The shortage of arable land has gone global. Africa has seen an explosion of activity since 2008. How big is the land grab? Who’s doing the grabbing? It’s hard to tell as there is no central source of information and many of the transactions are not made public. An outfit called the Oakland Institute has been compiling information on this. From their June 8 press release:
The scale, rate and negative impact of land deals is alarming. In 2009 alone nearly 60 million ha– an area the size of France – was purchased or leased in comparison to an average annual expansion of global agricultural land of less than 4 million ha before 2008.
Consider these three maps. They describe the scope of what has happened in Mali, Sierra Leone and Ethiopia.
The total in these two countries alone is 460k HA or 1.14 million acres. How big is that? Big. This is an area the size of Rhode Island, It is about 80Xs the size of Manhattan. But this is small beer. Consider what is going on in one of the poorest countries in the world, Ethiopia:
The total of 5.3mm acres in just this one country is equal to the size of New Jersey. It's the same as the combined area of both Connecticut and Delaware. If you’re thinking of a European comparison this is equal in size to about half the land of Switzerland, Denmark or the Netherlands. It’s equal to all of Israel.
Who’s playing in this big land grab? Hedge funds and other speculators are big, so are a number of US Universities. From The Oakland report:
Western firms, wealthy US and European individuals, and investment funds with ties to major banks such as Goldman Sachs and JP Morgan.
Surprised that Goldie and JP are involved? I’m not. Some other players:
Several Texas-based interests are associated with a major 600,000 ha South Sudan deal which involves Kinyeti Development, LLC, an Austin, Texas-based "global business development partnership and holding company," managed by Howard Eugene Douglas, a former United States Ambassador at Large and Coordinator for Refugee Affairs.
A key player in the largest land deal in Tanzania is Iowa agribusiness entrepreneur and Republican Party stalwart, Bruce Rastetter, who concurrently serves as CEO of Pharos Ag, co-founder and Managing Director of AgriSol Energy, CEO of Summit Farms, and is an important donor to the Iowa State University.
Major investors in Sierra Leone include Addax Bioenergy from Switzerland and Quifel International Holdings (QIH) from Portugal. Sierra Leone Agriculture (SLA) is actually a subsidiary of the UK based Crad-l (CAPARO Renewable Agriculture Developments Ltd.), associated with the Tony Blair African Governance Initiative.
Are the African countries getting a square deal? Not even close:
In Sierra Leone official regulation requires investors to pay $5 per acre, or $12 per ha, per year.
In Ethiopia, Karuturi initially received land for just $1.25 per ha, the rate was later raised to $ 6.75 per ha. In comparison, rates for Brazil or Argentina are $5,000-6,000 per ha.
I loved this quote from Oakland:
“The research exposed investors who said it’s easy to make a land deal – that they could usually get what they want in exchange for giving a poor, tribal chief a bottle of Johnny Walker.”
I suppose that some good could come from all of this. Clearly there is going to be a very big push for agribusiness in Africa in the coming years. This would suggest that a new food supply is coming to a hungry world. It also suggests that there are going to be jobs and opportunity in the countries involved. I doubt that this will happen in the way the land grabbers are thinking. I’m sure that the likes of Tony Blair and Bruce Rastetter will do just fine, but the pensioners and LP interest are going to get clobbered when history repeats itself in Africa. At some point the locals are going to say “No”. At $2 an acre and a tax holiday to boot I wouldn’t blame them.
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No worries. Hillary is on it as she warns Africans of neo-colonialism. Of course her threats are based on the Chinese buying up land which would forego the good governance provided by the US snatching up land cheap.
ReplyDeleteLUSAKA, Zambia (AP) - U.S. Secretary of State Hillary Rodham Clinton is warning Africa of a creeping "new colonialism" from foreign investors and governments interested only in extracting the continent's natural resources to enrich themselves and not the African people.
Clinton said Saturday that African leaders must ensure that foreign projects are sustainable and benefit all their citizens, not only elites. A day earlier, she cautioned that China's massive investments and business interests in Africa need to be closely watched so that the African people are not taken advantage of.
She says that American development aid and infrastructure projects come with good governance conditions.
http://apnews.myway.com/article/20110611/D9NPJV181.html
This is harsh stuff Bruce. You know it has been going on a while. Water rights acquisition is another area of particularly offensive exploitation. Today it isn't just corporations, but investors of all stripes, and even nations, scrabbling over the diminishing capacities and resources that sustain existence on this planet.
ReplyDeleteBut the really disturbing thing is that it is all evidence that the bad, scary people are also smart, and that they are paying attention. They clearly recognize the disasters looming on the horizon, and their response is to quietly use their wealth and access to position themselves to take advantage of them. Greed, some insane version of it, really has gone viral. It has become what Jung referred to as a 'psychic epidemic,' which was the best way he could describe the inexplicable transformation of the good, Christian people of Germany in the '30s.
And no, no 'good' will come from this. Please don't succumb to the conditioning that you must make excuses in the name of impartiality. Decent people don't have to excuse evil. Evil intentions, spurred by evil motivations, pursued my evil machinations are evil. It probably isn't possible to hate these people out of their disease, but its necessary to try.
It will be difficult for the foreigners to maintain their property rights, whether obtained fairly or not. One reason Africa is poor is that property rights are messy there.
ReplyDeleteWhile I agree with most of what is said, for me the interesting point is to why US universities think it is a good idea to invest their endowments there. It doesn't suit their image. Now it seems clear that the endowment managers see an opportunity for "mark to belief" - and get good performance out of it for a while.
ReplyDeleteGood to hear from you on this. Did you know that there was a woman who wanted to teach a course on restoring the soils? Well, she suddenly lost her job at the university she was at. Do you have any idea, it could have been some conspiracy at work. They wanted to keep her methods hush-hush. What? Yeah, maybe fertilizer companies doing this, but money is involved. What she was doing was teaching people to grow microbes in gallon buckets and pouring it on the soil destroyed by chemical fertilizers. What's up? Let go of fertilizers? Yeah, it would only cost but a few dollars for each farmer to restore the soils in America. And she was a threat to some big money. Serious.
ReplyDeleteA day previous, she cautioned that China's huge investments and enterprise concerns in Africa require to be nearly observed in order that the African persons are not taken benefit of.
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it could have been some conspiracy at work. They liked to hold her procedures hush-hush. What? Yeah, perhaps fertilizer businesses managing this, but cash is involved. What she was managing was educating persons to augment microbes in gallon buckets and pouring it on the dirt decimated by chemical fertilizers
ReplyDeletethanks for posting such a nice information
ReplyDeleteplease keep posting such information
At some point we will need boots on the ground to get the produce out of the country. That moment may come sooner than we hope.
ReplyDeleteWell, there now is a campaign to stop Africa land grab. Check it out at www.stopafricalandgrab.com.
ReplyDelete