If dodgy e-mails offering millions in return for your down payment to repatriate a stranded Nigerian astronaut do not tempt you, then maybe this will appeal to your speculative side. A hectare of fertile African land, a 99-year lease, and all for US$1 a year. Think about it: Crop prices are soaring, land is appreciating and import-dependent rich nations virtually guarantee you a never-ending export market.
It is starting to sound like that Nigerian astronaut deal.
However, this is not a scam. Sadly for anyone who happens to live on that farmland there are countless examples of governments handing it over at bargain prices to foreign investors, ranging from hedge funds to biofuel producers.
Critics call it “land grabbing.”
The trend of buying or taking out long-term leases on land first came to prominence during the 2008 world food crisis. As food riots raged from Mexico to Bangladesh, speculators and countries with their own food security fears quietly sealed deals with African nations.
Others call it “neo-colonialism.”
Expanding, industrializing populations in need of plentiful food sources with cheap workforces take over vast swaths of Africa.
However, proponents, including some at the World Bank, see overseas investment in foreign farmland, particularly in Africa, as a way to modernize agriculture there, bringing more food and profits to the local population.
One of the difficulties in assessing the impact of the land grab is that many of the transactions are opaque and the extent of investment unclear, but the UN’s Food and Agricultural Organization (FAO) and other analysts estimated last year that nearly 20 million hectares of farmland — an area roughly half the size of all arable land in Europe — was sold or had been negotiated for sale or lease in the space of just six months.
Investors range from Persian Gulf states dependent on food imports to Indian farming companies and European-based biofuel producers. Targets include Sudan, Tanzania, famine-prone Ethiopia and Madagascar.
On the latest evidence, the land rush is gaining momentum, with new investors entering the fray. Pension funds are the latest players to look to farmland after the financial crisis hammered returns on traditional assets such as shares.
The growing interest has prompted the World Bank to launch its own research into how developing nations could benefit from the foreign money. The full report is due any day now, but the release has already been delayed several times. A leaked draft suggested that so far, wealthy investors have largely threatened local resources and exploitatively targeted countries with lax laws and low charges.
It is hardly the ideal outcome supporters of land deals have in mind: That the investor makes financial or food-security gains, while the recipient gets local jobs, higher yields and some share in the profits and crops.
NGOs were hardly surprised by the headlines from the World Bank leak. Opinion varies between them over whether investment, when responsible, can bring benefits. The British development charity, Oxfam, for example, has said it can. Others believe land sovereignty is paramount. African land should remain in African hands. However, there is broad agreement that deals are often done under-the-counter and fail to involve local people.
Survival International highlights the example of the tribes of the Lower Omo Valley in Ethiopia. The charity says that after losing their hunting land as national parks were created in the 1960s and 1970s, local people then saw part of their territory turned into a state-run farm. Now the government is brokering deals to lease out tracts of tribal land to foreigners, so that they grow cash crops including biofuels. Survival says local tribes have had no say in the matter. It is a tale echoed by other NGOs, which report incidences elsewhere of consultations being held, but letters inviting locals arriving after the fact.
This is not just about isolated tribes. The sheer numbers of Africans dependent on agriculture should raise alarm bells over what is at stake if opaque, bargain-basement land deals are to continue. In west and east Africa, agriculture contributed about a third to GDP between 2003 and 2007, compared with just 1.6 percent in developed economies, the UN Conference on Trade and Development says. Agriculture accounted for more than half of total employment between 2002 and 2006.
Those farmers stand to gain from new technology, but they also risk being disenfranchised and left hungry. In reality, the dream of a win-win relationship is often a skewed flow of profits to the investors. Go back to the proposition: A 99-year lease on arable land at US$1 a hectare. To put that in context, farmland in Britain is selling at about £15,000 (US$23,500) per hectare, the Royal Institution of Chartered Surveyors says.
