Grabbing Africa

Print edition : May 07, 2010

THE continent of Africa, already facing severe food shortages, has in recent years been targeted for land acquisition by countries from outside the region. The trend started in the 1990s when countries such as Sudan allowed rich Gulf countries to buy agricultural land in the areas irrigated by the bountiful waters of the White and Blue Nile. The oil bonanza had not yet materialised in Sudan. Under virtual sanctions from the West, it was facing severe economic constraints and was caught in a bloody civil war.

However, it is only in the last couple of years that the global rush to grab land in Africa accelerated. According to the International Food Policy Research Institute, a Washington-based think tank, since 2006, some 15-20 million hectares of land in poor countries have either been sold or are under negotiations for sale to foreign buyers. Apart from the oil-rich Gulf emirates, China, South Korea and India have also made large investments in land in many African countries. The land has been taken either on the basis of outright purchases or on 99-year leases. The countries where most of the land deals are taking place are Ethiopia, Ghana, Mali, Madagascar, Mozambique, Sudan, the Democratic Republic of Congo (DRC) and Tanzania.

Indian firms have invested around $3 billion in Ethiopia, Kenya, Mozambique, Senegal and Madagascar to produce a wide variety of food crops and also crops that would be used to produce biofuel. The Indian government is actively encouraging investments in land acquisition programmes by providing cheap lines of credit to the governments of Ethiopia, Senegal, Kenya, Madagascar and Mozambique. Under a duty-free tariff preference scheme, Ethiopian farm produce can enter the Indian market on lower tariffs. A branch of the Nile also flows through Ethiopia.

Unlike most parts of the world, plenty of arable land in still available in scarcely populated areas of the African continent. Subsistence farmers who inhabit these areas have no political clout. The countries that acquire the land also get control of the key resource, water. The fight among communities and countries over water could be the defining trend in the next 100 years. Authoritarian and corrupt regimes, in alliance with global firms, can easily swing deals that in the long run could be detrimental to the sovereignty of the African states.

The Indian governments stated goal is to limit the purchase of foodgrains from the international market and source it directly at much cheaper rates from poorer African countries. At the end of the last decade, prices of wheat, rice and corn increased threefold. The governments involved in large-scale land acquisitions claim that their investments will give the languishing agricultural sector in Africa the much-needed boost besides providing employment to the local peoples. The Indian government has provided a soft loan of $640 million to Ethiopia for the next five years to encourage sugar production. This is the biggest credit line New Delhi has extended to any country. It has facilitated investment by about 80 Indian companies in agricultural land in Africa.

An official of Karuturi Global Limited, an Indian company with four commercial farms in Ethiopia, with his farmworkers in Bako, central Ethiopia, in November 2009.-

But there has been widespread criticism about the large-scale takeover of African land. The Food and Agricultural Organisation has described the investments as land grabbing. But senior United Nations officials have also said that investments in land could benefit small farmers in the developing world. Kanayo Nwanze, the head of the U.N.s International Fund for Agricultural Development (FAO) has said that it is wrong to describe the deals as land grabs. He compared the investments in farmland to investments in oil exploration. Supporters of such deals claim that new seeds, technology and finance are provided to regions suffering from underinvestments for decades.

The FAO, in a position paper titled Land grab or development opportunity, criticised some aspects of the land deals being negotiated in Africa but has also said that foreign investments could be good news if the objectives of the land purchasers are reconciled with the investment needs of the (host) countries. The FAO study has emphasised that decades of low investments have meant stagnating productivity and production levels on the continent.

An Indian company, Karuturi Global Limited, acquired 8,50,000 acres (3,40,000 hectares) of land for cultivation in Ethiopia last year. The Bangalore-based company has also brought land in neighbouring Kenya.

The company has claimed that it now owns one of the largest agricultural land banks in the world. China has acquired 2.8 million hectares of land in the DRC. Palm oil plantations will replace the worlds second largest rainforest. Mozambique has signed a $2-billion deal with China which will allow 10,000 Chinese farmers to farm on land there. The deal has been sweetened by an additional $3 million in military aid from Beijing. South Korea and the United Arab Emirates have acquired 690,000 hectares and 30,000 hectares in Sudan for agricultural operations. British companies have been investing heavily in big ticket land purchases in Nigeria and Tanzania, former colonies of Britain, and in Angola, Mozambique and Ethiopia.

In fact, in Asia, Pakistan has sold tens of thousands of agricultural land to UAE investors to grow Basmati rice. UAE President Sheikh Khalifa bin Zayed said that his country was considering large-scale agricultural projects in Kazakhstan to guarantee a stable food supply for his country. Paul Vallely, a British expert on Africa and developmental issues, wrote recently that control of foreign farmland would not only secure food supplies but would eliminate the cut taken by middlemen and reduce food import bills by more than 20 per cent.

The opposition parties in Ethiopia have been protesting against their governments land policies. Some 13 million people are in need of food aid in that country but the government is offering 3 million hectares of the best land to foreign companies and countries to grow food for export. The authoritarian government of Meles Zenawi is, however, known for riding roughshod over the opposition and public opinion.

Children at Dambas primary school eating relief food, a meal of maize and dried peas, usually the only one in 24 hours, in the drought-stricken Wajir district in Kenya's north-eastern province.-AFP

Land is an emotive issue in the upcoming parliamentary elections. Those opposing the land deals with India and other countries have written angry letters to U.N. Secretary-General Ban Ki-moon.

The Ethiopian government claims that only 3-4 per cent of its 76 million hectares of fertile land is being offered to foreigners and that only 15 per cent of this land is being cultivated by subsistence farmers. Kenya too has witnessed large-scale inter-ethnic violence on land-related issues. White farmers there still own large-sized farms, some the size of countries such as Cyprus. Zimbabwe, until recently the breadbasket of southern Africa, saw its economy plummet, mainly as a result of disputes arising out of land ownership. Whites, who comprised only 1 per cent of the population, had control of over 70 per cent of the best agricultural land. When the inevitable land reforms happened, the West turned its opprobrium on the government led by Robert Mugabe and the ZANU-PF (Zimbabwe African National Union-Patriotic Front).

In early 2009, the Madagascar government announced that it had leased 1.3 million hectares of land for 99 years to the South Korean multinational Daewoo. The people took to the streets and eventually succeeded in removing the government of President Marc Ravolomanana. One of the first acts of the new President, Andry Rajoelina, was to cancel the deal with Daewoo. It also cancelled a deal with an Indian company, Varun International, which had taken 450,000 hectares on lease. Rajoelina said at the time that Madagascars land was not for sale or lease to foreign companies.

Libyan leader Muammar Gaddafi, speaking at a hunger summit organised by the FAO in Rome late last year, described the purchase of African farmland by food-importing countries as a kind of new feudalism and warned that the practice could spread to other parts of the world. Small farmers are being bereft of their own land, thanks to new feudal powers coming from outside of Africa and buying land very cheaply, he said. The head of the FAO, Jacques Diouf, said that the sharp rise in land deals in Africa could create a new form of neocolonialism, with poor countries producing food for the richer ones at the expense of their own citizens.

Critics of the land grab note that the bargaining power will be with the foreign powers, especially as they enjoy the backing of the governments and the local elite.

The FAO has admitted that most African governments do not have legal mechanisms in place to protect the rights of their people.