by Piet Coetzer

Food security

Land acquisitions: Investment opportunity or hydro-colonialism?

Aswam Dam
Aswan Dam.JPG

With increasing urbanisation and growing demand for food there is a need for advanced, more sustainable and efficient agriculture production. In order to reach these goals, technology and investment are required. Land acquisition with large-scale farming is one way. There are, however, important challenges for both “recipient” and  “investment” countries, according to  a recent research paper by Consultancy Africa Intelligence. 

As background to the paper, it is stated that today “we live in a ‘post-surplus world’ with a tense situation in global food markets, while at the same time facing increasing food demand. By 2050 the world will need 50% more food than currently, and transformation and partnerships with Africa will be essential for these global food needs.


“In order to secure food security, land acquisitions have increased. Recipient countries sell or lease out land to government or private sector investors. What is new to this process is its scale  and its possible implications. GRAIN, a non-government  organisation that backs smallholder farmers, recently highlighted the risk of water scarcity connected to the process of land acquisition.”

The paper then goes on to examine the controversial act of land acquisitions. The implications of the ‘investment perspective’ and the ‘water and land scramble perspective’ are discussed, with a focus on Saudi Arabia’s debated land deals in Ethiopia.

Two sides of the coin

Countries that are finance-rich and resource-poor look to finance-poor and resource-rich countries to ensure their own food and energy security.

Concern over food security spiked when grain prices reached an all-time high in 2007/2008. To secure the future of their populations, countries such as South Korea and Saudi-Arabia began to invest in overseas land. Other countries are also involved in this agricultural investment process, such as India and China. And the business includes African intra-regional land investments.

On one side, supporters of land acquisitions argue that the investments contribute to new techniques, seeds and money for the agriculture sector. These investments address the food crisis, create employment and earn foreign exchange.

Its opponents, on the other side, argue that farm lands are separated from their host countries and farmers are forced off their land.

The procedure has therefore been nick-named ‘land grabbing’, a term that implies an act in which someone deliberately and illegally takes away someone’s land rights.

Media reports have raised concern about a land grab of neo-colonial character, which is risking food security and affecting smallholder farmers.

The concept of land investment, flowing from, among other things,  the Rio+20 Summit 2012, is based on the assumption that investment can contribute to development.
Governments can use foreign exchange earnings gained from agricultural exports to attain food security by trade -- and in the end finance technological imports to increase industrialisation. The principles for this process include keeping it African led and African owned. It must also be multi-stakeholder, market-based, sustainable, transparent, agile and non-bureaucratic.

Water issues

On the African continent water scarcity is a reality that affects one in three people. A recent report by GRAIN underscores the effect of land grabbing on Africa’s fresh water systems. "If these land grabs are allowed to continue, Africa is heading for hydrological suicide," said co-ordinator of GRAIN, Henk Hobbelink. The report implies that the scramble for land is a struggle for control over water. Countries such as India and Saudi Arabia do not lack land for food production, they lack water.

History tells us that industrial agriculture is not sustainable: during India’s Green Revolution, water was pumped from deep boreholes for irrigation. The country's groundwater consumption consequently reached unsustainable levels. Today Indian farmers have to drill deeper every year, an unsustainable situation.

Another territory at risk of over-consuming its water resource is the Nile river basin. Ethiopia, South Sudan, Sudan and Egypt are dependent on its water for agriculture and have irrigation infrastructures for 5.4 million hectares (13 million acres). However, 8.6 million hectares have been leased out.

Investment perspective

For 30 years the Saudi Arabian Government promoted a self-sufficiency programme and subsidised its domestic food production to feed its 25 million inhabitants. However, after exhausting its scarce water supplies and consuming 60% of its fossil water, the 2007-2008 food prices spike hit the Government and a long-term strategy was established. The ‘King Abdullah initiative’, as it was called, included investments in foreign land, including that in Ethiopia.

From a Saudi-Arabian perspective Africa has the potential to both become self-sufficient and a global exporter of food. However, it is not just the soil that is attractive. Saudi Arabia is so thirsty for water that it has given priority to water over food. Food you can import, but water is very difficult.

Saudi Arabia considers its engagement in Ethiopia as a collaborative approach rather than a zero-sum game. By building partnerships around agriculture, Saudi Arabia both contributes to development and ensures its food security.

The Ethiopian Government considers the investments as a way to allow foreign currency to come into the economy and add to long-term food security by transferring technology to small-scale farmers.

Despite foreign investors’ view of Africa's potential as a food producer, Ethiopia is incapable of feeding its own people and is dependent on food aid from the World Food Programme (WFP). Leasing out land to foreign investors has led to food shortages for Ethiopia’s own people.

The human rights violation most often perpetrated by land deals is that thousands of people have been forced off their land, as a part of the Ethiopian Government’s ‘villagisation’ programme. The Ethiopian constitution protects indigenous people’s rights and Ethiopia signed the United Nations Declaration on the Rights of Indigenous Peoples in 2007.

However, neither consultations nor compensation have been provided for the affected people.

Concluding remarks

Besides the need for advanced, more sustainable and efficient agriculture production, in order to be sustainable, recipient nations of land deals must be able to negotiate contracts in accordance with their national constitutions and international human rights treaties.

The investment countries must also consult the locals and offer compensation if necessary. In addition, the recipient country needs to broaden its revenues from the macro level, to also become beneficial on a micro level.

This is largely an abbreviation version of a paper by Christine Petré of Consultancy Africa Intelligence's Rights in Focus Unit.
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