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DEVELOPMENT: To Grab, Or To Invest

ROME, Nov 18 2009 (IPS) - The World Food Security Summit in Rome this week opened up a dispute between what may be investment in farmland to some, but is seen as land grab by others.

There has been widespread alarm at a recent acceleration in purchases of farmland in developing countries, above all Africa, primarily by investors from the Middle and Far East.

The U.N.’s Food and Agriculture Organisation (FAO), the summit’s host, said it is estimated that up to 20 million hectares of African land have been acquired by foreign interests in the last three years.

States such as Saudi Arabia and China started to look for farmland abroad after a spike in the price of staples such as wheat and rice in 2007-08, prompting fears that smallholder farmers may be displaced from their territories, worsening the situation in countries already suffering grave food insecurity.

The rise in food prices and the financial crisis have driven more than 100 million people into the ranks of the hungry this year, to take their number beyond the one-billion mark for the first time, the FAO says. So it is perhaps understandable that hostility to foreign land purchases in Africa remains high.

“Our leaders (in Africa) are selling all our land,” Huguette Akplogan Dossa, coordinator of the African Network on the Right to Food, told IPS. “Selling national land is not a good thing. They have to think about what is good for the people. If they come to buy our lands for production, take it to their countries, transform it and sell it back to us very expensively, it is another form of colonialism. We have to ban it.”

However, the FAO and the International Fund for Agricultural Development (IFAD) are reluctant to stigmatise a possible source of capital, given that a long-running decline in agricultural investment is perhaps the main reason why so many people in rural areas of developing countries struggle to feed themselves.

“It is the wrong language to call them land grabs. They are investments in farmland like investments in oil exploration,” Kanayo Nwanze, head of IFAD, told a news conference. “The fact there are distortions does not suggest this should be banned.”

FAO and IFAD admit that the acquisitions, which continued to be called ‘land grabs’ in summit papers despite Nwanze’s objections, have had negative impacts in some cases. But they insist foreign investment can also help smallholders gain access to the resources they need to haul themselves out of poverty. So they are holding consultations on an international code of conduct to encourage positive forms of foreign agricultural investment and discourage bad practices.

“What strikes me is the heterogeneity of these situations. It appears superficially that all of these so-called land grabs are similar; it’s big foreign companies pushing smallholders off the land, and indeed some of them do look like that,” IFAD Assistant President Kevin Cleaver told IPS.

“But others are much more similar to old private investments in sugar, rubber and tea that actually put money into a country, developed an area that was underdeveloped, and helped smallholders,” Cleaver said. “My point is not to give a message about whether it is good or bad. I know for certain that the situation is highly heterogeneous. My suspicion is that there are horrible cases of grotesque exploitation and there are other cases of useful private investment.”

The agencies say the arrival of foreign investors could help smallholders by, for example, bringing with them greater access to modern seeds and other inputs needed to improve yields, as well as storage and processing facilities, loans and perhaps even markets.

They want the code of conduct to ensure that land purchases are carried out with the consent of local communities and do not damage the environment, and that smallholders are not rendered landless.

FAO and IFAD also want measures that would prevent weaknesses in the national laws of developing countries meaning that the interests of the rural poor are overlooked when it is time to sign contracts.

“One area of concern is the imbalance between domestic laws with respect to the terms of the contracts,” David Hallam, FAO deputy director of the trade and markets division told a news conference. “There tends to be very little reflection of domestic needs in terms of food security and the rights of all the stakeholders in those contracts.”

The two U.N. agencies said they were also looking to promote alternative, less controversial forms of inward investment, such as joint ventures in which foreign backers provide resources, know-how and a market for smallholders in exchange for guaranteed supplies.

The consultations will not be concluded until next year, Hallam said, and it will then take some time for the various contributions to be distilled into a set of guidelines. But he expressed confidence that the political support existed for the code of conduct’s approval once it is drawn up.

Nevertheless, the 450 civil society organisations taking part in a parallel forum were not won over. “Land grabbing by external capital must stop,” read a declaration by participants at the forum.

Libyan leader Muammar Gaddafi is also among those vehemently opposed. “Rich countries are now buying land in Africa. They are cheating African people out of their rights. This is going to happen in Latin America too,” Gaddafi said in his address to the summit.

“Small farmers are being bereft of their own land by new feudal powers coming from outside Africa and buying up land very cheaply. We should fight against this new feudalism. We should put an end to the land grab in African countries.”

The Food Security Summit, which ended on Wednesday after being snubbed by the world’s most powerful leaders, has been branded a flop by anti- poverty non-governmental organisations. They are disappointed at the failure to get the international community to commit to wiping out hunger by 2025 and to convince developed nations to agree to allocate 44 billion dollars in aid to agriculture each year.

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