Agriculture

126 ‘land deals’ backfired; most of them in Africa: GRAIN report

The failed investments involved acquisition of agricultural lands ranging from 1,000 hectares to 1.5 million hectares.

 
By Kiran Pandey
Last Updated: Tuesday 28 June 2016 | 07:25:39 AM
These investments were made with the aim of expanding agribusiness but have failed to address food and financial crises (Photo credit: iStock)
These investments were made with the aim of expanding agribusiness but have failed to address food and financial crises (Photo credit: iStock) These investments were made with the aim of expanding agribusiness but have failed to address food and financial crises (Photo credit: iStock)

A report released by international non-profit GRAIN has revealed that mega investments involving acquisition of more than 10 million hectares of land in Africa and Asia have failed.

Africa is the favourite destination of most investors. But around 126 “land deals” failed, cancelled or were abandoned due to reasons such as failure of the investors to arrange for necessary finances, failure of the crops and lack of access to water. Projects which started without consulting the local community also failed.

These investments were made with the aim of expanding agribusiness but have failed to address food and financial crises, the report says. Prices remain stubbornly high and access to food continues to be a daily struggle for most people.

The failed investments involved acquisition of agricultural lands ranging from 1,000 hectares to 1.5 million hectares. The largest of these involved agricultural and horticultural investments in Sudan, Uganda and Morocco.

An example of such an investment is the Sayegh Group from Sudan which told a news organisation in September 2009 that it had acquired 1.5 million ha of agricultural land in the Nile Delta. But GRAIN says there is no recent information showing the progress of this project or what happened to the land acquisition.

Many failed investors were from India with business interests in countries such as Tanzania, Madagascar, Ethiopia, Côte d'Ivoire, and Senegal. For example, in February 2011, farmers from Punjab—most of them members of the Confederation of Potato Seed Farmers (Poscon)—were in the process of acquiring 2,000-5,000 ha in Ethiopia at a lease cost of US $4 per ha per year for a period of 25 to 45 years. Today, there is no clarity on the current status of the project amid reports of failed harvests and the farmers returning to India.

Most land acquisition deals include access to water, diverting not only agricultural land but also water for agriculture. The report cites evidence of the agreements and the disputes due to water-guzzling investments, especially in water conflict zones.

Who is investing where

Japanese companies, backed by their government, are focusing on northern Brazil and Mozambique for soy production, the report says. Chinese companies are aggressively buying farmland in New Zealand and Australia, as well as Russia’s Far East. Russia’s western farmland is a favourite destination of European companies, as are Romania and the Ukraine. Indian companies are keen on Ethiopia. French and Portuguese companies favour their former colonies in Africa.  

Investment for sustainable expansion of agribusiness

The GRAIN report highlights the need for “responsible investment” in the interest of local people and their ecosystems. Over the past eight years, there have been important development frameworks and guidelines on land governance and agricultural development in African nations. These include the UN Sustainable Development Goals (SDGs) and the Guiding Principles On Large Scale Land Based Investments In Africa developed by the African Development Bank along with the United Nations Economic Commission for Africa and the African Union.   

It is hoped that these mechanisms will guide the structuring and planning of profitable, just and environmentally sustainable expansion of agribusiness in African and other countries.

Subscribe to Weekly Newsletter :

Related Story:

Land reform in reverse gear in Asian countries, says report

PM chooses to continue with UPA’s 2013 Land Acquisition Act

IEP Resources:

The global farmland grab in 2016: how big, how bad?

The great land heist: how the world is paving the way for corporate land grabs

Conflicts over land

India’s role in the new global farmland grab

We are a voice to you; you have been a support to us. Together we build journalism that is independent, credible and fearless. You can further help us by making a donation. This will mean a lot for our ability to bring you news, perspectives and analysis from the ground so that we can make change together.

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.