A new attack

G20 countries practice ‘agricolonialism’ in developing countries

By Betsey Piette

Collectively the countries which participate in the Group of Twenty comprise 85 percent of the global gross national product, 80 percent of world trade and two-thirds of the world’s population. What many G-20 countries lack, however, is sufficient arable land to meet the needs of growing urban populations.

In recent years, many G-20 nations have engaged in agricolonialism, taking over arable land in developing countries.

One billion people worldwide face starvation, according to United Nations reports. The global recession is expected to drive 103 million more into hunger.

However, the land grabs, concentrated in Africa, Asia and Latin America where hundreds of millions lack sufficient food, are intended to grow food and biofuel crops for export, not for use by at-risk populations.

While the U.S., Britain and European Union nations have a long history of colonial control over land in developing countries, other G-20 countries, including China, south Korea, Japan and Saudi Arabia, have recently bought up global farmland.

After the collapse of the former Soviet Union, even Russia and other former Soviet states became targets of land grabs.

Global “AgInvesting”

Last year, as the global economic crisis deepened, food “riots” destabilized many countries. In December, spiking grain prices that had led to food shortages fell by 50 percent. Today, grain prices remain above their 20-year average, and global food stocks continue at 40-year lows.

Over the next 40 years the world’s population is projected to grow from 6 billion to 9 billion, doubling demand, while arable land and water become scarcer. As a result, the cost of farmland keeps rising.

Food now rivals oil as a basis of power and economic security. Arable land has become the latest target for international investors, with more than 90 funds invested directly in farmland.

With the current credit crunch, large companies are investing in farmland as a means of control over future food supplies when food security could become a major concern.

In June a Global AgInvesting 2009 Conference, held in New York, aimed at investors eager for opportunities to invest in agricultural lands, commodities and infrastructure. It brought together top players from the global agricultural and investing industries, including Soyatech, Altima Partners, Bayer CropScience, Brazil AgroLogic, DuPont, Rabobank and the World Bank. The participating firms own and/or manage over 11 million acres of productive farmland worldwide.

The International Food Policy Research Institute reports that 37 million to 49 million acres of land in poor countries, valued at $20 to $30 billion, were sold or under negotiation for sale to foreign buyers since 2006.

Foreign investments in agriculture are not new, but today they are more strategic than commercial, with many transactions intended to insulate the foreign investor’s home country from future global food and energy crises.

Another significant difference is the scale of these purchases. A “big land deal” used to be 240,000 acres. Now the largest ones are many times that size.

The investment firm Blackrock has set up a $200 million hedge fund to invest in land. Dow Chemical has invested its pension funds in farmland futures. Morgan Stanley bought nearly 100,000 acres of Brazilian farmland.

Multibillionaire George Soros is getting into the global land-buying business. Jim Rogers Jr., Soros’ partner at the Quantum Fund, is involved with two farmland investment funds–Agrifirm and Agcaptia Farmland Investment Partnership. “I’m convinced that farmland is going to be one of the best investments of our time,” Rogers told ContrarianProfits. (July 27)

Land in Africa targeted

Africa imports 25 percent of its food, and the continent has become a prime target of land grabbers. Although sub-Saharan Africa is rich in minerals and natural resources, more than 450 million people live there on less than $2 a day. More than one-third of the population suffers from malnutrition.

A recent Food and Agricultural Organization study of five African countries found that 6.2 million acres of farmland valued at $920 million were bought or leased by foreign investors since 2004.

Most of the nearly 1 million acres taken over in Ghana were for biofuel production. Philippe Heilberg, chairman of New York-based Jarch Capital, controls nearly 2 million acres of land in south Sudan.

Saudi Arabian investors spent $100 million to raise grain on land leased to them by the Ethiopian government; the entire crop is for export back to Saudi Arabia. Meanwhile, millions of Ethiopians face hunger and malnutrition and require emergency food assistance.

A proposed 99-year land lease deal with the south Korean company Daewoo would have included nearly half of Madagascar’s arable land, with almost no benefits to the host country. Public protest over this deal contributed to the overthrow of President Marc Ravalomanana earlier this year.

