Wish You Weren't Here:
The Devastating Effects of the New Colonialists
A new breed of colonialism is rampaging across the world, with rich nations
buying up the natural resources of developing countries that can ill afford
to sell. Some staggering deals have already been done, says Paul Vallely,
but angry locals are now trying to stop the landgrabs
By Paul Vallely
August 10, 2009 "The Independent" -- Thousand of protesters took to the
streets, waving the orange flags of the opposition. Before long, looting
began. Buildings were set on fire. But the turning point came when a crowd
moved from the main square towards the presidential palace. