[Dehai-WN] Worldpress.org/: Land Grabs and the World Bank

[Dehai-WN] Worldpress.org/: Land Grabs and the World Bank

From: Berhane Habtemariam <Berhane.Habtemariam_at_gmx.de_at_dehai.org>
Date: Thu, 17 Nov 2011 00:07:47 +0100

Land Grabs and the World Bank

Joshua Pringle
November 16, 2011


The United Nations estimates that the global population will grow to 9.2
billion by 2050 (from 7 billion now), 70 percent more food will be needed to
feed everyone, and food prices will rise with demand. Climate change
threatens to exacerbate the challenge of food production as droughts, fires
and floods damage arable land with increasing frequency and magnitude. Thus,
fertile land is becoming more valuable by the day.

Public and private investors, both foreign and domestic, are buying or
leasing large tracts of fertile land from developing countries in deals
commonly referred to as "land grabs." Countries concerned about their own
food security, particularly in Asia and the Middle East, are seeking to
obtain offshore farms from which to export food crops (often exporting their
food insecurity to the country whose land they are utilizing in the
process). Private investors see an opportunity to make a large profit by
exporting food crops or biofuels, often enticed by tax incentives, low labor
costs and giveaway prices. In most cases, the governments selling this land
do not consult the local population that has been subsisting off the land
for generations. Farmers get kicked off their farms, sometimes compensated,
sometimes not.

Since the financial and food crises of 2008, the World Bank Group has
incentivized and facilitated land grabs in several countries in Africa,
Latin America and parts of Asia. Through its private-sector arm, the
International Finance Corporation, as well as its Foreign Investment
Advisory Service and program to Remove Administrative Barriers to
Investment, the World Bank has worked to reform land laws and offer tax
holidays that attract investors to farmland, while also providing technical
assistance and advisory services to the governments of developing countries
that are in need of foreign direct investment.

The World Bank claims that it works to help countries overcome inequality
and ensure that new land investments offer benefits shared by local
populations. Its Principles for Responsible Agricultural Investment (RAI), a
list of voluntary principles for investors in agriculture, specifically lays
out principles that are meant to protect the food security and natural
resources of the public. The World Bank not only fails to comply with its
own principles regarding agricultural investment; the Bank's policies
actually accomplish the opposite of its stated goals, facilitating land
deals that have deleterious effects on local populations.

World Bank Principles

In May 2008, the World Bank responded to the financial and food crises by
creating the Global Food Crisis Response Program (GFRP), which led to a 54
percent increase in the next fiscal year in World Bank loans, grants and
equity investments. In October 2009, the Bank acted as the central organizer
in establishing a multilateral trust fund to support a multibillion-dollar
food-security initiative with the G-20. Joan Baxter, a research fellow at
the Oakland Institute, notes that, in 2009 alone, the Bank estimates that
foreign investors acquired approximately 56 million hectares of farmland—"an
area about the size of France"—by long-term lease or purchase in developing
countries. "The investment promotion agencies are developing and advertising
a veritable smorgasbord of incentives not just to attract foreign investment
in farmland, but also to ensure maximum profits to investors. … Investors
may pay just a couple of dollars per hectare per year for the land, and in
Mali, sometimes no land rent at all."

The Bank has continued to defend the RAI principles that it drafted jointly
in April 2010 with the International Fund for Agricultural Development, UN
Food and Agriculture Organization, and UN Conference on Trade and
Development. The RAI principles encourage, but do not mandate, that existing
rights to land and associated natural resources are recognized and
respected; investments do not jeopardize food security but rather strengthen
it; investments are transparent, monitored and ensure accountability by all
stakeholders within a proper business, legal and regulatory environment; all
those materially affected are consulted and agreements from consultations
are recorded and enforced; and environmental impacts are minimized and

None of these standards are being met. Because the principles are not
legally binding—and because the Bank, in purporting to hold apolitical
status, asserts that securing property rights is a matter to be left to
governments—the Bretton Woods project argues that the RAI principles merely
"legitimize land grabbing from smallholders."


In June 2009, a policy brief by the Food and Agriculture Department of the
United Nations stated, "The agricultural sector in developing countries is
in urgent need of capital," and in order to halve the number of the world's
hungry by 2015, "at least $30 billion of additional funds are required
annually." It is because of this urgent need, and because an estimated 70
percent of the demand for farmland is in Africa, Baxter says, "that
low-income and food-deficit African countries, some still struggling to
rebuild after long conflicts, such as Sierra Leone and Liberia, find
themselves competing with each other to offer foreign investors ever sweeter
deals on their arable land, so desperately needed for local food

The Oakland Institute (OI), which has done extensive investigative research
in seven African countries where land grabs are taking place (Ethiopia,
Mali, Mozambique, Sierra Leone, South Sudan, Tanzania and Zambia), finds
that Ethiopia has been the largest recipient of the World Bank's GFRP
program. Between early 2008 and January 2011, OI research finds, the
Ethiopian government transferred at least 3.6 million ha of land to
investors, although the actual number could be higher. "Ethiopia has created
a very attractive investment climate in recent years by providing potential
investors with various tax breaks, access to affordable land, and a
relatively efficient investment process."

