Farmland - Who is Behind Immense Land Grab in Africa

Who is Behind Immense Land Grab in Africa?

16 January, 2010 | By John Vidal (Mail & Guardian)

20+ African countries are selling or leasing land for intensive
agriculture on a shocking scale in what may be the greatest
change of ownership since the colonial era.

Awassa, Ethiopia -- We turned off the main road to Awassa, talked our
way past security guards and drove a mile across empty land before we
found what will soon be Ethiopia's largest greenhouse. Nestling below
an escarpment of the Rift Valley, the development is far from finished,
but the plastic and steel structure already stretches over 50 acres* -- the
size of 20 soccer fields.

The farm manager

shows us millions of

tomatoes, peppers and

other vegetables being

grown in 1,500 foot

rows in computer

controlled conditions.

Spanish engineers are

building the steel

structure, Dutch

technology minimises water use from two bore-holes and 1,000 women
pick and pack 50 tons of food a day. Within 24 hours, it has been
driven 200 miles to Addis Ababa and flown 1,000 miles to the shops
and restaurants of Dubai, Jeddah and elsewhere in the Middle East.

Ethiopia is one of the hungriest countries in the world with more than
13-million people needing food aid, but paradoxically the government is
offering at least 7.5 million acres of its most fertile land to rich
countries and some of the world's most wealthy individuals to export
food for their own populations.

The 2,500 acres of land which contain the Awassa greenhouses are
leased for 99 years to a Saudi billionaire businessman, Ethiopian-born
Sheikh Mohammed al-Amoudi, one of the 50 richest men in the world.
His Saudi Star company plans to spend up to $2-billion acquiring and
developing 1.25 million acres of land in Ethiopia in the next few years.
So far, it has bought four farms and is already growing wheat, rice,
vegetables and flowers for the Saudi market. It expects eventually to
employ more than 10,000 people.

But Ethiopia is only one of 20 or more African countries where land is
being bought or leased for intensive agriculture on an immense scale in
what may be the greatest change of ownership since the colonial era.

Land rush

An Observer investigation estimates that up to 125 million acres of land
-- an area more than double the size of the UK -- has been acquired in
the last few years or is in the process of being negotiated by
governments and wealthy investors working with state subsidies. The
data used was collected by Grain, the International Institute for
Environment and Development, the International Land Coalition,
ActionAid and other non-governmental groups.

The land rush, which is still accelerating, has been triggered by the
worldwide food shortages which followed the sharp oil price rises in
2008, growing water shortages and the European Union's insistence that
10% of all transport fuel must come from plant-based biofuels by 2015.

In many areas the deals have led to evictions, civil unrest and
complaints of "land grabbing".

The experience of Nyikaw Ochalla, an indigenous Anuak from the
Gambella region of Ethiopia now living in Britain but who is in regular
contact with farmers in his region, is typical. He said: "All of the land in
the Gambella region is utilised. Each community has and looks after its
own territory and the rivers and farmlands within it. It is a myth
propagated by the government and investors to say that there is waste
land or land that is not utilised in Gambella.

"The foreign companies are arriving in large numbers, depriving people
of land they have used for centuries. There is no consultation with the
indigenous population. The deals are done secretly. The only thing the
local people see is people coming with lots of tractors to invade their
lands.

"All the land round my family village of Illia has been taken over and is
being cleared. People now have to work for an Indian company. Their
land has been compulsorily taken and they have been given no
compensation. People cannot believe what is happening. Thousands of
people will be affected and people will go hungry."

It is not known if the acquisitions will improve or worsen food security
in Africa, or if they will stimulate separatist conflicts, but a major World
Bank report due to be published this month is expected to warn of both
the potential benefits and the immense dangers they represent to people
and nature.

Leading the rush are international agribusinesses, investment banks,
hedge funds, commodity traders, sovereign wealth funds as well as UK
pension funds, foundations and individuals attracted by some of the
world's cheapest land.

Together they are scouring Sudan, Kenya, Nigeria, Tanzania, Malawi,
Ethiopia, Congo, Zambia, Uganda, Madagascar, Zimbabwe, Mali, Sierra
Leone, Ghana and elsewhere. Ethiopia alone has approved 815 foreign-
financed agricultural projects since 2007. Any land there, which
investors have not been able to buy, is being leased for approximately
$1 per year per 2.5 acres.

Saudi Arabia, along with other Middle Eastern emirate states such as
Qatar, Kuwait and Abu Dhabi, is thought to be the biggest buyer. In
2008 the Saudi government, which was one of the Middle East's largest
wheat-growers, announced it was to reduce its domestic cereal
production by 12% a year to conserve its water. It earmarked $5-billion
to provide loans at preferential rates to Saudi companies which wanted
to invest in countries with strong agricultural potential .

Meanwhile, the Saudi investment company Foras, backed by the
Islamic Development Bank and wealthy Saudi investors, plans to spend
$1-billion buying land and growing seven million tonnes of rice for the
Saudi market within seven years. The company says it is investigating
buying land in Mali, Senegal, Sudan and Uganda. By turning to Africa to
grow its staple crops, Saudi Arabia is not just acquiring Africa's land
but is securing itself the equivalent of hundreds of millions of gallons of
scarce water a year. Water, says the UN, will be the defining resource
of the next 100 years.

Huge deals

Since 2008 Saudi investors have bought heavily in Sudan, Egypt,
Ethiopia and Kenya. Last year the first sacks of wheat grown in
Ethiopia for the Saudi market were presented by al-Amoudi to King
Abdullah.

Some of the African deals lined up are eye-wateringly large: China has
signed a contract with the Democratic Republic of Congo to grow 7-
million acres of palm oil for biofuels. Before it fell apart after riots, a
proposed 3 million acres deal between Madagascar and the South
Korean company Daewoo would have included nearly half of the
country's arable land.

Land to grow biofuel crops is also in demand. "European biofuel
companies have acquired or requested about 10 million acres in Africa.
This has led to displacement of people, lack of consultation and
compensation, broken promises about wages and job opportunities,"
said Tim Rice, author of an ActionAid report which estimates that the
EU needs to grow crops on 43 million acres, well over half the size of
Italy, if it is to meet its 10% biofuel target by 2015.

"The biofuel land grab in Africa is already displacing farmers and food
production. The number of people going hungry will increase," he said.
British firms have secured tracts of land in Angola, Ethiopia,
Mozambique, Nigeria and Tanzania to grow flowers and vegetables.

Indian companies, backed by government loans, have bought or leased
hundreds of thousands of acres in Ethiopia, Kenya, Madagascar,
Senegal and Mozambique, where they are growing rice, sugar cane,
maize and lentils to feed their domestic market.

Nowhere is now out of bounds. Sudan, emerging from civil war and
mostly bereft of development for a generation, is one of the new hot
spots. South Korean companies last year bought 1.75 million acres of
northern Sudan for wheat cultivation; the United Arab Emirates have
acquired 1.875 million acres and Saudi Arabia last month concluded a
100,000 acre deal in Nile province.

The government of southern Sudan says many companies are now
trying to acquire land. "We have had many requests from many
developers. Negotiations are going on," said Peter Chooli, director of
water resources and irrigation, in Juba last week. "A Danish group is in
discussions with the state and another wants to use land near the Nile."

In one of the most extraordinary deals, buccaneering New York
investment firm Jarch Capital, run by a former commodities trader,
Philip Heilberg, has leased 2 million acres in southern Sudan near
Darfur. Heilberg has promised not only to create jobs but also to put
10% or more of his profits back into the local community. But he has
been accused by Sudanese of "grabbing" communal land and leading an
American attempt to fragment Sudan and exploit its resources.

New colonialism

Devlin Kuyek, a Montreal-based researcher with Grain, said investing in
Africa was now seen as a new food supply strategy by many
governments. "Rich countries are eyeing Africa not just for a healthy
return on capital, but also as an insurance policy. Food shortages and
riots in 28 countries in 2008, declining water supplies, climate change
and huge population growth have together made land attractive. Africa
has the most land and, compared with other continents, is cheap," he
said.

