Mary Wanjiru is a farmer from Nyeri County in central Kenya. Experts say that Africa's extensive land subdivision is emerging as a significant threat to food security. Credit: Miriam Gahtigah/IPS

By Miriam Gathigah
NAIROBI, Sep 10 2014 (IPS)

When Kiprui Kibet pictures his future as a maize farmer in the fertile Uasin Gishu county in Kenya’s Rift Valley region, all he sees is the ever-decreasing plot of land that he has to farm on.

“I used to farm on 40 hectares but now I only have 0.8 hectares. My father had 10 sons and we all wanted to own a piece of the farmland. Subdivision … ate into the actual farmland,” Kibet tells IPS. “From 3,200 bags a harvest, now I only produce 20 bags, at times even less.”

Experts say that Africa’s extensive land subdivision is emerging as a significant threat to food security.

Statistics by the Food and Agricultural Organisation of the United Nations (FAO) show that a majority of Africa’s farmers now farm on less than one hectare of land.

According to FAO, in the last 10 years the land/person in agriculture ratio in Kenya declined from 0.264 to the current 0.219. Explained as a percentage, this means that the number of people with one hectare of agricultural land in Kenya decreased by 17 percent over the last decade.

Within the same period, the number of people with one hectare of agricultural land declined by 13 percent in Zambia and by 16 percent in Uganda.

Allan Moshi, a land policy expert on sub-Saharan Africa based in Zambia, tells IPS that while investors are rushing to East and southern Africa and making large-scale planned land acquisitions, “large-scale land acquisition not only reduces available land for locals, but what is available to the locals still has to be subdivided [because of] land inheritance.”

He explains that land subdivision has been driven by growth in population, land inheritance “as well as a shift from customary land tenures to land owned by individuals based on the belief that individuals can exploit the productive potential of land more effectively.”

According to a 2012 USAID report titled “Emerging Land Issues in Africa”, 25 percent of young adults who grew up in rural areas did not inherit land because there was no land to inherit.

“[People] just want to have a title deed even if it means subdividing the land to economically non-viable portions, while big investors are interested in high-value crops, particularly in horticulture, limiting available land for food crops,” Moshi says.

Smallholder farmers across Africa account for at least 75 percent of agricultural outputs, according to FAO.

“Small-scale farmers still produce more than big farms. Big farms often lie idle, investors hoard them for speculative purposes, they rarely grow food on this land,” Isaac Maiyo from Schemers, an agricultural community-based organisation in Kenya, tells IPS, explaining that 93 percent of farmers in Botswana are smallholders.

“They [smallholder farmers in Botswana] have less than eight percent percent of the agricultural land and they still account for nearly 100 percent of the country’s maize production,” he says.

• In the southern African nation of Zambia, 41.9 percent of farms comprise of less than one hectare of land, with at least 75 percent of small-scale farmers farming on less than two hectares.

• In Zambia, 616,867 farms, which are on average less than a hectare, produce about 300,000 metric tonnes of maize.

• In contrast there are 6,626 Zambian farms of between 10 to 20 hectares that produce 145,000 metric tonnes of maize.

Anthony Mokaya, of local NGO Kenya Lands Alliance, tells IPS that many countries on the continent are yet to establish laws that govern subdivision of agricultural land.

And while South Africa and Kenya have legislation on the subdivision of land, Mokaya says “the laws remain largely ineffective.”

While the Agriculture Act (Chapter 318) in Kenya categorically states that agricultural land should not be subdivided below 0.8 hectares, smallholder farmer Kibet says that “many farmers do not know that the law exists.”

“We subdivide not based on what the law says, but based on the number of dependents who want a share of available land, particularly where land inheritance is concerned,” Kibet explains.

South Africa’s Agricultural Land Act prevents the “subdivision of agricultural land to the extent where the new portions created are so small that farming will no longer be economically viable.”

South African land owners are prohibited by the act from subdividing agricultural land without consent from the Ministry of Agriculture, Forestry and Fisheries.

But as is the case with many African countries, Moshi says that subdivision of agricultural land has not been guided by the law.

“The problem is not the act itself, but the implementation of it. Many land owners are not aware that there is a law that prohibits subdivision of agricultural land below a certain threshold.”

Amos Thiong’o from Agri-ProFocus Kenya, a network of organisations working in agribusiness, tells IPS that extensive land subdivision is also affecting mechanisation of agriculture.

“Smaller farmlands will require very intensive production technologies, such as the hydroponic production where plants are grown in a mineral solution rather than in the soil,” he says, adding that some flower farms in Naivasha, Rift Valley were already using this technology “but it requires a lot of water.”

Titus Rotich, an agricultural extension officer in Kenya’s Rift Valley region, says “farmlands are becoming so small that with time, farming will no longer be economically viable.”

