A World Bank official last week leaked a draft report by the organization dealing with the “farmland grab.” The report, entitled “The Global Land Rush: Can it yield sustainable and equitable benefits?” is intended to be the most comprehensive analysis of the farmland grab, in which countries invest in land overseas to expand food security domestically.
To date, a small number of high-profile purchases have received some attention, but the broader trend has been largely ignored. Using large sovereign wealth funds, obtained mostly from oil exports, countries like Saudi Arabia have been purchasing large tracts of land in Sudan, Ukraine, Pakistan, and Thailand, to establish large-scale agricultural production intended for export back to the home country. The United Arab Emirates is exploring similar deals with Sudan and Kazakhstan, Libya is looking to Ukraine, South Korea is purchasing land in Mongolia, and even China, which has considerable land resources but faces severe water shortages, is looking for investments in Southeast Asia.
According to the World Bank’s President, Robert Zoellick, such investments are a “win-win venture.” His spokesperson argues, “This is a situation that could bring real benefits to people in some developing countries, but to be sustainable, land purchase or lease arrangements must benefit, and be seen to benefit, all parties including citizens of the host country, local communities and investors.”
But the draft World Bank report itself notes a number of challenges associated with the new trend, noting that:
- “Rarely if ever” were land deals linked to “countries’ broader development strategy.”
- “Consultations with local communities were often weak” and, as a result, “conflicts were common, usually over land rights.”
- “The level of formal payments required was low,” encouraging speculative investment. Further, “payments for land are often waived…and large investors often pay lower taxes than smallholders…or none at all.”
- And perhaps most dramatically, “Investor interest is focused on countries with weak land governance.” Despite promises to the contrary, “investors failed to follow through on their investments plans, in some cases after inflicting serious damage on the local resource base” and not providing the jobs and infrastructure development promised when the contract was signed.
The U.N. Food and Agriculture Organizations’ Director General, Jacques Diouf, worries that a “neo-colonial” agricultural system is emerging, noting that “some negotiations [between host countries and the investors] have led to unequal international relations and short-term mercantilist agriculture.” may be emerging. Food First’s Raj Patel, concurs, describing the process as neocolonial globalization.
The real food security challenge occurs in countries like Sudan, which faces its own domestic food crisis but has also signed deals to lease nearly 4 million hectares of agricultural land (and thus food exports) to other countries. Under such a situation, countries like Sudan may wind up exporting food to rich nations while, according to UN figures, some 5.6 million Sudanese people face the prospects of famine in their own country. And with global food prices likely to continue to remain high, the prospect of continued land purchase in the developing world remains high.