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Land Grabbing – A New Political Strategy for Arab Countries

BEIRUT, Jul 30 2014 (IPS) - Food price rises as far back as 2008 are believed to be the partial culprits behind the instability plaguing Arab countries and they have become increasingly aware of the importance of securing food needs through an international strategy of land grabs which are often detrimental to local populations.

Between 2007 and 2008, rises in food prices caused protest movements in Egypt and Morocco. “This has become an important concern for countries in the Arab region which want to meet the growing demands of their populations,” notes Devlin Kuyek, a researcher at GRAIN, a non-profit organisation supporting small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems.

Arab countries ... have become increasingly aware of the importance of securing food needs through an international strategy of land grabs which are often detrimental to local populations

Arab countries, which appear to have started losing confidence in normal food supply chains, are now relying on acquisitions of farmland around the world. Globally, land deals by foreign countries were estimated at about 80 million ha in 2011, according to figures provided by the World Bank.

The 2008 international food price crisis caused alarm among policy-makers and the public in general about the vulnerability of Arab countries to potential future food supply shocks (such as, for example, in the event of closure of the Straits of Hormuz) as well as the perceived continued sharp increase in international food prices in the long term, explains Sarwat Hussain, Senior Communications Officer at the World Bank.

Increasing food prices are caused by entrenched trends that include population growth combined with high urbanisation rates, depleting freshwater sources, increased demand for raw commodities and biofuels, as well as speculation over farmland.

To face such threats, Arab countries have worked on buying or leasing farm land in foreign countries. “Investment in land often takes the form of long-term leases, as opposed to outright purchases, of land. These leases often range between 25 and 99 years,” says Hussain.

Currently, the United Arab Emirates accounts for around 12 percent of all land deals, followed by Egypt (6 percent) and Saudi Arabia (4 percent), according to GRAIN.

“It is however very difficult to estimate the total value of land grabbed today because most deals remain in the negotiations phase and are, for the most, very obscure ,” adds Hussain.

Land acquisitions are becoming institutionalised as clear strategies are developed by governments, which also rely on the private sector and international organisations, explains Kuyek.

Some governments of member states of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – have adopted explicit policies to encourage their citizens to invest in food production overseas as part of their long-term national food security strategies.

Such policies cover a variety of instruments, including investment subsidies and guarantees, as well as the establishment of sovereign funds focusing exclusively on investments in agriculture overseas.

Countries falling victims of the land acquisition mania range from Western countries such as Australia, New Zealand, Poland, Russia, Ukraine and Romania to countries in Latin America, Asia or Africa.

Globally, the largest targeted countries are Brazil with 11 percent by land area; Sudan with 10 percent; Madagascar, the Philippines and Ethiopia with 8 percent each; Mozambique with 7 percent; and Indonesia with 6 percent, according to the World Bank.

“The main driving force seems to be biofuels expansion, with exceptions in Sudan and Ethiopia, which are seeing a trend towards growth of food from Middle Eastern and Indian investors,” Hussain points out.

Governments, often through sovereign wealth funds, are negotiating the acquisition or lease of farming land. According to GRAIN, the Ethiopian government has made deals with investors from Saudi Arabia, as well as India and China among others, giving foreign investors control of half of the arable land in its Gambela region.

Powerful Saudi businessmen are pursuing deals in Senegal, Mali and other countries that would give them control over several hundred thousand hectares of the most productive farmlands. -“The [Saudi Arabian] al-Amoudi company has acquired ten thousand hectares in south western Ethiopia to export rice,” notes Kuyek.

Besides food security concerns, it appears that such acquisitions are increasingly perceived by international companies as a useful investment tool allowing for diversification. A number of investment companies and private funds have been acquiring farmland around the globe.  These include Western heavyweights such Goldman Sachs and Deutsche Bank, but also Arab players such as Citadel Capital, an Egyptian private equity fund.

Kuyek explains that large land acquisitions are triggering debates in developing countries and can become electoral issues.  Land grabs can have adverse repercussions on indigenous populations which find themselves evicted from the land they have used over generations for cultivation and irrigation.

“People are concerned by the sale of their local resources,” adds Kuyek.

This has translated into the creation of local groups that are challenging large land sale deals negotiated by their governments. As an example, farmers in Serbia have made formal complaints about the purchase of farmland by an Abu Dhabi company, Al Rawafed Agriculture, according to The National newspaper.

Small opposition groups will nonetheless face increasing difficulty in fighting-off governments and institutions, for which food security has become a matter of political survival.

 
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  • originalone

    Considering who is buying the land[s] as well as where, what happens to the indigenous population requirements? I ask this because of the export of Quinoa, a staple of the poor people of the Andes in the past, before the export to the world, which has priced it out of reach of those same poor people? I suppose this is one of the next many battle-zones for human survival in the up coming future. Too many people to feed, but poor planning in the production of food.

  • Alia Al-Dalli

    Thank you for this timely piece. Land grabs, or foreign direct investment for
    others, both lead to a foreign entity taking control of land for the purpose of
    exporting a commodity. This is not a new issue: for example, American companies have been cultivating pineapples in the Philippines for decades with the purpose of providing canned fruit to their domestic and international markets. Similarly, developing countries such Iraq (yes no misspelling here) was raising cattle for meat in Vietnam back in the 1980s. There have always been issues of the local population and their disenfranchisement which were never addressed. Now the issue has become a problem due to the vast areas of land exchanging hands and critically due to anxiety by states to achieve food security for their populations. While this is done at the expense of indigenous populations in the first instance, it poses a serious threat to natural resources such as water, indigenous production, seeds, as well as compromise the state’s sovereignty ultimately if not done transparently and with the requisite safeguards. I do not think it is possible to stop the tide of ‘land grabs’ but I believe that it requires regulation and legal measures to safeguard the rights of the indigenous population as well as the future natural wealth of those countries. To end on a positive note, with adequate measures in place (and without underestimating the efforts required to put these measures in place) and strategic partnerships these ventures can be profitable to both parties in the sense of introducing more efficient agricultural practices, increase food production by many folds, ensure food security to both locals and investors, provide employment to destitute farmers, improve on farm and off farm infrastructure and lead to developing areas that have been bypassed by traditional rural development programmes.

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