In the vast swathes of land ranging from Africa to Asia and Americas, a new type of activity is discernable undertaken by countries and corporations. Several bureaucrats and officials from various multi-nationals and finance ventures are criss-crossing and hopping from one country to other in pursuit of new farmlands that they can purchase in places as diverse as Brazil to Philippines and from Pakistan to Madagascar. Even the war-ravaged Sudan and the Democratic Republic of Congo have emerged as preferred destinations for the purchasing of agricultural lands.
The intriguing question is why are these companies and rich countries purchasing such large tracts of agricultural land? The answer – for growing food. This mad rush for farmland has brought back the vivid memory of the gold rush undertaken by the colonial powers and individuals in 18th and 19th century Africa.
The recent financial crisis and the food crisis just before the global meltdown have once again brought the question of food to the centre stage of international polity. Between April 2006 and April 2007, the food price index based on the International Monetary Fund (IMF) assessment increased by 9.5 per cent, whereas in next 12 months it saw a steep increase of 45.6 per cent. Staple foods witnessed the most steep hike… as a result in many countries the food import bills rose from around $8 billion five years ago to almost $20 billion, this sharp increase in price caused food riots in over 20 countries mainly the poorest countries like Haiti, Yemen and Cameroon.
The International Food Policy Research Institute reported that, since 2006 in poor countries 37 to 49 million acres of farm land, valued at $20 to $30 billion have been purchased or are under negotiation for purchase by foreign buyers. Over the next 40 years the world population is expected to grow from 6 billion to 9 billion, doubling the demand for food items. As arable land and water become scarcer the cost of farmland is rising steeply. A study by the Food and Agricultural Organisation revealed that since 2004, 6.2 million acres of farmland valued at $920 million were bought or leased by foreign investors in five African countries.
In the past few years hedge fund owners and currency speculator like George Soros, investment entities like BlackRock, and retirement plan giants like TIAA-CREF have begun to plough money into farmland – everywhere from the Midwest to Ukraine to Brazil. The Canadian private equity firm AgCapita raised $18 million in 2008 to invest in Saskatchewan cropland, it is estimated that as of the first quarter of 2009, more than $2 billion of private equity money had been raised for farmland investments globally, and another $500 million was planned. (http://money.cnn.com) Rogers Jr., who is George Soros’ partner at the Quantum Fund, which is involved with two farmland investment funds – Agrifirm and Agcaptia Farmland Investment Partnership, told investment portal Contrarian Profits ‘I’m convinced that farmland is going to be one of the best investments of our time’. Today, for instance the Danish company Trigon Agri controls 100,000 hectares of land in Russia. Morgan Stanley, despite its liquidity problems, owns 40,000 ha in Brazil.
According to a report by CNN, the ‘…biggest investors in farmland over the next decade will probably be sovereign wealth funds and governments of crop-starved countries eager to secure food supplies for their rapidly growing populations’ (emphasis mine). In 2008, China announced a $5 billion plan to develop agricultural assets in Africa. This was just a start. Given that it has 20% of the world’s population but only 7% of its arable land and 7% of its freshwater resources, China has no choice but to look beyond its borders. The global recession has hardly slowed its appetite for crops. In the first four months of 2009, China imported a record 13.9 million tons of soyabeans…. The Gulf States of Qatar, Abu Dhabi, and Saudi Arabia have already begun making deals to acquire or lease large tracts of farmland in Africa and Asia at bargain prices. That in turn has led to a spate of headlines recently about a ‘land grab’ by rich countries.
When South Korea’s Daewoo Logistics announced a $6 billion deal last November to lease roughly half the arable land in Madagascar, it caused so much anger that it helped spur a coup d’état (against the then President Marc Ravalomanana). A UN-sponsored study concluded that too many farmland deals were giveaways by leaders of poor countries, with only vague promises of jobs and investment in return.
Why this Land Rush?
So why suddenly are we witnessing such massive interest in agriculture? ‘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. (www.workers.org) So it is no surprise to find major transnational and investment firms investing in farmland as a means to control future food supplies. For instance Blackrock has set up a $200 million hedge fund to invest in land, and Dow Chemical has invested its pension funds in farmland futures. That is the reason why Reza Vishkai, head of alternatives at Insight Investment, said, ‘The single best recession hedge of the next 10 or 15 years is an investment in farmland.
1. ‘Land is scarce and will become scarcer as the world has to double food output to satisfy increased demand by 2050,’ says Joachim von Braun, director general at the International Food Policy Research Institute. ‘With limited land and water resources, this will automatically lead to increased valuations of productive land. And it goes hand in hand with water. Water scarcity will probably increase even more than land.’