Ethiopia is a member of several international agreements that reduce risk
for foreign investors, such as the World Bank's Convention on the Settlement
of Investment Disputes between States and Nationals of Other States, which
details international arbitration procedures for disputes with foreign
investors, and the World Bank's Multilateral Investment Guarantee Agency,
which insures foreign investors against potential political risks including
expropriation and war damages. However, the OI says, "While there is
undoubted need for foreign direct investment in Ethiopia, there are
widespread concerns that these land investments are not being undertaken in
a manner that safeguards the social, environmental and food needs of local

Ethiopians consistently suffer endemic food insecurity and malnutrition. In
2009, some 7.8 million Ethiopians (10 percent of the population) were
considered chronically hungry. The Food Security Index for 2010 counted
Ethiopia as the sixth most at-risk country out of the 162 countries
surveyed. The OI says, "Despite Ethiopia's endemic poverty and food
insecurity, there are no mechanisms in place to ensure that these
investments contribute to improved food security. In addition, there are
numerous incentives to ensure that food production is exported out of the
country, providing foreign exchange for the country at the expense of local
food supplies."

The Ethiopian government insists that no farmers are displaced by these land
deals, that the land being granted is unused—a claim the OI finds blatantly
untrue. "In Gambella and Benishangul, respectively, 45,000 and 90,000
households are slated for relocation due to villagization and land
investment displacements, resulting in a loss of livelihood for over 650,000
people." Displacement is widespread, and the vast majority of locals do not
receive compensation. The government insists that communities are being
consulted about land deals, but local populations often don't find out about
them until the bulldozers show up.

Forests and wildlife habitats are cleared, and water is used without
restriction. "There is nothing in place to ensure that local people benefit
from the business opportunities that these investments could present," the
OI concludes. The degradation to the land and "the loss of livelihood are
difficult to understate. … Decreased food security, the likely increase in
natural-resource-related conflict, loss of self-worth, and erosion of
cultural identity are all probably outcomes of livelihood loss. Thus, the
adverse impact of land investment on the lives of local people will be
dramatic, long term and potentially irreversible."

If the needs of African communities were taken into consideration—not only
in Ethiopia, but across the gamut of African land grabs—foreign direct
investment could be directed to numerous critical areas, such as the need
for roads, schools, health centers, farming equipment and technology, water
wells, and general infrastructure. Unfortunately, Baxter says,
"Conspicuously absent in the talk about the purported benefits of the land
deals is serious discussion of protection of local people, human and
environmental health, water resources, biodiversity, human rights, food
security, and free prior informed consent of the affected communities."


In India, a country where 65 percent of the population is dependent on the
land, land grabs have been facilitated by the Land Acquisition Act of 1894,
which allows the government to acquire land from landowners by paying a
government-fixed compensation. A 1991 World Bank structural-adjustment
program reversed land reform that had created laws that kept lands under
ownership of the tiller. The 1894 Land Acquisition Act was untouched, thus
making it easier for the government to acquire land and sell it to foreign

Vandana Shiva reports, "While land has been taken from farmers at Rs 300
($6) per square meter by the government—using the Land Acquisition Act—it is
sold by developers at Rs 600,000 ($13,450) per square meter—a 200,000
percent increase in price, and hence profits. This land grab and the profits
contribute to poverty, dispossession and conflict." Not all the land is
being grabbed for agribusiness; some is being bought by investors to build
racetracks and expressways. To protect the interests of the POSCO Steel
project, India's largest foreign investment, the government has set about
destroying as many as 40 farms a day. Nonviolent Indian protestors have been
fired at and killed by the government.


Land grabs are happening in developing countries all over the world: China,
Pakistan, Indonesia, Colombia, Paraguay, Bolivia, Guatemala, Honduras. The
MERCOSUR countries of Argentina, Uruguay and Brazil have implemented
initiatives that regulate foreign purchases of land. But in Argentina,
President Cristina Kirchner passed a law that allows foreigners to rent
land, rather than buying it, which some argue is even worse because it
permits the environmental degradation of agrochemicals and large-scale
farming to take its toll without any long-term accountability in place.

Chinese food corporation Heilogjiang Beidahuang State Faros Business Trade
Group Co., Ltd. is investing in irrigation systems in Rio Negro, Argentina,
in exchange for land rental that it will use to export genetically modified
food staples back to China. The Council on Hemispheric Affairs finds,
"Chinese irrigation practices are notably problematic, as almost 40 percent
of China's total land is plagued by soil erosion. Worried that these
practices will be transferred to the Río Negro valley, environmentalists and
concerned citizens have begun to protest." As another example of the lack of
free, prior and informed consent in land grabs, "The provincial government
leased these lands to the Chinese corporation without ever consulting the
true owners of the land—the Mapuche."

As the case of Argentina illustrates, governments clearly play a major role
in protecting (or failing to protect) the rights and interests of its
citizens in these land deals. However, World Bank policies have been these
governments' partner in crime, exhibiting blatant disregard for local
populations and contradicting the RAI principles the Bank claims to uphold.
As long as the World Bank continues to act as an engine for land deals that
exacerbate food insecurities of local populations, remove agrarian families
from their properties without compensation or informed consent, and result
in unsustainable exploitation of natural resources, the Bank cannot claim
with any veracity that helping countries reduce poverty and hunger is at the
core of its agenda.

Joshua Pringle is a journalist, novelist and singer living in New York City,
and is the senior editor for Worldpress.org. He is currently studying
international relations in the master's program at New York University.


A farmer in Ethiopia's Ghibe Valley. (Photo: International Livestock
Research Institute)



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