here - Island Press

The Global Farms Race:
Land Grabs, Agricultural Investment,
and the Scramble for Food Security
A primer on the book’s major themes
The Global Farms Race is a new Island Press volume edited by
Michael Kugelman and Susan L. Levenstein
What is the “Land Grab” Phenomenon?
“A new phase of the world food crisis”
—former IFPRI director
*2008: Rising food prices, food riots, and food export bans
*Global food crisis exacerbates existing food insecurity
fueled by farmland-displacing urbanization, water
shortages, and wheat-destroying disease
RESULT: Food-importing nations (and profit-seeking
private corporations) begin acquiring farmland
overseas. They cultivate the land themselves, and
export the harvests back home.
*Historical precedent exists, but today the scale is much
larger and the focus is on core staples, not cash crops
The Growing Scale of the Global Farms Race
2009: 15-20 million hectares subject to negotiations or
transactions in recent years (IFPRI)
2011: 80 million hectares subject to negotiation since 2001
(ILC); 60 million hectares’ worth of deals announced in
2009 alone (WB)
2012: 230 million hectares sold or leased since 2001—the
size of Western Europe (Oxfam)
The 100,000-Hectares-and-Above Club:
The Largest Land Deals
2011: Mozambique offers concession to Brazil to farm 6 million hectares
2009: Madagascar grants 1.3 million hectares to Daewoo corporation
2011: Indonesia provides 1.2 million hectares to Binladen Group
2008: Philippines signs MOU with Asian firms granting 1.2. million
2009: South Korea completes deal to farm 700,000 hectares in Sudan
2008-2011: American, Indian, Chinese, and Libyan investors have each
completed deals of at least 100,000 hectares for farmland in Africa and
Latin America
[Most common individual plot size in developing world: less than 2
Key Players Involved
Main Targets of Investment are:
Africa (especially sub-Saharan Africa), Southeast Asia,
Latin America (especially Brazil), Central/Eastern Europe,
Former Soviet Union region
The developed world too: Australia and New Zealand
Key Players Involved
On the investor side:
*Capital-rich, food-importing nations
(Mostly from the Gulf and China; also Japan and South
*Private sector, especially agribusiness (from above
countries and from the West; includes financial
corporations eg Goldman Sachs and universities eg
*Not a strictly North-South affair: North Africa is investing in
sub-Saharan Africa; Southeast Asian nations are
investing in each other’s soils; and various nations
targeting Oceania
Motivations for Investing Nations and Firms
*Food security
A way to secure food supplies that avoids dependence on
volatile commodities markets
*Energy security
A key aspect of the biofuels acquisition craze
40 percent of land involved in overseas farmland
acquisitions to be set aside for biofuels production (ILC)
Farmland seen as hedge against inflation and portfolio
$14 billion in private capital committed to farmland as of
early 2012 (IIED)
Motivations for Nations Hosting Investments
*Potential for agricultural growth
A hope that foreign capital will bring in better agricultural
technology, increase local employment, and improve farm
*Potential for infrastructure
Many foreign investors promise to build new roads,
bridges, and ports
Many governments hosting investments are corrupt and
undemocratic, and simply seek to line pockets with revenue
The Risks—Part I
*Promises of benefits to local communities (new
technologies, greater employment, higher farm yields) are
not materializing
*Power asymmetries (wealthy and influential foreign
investors, investment-supporting host governments, and
impoverished local communities) increase likelihood of
inequitable outcomes. Already, research has uncovered:
Displacement of local communities
Smallholders’ access to sources of water, food, and
medicine cut off (“unowned” or “unfarmed” land is still often
used by local communities to meet everyday needs)
The Risks—Part II
*Environmental destruction
Farming projects entail use of highly polluting technologies,
and raise concerns about deforestation
Uneasy mix of land, poverty, and foreign intrusion (already
cases of armed resistance to land acquisitions in Africa)
*Food market crisis
Excessive non-market food production may portend shocks
for global market supply and consequent price rises
Regional Case Studies: Africa
Most popular regional target of investment
10 million hectares of acquisitions in four African countries
alone in 2004-09 (Ethiopia, Liberia, Mozambique, Sudan)
2007-2010: Nearly 10 percent of landmass of present-day
Sudan acquired by foreigners
Many African nations ceding their farmland are dependent
on World Food Program aid (Ethiopia, Sudan)
Nearly half of world’s unfarmed land suitable for farming is
in Africa (according to WB)
Regional Case Studies: Asia
2nd most popular regional target
Cambodia, Indonesia, Philippines of particular interest to
Farmland investment in Asia is mostly intra-regional: Asian
investors acquiring Asian land (a contrast to Africa, where
much of outside investment originates outside the region)
Regional Case Studies: Latin America
3rd most popular regional target
Only sub-Saharan Africa contains more available cultivable
Investors attracted to its nutrient-rich soil, adequate water
supplies, and livestock-producing capabilities
Brazil: $421 million in FDI inflows into agriculture from
2005-2007—3rd highest volume in world
Regional Case Studies: Central and Eastern
Europe and Former Soviet Union
Early 1990s: Foreigners rush to claim formerly state-owned
farms—and this process continues today.
Nutrient-rich surface soils of great interest to investors
Ukraine, Kazakhstan, Russia particularly attractive
Experts on this region: Large-scale land acquisitions here
are not as controversial as elsewhere—because
investments are long-standing, and opposition is neither
well-organized nor visible
A Necessary Reality Check…
*Implemented investments less than what media have
reported; land controlled by foreigners a relatively small
percentage of total land in nations hosting investments.
Actual farming has commenced with only about 20 percent
of announced deals (WB)
*Pace of acquisitions slowed between 2008 and 2010
*Investors are notoriously cautious about acquiring
farmland (concerns about sensitivities and perceptions of
outside encroachment and neocolonialism); they may
eventually seek to redirect their capital to other sectors
…But Still Major Reasons for Concern
Original drivers for large-scale land acquisitions originating
in 2008 remain present, and likely will be for long haul:
High commodity prices
Population growth
Dietary changes
Biofuels and food demand
Natural resource constraints
Precious state of arable land
Policy Questions
1. Land deals are a reality. How can they be made into winwins for each side?
Normative international approaches (eg implementation of
“codes of conduct”) vs. stronger laws in host countries to
govern foreign land investments.
2. Are there alternatives to large-scale land acquisitions?
Options: Regional food reserves, contract farming,
genetically engineered drought-resistant food crops
3. Large-scale land deals have the potential advantage of
providing investment to the sagging global agricultural
sector. What’s the way to deliver this needed investment?