Genetically modified sugar cane in Latin America

Since 1994, U.S. farm policies through the so-called “North American Free Trade Agreement” have devastated farmers who produced corn throughout Mexico. NAFTA opened Mexican markets to corn imports from the U.S. and to the introduction of genetically modified seeds.

Now other countries are getting into the act. A French investment firm is buying up cattle ranches in Argentina and Uruguay to convert the acreage to the production of barley, corn and soy.

Within a 10-year span, nearly the entire Argentine pampas and large areas of forest and farmland in Brazil, Bolivia, Uruguay and Paraguay have been converted to produce soy as a solo crop. Agribusiness giants Cargill, Archer Daniels Midland, and Bunge made billions selling chemical fertilizers, while Monsanto and Syngenta raked in record profits from modified seeds and chemical pesticides.

Corporations that led the boom in soy production in Latin America are now aggressively moving into genetically modified sugar cane production. GM and Monsanto have been working on “Roundup Ready” sugar cane and sugar beets. Production of genetically modified sugar cane crops would devastate cane growers in Colombia, where panela, a sugar cane byproduct, is a source of nutrition.

Protests erupt in Southeast Asia

Many of the anti-agricolonialism protests have taken place in Asia. The 15-million-member Asian Peasant Coalition recently began a five-month Asia-wide Peasants’ Caravan for Land and Livelihood. The group is acting against global land grabbing in 10 Asian countries, including Sri Lanka, Philippines, Pakistan, Bangladesh and Nepal. In India and Thailand, the theme is “Stop Global Land Grabbing! Struggle for Genuine Agrarian Reform and Peoples’ Food Sovereignty.”

An estimated 365 million people in Asia make their living off the land. Globalization has increasingly integrated Asian countries into the global market and intensified landlessness among Asian peasants. In Pakistan and the Philippines, almost 75 percent of peasants are now landless.

In the Philippines, Fil-Japan is using 1.49 million acres of land for biofuel production. South Korea has leased 232,000 acres of farmland for 25 years to grow 10,000 tons of corn annually. Protests halted plans to allow China to use 3 million acres of farmland.

Wagar Ahmad Khan, the Pakistani federal minister for investment, assures legal cover and tax breaks for investors and says his government “has decided to raise a special security force, which will help create an investment-friendly atmosphere.” (IslamOnline.net, April 21)

Impact on Indigenous populations

Since the 1970s, more than half of the farmland expansion has come at the expense of natural forests, including large tracts of land in Brazil’s Amazon region. While biofuels are promoted as a means to reduce climate change, expanding cropland for biofuel production has devastated rainforests and savannas.

Conversion of natural ecosystems for production of corn and sugar cane for ethanol, and soy and palm oil for biodiesel, causes substantial greenhouse gas emissions since these crops absorb far less carbon dioxide than the forests and wetlands they replace.

Monsanto, DuPont, Archer Daniels Midland, Deere & Co. and the Renewable Fuels Association have formed the Alliance for Abundant Food and Energy, which spends billions of dollars to lobby U.S. lawmakers to support subsidies for biofuel production and to promote genetically modified crops.

The social consequences of these land grabs are significant. Indigenous groups who have lived off the land for generations are being driven off their lands. Even when local peasant farmers are able to retain the land, larger land tracts draw off most of the water supply.

G-8 code of conduct

Faced with growing pressure from developing countries, the recent G-8 Summit issued a code of conduct in international agricultural investments that reflects the debate over foreign land purchases in poor countries. It is not clear, however, how the code might work.

“The G-8 statement is pretty weak,” said Sarah Gillam of ActionAid, an anti-poverty group which is calling for an independent U.N. commission to establish an enforceable code of conduct for foreign land purchases. It would include adequate compensation for affected communities and an assessment of the impact on local food security and rural livelihoods.

Devlin Kuyek of GRAIN, an international nonprofit organization that supports struggles for community-controlled, biodiversity-based food systems, compared the danger of land investments to the subprime mortgage crisis. “It’s not just that they want to produce food. It’s that they want to produce it in a way that makes profit. ... Nothing is being done to address speculation or the amount of profits taken by the corporations in control of the food system.

“Land is fundamental to life particularly in many countries of the South,” stated Kuyek. “Governments are playing with fire, and better watch out what they are doing.” (See www.farmlandgrab.org.)

---