The ongoing financial crisis has further accentuated this land grab. Given the current financial meltdown, all sorts of players in the finance and food industries the investment houses that manage workers’ pensions, private equity funds looking for a fast turnover, hedge funds driven off the now collapsed derivatives market, grain traders seeking new strategies for growth are turning to land, for both food and fuel production, as a new source of profit. Land itself, reports GRAIN, is not a typical investment for a lot of these transnational firms. Indeed, land is so fraught with political conflict that many countries don’t even allow foreigners to own it. And land doesn’t appreciate overnight, like pork bellies or gold. To get a return, investors need to raise the productive capacities of the land and sometimes even get their hands dirty actually running a farm. But the food and financial crises combined have turned agricultural land into a new strategic asset. In many places around the world, food prices are high and land prices are low. And most of the ‘solutions’ to the food crisis talk about pumping more food out of the land we have. So there is clearly money to be made by getting control of the best soils, near available water supplies, as fast as possible.
There are two mutually harmonious agencies working in consonance, on the land purchasing spree. On one side there are the governments of food scarce but cash rich countries and on the other there are the international corporations and financial groups who are investing so that they may reap a massive profit later. The interest of both converge and so is the modus operandi, both the players are being aided by the World Bank, the International Monetary Fund, and — unfortunately even the Food and Agriculture Organisation of the United Nations. These agencies are acting as a ‘real estate agent’ of the neo-colonial powers by actively pursuing and financing access to ‘under-utilised land’ around the world.
Pakistan has become a favourite hunting ground for the Gulf states stashed with petro-dollars. Countries such as UAE, Qatar and Saudi Arabia have been purchasing or are in negotiations to acquire millions of acres of rich farmland, in the impoverished Pakistani provinces such as Sindh and Balochistan. According to various media reports already 324,000 hectares (800,621 acres) of Pakistani farmland have been obtained by various countries and investors. UAE reportedly is in the process of finalising a deal with the Balochistan government for 150,000 hectares (370,657 acres) near the Mirani Dam at an approximate cost of $40 million for 40,000 acres. That is a thousand dollars per acre.
The Pakistani magazine Newsline commented, ‘To get an idea of the scale of the land grab, the UAE alone plans to acquire close to a million acres in Pakistan, according to the Food Policy Research Institute. Others in line are Qatar and Saudi Arabia. In most cases, these governments have teamed up with large business groups like the MAP Services Group, Al Rabbie and Al Qadra. The reality is that Pakistan has a population of around 180 million, and the majority is dependent on farming in one way or another. Generally, the techniques in use are outdated and produce a fraction of what mechanised farming would. But if people are thrown off their farms in the name of productivity, where will they go, and what will they do? Only a small number of them would be given jobs by the new owners, and the government needs to announce how it will house and feed the rest… Abraaj Capital of the UAE plans to acquire 800,000 acres of ‘barren’ land in Pakistan to grow wheat and rice, as well as to have a commercial dairy farm.’1
The government is giving sop to the potential investors to include a 99-year lease and an hundred percent control on the produce. To quell any rebellion of the poor peasantry the government has raised a 100,000 strong para-military force to protect these investments at an additional cost of $2 billion. Another gulf company Qatar Livestock is reported to have invested $1 billion into corporate farming in Pakistan. They are planning to lease lands in both Sindh and Punjab, for producing food crops like rice for them.
Africa is back in the radar of global companies and the former colonial powers. Though the forces of imperialism had never left their stranglehold on the continent and through their puppet regimes and collaborationist warlords and politicians have been involved in all the civil wars pulling the strings from behind. They are now back in the foreground.
After plundering the African continent for its rich mineral resources for centuries, the imperialist powers are now eyeing its vast and fertile farmlands. Today the ‘under utilised’ farmlands in Africa has become the centre of attraction for food scarce countries and the corporations and financial groups. These players have been purchasing vast tracts of lands in the continent so that they can be converted into mechanised farms and their produce can be shipped back to the investor country or be sold in the international market at exorbitant prices. Today 450 million people live there on less than $2 a day. More than one-third of the population suffers from malnutrition.
It is a bitter irony that Ethiopia, a country that is grappling with the chronic problem of food with almost 6.2 million people starving, has signed land deals with Saudi Arabia to produce food for them, while its own population faces severe starvation and even death from hunger.
According to a study conducted by the Food and Agricultural Organisation in five African countries, since 2004, 6.2 million acres of farmland valued at $920 million were bought or leased by foreign investors. Most of the nearly 1 million acres taken over in Ghana were for bio-fuel production. Philippe Heilberg, chairman of the New York-based Jarch Capital, controls nearly 2 million acres of land in south Sudan.
1. According to the International Food Policy Research Institute (IFPRI), the United Arab Emirates has leased 375,000 hectares in northern Sudan, 325,000 hectares in Pakistan and 5,000 in Ethiopia. The government is reportedly also negotiating with Senegal.
