. Sachs of the Earth Institute in a recent article entitled 'Need Versus Greed' notes that "The rise in food prices is leading to a land grab, as powerful politicians sell foreign investors massive tracts of farmland, brushing aside the traditional land rights of poor smallholders. Foreign investors hope to use large mechanised farms to produce output for export, leaving little or nothing for the local populations." [2] Meanwhile the belief in some countries in Africa like Sudan and Ethiopia that heavy injections of foreign capital will enhance agricultural technology, boost local employment, revitalize sagging agricultural sectors, and ultimately improve agricultural yields has given the corporations a field day with serious social, economic, political and environmental consequences, [3]

The land grabbing statistics worldwide and Africa in particular is not only overwhelming but is also extraordinary shocking. According to International Food Policy Research Institute (IFPRI) a US-based policy think thank, since 2006 between 15 million and 20 million hectares of farmland around the world have been secured for biofuel and grain production, while between US$20bn and US$30bn has gone into investment [4].

In Africa the past five years has seen more rich agricultural lands being taken over by food insecure but rich countries in the Middle East and rich multinational firms in Europe, US, and Asia particularly China, Korea and India. Some of the land acquisitions have occurred under bizarre and non-transparent circumstances making experts to warn of the consequences if the practice is not stopped. In Mozambique for example China has US$800 million investment to expand 100,000 to 500,000 metric tons of rice production in the country and Skebab (Sweden) and Sun Biofuels (UK) have acquired more than 100, 000 hectares of land for biofuel production in the country. In Ethiopia, a country noted internationally for its food insecurity and its dependence on handout from the World Food Programme, the government has set aside around three million hectares of farm land to be used to produce grain and biofuel for export. Flora EcoPower (Germany) has acquired 13,000 hectares for bio-crop production while India is investing US$4 billion in agriculture, flower growing and sugar estates in that country. In Tanzania Sun Biofuels (UK) has acquired 5,500 hectares of land for sorghum (biofuel) production while the Chinese firm Chongqing See Corp has secured 300 hectares of farm lands for rice production. In the same Tanzania the Gulf State of Saudi Arabia has requested a lease of 500,000 hectares of land. In Southern Sudan Jarch Capital (USA) has signed a 400, 000 hectare deal with a local army commander while the Middle East and Gulf States of Qatar, Saudi Arabia, United Arab Emirates, Jordan, Kuwait and Egypt together have about 1.045m hectares under their thumb in that country. In the same Sudan, South Korea is running away with 690,000 hectares of farmland secured for wheat production. In Nigeria, Trans4mation Agrictech Ltd (UK) has secured 10,000 hectares of land. In Angola, Lornho (UK) has 25,000 hectares leased to her for rice cultivation and is negotiating for a further 125,000 hectares in Malawi and Mali. China has requested 2 million hectares for jatropha production in Zambia; and in Democratic Republic of Congo the Chinese firm ZTE International has secured 2.8 million hectares for biofuel oil palm plantation [5].

These figures do not only reflect the unequal power relations between rich multinational corporations and governments of rich countries on one hand and poor African countries on the other, but it also reflects the vulnerability of African countries to the predatory activities of rich multinational corporations and governments of these rich countries. It has been argued elsewhere that the global assault on Africa has the tendency to produce the same negative effects that colonialism produced on the continent.

A major problem is that many of the corruption-ridden governments in Africa are rushing to make land deals with multinationals without proper consultation with the people and without proper studies as to the economic, social and environmental cost of such deals. Another issue is that the lands being giving to corporations by the nonchalance governments in Africa are not empty lands. They are lands that rural farmers farm on and depend on for their livelihoods. That means the farmers whose lands have been taken over by the multinationals are being denied the opportunity to make a living. They are being dispossessed of the only asset that helps put food on their tables.The lands of the poor farmers are being handed over to rich multinationals to meet the needs of populations elsewhere to the detriment of the local farmers. The local farmers are being pushed away by multinationals that are increasingly seeing land as strategic asset that must be acquired at all cost to meet their own greedy, selfish and opportunistic ambitions.

