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Features

Land-grabbing in Africa: The why and the how

Nikolaj Nielsen

2009-10-07, Issue 451

http://pambazuka.org/en/category/features/59291

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Specific home and host-country policies, cheap land, the lack of a legal infrastructure, investment opportunities and the promise of quick profit returns are the driving factors behind land acquisitions throughout Africa, argues Nikolaj Nielsen in this week's Pambazuka News.

Two years ago singer–songwriter and activist Bob Geldof was so excited about biofuels he even became the special advisor to biomass company Helius. At the time, Geldof visited jatropha curcas plantations in Swaziland run by UK biodiesel producer D1 Oils. Geldof was quoted as saying that these plantations had 'life changing potential'. Since then, D1 Oils dropped out and Mr Geldof silenced. HIV/AIDS victims in Swaziland were 'targeted to plant jatropha and promised easy money', said Adrian Bebb at Friends of the Earth International (FoE) in a telephone interview with Pambazuka News. But jatropha was a cause supported by rhetoric and a science that neglected the socio-cultural impact. The perennial plant would produce inedible oil and any financial gain would depend entirely on the biodiesel plant operator, which pulled out. The crops planted in marginal lands were also unable to produce any sufficient yields. Those who worked the land were left empty-handed and considerably worse off.

Biofuels were then and continue to be in many respects hyped as an environmentally friendly alternative to oil-based transport fuels. The United States, the EU and other OECD (Organisation for Economic Co-operation and Development) countries initiated legislation to encourage its production. They also set mandatory targets. The EU set a binding target to replace 20 per cent of fossil fuels with biomass, hydro, wind and solar by 2020. Each member state is also required to replace 10 per cent of its transport fuel as well. It is this 10 per cent target that is a cause for concern and is partly conditioned on the commercial viability of second-generation biofuels. Second-generation biofuels are mainly made from lignocellulosic materials like wood and straw. First-generation biofuels are mainly ethanol from grains, sugar crops and biodiesel from oil seeds or from recycled cooking oil.[1]

Sweden, for instance, has set a 40 per cent target for 2020 and a new government bill requires its transport sector to be fossil-free by 2030. While such initiatives may be applauded, Sweden is as a result investing heavily in research and influencing EU-wide policy that provides financial incentives for companies to buy up land in Africa for biofuel production. Two Swedish biofuel companies, SweTree Technologies and SEKAB, currently sit on the industry-dominated board of the European Biofuels Technology Platform (EBTP). The EBTP have privileged access to European Commission decision-making and help shape research direction and spending of public money.[2] SweTree Technologies, for instance, is researching second-generation biofuels by genetically modifying trees for fuel conversion. SweTree’s director, Björn Hägglun, also happens to be the chief director of WWF (World Wildlife Fund) Sweden, only one of only two NGOs that has openly admitted its involvement with the EBTP. Second-generation biofuels are now mandated to produce twice as much energy compared to first-generation biofuels in meeting the 10 per cent EU-wide transport target.

Exporting biofuels or feedstocks from developing countries to the EU will push up food prices and hurt poor consumers. Studies and countless media reports link biofuel plantations with a number of destructive conditions that directly undermine their potential, not to mention ethics. For instance, the EU has a contractual obligation to import sugar from ACP (African, Caribbean and Pacific) states entering into an EPA (economic partnership agreement). But there are no clear legal mandates to determine the difference between 'environmentally sound' and 'environmentally damaging' imports.[3]

As such, European companies are scrambling for a slice of African soil. The financial incentives along with home policies drive the business fury and yet, according to a report by the European Parliament, only a tiny percentage of biofuel is imported from Africa because of high tariffs. The United Nations FAO (Food and Agricultural Organisation) along with the IIED (International Institute for Environment and Development) and the IFAD (International Fund for Agricultural Development) conducted a study that looks at the impact of land acquisition in Mali, Ghana, Sudan, Ethiopia and Madagascar. Since 2004, close to 2.5 million (ha) hectares of land – excluding land allocations below 1,000 ha – have been appropriated by foreign acquisition in these countries. Two-thirds of 3 billion people survive on around 500 million parcels of land less than two hectares in size. Most of the land claimed by foreign acquisition was already in use by local people. Women, who are the main food producers, were more easily driven out due to discrimination. In Tanzania, a sugarcane plantation for biofuel in the Wami basin displaced 1,000 farmers. The results are disheartening as people end up in over-populated urban centres and their outlying slums.

