FOOD: Spotlight on land grab deals

Published on IRIN humanitarian news and analysis, by jk/cb, November 14, 2012.

JOHANNESBURG, 14 November 2012 (IRIN) – “Land-grab” deals involving multinationals in developing countries have often been seen as detrimental to food security and the livelihoods of millions of small farmers, but a new study puts such deals into the context of agricultural investments more generally.  

“Yes, these deals are important, but in most countries domestic investors acquire more land than foreigners,” said Pascal Liu, one of the editors of a new report by the Food and Agriculture Organization (FAO) which looks at various forms of foreign investments in agriculture including land deals.

Liu says most agriculture-related foreign direct investment (FDI) flows into food processing (such as – fruit juices, sauces and tinned food), distribution and retailing rather than into land acquisition.

The FAO researchers, in collaboration with the International Institute for Environment and Development (IIED), examined foreign investments in nine countries (Ghana, Mali, Senegal, Uganda, Tanzania and Zambia Thailand, Cambodia and Brazil) selected on the basis of the availability of data and the ability of local institutions to provide additional research … //

… IRIN summarizes some of the findings from the study and other reports:

1. Lack of data prevents the establishment of trends in FDI, including those relating to the acquisition of land for agriculture. The number of countries for which data are available varies from year to year. Looking at agriculture alone, comparable data are available for 44 countries, so you never have the complete picture.

2. Media reports on “land-grab” deals are not entirely reliable, as most countries do not have accurate records. In Mozambique, for example, media sources indicated that more than 10 million hectares were acquired between 2008 and 2010, whereas a national inventory for 2004-2009 calculated a figure closer to 2.7 million hectares … //

… 14. Governments are increasingly supporting investments by their private sectors in foreign land deals, rather than investing directly in agricultural land in developing countries. “This results partly from a strategy of risk reduction, including financial risks and risks to their reputation in the wake of negative media coverage. This support can take the form of public-private partnerships whereby the government provides or guarantees loans and provides tax rebates, technical assistance or other means of assistance,” said the FAO study.

15. South African companies lead African investment on the continent. Globally, most investors are focusing their agriculture-related FDI in Africa – in Nigeria (with UK and Netherlands being the top two investors), South Africa (Switzerland and Netherlands), Ghana (UK and USA), Egypt (Saudi Arabia and Switzerland) and Angola (USA and UK).

16. In Asia – Japan leads investment, followed by China. Global investors tend to favour China, India, Vietnam and Indonesia.

17. FDI encourages the diversification of crops. In Senegal FDI contributed positively to the production of some high quality fresh fruits, according to the FAO study.
(full long text).

Comments are closed.