Many who support corporate land grab efforts in Africa point to Asian-style Green Revolution. Their argument is that allowing the land grabbing to go on will allow benefits such as revenue, employment, and technology transfer to be bequeathed to countries in Africa. But there are many unanswered questions regarding the so called benefits of land investments in Africa. For example what happens to displaced farmers whose lands are taken for food production to feed populations abroad? What happens to food production and food security in countries where agriculture lands are being auctioned to produce biofuel and food to feed economies elsewhere? In some of the countries where land is being taken for food and energy production people already spend between 60-75% of their income on food so what per cent of income of these poor people will be spent on food when it becomes unavailable in the local market? Most importantly what happens to communities when scarce water and other scarce resources that they depend on and which are currently being channeled into food and energy production for export abroad are depleted? What happens to farmlands that are degraded after the food is produced and exported? What happens to the polluted environment after the food and biofuels have been shipped abroad? Little is known of the environmental implications of committing hundreds of thousands of hectares of farm lands into jatropha production. New pests and diseases may emerge to confront poor farmers, who may not have benefited from the jatropha production with serious consequences. For example the use of chemicals to process the jatropha into biofuel may not only lead to contamination of soil, but also the poisoning of shallow groundwater with serious health repercussions for both humans and animals.

As Hornborg (2009:244) notes: "Generally speaking, social scientists will probably not get too involved in discussions about ethanol with all those engineers, agronomists, and economists who are committed to keeping the global technomass going by feeding it with corn or sugar cane. But we can listen attentively to the debate. We are told, for instance, that the conditions of people harvesting sugar cane for ethanol production in Brazil are appalling. We are told that ethanol production might in fact generate more greenhouse gases than the combustion of fossil fuels. We are told that it will accelerate tropical deforestation and loss of biodiversity. We are told that it will probably yield less horsepower per hectare than just simply growing fodder for horses. And what undoubtedly worries us the most, we are told that it is making food more expensive and contributing to malnutrition and starvation among the global poor" [6].

In Ghana for instance while the Ministry of Agriculture has allowed over 20 companies from around the world, including Brazil, China, Germany, Italy, Norway and The Netherlands, to acquire land to produce biofuels, the ministry has not conducted any study to establish the social, economic, political and food security implications of such land deals to Ghana as a whole and the affected farmers and the communities in particular.

Current estimates by the World Food Programme (WFP) put the number of people in Ghana who are food insecure to 1.2 million; almost half the number is people living in the Northern Region of the country where the corporate land grabbing is taking place. In a paper presented during the World Bank Annual Bank conference on Land Policy and Administration in Washington, DC, April 26 and 27, 2010,Kwesi Ahoi, Ghana's Minister of Food and Agriculture admitted that on the whole Ghana remain food insecure. He stated that "Ghana is self-sufficient only in roots and tubers but deficient in cereals where it produces 51% of its needs, fish, 60% of its requirements, meat 50% of requirements and less than 30% of the raw materials needed for agro-based industries. The output of vegetables such as tomatoes and onions, the most widely used, is rather erratic and vacillates between scarcity, sufficiency and glut depending on the vagaries of the weather". [7] Yet, in spite of the food insecurity in the country, Kwesi Ahoi and his ministry are busy supervising the handing over of the same land that could make Ghana food sufficient to non-food producing multinationals.

The acquisition of 23,700 hectares of Ghanaian land by Biofuel Africa Ltd in the northern part of the country has already forced the inhabitants of seven villages that depend on the land for their livelihoods to move to Tamale, the regional capital in search of non existing jobs. These 23,700 hectares of land were taken away from the people without adequate compensation and without viable alternatives. For example Steinar Kolnes, Biofeul Africa Ltd chief executive officer (CEO) in Ghana admitted that the company did not pay compensation to farmers whose land his corporation has seized. "We don't pay compensation...We gave the farmers two options: To stay and farm their crops alongside the jetropha or leave to other more fertile lands we had provided for them" [8] The question is if there are fertile lands as the chief executive claims why doesn't he use it for his jatropha business? Why is he seizing the poor farmers' land and not use his so called rich land for his jatropha business?