"Farmland in sub-Saharan Africa is giving 25% returns a year and new
technology can treble crop yields in short time frames," said Susan
Payne, chief executive of Emergent Asset Management, a UK
investment fund seeking to spend $50-million on African land, which,
she said, was attracting governments, corporations, multinationals and
other investors. "Agricultural development is not only sustainable, it is
our future. If we do not pay great care and attention now to increase
food production by over 50% before 2050, we will face serious food
shortages globally," she said.

But many of the deals are widely condemned by both Western non-
government groups and nationals as "new colonialism", driving people
off the land and taking scarce resources away from people.

We met Tegenu Morku, a land agent, in a roadside cafe on his way to
the region of Oromia in Ethiopia to find 1,250 acresof land for a group
of Egyptian investors. They planned to fatten cattle, grow cereals and
spices and export as much as possible to Egypt. There had to be water
available and he expected the price to be about 15 birr (about $1) per
2.5 acres per year -- less than a quarter of the cost of land in Egypt and
a tenth of the price of land in Asia.

"The land and labor is cheap and the climate is good here. Everyone --
Saudis, Turks, Chinese, Egyptians -- is looking. The farmers do not like
it because they get displaced, but they can find land elsewhere and,
besides, they get compensation, equivalent to about 10 years' crop
yield," he said.

Man-made famine

Oromia is one of the centers of the African land rush. Haile Hirpa,
president of the Oromia studies' association, said last week in a letter of
protest to UN Secretary General Ban Ki-moon that India had acquired
2.5 million acres, Djibouti 2,500 acres, Saudi Arabia 250,000 and that
Egyptian, South Korean, Chinese, Nigerian and other Arab investors
were all active in the state.

"This is the new, 21st-century colonization. The Saudis are enjoying the
rice harvest, while the Oromos are dying from man-made famine as we
speak," he said.

The Ethiopian government denied the deals were causing hunger and
said that the land deals were attracting hundreds of millions of dollars of
foreign investments and tens of thousands of jobs. A spokesperson said:
"Ethiopia has [187 million acres] of fertile land, of which only 15% is
currently in use -- mainly by subsistence farmers. Of the remaining
land, only a small percentage -- 3 to 4% -- is offered to foreign
investors. Investors are never given land that belongs to Ethiopian
farmers. The government also encourages Ethiopians in the diaspora to
invest in their homeland. They bring badly needed technology, they
offer jobs and training to Ethiopians, they operate in areas where there
is suitable land and access to water."

The reality on the ground is different, according to Michael Taylor, a
policy specialist at the International Land Coalition. "If land in Africa
hasn't been planted, it's probably for a reason. Maybe it's used to graze
livestock or deliberately left fallow to prevent nutrient depletion and
erosion. Anybody who has seen these areas identified as unused
understands that there is no land in Ethiopia that has no owners and
users."

Development experts are divided on the benefits of large-scale, intensive
farming. Indian ecologist Vandana Shiva said in London last week that
large-scale industrial agriculture not only threw people off the land but
also required chemicals, pesticides, herbicides, fertilizers, intensive
water use, and large-scale transport, storage and distribution which
together turned landscapes into enormous mono-cultural plantations.

"We are seeing dispossession on a massive scale. It means less food is
available and local people will have less. There will be more conflict and
political instability and cultures will be uprooted. The small farmers of
Africa are the basis of food security. The food availability of the planet
will decline," she says. But Rodney Cooke, director at the UN's
International Fund for Agricultural Development, sees potential benefits.
"I would avoid the blanket term 'land-grabbing'. Done the right way,
these deals can bring benefits for all parties and be a tool for
development."

Lorenzo Cotula, senior researcher with the International Institute for
Environment and Development, who co-authored a report on African
land exchanges with the UN fund last year, found that well-structured
deals could guarantee employment, better infrastructures and better
crop yields. But badly handled they could cause great harm, especially if
local people were excluded from decisions about allocating land and if
their land rights were not protected.

Water is also controversial. Local government officers in Ethiopia told
the Observer that foreign companies that set up flower farms and other
large intensive farms were not being charged for water. "We would like
to, but the deal is made by central government," said one. In Awassa,
the al-Amouni farm uses as much water a year as 100,000 Ethiopians.

*Measurements in the article have been adapted from metric system.

Courtesy