Annual World Bank Conference on Land and Poverty
18th to 20th April 2011
Washington, DC USA
PANELIST – DISCUSSANT
Contact details
Philip. Macharia Kiriro
President - EAFF
Vice patron - KENFAP
P.O.Box 13747 – 00800
Westlands, Nairobi
Tel: +245-20-4451691
Email: [email protected], [email protected]
Website: www.eaffu.org
FOCAL POINTS
We recognise
- Land as a central asset for farmers
- A key factor of production
- Small farmers face many challenges with regards to access to land and land rights
-
Existence of different types of land ownership;
- Commercial
- Public
- Private
- The current acquisition of land in Africa by foreign investors in its current form and purpose is an emerging challenge that we now face.
-
There are various players in these deals i.e
- Foreign investors – Government (Public) and companies (Private)
-
Players have various motivations
- Need to secure food security – external and domestic
- Believe that foreign investment in agriculture will lead to increased opportunities for -: employment, technology and skills transfer, biofuel production, speculation for higher land prices in the future
- Many of these land deals are shrouded in secrecy, luck consultations, no information or concrete data on size of investment, impact to local communities, impact on natural resources and biodiversity.
- Trend and the environment within which it is taking place.
- Happening in countries where existing land policies are either not there, weak and have no ownership among the citizens and therefore limited in framework to regulate land and investment.
-
The following issue still outstanding not just for countries without a comprehensive land policy but even those who do :- i.e
- Status of state sovereignty over land
- Land distribution
- Land Tenure systems
- Land Tenure Security
-
Recipient countries
- Dependent on Agriculture
- Food importers therefore food insecure
Why Africa.
- Perception that there is plenty of land.
- Land is relatively cheap i.e USD 350 to 500 per hector in Zambia which is a tenth of the price of land in the USA.
- Africa endowed with rich natural resources including fertile soils abundant water to support irrigation and favourable climate.
- Cheap labour.
- Africa with over 800 million hectors of cultivable land and only 197 million being farmed (But Why)
- Of the 197 million hectors on cultivation – production potential to produce so far exploited is in the range of 10 to 30%.
- In Africa only 2 to 10% of land is held under formal land tenure. The rest is nationalised or controlled by state (World Bank report). Land not in the hands of citizens but states. Fertile ground for acquisition.
- 80% of countries in Sub-Saharan Africa countries that allow foreign companies lease land also allow them to sub-divide and sub-lease – income on land that is not in direct use as intended.
- African governments are changing land policy laws in a hurry to suit and attract foreign investors.
- The new rush for land in developing countries in recent years is taking on a frightening dimension.
-
Land and the natural resources it supports i.e water, soil nutrients and biodiversity is being taken from the poor to secure needs of population in rich countries.
- Food
- Biofuels – Energy
- Secure investment vehicles for rich multinational investment funds
Trigger
Opportunity for Foreign Direct Investment (FDI) in Agriculture. Attracting FDI is a key agenda of governments in developing countries. Governments focus on benefits i.e – Additional resources, employment, services, access to technological innovations, inputs, markets etc. Unfortunately governments do not look into the implications of these deals on local communities including small farmers, natural resources access rights as well as social and political implications.
Food Security
Note:
- To feed 9.1 billion people by 2050
- Agriculture production world wide has to increase by 70%
- Space for expansion of Agriculture is in Africa
- Countries now involved – Saudi Arabia, Egypt, Libya, India, South Korea, Japan, China, Qatar, South Africa etc...
- India – Focus Africa – programme – EXIM(Foreign Trade) policy 2002-2007. “Special Agriculture production scheme.
- Saudi Arabia – To reduce domestic cereal production by 12% per year to conserve water. Establish a $5 billion special fund to provide loans at preferential rate to SAUDI companies which wanted to invest in countries with a strong agricultural potential.
- Outcome – Saudi Arabia has 500,00 hectors in Tanzania and over 10,000 hectors in Sudan. The United Arab Emirates purchased 400,000 hectors in Sudan. New Based Jarch capital in southern Sudan – 400,000 hectors
2. Securing Energy Supplies and Climate Obligations
Ready Markets and other incentives i.e
- EU – The 1997 – White paper “Energy for the future: Renewable sources of energy proposed a possible 18 Mtoe(Tonnes of oil equivalent) liquid fuel by 2010”
- Towards European strategy for the security of energy supply – Alternative fuel to reach a target of 20% by 2020.
- EU Directive on the promotion of use of biofuels and other renewable fuels for transport (2003/30/EC) came into force in May 2003. Target developing countries for biofuel production, provide funds for research into biofuel production, EU member states to provide guarantee that a minimum share of biofuels was sold on their national markets.
2007/2008 – Global Financial Crisis – brought with it increased attention on
land.
Financial Opinion – “The single recession hedge of the next 10 or 15 years is
an investment in farmland.
Funds being set aside for land acquisition
- Over 90 funds – Banks – investment funds hedge funds etc.
- Blackrock Inc. 2008 – USD – 200 m. target farm land across the world.
- Germany’s Palmer capital and UK Birdwell – jointly launched a USD425 joint venture also target land in Eastern Europe.
- Al Qaida and Abu Dhabi investment company
- Slow the rush – until acquisition processes are renegotiated with the citizens
- Provide land access and security of tenure to small famers using the land.
- Renegotiate policies on use of the large amount of land in the hands of governments so that their access for use and approvals are negotiated with the communities.
- Apply land as a resource for the benefit of citizens – support production by the local people to ensure national food security and service external food markets
- Instead of seeking investment on land, invest in people to produce and all the anticipated benefits out of foreign and direct investment will be realised.
- Government in developing countries should take advantage of the projected food demand by 2050 to develop their agriculture sector to enable their producers exploit the future regional and global food demands.
WAY FORWARD
- Whereas land acquisition is not a new phenomenal, current circumstances demand that local technical experts and stakeholders and especially the rural poor must be consulted.
- We all agree that it is wrong for the international community and governments and especially in developing countries to support and even attempt to formalize (in FAO/WB) the current grabbing process at the expense of the poor who are being denied an opportunity to be directly productive.
- Land acquired for investment by foreigners will never guarantee developing countries and people a sustainable food security and neither will it enable our countries and regions be food sovereign.
- To trigger performance of the agriculture sector in the sub-Saharan Africa; issues around land rights, secure land tenure systems and proper administration of land policies must be put in place. This will not only be an incentive to small farmers to invest in land but the entire private sector.
- Apart from facilitating investment proper policies and implementation will enhance efficiency on land use for agricultural production.
- Land is also a major political resource in that it defines power relations between and among individuals, families and communities under established systems of governance – Better livelihoods, more equitable relations in societies, thus contributing to faster and sustainable development.
Philip M. KIRIRO