New land rush: Indiscriminate land acquisition to have adverse impact on sustainable development
Published: 05 Mar 2012
Posted in:  India | UNEP
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New Land Rush: Indiscriminate land acquisition to have adverse impact on sustainable development

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NAIROBI: As the world gears up to mark 20 years of the Rio declaration, there are concerns that indiscriminate land acquisition, primarily in Africa, will have adverse impact on efforts at sustainable development.

The United Nation Environment Programme Foresight Panel has flagged off the adverse impact of the " new land rush" as a cause of concern. The Foresight Panel, which undertook an eight-month global consultation with 400 leading scientists and experts, has expressed concerned about the manner in which foreign investors have acquired land and the consequences it has for growing inequities and injustices. [See excerpt below.]

The UN panel has suggested greater transparency in acquisitions, and better monitoring to ensure that local concerns and sustainability of ecosystems are taken into consideration. The "new land rush" is ranked tenth in the 21 emerging issues identified by the Foresight Panel.

It calls for better information flows especially about implications for livelihoods, food security, ecosystem services of host countries. It has also suggested a better monitoring system to ensure that all parties gain from this venture, this could be in the form of an internationally accepted procedure for assessing the socio-economic and environmental costs and benefits of the potential land acquisitions or adopting the Principles for Responsible Agricultural Investments suggested by the FAO.

Without such efforts, the panel say that it will contribute to growing inequities, especially for vulnerable social groups and depletion of natural ecosystems leading to adverse environmental and climate consequences.

The Foresight Panel recognizes the possible advantages that foreign investments in land could bring to host countries, however it argues that these advantages are seldom actualized. The UNEP panel has stressed that the lack of documented rights claimed by the locals and a weak consultation process has led to uncompensated loss of land rights.

A situation made worse by the fact that often these countries or communities do not have the capacity to assess the a project's technical or economic viability or to assess and enforce environmental and social safeguards.

A boom in commodity prices in 2008 led to a surge in investments from outside Africa. Though there is no clear idea of the size of this surge, according to an Oxfam report as much as 227 million hectares of land has been sold or leased worldwide since 2001, the vast majority of the deals coming through in the last two years.

A preliminary estimate by the International Land Coalition, a non-governmental organisation, puts the bulk of these land deals in Africa, some 51 million hectares of the 80 million hectares that were tudied. The evidence about increasing foreign ownership or use of land in Africa just keeps piling up.

A 2010 World bank report states that foreign investors expressed interest in nearly 57 million hectares in 2009 alone, with two-thirds of the investments taking place in Sub-Saharan Africa. The Global Land Project estimated that that in 2010 between 51 and 63 million hectares of land were part if finalized land deals or under negotiations in 27 African countries in 2009.

Compare this to the fact that before 2008, agricultural land grew by 1.8 to 4 million hectares worldwide. While not all of the land was for farm use, the total demand for land in Africa is more that the total land brought under development on the continent in the last 20 years. Clearly, there is a land rush led by foreign investments on Africa.

India has been one of the countries that have taken advantage of this land rush. Companies like Allied Chemicals, AVR Engineering, BP Jewellery, Kankaria group, Karuturi Agro Products, Kommuri Agrotech, KSR Earthmovers, Nelvo International and Surya Electrical have either leased or bought land in Africa.

Estimates suggest that as many as 80 Indian and Indian-owned companies have made invested in land in Ethiopia, Kenya, Madagascar, Mozambique and Senegal. The Indian government has been encouraging farmers consortiums to look into these proposals as well.

Studies suggest that the primary motivation for this rush is ensuring food security for the investing countries. In many cases, it is not economically viable to boost agricultural production at home, so the vast African farmlands stand in as the alternative.

"Investing in and explointing productive land abroad is a way of hedging against food shortages", the UNEP Foresight Panel's report states. Another driving force for this land rush is the interest many countries have in cultivating bio-energy crops abroad for their domestic consumption.

Advocates say that the foreign investment in land on the African continent has meant income from land deals, employment opportunities, which are often provided by the foreign land purchasers, better infrastructure, new technology and increased tax revenues.