The promise of easy money in an environment without strong regulation and cheap land is a motivating factor for companies and the hosting government. Weak legislation means mechanisms that are supposed to protect local rights, interest, and welfare is disregarded.[4] Rich arable land used for commercial biofuel production has serious implications for a people who already spend 70 per cent of their incomes on food. Food and energy security concerns are supposed to be key drivers behind government-backed investments. However, the key driver behind these deals is investment opportunities. This is compounded by a global demand for non-food agricultural commodities and biofuels, which promise high rates of return. The buy-outs and speculation of African land is also driving up its value while policy measures in home and host countries encourage the scramble.[5] The incentives stemming from EU legislation on biofuels, for example, mean the acquisition of land for biofuel production will continue.

'A lot of little start-up companies with financing are going to Africa. It’s like the conventional oil industry. It starts off small and if it works, they will be bought out by the large companies,' Mr Bebb told Pambazuka News. Mr Bebb suspects most of these start-ups will fail within in two years.

In Ethiopia, arable land and wooded areas are being cleared without taking into consideration the loss to biodiversity. Environmental impact assessments are not required or are performed in an ad hoc manner. Access to rural land by investors is guaranteed by Article 4 of Ethiopia’s Rural Land Administration and Land Use Proclamation (456/2005) so long as priority is supposedly given to peasant farmers and pastoralists. Biomass fuels account for almost 94 per cent of total energy consumption while the remaining percentage comes from imported petroleum fuels. As a net importer of petroleum fuels, the country is particularly vulnerable to price hikes and the government is seeking to offset the risks by investing in alternative fuel sources.[6] Energy security is the official line. But at what cost? Two years ago there were around 50 registered developers for biodiesel and another six for bioethanol production in Ethiopia. Four of the bioethanol producers are government operated and sugar is their source crop.

The Ethiopian Biofuels Development and Utilization Strategy is encouraging large scale production of biofuels without conducting proper land inventories. For instance, Flora Eco Power Ethiopia, operated by a German private company, purchased 200,000 ha to plant castor seeds for biodiesel production. By 2008, they had cultivated 15,000 ha in several Woredas in East and West Hareghe Zones. They cleared 10,000 ha of virgin forestland. One hectare of trees can offset up to 200 tonnes of carbon a year, according to a 40-year study by the University of Leeds on African forests. The company also bought communal grazing land that runs into the Babile Elephant Sanctuary. Flora Eco Power then conducted a disingenuous Environmental Assessment Impact and proposed to leave behind at least 10 trees on every hectare of felled virgin forests.[7] For Ethiopia to replace its consumption of 29,000 barrels of oil a day by renewable energies it will need to cultivate 24 per cent of its entire surface. The highest yields are invariably located on arable lands or forests where rainfall is abundant. Indeed, over 80 per cent of all land allocated for biofuel production is located in arable lands, forest lands and woodlands. As such, the price and demand for any remaining arable land increases.

'Land acquisition is a political issue', Alexander Muller, the assistant director at FAO, told a special committee at the European Parliament. 'Deals seek access to resources, not to the market. Most of the investors are private but the government is also involved', he said. Mr Muller then explained that it was in the interest of everyone to support small farmers and that local communities must be involved to defend vulnerable groups. These individuals are asked to produce legal documents to protect them from foreign acquisition. Traditional land rights are not considered binding so people are forced off the land.

