The Same Financial Firms Responsible For Our Economic Crisis Are Driving Us Toward a Global Food Disaster
By Tina Gerhardt
US and EU investors -- including US universities, pension funds and investment firms -- are involved in unprecedented land grabs currently taking place in Africa, according to a series of investigative reports released on Wednesday by the Oakland Institute.
The Oakland Institute spent over a year working undercover to gather information on land deals in Ethiopia, Mali, Sierra Leone, Mozambique, Tanzania and South Sudan.
The reports show how land deals have a number of effects, including the destabilization of food prices, mass displacement and environmental damage.
"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," she added, "this is resulting in the displacement of small farmers, environmental devastation, water loss and further political instability."
These deals are often presented as agricultural investment, providing much-needed economic funds, creating jobs and infrastructure in developing countries.
Yet, the report argues, many of the deals have negative impacts. These include inadequate participation of local populations, misinformation, lack of adequate compensation, especially for women or indigenous populations.
The intention of releasing the reports is not to curb agricultural investment but rather to ensure that the funding does what it promises to do and minimizes the deleterious effects.
The "Understanding Land Investment Deals in Africa" reports 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.
So there is an inversion of small, local farming to industrialized agriculture.
As farmers are forced to vacate ancestral lands, they and their families, who rely on the land for grazing cattle or planting crops, are left without sustenance.
Frederic Mousseau, the Oakland Institute policy director, tells of land recently acquired, where "the investors were required to create 17 jobs. The village has 7000 people living on and surviving off of that land. We have spent time with these people. Seventeen jobs will not suffice. They need the land for the cattle and for the agriculture."
In another instance, Mousseau says, "One thousand jobs were to be created for 100,000 acres acquired. But that is an area that could nurture 25,000 farmers and their families."
Forced off the land, these farmers often find themselves struggling even more simply to survive.
"In many East African countries," Obang Metho said, "we have customary rights. We have systems that can be turned around to take advantage."
The reports charge that this acquisition is increasing in breadth and in speed. Mousseau stated, "in 2009 alone nearly 60 million hectares -- an area the size of France -- were purchased or leased in these land grabs. It is estimated that 80 million hectares were acquired in 2010." By contrast, prior to 2008 the annual expansion of global agricultural land was less than 4 million hectares.
Not only are these land grabs, the land acquired is often also located near water resources. The reports state that major African rivers, including the Nile, the Niger and the Zambezi, are tapped by these land grabs. Hence, these land grabs are actually often water grabs, intended to stabilize not only food supplies but also water access in other countries. Countries that often acquire the land include China, India and the Gulf States.
According to Mittal, "Universities such as Harvard University, Vanderbilt University, Wake Forest University are investing in hedge funds that are involved in these land grabs."
These universities put their money into a direct investment fund, which then purchases the land. According to the Oakland Institute's reports, these are "investment funds with ties to major banks such as Goldman Sachs and JP Morgan."
When asked if these universities are aware of their implication in these land grabs, Mittal replied: "We would like to believe that these universities are not aware. But an educational institution also needs to be informed about the kinds of returns that these funds deliver, which are around 25 percent, 30 percent and more, and in this kind of economy, should raise some questions."
"While countries such as China, India and Gulf States acquire the land, the financial sector involved also needs to be examined," Mousseau added. "There is a high level of fiscal incentives." These include exemption from VAT taxes. Moreover, the land is often acquired for very little compensation; some land parcels were even documented as being given away for free.
Obang Metho underscores the financial motivations, stating "These people are not there to feed the Ethiopian people. They are here for the profit. If this is not allowed in the free world, it should not be allowed in Ethiopia."
Tina Gerhardt is an academic and journalist whose writing has appeared in Grist, The Huffington Post, In These Times and The Nation.