The findings of an in-depth study sponsored by the World Bank on the impact of corporate land grabbing in Ghana have implicated the biofuel corporations in the country. According to the World Bank study published in 2010 [9] "The most direct and immediate impact of biofuels relates to land loss… Some 70 households from three communities were involuntarily vacated from their lands, without any form of restitution, following the harvest of yam (the primary cash crop) from the 2008 growing season. For two of the villages this equated to between 40 and 50 percent of households. Of those households that lost land, on average nearly 60 percent of their total landholdings were acquired by the company. Only 20 percent of households were able to obtain some replacement land, with most households unsuccessful in recovering both the quantity and quality of land lost to the plantation. These households cited increasing land scarcity and land quality concerns as key obstacles."

The World Bank study concludes: "In all the plantations assessed households were required to relinquish landholdings for the purpose of plantation development. At the majority of plantations, directly affected households were not consulted by the company, nor did they formally acquiesce to transferring their land. With the exception of one company that promised to pay approximately US$ 1 per acre per year to those losing land, no formal compensation measures have been proposed by other companies or by the relevant Traditional Authorities" [10]. These findings which corroborate Steinar Kolnes' statement that his company does not pay compensation show that the corporations are paying close to nothing for their robbery. The question is how many Europeans, Americans, and Koreans will accept approximately US$ 1 per acre per year as compensation for not farming on a land that acts as the source of livelihood? Instead of Africans benefiting from the new international status of land they are being handed peanuts by the corporations who have are making money the crudest way by dispossessing the farmers without compensation.

Meanwhile similar reports of people losing their livelihoods are being reported in Ethiopia, Tanzania, Mali, Zambia and war ravaged Sudan. Thus the commodification of land is threatening rural farmers whose lands are being seized by these greedy multinationals acting in cahoots with local politicians and traditional leaders. The consequence of such blind land grabbing by bio-multinationals is that food security efforts of a continent frequently scarred by food shortages, hunger and starvation is being compromised. Such acts are creating unnecessary tension and chaos in many farming societies and helping to destabilise the cohesiveness of rural communities. The peace and stability that many communities have enjoyed for decades are being breached as a result of the land grabs especially in communities where farmers have been left without compensation and without alternatives. The danger is that the carving up of rich arable farmlands for production of non-food commodities such as biofuel if not checked will worsen the continent's food security efforts and force already poor people into hunger and starvation. That warning has been issued already in the GRAIN Report of 2008.

The Report by the Spain based NGO-GRAIN states that: "Food corporations and private investors, hungry for profits in the midst of the deepening financial crisis, see investment in foreign farmland as an important new source of revenue. As a result, fertile agricultural land is becoming increasingly privatised and concentrated. If left unchecked, this global land grab could spell the end of small-scale farming, and rural livelihoods, in numerous places around the world". [11]

The true value of that warning cannot be underestimated because the danger is already appearing. That is the leasing of these lands to multinationals under circumstances that leave much to be desired, as indicated by Ghana's example is forcing many rural farmers to move into the cities and towns in search of non-existing jobs. That is the commodification of land is pushing already poor farmers out of farming and into cities that have little to offer them. These cities are already overburdened with populations and face major problems as discussed by Mike Davis in his book the "Planet of Slums" [12]. In effect the seizing of the poor farmers' land is destroying their only hope of survival on earth.

Governments in Africa that think major agro-multinationals securing large tracts of land under dubious means could help initiate Asian-style Green Revolution in Africa must know and understand that in Asia the Green Revolution was largely successful because of the role played by smallholders [13]. These smallholders who played pivotal role in making Asia economies food sufficient are the very people being displaced by the multinationals and the rich countries and their hedge fund managers. Such displacements will produce nothing but a backlash with serious economic and political consequences.

