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Agricultural Investment in Africa - Development or Land Grabbing?

Monday, November 7, 2011

Originally published by Deutche Welle



A Swiss company has embarked on a project leasing land from rural villages in Sierra Leone to produce European biofuel. Some say this is agricultural development, but others warn it's opportunistic land grabbing.



Lungi Acre is an impoverished farming village in the heart of rural Sierra Leone. It is home to about 600 villagers, who live in simple mud huts. There is a gazebo for village meetings, a few palm trees, cooking fires, but as yet, no electricity or running water. Until recently the villagers cultivated rice, beans and manioc. But this all changed when the Swiss company Addaz began leasing land around the village. 

Villagers initially welcomed the project and gladly gave up their land for cultivation. Addax executives had promised to invest in the area building hospitals and schools, generating up to 4,000 well-paid jobs and providing a modern agricultural education. Farmers were also offered money and other, better fields, as compensation for their land.

The Lungi Acre village

Around 600 people live in Lungi Acre

But today the farmers feel cheated. 

Kneeling on the ground, Alusine Koromo examines the exhausted bone-dry earth between his thumb and forefinger. "The soil here is of no value to us anymore," he says. "Once the field has become dry, there is nothing more we can do with it. There is no agriculture here anymore. Nothing. We have nothing left here. Look at our school hut, we don't even have a teacher for our children. And we are working here for low wages with no waterproof or protective clothing."

Like many men in the village, Alusine is employed as a casual worker with Addax. Hunched over the land, he chops down bushes and roots, clearing the forest to make way for the sugarcane. It's a tough job. Alusine earns 10,000 leones a day, around two US dollars. It isn't even enough for a sack of rice. 

Leaning on his walking stick, Brima Serry, the old village chief, is at a loss: "I ask you, how on earth are we supposed to survive here?"

Return on investments

But Addax says it can't understand these complaints. The Swiss investors claim they have done their homework and kept the needs of the population in mind. 

"This is clearly a commercial project," says Jörgen Sandstrom, project manager at Addax. "We want to earn money, but we have also invested a great deal."


The fields are cleared for growing sugarcane


"We are supported by development banks who want to see a return on the money they have lent. But they also demand that we develop the region which we are working in," he adds. "It is our aim that the people who are affected by our project are left better off than they were before it began."

It's a noble objective. Addax invests some 285 million euros ($391 million) in Sierra Leone. Of that, the development banks shoulder more than 130 million euros. This money finances the enormous sugarcane plantations, training workers, the ethanol plant and the small power plant that generates biomass energy with has a 15 megawatt capacity. Addax was able to convince not only the banks to back their idea, but also a subsidiary of the state-owned KfW bank, the German Development and Investment Company (DEG).

Complicated contracts

The Germans contributed an estimated 20 million euros and are full of praise for the project. But Mohamed Conteh from the civil rights organization MADAM is skeptical. Addax is by no means a charity, and the farmers don't know what they are getting themselves into - most cannot read or write, he claims. "The contracts are anything but transparent," says Conteh. "When these investments are bad for people and the deals are not understood by everybody, then it's land grabbing."

Farmers of Lungi Acre village

The farmers of Lungi Acre are worried about their future

Land grabbing is not a new phenomenon. Worldwide, corporations, investment companies and entire states are looking to invest in renewable resources. In Africa more than 30 million hectares (74 million acres) of land are leased to foreign companies. As a result, countries such as Ethiopia, Angola, Kenya, Madagascar, Mali and Sudan all have to import food at a high price as they can no longer produce enough domestically. 

This can also be seen in Sierra Leone. Still suffering from the consequences of a brutal civil war, it is one of the poorest countries in the world. Hundreds of thousands of people were killed in the war which spanned from 1991 to 2002.

But now, finally, it seemed better times were on the horizon.

Dangerous chemicals

Addax was obliged to provide an assessment outlining the social, heath and environmental impact of the project. It found that heavy agricultural machinery was being operated on the plantation, that fungicides and pesticides were being sprayed as well as the herbicide Glyphosat, a chemical mace that scientists suspect could be harmful to animals, crops, water sources and ultimately humans. The report did not disclose, however, how much water was being tapped from nearby rivers like the Rokel, and how much waste would be pumped back in. 

Agronomist Momoh Lavahun is concerned. "We don't have the resources in Sierra Leone to carry out our own studies," he says. "If a foreign expert comes in and presents his analysis to the government saying that the whole thing is environmentally friendly, no one here is able to contradict him."

River Rokel

What will happen to the Rokel River?


Oluniyi Robbin-Coker, Sierra Leone's private sector advisor to the president, likes to describe Addax as a flagship of the country's agricultural investment policy. It was he who negotiated the contract with Addax on behalf of the government. 

"This is the biggest agricultural investment Sierra Leone has ever seen," Robbin-Coker boasts. "Addax is a pioneer in the production of bio-ethanol. We hope to see more companies like Addax come along. Without a doubt we have enough land and water to accommodate them."

Industry lobbyists avoid using the term "land grabbing," preferring instead to refer to "win-win situations," "technology transfers," and a symbolic partnership between government, country and investor. This is also the favored terminology of Addax project manager Jörgen Sandstrom. He firmly believes that large investments in agriculture further development in Africa. 

"Agriculture must become more industrial, and wealthy investors can provide the technology," Sandstrom says. "It is no surprise to me therefore that organizations such as the World Bank advocate this approach."

Time bomb

But herein lays the problem. Land grabbing as a stepping stone to development has been publically legitimized by institutions such as the World Bank. There's an increasing trend toward land-leasing which carries the cachet of being in the name of development. Canadian author Joan Baxter, who researches agricultural investment in Africa for the Oakland Institute think tank, has observed the change with trepidation.

Sugarcane plantation

Sugarcane as far as the eye can see


"It is as if all African presidents have been seduced by the doctrine of the World Bank Group," she says. "They think that large investments are the solution to all their problems. I can almost hear how they beg - take our resources, take our water, take our country! As if that is a development strategy! But no one can tell me what exactly they mean when they talk about development!"

Baxter isn't concerned with a sweeping critique of neo-liberal approaches or the private sector. She does not cling to the romantic cliché of a small farmer plowing his field. She is concerned that land grabbing could be a potential time bomb. 

"In five to 10 years, people will realize the consequences of land grabbing. It will lead to conflict; the next bad harvest and the next food crisis are just around the corner… Starvation will increase. It's a disaster."

It's a disaster that won't have come without fair warning.

Author: Alexander Göbel / ccp
Editor: Nancy Isenson