Irrational use of agricultural land criticized

The profit-driven diversion of food-producing land to non-agricultural use and massive land grab currently underway threaten to worsen the food crisis and ruin rural livelihoods, said VPDF Vice-President Mr. Nguyễn Văn Thanh.

In an article compiled for readers of VPDF publications and titled “The Neoliberal Land Grab”, Mr. Thanh wrote: 

Food vs Fuel

The years 2007–2008 saw dramatic increases in world food prices, creating a global crisis and causing political and economical instability and social unrest in both poor and rich nations. “A Note on Rising Food Prices”, a World Bank policy research working paper released in July 2008 pointed out that “…large increases in biofuels production in US and EU are the main reason behind the steep rise in global food prices,” which actually pushed up food prices by 75% – in stark contrast to a US Department of Agriculture claim that prices had risen by only 2-3% as a result. Meanwhile, there is wide agreement around the world that diverting food into fuel was responsible for at least 30% of the price rises. An independent study by OECD in the same year also found a conclusion similar to the one made by the World Bank. 

After years of work and lots of money, the World Bank on 7 September 2010 decided to release its much anticipated report of 160-plus pages on the global farmland grab. This is quite different from the 2008 report.  Now, the Bank concluded that their previous study may have overestimated the contribution of biofuel production, as “the effect of biofuels on food prices has not been as large as originally thought.” 

Root causes of the food spike may be both: the increasing use of biofuels in developed countries and an increasing demand for a more varied diet across the rich nations and also in the expanding middle-class populations of Asia. These factors, coupled with falling world-food stockpiles, agricultural price subsidies in developed nations, commodity market speculation, and climate change, all contributed undoubtedly to the worldwide rise in food prices. 

Factually, biofuel production has increased in recent years. Certain commodities like maize, sugar cane, cassava or vegetable oil, can be used either as food, or to make biofuels. For example, in the United States since 2006, land that was formerly used to grow other crops is now used to grow maize for biofuel, and a larger share of maize is destined to ethanol production, reaching 25% in 2007. Since converting the entire grain harvest of the US would only produce 16% of its auto fuel needs, some experts believe that placing energy markets in competition with food markets for scarce arable land will inevitably result in higher food prices. To prevent that, a lot of R&D efforts are currently being put into the production of second-generation biofuels from non-food crops, crop residues and waste with the hope of combining farming for food and fuel. 

Biofuels from crops not only jeopardize food production; they are highly unsustainable, requiring huge inputs of fertilizers and pesticides as well as water, depleting soil fertility, accelerating soil erosion and generating a great deal of polluting wastes. A realistic energy accounting shows that all biofuels except one require more energy input in fossil fuels than the energy in the biofuel product. In other words, they have net negative energy returns and hence result in more CO2 emissions than just using the fossil fuels. The only exception is ethanol from sugarcane in Brazil, with a positive energy return of 128 percent, though it is still unsustainable in other respects.

As food supplies tighten and biofuels are in great demand, food vs fuel is the dilemma regarding the risk of diverting farmland for biofuels production from food supply on a global scale. Africa has become the “new frontier” for global food and biofuel production. For more than a decade now, the World Bank, USAID and other international agencies and foreign donors have been laying the foundations for this rebirth of the new colonialism of 1960 .

 

Corporate farming for the rich

In the past three years, foreign governments and investment companies have been buying or leasing vast tracts of farmland in Africa and elsewhere for producing biofuels or food for their own use. Government policies promoting biofuels are based on the mistaken belief that fuels made from plants are “carbon neutral”, in that burning them would not increase greenhouse gases. The European Union is aiming for 10 percent of its transport to run on biofuels by 2020. George W. Bush, for his part, proposed to cure the US' “addiction to oil” by increasing the federal budget 22 percent for research into clean fuel technologies including biofuels as substitutes for oil to power the country's cars. The hope is to replace more than 70 percent of oil imports from ‘unstable parts of the world’ – the Middle East – by 2025.

Meanwhile, the United Nations Food and Agriculture Organization (FAO) helpfully identified immense areas of “spare land” in developing countries that could be used for planting “bio-energy” crops to be turned into biofuels. The World Bank report on the 2008 commodities price hike includes a diagram entitled “The stock of unused but potentially arable land is enormous”, with more than 700 million hectares of “unused” land in sub-Saharan Africa, and more than 800 million hectares in Latin America and the Caribbean.