There are concerns about whether these promises are being actually delivered. And on the ground the situation is not that simple. Often the irrigation systems put in place affect the exisiting water eco-systems which in turn impact productivity of other cultivable land.

Often "natural land" that is lightly cultivated or unmanaged land is being acquired. What happens in these cases is that there is a loss of ecosystem services like fuelwood supply, water supply and flooding watersheds, loss of medicinal plants, and loss of biodiversity.

Clearly, the unprecedented rush for African land has social, economic and environmental costs for local communities. There is also concern that traditional land-use rights are often being eroded.

The World Bank report, Rising Global Interest in Farmland, concludes that risks associated with these investments are "immense". "In many cases public institutions were unable to cope with the surge in demand. Land acquisitions often deprived local people, in particular the vulnerable, of their rights.

Consultations, if conducted at all, were superficial and environmental and social safeguards were widely neglected. These large land acquisitions can come at a high cost. The veil of secrecy that often surrounds these land deals must be lifted so poor people don't ultimately pay the heavy price of losing their land," the report stated.

Download the report: http://www.unep.org/publications/ebooks/foresightreport/Portals/24175/pdfs/Foresight_Report-21_Issues_for_the_21st_Century.pdf



Excerpt:

Issue 010
The New Rush for Land: Responding to New
National and International Pressures (Ranked #12)


Where we stand

Although the area of agricultural land has been expanding in developing countries for decades, a boom in commodity prices in 2008 led to a surge in investments from abroad. The size of the surge is uncertain, but a 2011 Oxfam report stated that up to 227 million hectares have been sold or leased worldwide since 2001, with the bulk of the acquisitions occurring in the past two years. Another report in 2010 by the World Bank says that investors expressed interest in around 56 million hectares of land in 2009 alone, with about two-thirds of the investments taking place in SubSaharan Africa. In the same vein, the Global Land Project estimated in 2010 that between 51 and 63 million hectares of land were either part of finalized land deals or under negotiation in 27 African countries in 2009. By comparison, agricultural land worldwide grew by around 1.8 - 4 million hectares per year before 2008. Deininger and others (2011) stated that the 2009 demands for land in Africa equates to more than the total land development on the continent over the previous 20 years. It should be noted, however, that not all land deals have been converted to farmland.

As for the motivation for these investments, a main driving force is the aim of countries to enhance their food security because it is not economically or otherwise viable to sufficiently boost agricultural production at home. In this case, investing in and exploiting productive land abroad is a way of hedging against food shortages. Another important factor is the interest of many countries in cultivating energy crops abroad for import into their own countries. Bioenergy would help them satisfy their growing demand for energy, provide an alternative to increasingly expensive oil, and perhaps help them reduce greenhouse gas emissions. Meanwhile, the developing countries marketing their land look forward to the income from such land deals, as well as to the employment and other opportunities often promised by land purchasers.

On top of these international pressures come national pressures for land development, such as continued urbanization, expansion of infrastructure, and demand for new cropland to satisfy growing domestic food requirements.

Importance/relevance

Despite the advantages of selling land to investors abroad, there are sometimes undesirable side effects. In a 2010 report, the World Bank noted that recent land deals ‘too often, …have included a lack of documented rights claimed by local people and weak consultation processes that have led to uncompensated loss of land rights, especially by vulnerable groups; a limited capacity to assess a proposed project’s technical and economic viability; and a limited capacity to assess or enforce environmental and social safeguards.’ The report goes on to say that action is needed in some countries to protect vulnerable groups from losing land on which they have ‘legitimate, if not formally recognized, claims. ...Public disclosure, broad access to information on existing deals, and vigilant civil society monitoring are needed, along with other efforts to improve land governance, including the overall policy, legal, and regulatory framework for large-scale land acquisition.’ The report also notes that the employment and training promised as part of a land deal sometimes never happens.

