by Tina Gerhardt
June 9, 2011
Investors are involved in massive land
grabs in Africa that may cause destabilization of food prices, mass
displacement and environmental damage.
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,
The reports show how land deals have a number of
effects, including the destabilization of food prices, mass displacement and
"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
"In Africa," she added, "this is resulting in the displacement of small
farmers, environmental devastation, water loss and further political
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
So there is an inversion of small, local farming to industrialized
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
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.
"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.
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."