International agribusinesses, investment banks, hedge funds, commodity traders, sovereign wealth funds, pension funds, foundations and individuals have been snapping up some of the world's cheapest land, in the Sudan, Kenya, Nigeria, Tanzania, Malawi, Ethiopia, the Congo, Zambia, Uganda, Madagascar, Zimbabwe, Mali, Sierra Leone, Ghana and elsewhere. Ethiopia alone has approved 815 foreign-financed agricultural projects since 2007. Any land investor who cannot buy is leased for about US$1 per year per hectare (!). In many cases, according to John Vidal reports in UK's The Guardian, the contracts have led to evictions, civil unrest and complaints of “land grabbing”.

Foreign companies are depriving people of the land they have exploited and used for centuries. There is no consultation with the indigenous population. The deals are done secretly. The Ethiopian government denied that the deals were causing hunger, claiming that the land deals were attracting hundreds of millions of dollars of foreign investment and tens of thousands of jobs. A spokesman said that Ethiopia has 74 million hectares of fertile land, only 15 percent of which is currently in use. Of the remainder, only 3 to 4 percent is offered to foreign investors. So that is good business!

Saudi Arabia and other Mid-East emirates, Qatar, Kuwait and Abu Dhabi, are thought to be the biggest buyers of African land. In 2008, Saudi Arabia, one of the Middle East's largest wheat-growers, announced it was to reduce domestic cereal production by 12 percent a year to conserve water. The government earmarked US$5 billion to provide loans at preferential rates to Saudi companies to invest in countries with strong agricultural potentials.

Saudi Arabia is also leasing land from other countries such as Pakistan, already water-stressed and water-depleted. The neoliberal idea of effectiveness is for individual landowners to open the door to large-scale corporate farming. Big landowners who are now renting out their land to small farmers will throw them out and put it up to the highest foreign bidder.

Increasing hunger and landlessness

The Asian Peasant Coalition (APC), with 15 million members in 26 peasant organizations and six other supporting non-government organizations from Bangladesh, India, Malaysia, Nepal, the Philippines, Sri Lanka and Pakistan, launched an Asia-wide protest against the global land grab in July 2009. It noted that “state terrorism” and a widespread land grab in poor Asian countries took place at the height of the financial crisis. The APC represents farmers, landless peasants, dalits, forest people, indigenous people, agricultural workers, herders, pastoralists, and the women and youth across these sectors.

Approximately 365 million people in Asia derive their livelihoods from land, but, landlessness in Asia is worsening at an alarming rate over the past decade, owing to “the greater degree of integration of Asian countries with the global market, and increasing demands for land by big corporate interests”. Landlessness among Asian peasants is very high – 49.6 percent in Bangladesh, 22 percent in India, 10 percent in Nepal and almost 75 percent in Pakistan and the Philippines – and the trend is growing, according to Danilo Ramos, APC Secretary General.

Influence of the ideology of economic neoliberalism

The legacy of old colonialism is in basic conflict with traditional land systems. Australian aborigines were not recognized as citizens of their own country until 1967, and as its first inhabitants only in 1993. At independence many African countries were self-sufficient in food and exporters of food (Walden Bello). That situation has dramatically changed. The policies of Structural Adjustment Programmes (SAPs) dictated by the IMF and WB during the 1980s and 1990s in 90 countries helped to destroy African agriculture through the imposition of conditionalities as the price for receiving IMF and WB assistance and to service debt. 

This global agribusiness land seizure destroys jobs, rural livelihoods and the environment. Millions of indigenous people and farmers are being dispossessed. The results are conflict, more urban slums, rising poverty, a corporate stranglehold on food, dislocation, social inequity and hunger. So it is vital to reflect on the causes of the land-grab.

First, the land-grab is being driven by the ideology of free market, with its deep-seated dog-eat-dog ethic. As John Maynard Keynes once observed, capitalism rests on the belief that if everyone is nasty to everyone else, then a healthy economy will be the result. This ideology is in fundamental conflict with the cooperative patterns of food-growing and complex customary land rights characterizing traditional agriculture.

Second, neoliberal economics treats such commons as air, water, natural resources and land as commodities to be enclosed and traded. Institutions such as the International Monetary Fund and the World Bank favour the commodification and marketization of land, finding customary tenure systems hard to understand, let alone recognize and support. By definition, they must be inefficient. This is a totally different paradigm from traditional land systems, which are governed by custom, by overlapping rights, and by deep cultural and spiritual attachments of people to the land which nourish all their children, beasts, birds, fish, and all men.

Third, the legacy of colonialism, where “virgin land” was conquered, mapped, distributed among immigrants, registered and enclosed, is in basic conflict with traditional land systems. 