Another downside of large-scale land acquisitions comes from the fact that much of the acquired land is currently unmanaged or lightly settled ‘natural land.’ The conversion of this natural land to cropland often involves the loss of ecosystem services such as fuelwood supply; control of water
supply and flooding in watersheds; supply of medicinal plants; regulation of local climate conditions; and provision of habitat for plants and animals.

A key question then is how to achieve the economic and other benefits a country receives by selling land to foreign investors, while at the same time minimize or eliminate its disadvantages.

Options for action

First of all, there seems to be an immediate need for more concrete information about the scope of land acquisitions and a better understanding of their implications for livelihoods, food security, ecosystem services and other issues. An international and transparent inventory of these acquisitions
would be helpful to better assess the situation. It would also be useful to have an ongoing monitoring system for keeping track of new land acquisition contracts and for helping achieve a win-win situation for all parties. This system could help ensure that land development projects produce the promised employment, skills and knowledge gains for local populations.

Another option is to put into place an internationally-accepted procedure for assessing the socioeconomic and environmental costs and benefits of potential land acquisitions.

A further option is to encourage investors to adopt and follow a set of ‘Principles for Responsible Agricultural Investment’ along the lines suggested by FAO (2009), World Bank (2010) and others. These principles include: respecting land and resource rights; ensuring that investments do not jeopardize food security (see Issue 007 for a discussion of other aspects of food security.); ensuring transparency and good governance of contracts; consulting all those materially affected; and ensuring that projects respect the rule of law, reflect industry best practice, are economically viable, and result in durable shared value. Some civil society groups, such as the Global Campaign for Agrarian Reform (2010), however, consider these principles to be insufficient for protecting vulnerable groups.

Consequences of inaction/action in the next 10–20 years

The consequence of an unbounded rush for land could be growing inequities and injustices in the country selling off its land to foreign investors, including a continuing loss of land rights of vulnerable social groups. Another consequence could be the further depletion of unmanaged natural land which provides various ecosystem services and products ranging from watershed protection to fuel supply.

Putting safeguards in place, such as monitoring investments, assessing the potential impacts of land deals before they are finalized, and adopting a set of principles for responsible investment, could minimize the drawbacks while allowing the investing countries to enhance their food and energy security.

Background information

Deininger, K. 2011. Forum on global land grabbing: challenges posed by the new wave of farmland investment. Journal of Peasant Studies, 38, 217-247.

The Economist. 2011. The surge in land deals: when others are grabbing their land, evidence is piling up against acquisitions of farmland in poor countries. http://www.economist.com/node/18648855, 5th May, 2011.

Food and Agriculture Organization (FAO). 2009. Towards voluntary guidelines on responsible governance of tenure of land and other natural resources. Land Tenure Working Paper 10. Land Tenure and Management Unit. ftp://ftp.fao.org/docrep/fao/012/i0955e/i0955e00.pdf

Global Campaign for Agrarian Reform and Land Research Action Network. 2010. Why we oppose the principles for responsible agricultural investment. http://www.fian.org/resources/documents/others/why-we-oppose-the-principles-for-responsible-agricultural-investment/pdf

Global Land Project (GLP). 2010. Land Grab in Africa: emerging land system drivers in a teleconnected world. The Global Land Project: http://www.globallandproject.org/Documents/GLP_report_01.pdf

Harvey, M., Pilgrim, S. 2011. The new competition for land: food, energy, and climate change. Food Policy, 36, S40-S51.

Oxfam. 2011. Land and power: the growing scandal surrounding the new wave of investments in land. 151 Oxfam Briefing Paper. http://policy-practice.oxfam.org.uk/publications/land-and-power-the-growing-scandal-surrounding-the-new-wave-of-investments-in-l-142858

World Bank. 2010. Rising global interest in farmland: http://siteresources.worldbank.org/INTARD/Resources/ESW_Sept7_final_final.pdf

World Bank, Food and Agriculture Organization, UNCTAD, IFAD. 2010. Principles for responsible agricultural investment that respects rights, livelihoods and resources. http://www.responsibleagroinvestment.org/rai/node/256