Suppose that, one day, a foreign investor decided to buy a vast tract of fertile land in the United States, with support of the American government. Suppose all that is grown or produced in that land, and all profits made, would be shipped directly overseas. Worse, imagine that those Americans who had been living off that land for decades, maybe centuries, would be forced to move and given little to no compensation.
Such an event would undoubtedly spark the anger and outrage of thousands, if not millions, of Americans. And yet, this scenario is not far from reality -- only the roles are reversed. American companies have recently been investing heavily on foreign land, and many involved in the worldwide struggle against hunger believe that is a cause for concern. What investors call "agricultural development" is described by critics as "land grabbing," which they say undermines food security in developing countries.
As World Food Day approaches, and almost a billion people worldwide continue to suffer from chronic hunger, dozens of NGOs in the U.S. and abroad have started calling citizens to action against these controversial business practices. The Right to Food and Nutrition Watch, a report released last week by a consortium of 13 international civil society groups in over twenty countries, denounces the practice of land grabbing as an aggravator of hunger, depriving the rural poor from access to land and violating their right to food.
"Land grabbing itself is nothing new -- it has existed for hundreds of years," says Flavio Valente, secretary general of FIAN International, one of the publishers of the report. "But recently, the practice of land grabbing has been intensifying and affecting those who are most vulnerable those who depend on natural resources for their survival, such as small farmers, indigenous groups and peasants."
Despite promises of bringing technology to developing countries, creating jobs and increasing food production, foreign investment hardly ever benefits local communities because it aims to secure crops and profits for those back home, the report states.
"Land grabbing distorts markets towards increasingly concentrated agribusiness interests and global trade rather than sustainable peasant agriculture for local and national markets," says Sofia Monsalve Sua'rez, land program coordinator at FIAN International.
The Food and Agriculture Organization of the United Nations (FAO) estimates 20 million hectares have been acquired by foreign interests in Africa alone. A field study conducted by FIAN in Ethiopia found that the equivalent of up to twenty percent of the country's arable land have been bought by or made available to foreign investors. The Ethiopian minister of agriculture reportedly declared that herders making use of such land for pasture would not be compensated, and should go somewhere else.
American companies are among those making land deals in Africa. An American investor, New-York-based Jarch Capital, bought an area the size of Dubai from a warlord in South Sudan last year, and Dominion Farms Ltd., which bought a swampland in Kenya in 2003 to turn it into a rice plantation, has been reported to intentionally flood local farms to force them to relocate. However, FIAN reports most deals are surrounded by secrecy, and many investors' identities remain unknown.
According to the UN Conference on Trade and Development, the United States is the largest foreign direct investor in agriculture, followed by Canada and China. In many cases, such investments do not prioritize food production. John Peck, executive director of Family Farm Defenders, a non-profit in Madison, Wisconsin which fights against corporate land takeovers in the U.S., says there is a "huge trend" of American investors buying land in developing countries because of the agrofuel boom and of environmental regulations. "American companies are looking for carbon credits, so they buy farmland in the global South, because it's cheaper," he says.
But Peck argues that Americans do not need to go overseas to see the harmful effects of land grabbing. He says American farmers are going bankrupt everyday, and some are even committing suicide.
"With the financial and food crises, many farms have been foreclosed, and financial institutions inherit the land to speculate with," he says. "They are using the land as collateral for hedge funds and buying farmland in hopes to sell it at higher value -- the goal is not to produce food."
Control mechanisms needed
Food security advocates say that even initiatives being touted as presenting solutions to the land-grabbing problem, such as the World Bank's Principles for Responsible Agricultural Development, fail to address the lack of concrete mechanisms to hold companies and governments accountable. "These principles, which are meant to be voluntary and self-regulated by the private sector, distract from the fact that what is needed is mandatory and strict state regulation of investors in several policy fields, such as financial markets and agriculture," says Sua'rez.
Several mechanisms intended to regulate foreign land acquisition already exist, but are ineffective and weak due to pressures from the economic sector, Valente says. But he is hopeful when it comes to the Committee on World Food Security (CFS), a United Nations organ which was reformed last year and has since become more inclusive, incorporating voices from civil society, small farmers and indigenous peoples into the decision-making process.
"The CFS is the best mechanism in place today, because it is the only with a clear mandate to uphold food security, and each country gets one vote," Valente says. "Facilitating the participation of those most affected was the first step; now we must see if those voices will actually be heard."