“Most families who, 10 to 20 years ago, had over 40 hectares now have to contend with less than a hectare. Meaning that the land is only used to set up a homestead, and to grow a few backyard vegetables and rear a few chickens,” Rotich tells IPS, explaining that previously a farmer could produce 28 to 38 90-kilogram maize bags on just 0.4 hectares of land.

“One such bag is sold at a significant amount of 35 to 50 dollars depending on the region. But many farmers are now lucky if they produce 20 bags because they have their homestead, their cows, chickens and so on the 0.4 hectares [and it is not solely used for farming],” he says.

Edited by: Nalisha Adams

By Anuradha Mittal
OAKLAND, United States, Aug 4 2014 (IPS)

The first years of the twenty-first century will be remembered for a global land rush of nearly unprecedented scale.

An estimated 500 million acres, an area eight times the size of Britain, was reported bought or leased across the developing world between 2000 and 2011, often at the expense of local food security and land rights.

When the price of food spiked in 2008, pushing the number of hungry people in the world to over one billion, it spiked the interest of investors as well, and within a year foreign land deals in the developing world rose by a staggering 200 percent.

Anuradha Mittal

Today, enthusiasm for agriculture borders on speculative mania. Driven by everything from rising food prices to growing demand for biofuel, the financial sector is taking an interest in farmland as never before.

The Oakland Institute has reported since 2011 how a new generation of institutional investors – including hedge funds, private equity, pension funds, and university endowments – is eager to capitalise on global farmland as a new and highly desirable asset class.

But the thing most consistently missed about this global land rush is that it is precisely that – global. Although media coverage tends to focus on land grabs in low-income countries, the opposite side of the same coin is a new rush for U.S. farmland, manifesting itself in rising interest from investors and surging land prices, as giants like the pension fund TIAA-CREF commit billions to buy agricultural land.

One industry leader estimates that 10 billion dollars in institutional capital is looking for access to U.S. farmland, but that figure could easily rise as investors seek to ride out uncertain financial times by placing their money in the perceived safety of agriculture.

In the next 20 years, as the U.S. experiences an unprecedented crisis of retiring farmers, there will be ample opportunity for these actors to expand their holdings as an estimated 400 million acres changes generational hands. And yet, the domestic face of this still unfolding land rush remains largely unseen.

For all their size and ambition, virtually nothing is known about these new investors and their business practices. Who do they buy land from? What do they grow? How do they manage their properties? In an industry not known for its transparency, none of these questions have a satisfactory answer.

For more than six years the Oakland Institute has been at the forefront of exposing the murky nature of land deals in the developing world. The challenge today is to begin a more holistic discussion that places transfer of land in both the developed and developing worlds along the same continuous spectrum.

Driven by the same structural factors and perpetrated by many of the same investors, the corporate consolidation of agriculture is being felt just as strongly in Iowa and California as it is in the Philippines and Mozambique.

Down on the Farm, a new report from the Oakland Institute, aims to increase awareness of the overlapping global and national factors enabling the new American land rush, while at the same time introduces the motives and practices of some of the most powerful players involved in it: UBS Agrivest, a subsidiary of the biggest bank in Switzerland; the Hancock Agricultural Investment Group (HAIG), a subsidiary of the biggest insurance company in Canada; and the Teacher Annuity Insurance Association College Retirement Equities Fund (TIAA-CREF), one of the largest pension funds in the world.

Only by studying the motives and practices of these actors today does it become possible to begin building policies and institutions that help ensure farmers, and not absentee investors, are the future of our food system.

Nothing is more crucial than beginning this discussion today. The issue may seem small for a variety of reasons – because institutional investors only own an apparently tiny one percent of all U.S. farmland, or because farmers are still the biggest buyers of farmland across the country.

But to take either of these views is to become dangerously blind to the long-term trends threatening our agricultural heritage.

Consider the fact that investors believe that there is roughly 1.8 trillion dollars’ worth of farmland across the United States. Of this, between 300 and 500 billion dollars is considered to be of “institutional quality,” a combination of factors relating to size, water access, soil quality, and location that determine the investment appeal of a property.

This makes domestic farmland a huge and largely untapped asset class. Some of the biggest actors in the financial sector have already sought to exploit this opportunity by making equity investments in farmland. Frequently, these buyers enter the market with so much capital that their funds are practically limitless compared with the resources of most farmers.

Although they have made an impressive foothold, this is the beginning, not the end, of a land rush that could literally change who owns the country and our food and agricultural systems. Not only is there space in the market for institutional investors to expand, but there are also major financial incentives for them to do so.

If action is not taken, then a perfect storm of global and national trends could converge to permanently shift farm ownership from family businesses to institutional investors and other consolidated corporate operations. (END/IPS COLUMNIST SERVICE)

Excerpt:

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.