2. More disturbing news relates to the purchase of approximately 400,000 hectares of land in the Southern Sudan from the family of former warlord Gabriel Matip. This deal was struck ‘by US financier Philippe Heilberg, who has used a British Virgin Islands subsidiary of his Jarch Group to facilitate the deal, private interests have intervened directly in disputed territories. Co-directors of the group reportedly include ex-CIA operatives. Given the ongoing instability in that nation and the forced eviction of millions in the neighbouring Darfur region, this sort of land acquisition is perhaps a harbinger of an unsavoury trend in who gets to control the land in disputed territories.’2
3. The Gulf states have been eyeing these under-utilised lands for providing them food. After abandoning its 30-year self-sufficiency programme to grow wheat in the desert at exorbitant costs, the Saudi government has created the Saudi Company for Agricultural Investment and Animal Production to fund $800 million in agriculture projects abroad. The Saudi plans to set up blocks of 100,000-hectare (247,000-acre) farms in different countries to produce its crops of choice, such as wheat, corn, rice and soybeans, and even fodder.
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. India has invested $4 billion in Ethiopian agriculture, though its own farmers are forced to commit suicide due to the apathy of government. The artificial crisis in the Indian agriculture is a brazen attempt by the ruling class in collaboration with big business and the multi nationals to deliberately ruin the peasantry so that the farmlands can be converted into SEZs and industrial hubs, so that it becomes a harbinger for capitalism at the expense of vast majority of the marginal farmers, rural proletariat and tribals.
The spectre of GM and Bio Diesel Crops
A major portion of the farmlands purchased are being utilised for producing raw materials for bio fuels and to grow genetically modified plants (also known as genetically modified organisms or GMO). Both these activities have a proven track record of soil degradation and environmental destruction.
While biofuel is being promoted as a viable eco-friendly alternative to reduce dependence on fossil fuel, diverting cropland from producing food crops to biofuel production has devastated rainforests and savannas, at the same time having devastating effect on water management, food security, bio-diversity and food scarcity leading to a severe rise in food prices.
As a result of large scale corporate farming using chemical fertilisers, mono-crop farming has been a prime factor for the loss of bio-diversity. Devlin Kuyek author of the book Good Crop/Bad Crop: Seed Politics and the Future of Food in Canada, says ‘the [recent] rice crisis is an example of the food-related calamities we can expect in growing numbers due to a looming “perfect storm” combo of self-imploding crop monocultures and global warming.’ Because the new mono-crops were poorly adapted to local conditions, the plants didn’t do so well unless sustained by massive amounts of water, fertilisers, and pesticides. Little wonder that almost all of the world’s largest seed companies, including the likes of Monsanto, Syngenta, and DuPont, got their start as chemical manufacturers. The UN’s Food and Agriculture Organisation says 75 percent of crop varieties have disappeared since 1900. Nine-tenths of the world’s calories now come from 20 crop species, with four making up half of total calories: rice, corn, wheat, and potatoes.
Since 1970 large tracts of land in Brazil’s Amazon region have been colonised for producing bio fuels by the multinational companies. This expansion of mono-cropping for the production of agro fuels has increased land grabbing by monopolistic agro multinational companies. These companies have been forcing the government to ‘legalise’ this land grabbing in existing areas of land invasion. The land grabbing follows a well defined cyclical framework, beginning with deforestation, usage of slave labour who are mainly the landless rural proletariats or the indigenous people of the area, followed by large scale cattle ranching and soy production. Currently, with the expansion of the production of ethanol, this cycle may end with mono-cropping of sugarcane. These lands could be used for agrarian reform, for the production of food crops, and to attend to the historic demands of close to five million families without land. In many regions in the country, an increase in the production of ethanol has led to the expulsion of peasants from their lands, and has reduced them to wage slaves of the multinational corporations fuelling the sugarcane economy.
In the United States the agro giants like Monsanto, DuPont, Archer Daniels Midland, Deere & Co. and the Renewable Fuels Association have formed a cartel called the Alliance for Abundant Food and Energy. Among one of the hidden motive of this alliance is to lobby U.S. lawmakers to support subsidies for biofuel production and to promote genetically modified crops. For this endeavour the alliance has been spending billions of dollars in lobbying.
According to the International Institute for Sustainable Development, agro-giant Monsanto has bought the rights to 10,000 acres of farmland ‘for experimenting with GMOs’ and ‘is looking for an additional 50-100,000 acres’ in the near future. These companies are creating the modern day version of Frankenstein.