Thousands of kilometres away in the capitals of Europe, ministers are slapping taxes on locally produced first-generation biofuels. In Germany, for instance, biofuels were entirely tax-free until 2006. A year later German biodiesel production capacity peaked and then bottomed out in 2008. Nearly 70 per cent of Germany-based biofuel companies went bankrupt. But the knock-on effect is that Germany is now importing more biofuel from abroad. As an added bonus, second-generation fuels will continue to enjoy complete tax exoneration until 2015.[8]

Over the weekend in New York, the EU Commissioner for Development Karl de Gucht delivered a speech and proposed a monitoring mechanism under the conjoined efforts of the Global Partnership for Agriculture and Food Security and a reformed Food Security Committee hosted by the FAO. But it’s also back home in Europe where policies influenced by corporate interests should be fully disclosed. The backroom dealings and the lobbyists that roam the corridors of the European Parliament and the European Commission do their best to stay out of the public eye.

It is indeed a tragic enterprise where worthy conservation and sustainable energy initiatives become high-jacked by political and corporate interests. Strong regulation of EU companies seeking their fortunes in Africa is missing and as a result, reckless investments and the promise of quick returns are felling virgin forests and driving indigenous peoples off their land. When and if these companies fail, they will pull out and leave behind them a wasteland where elephants in the Babile Elephant Sanctuary once roamed, where entire families surviving on less than 2 hectares attempt to carve out a desperate living in an overcrowded slum, where carbon absorbing trees lie smouldering. In the meantime, Europe will meet its 10 per cent target and some, like Sweden, will even excel. Then the highbrow discourse will follow along with the press releases that praise Europe’s commitments to meeting its objectives. But in the far-flung places of the world’s least developed countries, the machinery will grind out the devastation if serious attempts at oversight, at regulation, at responsible government and sincere sustainable efforts are not met.

The right to an adequate standard of living, including food and housing, is inscribed in the Universal Declaration of Human Rights. This includes the right to property and indeed land. The acquisition of land and other natural resources must not be a free-for-all. International laws are there to ensure that these conditions are met. The Rio Declaration on Environment and Development affirms that the right to development must respect the developmental and environmental needs of present and future generations. States on both sides of the divide must promote responsible governance to protect the rights of individuals and the precious natural resources of water and land. So long as priority is given to investors, then sincere human and environmental development policies will fall by the wayside.



BROUGHT TO YOU BY PAMBAZUKA NEWS

* Nikolaj Nielsen is a freelance journalist based in Brussels. His work has appeared in openDemocracy, Reuters AlertNet and other media. He writes the human rights blog at the Foreign Policy Association.
* Please send comments to editor@pambazuka.org or comment online at Pambazuka News.

NOTES
[1] UNCTD (UN Conference on Trade and Development) (2007) Report of the Ad hoc expert group meeting on biofuels: trade and development implications of present and emerging technologies. Available at: http://r0.unctad.org/ghg/events/biofuels/UNCTAD_DITC_MISC_2007_8.pdf
[2] Corporate Europe Observatory. 'Agrofuels and the EU Research Budget: Public Funding for Private Interests.' May 27, 2009.
[3] European Parliament. Directorate-General for External Policies. 'Production and use of biofuels in developing countries.' May, 2009.
[4] 'Land grab or development opportunity? Agricultural investment and international land deals in Africa.' Lorenzo Cotula, Sonja Vermeulen, Rebeca Leonard and James Keeley. Iied, FAO, IFAD. 2009.
[5] ibid
[6] 'Rapid Assessment of Biofuels Development Status in Ethiopia And Proceedings of the National Workshop on Environmental Impact Assessment and Biofuels.' Editors Teresa Anderson and Million Belay. MELCA Mahiber, September 2008
[7] 'Rapid Assessment of Biofuels Development Status in Ethiopia And Proceedings of the National Workshop on Environmental Impact Assessment and Biofuels.' Editors Teresa Anderson and Million Belay. MELCA Mahiber, September 2008
[8] 'Update on implementation agendas 2009. A review of key biofuel producing countries.' A report to IEA Bioenergy Task 39. Editors: Mabee, W., Neeft, J. Van Keulen, B. March 2009.