Currently, African governments such as that of Ethiopia and the Sudan are using the argument of seeking foreign direct investment as the reason why they have invited rich countries to purchase land in their countries. Even before this unprecedented “land grab”, farmers in Africa had been forced to grow crops that the market demanded if they were to make a living. They often got into debt to buy or hire machinery, acquired credit to purchase seeds, fertilizers, or abandoned farming altogether in order to migrate to urban areas in search of an alternative means of living. 

The win-win language of Western agri-businesses conceals the fact that, as Raj Patel points out, “as lands have fallen before the banks, repossessed and repurchased, suicide rates for farmers across the world have soared”. Whilst records of suicides amongst African farmers are unknown, according to P. Sainath, between 1997 and 2007, the official number of Indian farmers who committed suicide reached 182,936. He writes, “Those who have taken their lives were deep in debt – peasant households in debt doubled in the first decade of the neoliberal ‘economic reforms’.” Meanwhile, it is ironic that whilst Indian farmers commit suicide, the Indian government is seeking to purchase land for growing food in Ethiopia and the Sudan. 

Land grab encouraged by governments and the IFI

More than 100 cases of land grab have been compiled by the Barcelona-based international not-for-profit organization GRAIN (Genetic Resources Action International). “Land grabbers” are driven by different agendas, but they eventually converge.

The first is food security. A number of countries that rely on food imports see outsourcing food production in foreign land as a long-term strategy to feed their own people cost-effectively, instead of having to pay the high prices in world markets. Saudi Arabia, Japan, China, India, Korea, Libya and Egypt fall into this category. Foreign governments are buying up farmland in countries like the Sudan, Cambodia and the Philippines that still depend on food aid delivered by the UN World Food Programme.

The scramble for biofuels by developed nations was a second major factor in precipitating the 2007-2008 food crisis and the ensuing “land grab”. The US imported 19.5 million barrels of petroleum a day in 2008, which made up 57 percent of its total consumption. In 2008, 9 billion gallons of ethanol were produced from 33 percent of the corn harvest subsidized at US$6–7 billion, to supply just 1.3 percent of the country's oil consumption. It takes 1,700 gallons of water to produce one gallon of ethanol. The US is a major exporter of corn, accounting for over 60 percent of the world's export . Even if all the 341 million tons of corn in the US were to be converted into ethanol, it would provide only 5 percent of the total oil consumption in the country, leaving nothing for livestock feed or food.

Globally, the scramble for ethanol and biodiesel resulted in accelerated deforestation (with large CO2 emissions) as well as forced evictions and rushed land grab.

The ultimate goal is financial return. Investment funds managers have been turning to food and agricultural commodities and derivatives; and coincidentally, agricultural land and produce are also seen as good sources of revenue. As the world population expands, the demand for arable land should soar. At least that's what George Soros, Lord Rothschild, and other investors believe.  For Georges Soros, investment in agriculture is “one of the best investments in our time”.   

Where these tracks come together is that in both cases it is the private sector that will be in control. In the drive for food security, governments take the lead through a public policy agenda. But while public officials negotiate and make the deals for land contracts, the private sector is explicitly expected – and encouraged – to take over. It is effectively a “new colonialism” by transnational corporations, a neoliberal colonialism.

China, for example, has been remarkably self-sufficient in food, though at the cost of using so much fertilizer that its soils are ruined, and its waterways putrid with pollution. The Chinese government has been gradually outsourcing its food production well before the global food crisis. Some 30 agricultural cooperation deals have been sealed to give Chinese firms access to foreign farmland in exchange for Chinese technologies, training and infrastructure development funds, not only in Asia but also all over Africa. Most of China's offshore farming is dedicated to rice, soybean and maize, along with biofuel crops like sugarcane, cassava or sorghum. “From Kazakhstan to Queensland, and from Mozambique to the Philippines, a steady and familiar process is under way, with Chinese companies leasing or buying up land, setting up large farms, flying in farmers, scientists and extension workers, and getting down to the work of crop production,” GRAIN reports.

The Gulf States – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – have insufficient water and fertile soil to produce food. But they have plenty of oil and money. Given that water is already in short supply, the Saudi government decided to stop growing wheat, their main staple, by 2016, and instead to grow it elsewhere and ship it back.