The GM food have been criticised for having adverse effect on other organisms. A laboratory study published in Nature showed that pollen from B.T. corn caused high mortality rates in monarch butterfly caterpillars. Monarch caterpillars consume milkweed plants, not corn, but the fear is that if pollen from B.T. corn is blown by the wind onto milkweed plants in neighbouring fields, the caterpillars could eat the pollen and perish. Although the Nature study was not conducted under natural field conditions, the results seemed to support this viewpoint. Unfortunately, B.T. toxins kill many species of insect larvae indiscriminately; it is not possible to design a B.T. toxin that would only kill crop-damaging pests and remain harmless to all other insects. This study is being re-examined by the USDA, the U.S. Environmental Protection Agency (EPA) and other non-government research groups, and preliminary data from new studies suggests that the original study may have been flawed 22, 23. This topic is the subject of acrimonious debate, and both sides of the argument are defending their data vigorously. Currently, there is no agreement about the results of these studies, and the potential risk of harm to non-target organisms will need to be evaluated further.3
It is clear that GM crops offer no benefits and cannot feed the world. There are also enormous risks. The most immediate are random and unpredictable. Dr. Arpad Pusztai, an eminent scientist in the Rowett Institute of Scotland, lost his job when he released findings that showed two GM potato lines were toxic to rats. A more insidious danger is horizontal gene transfer – the transfer of genetic material directly to unrelated species. It is inherent to the way GM organisms are constructed that the foreign genes introduced (transgenic DNA) may be more likely to transfer again to unrelated species. Such horizontal gene transfer can give rise to new viruses and bacteria that cause diseases and spread antibiotic and drug resistances among the pathogens.4
The GMO food have been severely criticised for their lack of genetic diversity, that has been linked to many of the major crop epidemics in human history According to botanist Jack Harlan, genetic diversity is all that ‘stands between us and catastrophic starvation on a scale we cannot imagine’. But the agro giants have been ignoring all these threats in their pursuit of reaping super profit.
The land purchased in the underdeveloped countries with a corrupt government and a weak peasants’ movement, these companies are having a free reign to farm GM food and sell it on the open grain market, where the unsuspecting masses would be susceptible to all sorts of problems arising out of consumption of these foods.
Voice of resistance
Resistance and protests have already started against this blatant land grab. Madagascar successfully resisted the neo-colonial land deal struck between the South Korean multinational Daewoo Logistics and the then government of Marc Ravalomana, who had leased 1.3 million hectares, almost half of the total farmland of Madagascar land to Daewoo for 99 years. According to the contract Daewoo would have the right to grow and export all the produce to South Korea, while the Madagascar population would have got nothing in return. Similarly resistance is growing in Philippines against what is being termed as the ‘great foreign land grab’.
The UN food programme states that there is enough food to feed the world one and a half times over. World cereal yields have consistently outstripped population growth since 1980, yet more than one billion people, almost a sixth of humanity, are now undernourished. It is on account of corporate monopolies operating under the globalised economy that the poor are getting poorer and hungrier. 75% of the world trade in cereals are in control of large corporations. The land grabbing and the farming method to be employed all would cause unemployment, exacerbate Third World poverty, threaten sustainable farming systems and increase poverty and hunger on a global level. It is an open recipe for disaster which is being orchestrated by the multinationals in consonance with the imperialist regimes.
Unlike the colonialism of 19th century, which involved the direct presence of colonial powers to implement their imperialist agenda, this new colonialism relies on finance, coercion, instructions, intimidation and blackmail.
The old colonialism involved the direct presence of colonial powers to implement their imperialist agenda; this new colonialism is relying on finance, coercion, intimidation and trade. Only a unified alliance of working class and peasantry at an international level can prevent this merciless march of international finance from marauding the life and liberty of the disempowered third world peasants.
Unfortunately these struggles have failed to find place in the corporate controlled media, whose owners in consonance with the neo-colonialist governments and the profit hungry predatory multi nationals have done their best to throttle these voices of resistance.
Even the international communist movement seems oblivious to the growing resistance. It is time that the Marxists world over should seek to bring to light the plight of poor peasants whose plans of pauperisation have been scripted by the neo-liberal policies of rich countries in unison with the multi-nationals corporations, and fully supported by the custodian of international finance the WTO and World Bank. Their objective should be to internationalise this burning issue and the ongoing resistance movement in the struggle for genuine land reforms that would ultimately lead to agrarian change in the interest of the poor and marginalised section of the society.
1 Husain Irfan; The great land grab, Dawn; 09 May, 2009; at http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-newspaper/columnists/16-irfan-husain-the-great-land-grab-959, accessed on 12th November, 2009.
2 Ashton, Glenn; The new international land and agricultural resources grab neo-colonialism writ large, at http://www.ekogaia.org/the-new-international-recources-grab.html accessed on 25th September, 2009.
3 Transgenic pollen harms monarch larvae; Nature, Vol. 399, No 6733, p. 214, May 1999.
4 Head to Head feature, Sovereign Magazine; http://www.twnside.org.sg/title/mwho2-cn.htm accessed on 29th October, 2009
Table 1: Trend in Per Capita Cereal Production during 1961 to 2007 (Kg)
|Source: FAOSTAT and FAO Food Outlook, various issues
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