If you do not believe the low African land price quoted, how about the first-hand account of the farmer and philanthropist Howard Buffett, son of billionaire Warren. He recounts the recent offer of an equity stake in a land deal being brokered by a hedge fund. The host government would provide 70 percent of the financing and a 98-year lease, requiring no payments for four years. After that, the cost would be US$2.91 per acre per year. Another fund pledged yields of 15 percent to 20 percent, dwarfing the average return on US agricultural land of 6 percent.
As Buffett says: “If I didn’t know better, this would sound like a great opportunity!”
However, then he spells it out.
“Here’s what I’m sure of: These deals will make the rich richer and the poor poorer, creating clear winners who benefit, while the losers are denied their livelihoods,” he writes in the foreword to the report (Mis)Investment in Agriculture: The Role of the International Finance Corporation in the Global Land Grab, by the Oakland Institute, a US think tank.
The counter-argument is that with about 1 billion people living in hunger, the FAO says, the world’s developed nations cannot stand by and let fertile African land lie fallow.
Anti-poverty campaigners challenge the notion that food is so scarce. People go hungry in poor countries because they cannot afford food, not because it is unavailable, they say. That is true up to a point, but ultimately people will go hungry without more investment, whether that be local or international.
There are models — in theory at least — where investing overseas could benefit both sides. With aid budgets squeezed, they may well become more desirable routes to development.
Take this example from sustainable development specialist Mahendra Shah. Under a shared-benefits deal on cultivated land, where the yield gap is large, food production of 100 tonnes is boosted to 500 tonnes with foreign investments in agricultural technology. This could be shared 200 tonnes for the investor and for the recipient and the balance of 100 tonnes sold on the local market, with the proceeds invested to benefit the local community.
Bodies, such as UN Conference on Trade and Development, are optimistic it is not too late for such equitable partnerships to flourish. It believes pension funds, with their apparent focus on reputation and accountability, could set new best-practice standards as they join the land investment trend. Unlike speculators, they are also more likely to think about the long term.
However, if African governments did not lease land at US$1 per hectare, investors would not be able to buy at US$1 per hectare. The buck stops with the seller. Guidelines drawn up by the World Bank and others may be well-intentioned, but they are unlikely ever to be truly binding.
African governments must consult their people, strive for national food security and know the value of what they are selling. They must also know what not to sell — too often land is classed as “unused” and flogged on when, in reality, it is vital hunting ground or a water source for local communities and ecosystems.
Investors need to do their due diligence in Africa, just as they would anywhere else. However, the landowners, too, need to use the emerging tools available to them. Land databases are being compiled, while methods to assess the value of farmland investments, including the socio-economic returns, are being created by Shah and his colleagues at the International Institute for Applied Systems Analysis in Austria. This is the only way to forge clearer and fairer deals.
When world leaders gather at a UN summit next month to discuss the Millennium Development Goals, including eradicating hunger, it may well be against the backdrop of a new world food-price crisis. Extreme weather has struck crops from Pakistan to Russia. They may well conclude that part of the answer lies in African farmland, but they must ensure that food security for the rich does not result in more hunger for the poor.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
In an article published on this page on Tuesday, Kaohsiung-based journalist Julien Oeuillet wrote that “legions of people worldwide would care if a disaster occurred in South Korea or Japan, but the same people would not bat an eyelid if Taiwan disappeared.” That is quite a statement. We are constantly reading about the importance of Taiwan Semiconductor Manufacturing Co (TSMC), hailed in Taiwan as the nation’s “silicon shield” protecting it from hostile foreign forces such as the Chinese Communist Party (CCP), and so crucial to the global supply chain for semiconductors that its loss would cost the global economy US$1
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
Sasha B. Chhabra’s column (“Michelle Yeoh should no longer be welcome,” March 26, page 8) lamented an Instagram post by renowned actress Michelle Yeoh (楊紫瓊) about her recent visit to “Taipei, China.” It is Chhabra’s opinion that, in response to parroting Beijing’s propaganda about the status of Taiwan, Yeoh should be banned from entering this nation and her films cut off from funding by government-backed agencies, as well as disqualified from competing in the Golden Horse Awards. She and other celebrities, he wrote, must be made to understand “that there are consequences for their actions if they become political pawns of