The United Arab Emirates, similarly, under the aegis of the Gulf Cooperation Council (GCC), banded together with Bahrain and the other Gulf nations to formulate a collective strategy of outsourcing food production, particularly to Islamic countries, where they will supply capital and oil contracts in exchange for guarantees that their corporations will have access to farmland and export the produce back home. The most heavily targeted states are the Sudan and Pakistan, followed by a number of South-east Asian countries – Myanmar, Cambodia, Indonesia, Laos, the Philippines, Thailand and Vietnam – as well as Turkey, Kazakhstan, Uganda, the Ukraine, Georgia, Brazil and so on.

Japanese firms already own 12 million hectares of farmland abroad for the production of food and fodder crops, some of which in China, where in 2006, Asahi, Itochu and Sumitomo began leasing hundreds of hectares of farmland for organic food production for the Chinese and Korean markets. In 2007, Asahi expanded to develop the first Japanese dairy farm in China. A year later, in September 2008, Asahi took advantage of the melamine milk tragedy to launch its first liquid milk product at a 50 percent mark-up. Japanese firms have also targeted Brazil. In late 2007, Mitsui bought 100,000 hectares of Brazilian farmland for soybean production.

The finance industry is getting in on the act. Throughout 2008, an army of investment houses, private equity funds, hedge funds and the like have been targeting farmlands throughout the world, with the World Bank and the European Bank for Reconstruction and Development “greasing the way for this investment flow” and “persuading” governments to change land ownership laws to ease the transactions. As a result, land prices have started to climb.

Deutsche Bank and Goldman Sachs have taken control of China's livestock industry. New York-based BlackRock Inc, one of the world's largest money managers with nearly US$1.5 trillion on its books, set up a US$200 million agricultural hedge fund, of which US$30 million will be used to acquire farmland around the world. Morgan Stanley, which nearly joined the queue for a US Treasury Department bail-out, bought 40,000 hectares of farmland in the Ukraine, where Renaissance Capital, a Russian investment house has acquired rights to 300,000 hectares. Meanwhile, Black Earth Farming, a Swedish investment group, acquired control of 331,000 hectares of farmland in the black earth region of Russia, where Alpcot-Agro, another Swedish investment firm, also bought rights to 128,000 hectares. Landkom, the British investment group, bought 100,000 hectares of agricultural land in the Ukraine and vows to expand to 350,000 hectares by 2011. All these land acquisitions are for producing grains, oils, meat and dairy for those in the world market who can pay. 

Meanwhile, world food crisis worsens

Not surprisingly, the food crisis worsens for the poor. At the end of 2009, over one billion of the world's population are critically hungry, with 24,000 dying of hunger each day, more than half of them children. The United Nations Food Programme faces a budget shortfall of US$4.1 billion. Food prices have remained high with the economic downturn and extreme weather patterns affecting production.

Many commentators rightly blame the deregulated financial speculation in the global agricultural commodities markets for precipitating the 2007-2008 world food crisis, and the ensuing land grab has almost certainly made it worse.

Some past civilizations collapsed on account of shrinking food supplies, and we may well meet the same fate from “our failure to deal with the environmental trends that are undermining world food economy – most importantly failing water tables, eroding soils, and rising temperatures”, according to veteran world watcher Lester Brown.

Actually, our agriculture and food system has been showing signs of collapse , with world grain yields failing to meet demand most years since 2000, and reserves reached their lowest in 50 years. Growth in yields has slowed despite record amounts of fertilizers being applied. In the major croplands of the world – China, India and US, which contain half the world's population – industrial farming practices have severely depleted underground water, dried out rivers and lakes, eroded topsoil, and decimated wild life with fertilizer and pesticide run-offs. Most alarming is the recent disappearance of bees and other pollinators. 

At the same time, world oil production has passed its peak with the peak of natural gas not far behind. Conventional industrial agriculture is heavily dependent on fossil fuels (especially in the manufacture of N fertilizers), as well as water.

Climate change will slash productivity

In addition, climate change has emerged as a major threat to agricultural productivity. Direct field monitoring showed that crop yields fell 10 percent for each degree Celsius rise in night-time temperature during the growing season.  The International Food Policy Research Institute (IFPRI) predicts that wheat yields in developing countries will drop 30 percent by 2050, while irrigated rice yields will drop 15 percent. Climate change may hit the developing world harder, but the developed world is not immune. Increasing frequencies of drought, flood, and storm associated with climate change will devastate crops and livestock, and spells of extreme heat are also damaging as plants will start to deteriorate at about 32 degrees Celsius. The yields of corn, soybean and cotton could fall by 30 to 46 percent under the slowest warming scenario, or 63 to 82 percent under the fastest warming scenario.

So what to do? 