Readers' Comments

Let your voice be heard. Comment on this article.

Yes, the scrabble for Africa's arable land by powerful multinationals can be presented in glossy terms but we know it will never solve the food crisis in the communities from which the land is taken because it is "someone else's initiative". The players involved in the transaction come in as unequal parties. The Foreign multinationals are driven by profit, not the food security of the natives. In fact in will increase the food insecurity in already marginalised communities as arable land is given up for "cash crop." This is a repeat of what happened in the colonial Africa that supplied raw materials for Europe's industries.

Tamali Amongi Makerere University

In so many valid ways this article is an excellent description of events that have taken place in SE Asia, India, Africa, South America and upon a number of island states in the Indian Ocean, Caribbean and Pacific regions. However; while many companies have dashed out to secure land for development they have done so without due regard for the need to model development opportunity in such a way as to deliver food and fuel security as well as improved land ownership rights, water management, training, and encourage FDI into the alternative energy as well as other bio resource/processing industries. Strategic thinking has eluded the vast majority in favour of attempting to bolster the companies capital base (land) and size of project opportunity. No one has investigated the absolute requirement for synergy with multiple united nation goals nor have any (seemingly) given any regard for the costs associated with professional agricultural extension of any plant species (for oil or biomass) upon semi arid rain fed peripheral land locations where opportunity exists within strategic regions. For several years now KBC has continued to research, investigate and draw conclusions that can steadily work towards the delivery of a new and exciting industry platform that will enhance the lives of rural agricultural communities of developing regions, deliver improved land use opportunity, promote enhanced water management, support both food and fuel security, add value to tourism and conservation ideology and most of all stimulate quality FDI inflows with associated technology transfers, skills development and life style opportunity lifting many above subsistence. While one can appreciate the fears expressed by the article we should keep in mind that the developing regions have to attract long term substantial investment into agricultural extension. This can only be achieved with reference to the sale of CHP and advanced liquid fuels for both domestic markets and export. It costs no less than $4000 USD per Ha of development. Under any circumstance lands set aside in semi arid rain fed regions are the toughest most expensive to cultivate successfully. These newly cultivated or developed land areas can belong to the work forces that are engaged within the development program. Land has to be prepared, planted and maintained with a clear route to market for any harvest values. All of these services must be established around the community. If not project simply fail. The notion of exporting oil to the EU for value adding to bio fuels is nonsense. Value adding must be carried out at strategic locations were complex bio refinery operations have been designed and commissioned to deliver end products to market at the refinery gate. Any export must be for immediate utility and purchased as such. Products for local market development must include CHP and Green Diesel and/or petrol replacements. If we were considering a 300,000Ha use of semi arid rain fed land with a complete agriculture to industry profile then we must consider that this regionally strategic development would cost no less than $3 Billion dollars to establish over about 16 years producing over $4 Billion of revenue to the region with desirable ROI to investors. KBC-JCL has identified over 40 strategic locations where such regional development can take place sustainably in the sub tropical regions of Africa, India, Asia, South America and several island states. In all cases ownership of the land rights may remain with indigenous communities. Ownership of the Bio refineries is a feature of the Investment Protection Policies of all the countries investigated. KBC-JCL will continue to refine the business model further over the coming months in order to arrive at a model that has long term credibility for all parties. While many are concerned with the reduction of GHG emissions we must focus on the reality. The developing regions need to produce their own energy from Biomass as and where possible. This will require massive long term investment. To end: While one may value many of the comments made by alarmed commentators and/or NGO groups we must also state that subsistence farming or deriving minimal utility from land is not an option. There has to be sustained first class investment into agriculture in the developing regions the demand for alternative energy and advanced liquid fuels driven by the greater need to off-set the burning of fossil derived fuels provides the leverage upon reinvesting logic to secure socio-economic and environmental advances.

Dr Clive Richardson KBC-JCL




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