Dangerous consequences are always in the pipeline when corporate interests coincide with that of corrupt and insensitive governments as we have seen between oil giant Shell and the corrupt federal government in Nigeria. Niger Delta crisis was largely created when the interest of Royal Shell Corporation coincided with that of the corrupt regimes that ruled the country since 1966. Thus the accumulation by dispossession currently underway in Africa will definitely produce its consequences not only for people being robbed of their lands but also the corporations acting in cahoots with the indifference governments in Africa. Rich governments securing lands in Africa may altogether lose their investments when landless farmers and hungry communities begin to make claims to what has been unjustly taken away from them.

The political ramifications of outsourcing lands to multinational corporation have had its first casualty in Madagascar. The toppling of the government in Madagascar after 1.3 million hectares of land was sold to the Korean firm Daewoo and another 465,000 hectares to Varun International of India demonstrates the political cost such non-transparent land arrangement poses to the security and stability of governments in Africa. Lesson should be learnt from that and it must serve as an eye opener to all those scrounging for lands in Africa and in the process helping to destabilise the people and their communities.

When foods being produced by the multinationals and rich governments are exported the shortages that will be created and the associated price hikes will produce devastating and undesirable effects. Avoiding the shortages and its undesirable effects through the implementation of policies that give first priority to smallholders and local farmers producing food for local consumption must be the objective of governments in Africa.

Reference

[1] Hornborg, A. 2009. Zero-Sum World Challenges in Conceptualizing Environmental Load Displacement and Ecologically Unequal Exchange in the World-System. International Journal of Comparative Sociology. SAGE Publications.

[2] Sachs, J. D. 2011. Need versus Greed. The global economy is growing quickly, but too much wealth is siphoned off by well connected billionaires. http://english.aljazeera.net/indepth/opinion/2011/03/20113313330192433.html

[3] Kugelman, M. and Levenstein, S. L (eds). 2009. LAND GRAB? The Race for the World's Farmland. Woodrow Wilson International Center for Scholars, Washington, D.C.

[4] IFPRI 2009 cited in the Economist "Outsourcing's Third Wave," Economist, May 21, 2009, available from http://www.economist.com/displaystory.cfm?story_id=13692889.

[5] Hornborg, A. 2009. Zero-Sum World Challenges in Conceptualizing Environmental Load Displacement and Ecologically Unequal Exchange in the World-System. International Journal of Comparative Sociology. SAGE Publications.

[6] Von Braun, J. and Meinzen-Dick, R. 2009. "Land Grabbing" by Foreign Investors in Developing countries: Risks and Opportunities. IFPRI Policy Brief. April 2009.

[7]World Bank, 2010 Annual Bank conference on land policy and administration Washington, DC April 26 and 27, 2010. Government's Role in Attracting Viable Agricultural Investment: Experiences from Ghana
http://siteresources.worldbank.org/EXTARD/Resources/336681-1236436879081/Ahwoi.pdf

[8] IRIN, 2009. Ghana: Land grabs force hundreds off farms, growers say. http://www.irinnews.org/Report.aspx?ReportId=86044

[9] Schoneveld, G. C. et al. 2010. Towards Sustainable Biofuel Development: Assessing the Local Impacts of Large-Scale Foreign Land Acquisitions in Ghana. World Bank.

[10] Schoneveld, G. C. et al. 2010. Towards Sustainable Biofuel Development: Assessing the Local Impacts of Large-Scale Foreign Land Acquisitions in Ghana. World Bank.

[11] GRAIN, 2008 Seized: The 2008 land grab for food and financial

[12] Davis, M.2006. Planet of Slums. Published by Verso.

[13] Jirström et al. 2005. Addressing Food Crisis in Africa - What Can Sub-Saharan Africa learn from Asian experiences in Addressing Food Crisis ITS? CIDA Report

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