Biofuels from crops not only jeopardize food production; they are highly unsustainable, requiring huge inputs of fertilizers and pesticides as well as water, depleting soil fertility, accelerating soil erosion and generating a great deal of polluting wastes. A realistic energy accounting shows that all biofuels except one require more energy input in fossil fuels than the energy in the biofuel product. In other words, they have net negative energy returns and hence result in more CO2 emissions than just using the fossil fuels.The energy returns for the major biofuels are: corn ethanol -46 percent, switchgrass -68 percent; soybean biodiesel -63 percent; and rapeseed biodiesel -58 percent. Even palm oil produced in Thailand has a -8 percent net energy return. The only exception is ethanol from sugarcane in Brazil, with a positive energy return of 128 percent [27], though it is still unsustainable in other respects.

Action needs to be taken on both the demand and supply sides. On the supply side, global civil society, land researchers and international institutions such as the UN (through the Food and Agriculture Organization) should research and expose these disastrous land thefts by rapacious agribusiness and governments. They should also expose how the land thefts are taking place and, thus, how they can be repelled. Active research needs to be undertaken into how nations can secure their land for local farmers and indigenous peoples, not profit-hungry corporations, though it may be that some companies can be sensitive partners. 

On the demand side, we need to ask rich importer countries to practically and sustainably provide more of its own food, so as to reduce global demand and the profits to be made from the land-grab, thus lessening the burden on the rural communities of the South.

What we need to underpin these initiatives is a new associative approach to the management of farm land; one in which multiple interests in, and uses of, land can be encouraged, such that food chains can be shortened and the land tilled according to the principles of long-term s 43d8 ustainable production. At its core, this is about breaking down the producer/consumer dichotomy and replacing it with mutuality, creating, in the words of agricultural pioneer Trauger Groh, a culture of community supporting agriculture and agriculture supporting community.

Alarming figures 

According to a plan designed by the Vietnamese Ministry of Natural Resources and Environment (MoNRE), farmland will increase in size from 8,793,783 ha in 2000 to 9,363,063 ha in 2010. A survey made by the Ministry of Agricultural and Rural Development (MARD) warned that the population will increase around 1.3 percent while areas under cultivation will decrease by 1 percent. Average farmland per capita has fallen from 0.113 ha in 2000 to only 0.108 in 2010, as compared to the world average of 0.23 ha.

Rice prices have increased by 68 percent sinceearly 2008 and 33 countries are facing social instability because of soaring food and energy prices. The food crisis is attributable to many factors, such as the high cost of energy and fertilizer, increased consumption and a new factor, the growing development of biofuel.

A non negligible factor

Mentioning the global food crisis, the Asian Development Bank (ADB) blamed some Asian countries for reducing farmland to build golf courses. In 2006, the Chinese Government even had to include golf course projects on a restricted list. China has reported over 200 courses right now, as compared to 17,179 courses in USA, 2,075 in Canada, 1,418 in EU and 32,000 in world total. But actually, in the case of China (as in Vietnam), players are limited to entrepreneurs, public servants, foreigners and aficionados.

Many investors jumped into the market in search of cheap land, which they then developed into expensive villas and golf clubs in the hope of huge returns. In reality, only 30 percent of the land planned for golf courses has been used in building that purpose. The remainder has been used in developing villas, hotels, orchads … “Vietnam is threatening its agricultural land,” the Minister of Planning and Investment told the National Assembly on June 12, and underlined that one-third of the projects (50/166) shoud be cancelled.

Statistics released by the MoNRE showed that from 2001 to 2007, over 500.000 ha of farmland was lost. On average, more than 73.000 ha of farmland (80 percent under rice) are turned into industrial parks and urban residential areas every year. Findings of a MARD survey on land repossessed in 16 major provinces and cities found that about 89 percent of the recovered area was fertile and high-yielding land. 

On April 18, the Prime Minister issued Decision No. 391/QD-Ttg on review and inspection of the management and use of land in the five years 2006-2010 with focus on farmland in general and rice fields in particular. According to the Decision, in localities which have different categories of land, specialized wet rice paddies will not be used for non-agricultural production. According to MARD, from 3.8 to 4 million ha of land will be kept for rice production. 

However, without strict guidelines from the government and a democratic participation from the grassroots, to make good use of agriculture land is no easy task. A culture of community supporting agriculture and agriculture supporting community is what we need for the 70 percent of the population living and working in the rural areas of our country. “If left unchecked, this global land grab could spell the end of small-scale farming and rural livelihoods”, this warning from the GRAIN deserves serious consideration./.