U.S. universities in Africa ‘land-grab'
Originally published in The Hindu
Institutions including Harvard and Vanderbilt reportedly use hedge funds to buy land in deals that may force farmers out.
Harvard and other major American universities are working through British hedge funds and European financial speculators to buy or lease vast areas of African farmland in deals, some of which may force many thousands of people off their land, according to a new study.
Researchers say foreign investors are profiting from “land grabs” that often fail to deliver the promised benefits of jobs and economic development, and can lead to environmental and social problems in the poorest countries in the world. The new report on land acquisitions in seven African countries suggests that Harvard, Vanderbilt and many other U.S. colleges with large endowment funds have invested heavily in African land in the past few years. Much of the money is said to be channelled through London-based Emergent asset management, which runs one of Africa's largest land acquisition funds, run by former JP Morgan and Goldman Sachs currency dealers.
Researchers at the California-based Oakland Institute think that Emergent's clients in the U.S. may have invested up to $500m in some of the most fertile land in the expectation of making 25 per cent returns.
Emergent said the deals were handled responsibly. “University endowment funds and pension funds are long-term investors,” a spokesman said. “We are investing in African agriculture and setting up businesses and employing people. We are doing it in a responsible way ... This is not landgrabbing. We want to make the land more valuable. Being big makes an impact, economies of scale can be more productive.” Chinese and Middle Eastern firms have previously been identified as “grabbing” large tracts of land in developing countries to grow cheap food for home populations, but western funds are behind many of the biggest deals, says the Oakland institute, an advocacy research group.
The company that manages Harvard's investment funds declined to comment.
“It is Harvard management company policy not to discuss investments or investment strategy,” said a spokesman. Vanderbilt also declined to comment.
Oakland said investors overstated the benefits of the deals for the communities involved. “Companies have been able to create complex layers of companies and subsidiaries to avert the gaze of weak regulatory authorities. Analysis of the contracts reveal that many of the deals will provide few jobs and will force many thousands of people off the land,” said Anuradha Mittal, Oakland's director.
IN TANZANIA, ETHIOPIA
In Tanzania, the memorandum of understanding between the local government and U.S.-based farm development corporation AgriSol Energy, which is working with Iowa University, stipulates that the two main locations — Katumba and Mishamo — for their project are refugee settlements holding as many as 1,62,000 people that will have to be closed before the $700m project can start. The refugees have been farming this land for 40 years.
In Ethiopia, a process of “villagisation” by the government is moving tens of thousands of people from traditional lands into new centres while big land deals are being struck with international companies.
“No one should believe that these investors are there to feed starving Africans, create jobs or improve food security,” said Obang Metho of Solidarity Movement for New Ethiopia. “These deals lead only to dollars in the pockets of corrupt leaders and foreign investors.”
Research by the World Bank and others suggests that nearly 60m hectares — an area the size of France — has been bought or leased by foreign companies in Africa in the past three years.
“Most of these deals are characterised 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,” says the report.
Frederic Mousseau, policy director at Oakland, said: “This is creating insecurity in the global food system that could be a much bigger threat to global security than terrorism. 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.”— © Guardian Newspapers Limited, 2011