Kofi Annan Blasts Hedge Funders For Acquiring So Much African Land
By Courtney Comstock
The former secretary general for the UN, Kofi Annan, recently commented on hedge funds' buying a disturbing amount of land in Africa.
"It is very disturbing that a recent report found that agricultural land that adds up to the size of France was bought in Africa in 2009 alone by hedge funds and other speculators."
Oakland Institute, the author of the report, made its research public. Click here to view it. The report says that in 2009 alone nearly 60 million hectares (the size of France) was purchased or leased in a "land grab." The entire press release is below.
Annan, alarmed by the report, said, "It is neither just nor sustainable for farmland to betaken away from communities in this way nor for food to be exported when there is hunger on the doorstep. Local people will not stand for this abuse – and neither should we."
One of the problems the research cites is that the land deals are poorly documented.
The institute says their research exposed investors who said it’s easy to make a land deal – that they could usually get what they want in exchange for giving a poor, tribal chief a bottle of Johnny Walker.
The release adds:
Annan did say, however, that large commercial farms have a role to play but must integrate their activities within communities, serving as a hub to link smallholder farmers to value chains — markets, supermarkets and agribusiness.
A BBC reporter on the ground in Africa found that the investors do in fact add value in Africa.
When I visited Lungi-Lol in rural Sierra Leone I saw men hoeing thousands of hectares of farmland owned by Addax, a Swiss-based bio-energy company.
They are growing sugarcane to produce biofuels.Campaigners say this contributes to food insecurity, but many people here welcome Addax's presence.
Francis Koroma, who works on the farm, says: "We thank God for Addax. I am gainfully employed and I receive about $70 (£46) a month. Before, I spent a whole year without getting $50."
Villagers are unaware of the controversy surrounding biofuels.Abdulai Conteh , a local traditional leader, said: "Some people are doing business here but I have no idea what they are doing with our land. I see them growing sugarcane. That's all I know."
The Oakland Institute press release says:
Hedge funds and other foreign speculators are increasing price volatility and supply insecurity in the global food system, according to a series of investigative reports released today by the Oakland Institute. The reports are based on the actual materials from these land deals and include investigation of investors, purchase contracts, business plans and maps never released before now.
The “Understanding Land Investment Deals in Africa” reports also reveal that these largely unregulated land purchases are resulting in virtually none of the promised benefits for native populations, but instead are forcing millions of small farmers off ancestral lands and small, local food farms in order to make room for export commodities, including biofuels and cut flowers.
“The same financial firms that drove us into a global recession by inflating the real estate bubble through risky financial maneuvers are now doing the same with the world’s food supply,” said Anuradha Mittal, executive director of the Oakland Institute. “In Africa this is resulting in the displacement of small farmers, environmental devastation, water loss and further political instability such as the food riots that preceded the Tunisian and Egyptian revolutions.”
Mittal added that for people living in developed countries, the conversion of African small farms and forests into a natural-asset-based, high-return investment strategy can drive up food prices and increase the risks of climate change.
“The research exposed investors who said it’s easy to make a land deal – that they could usually get what they want in exchange for giving a poor, tribal chief a bottle of Johnny Walker,” Mittal said. “When these investors promise progress and jobs to local chiefs, it sounds great – but they don’t deliver, which means no progress and relocating people from their homes.”
New reports and materials on these deals examine on-the-ground implications in several African nations including Ethiopia, Mali, Sierra Leone, Mozambique, Tanzania and South Sudan – and expose contracts that connect land grabs back to institutional investors in these nations and others. In addition to publicly sharing – for the first time -- the paperwork behind these deals, the reports demonstrate how common land grabs are and how quickly this phenomenon is taking place. Investors in these deals include not only alternative investment firms like Emergent Asset Management – that works to attract speculators, but also universities including Harvard, Spellman and Vanderbilt.
Contracts also reveal a bonanza of incentives for speculators ranging from unlimited water rights to tax waivers.
“No one should believe that these investors are there to feed starving Africans, create jobs or improve food security, Obang Metho of Solidarity Movement for New Ethiopia said. “These land grab agreements – many of which could be in place for 99 years – do not mean progress for local people and will not lead to food in their stomachs. These deals lead only to dollars in the pockets of corrupt leaders and foreign investors.”
In 2009 alone nearly 60 million hectares – an area the size of France – was purchased or leased in these land grabs. Most of these deals are characterized by a lack of transparency, despite the profound implications posed by the consolidation of control over global food markets and agricultural resources by financial firms.
“We have seen cases of speculators taking over agricultural land while small farmers, viewed as “squatters” are forcibly removed with no compensation,” said Frederic Mousseau, policy director at the Oakland Institute. “This is creating insecurity in the global food system that could be a much bigger threat to global security than terrorism. More than one billion people around the world are living with hunger. The majority of the world’s poor still depend on small farms for their livelihoods, and speculators are taking these away while promising progress that never happens.”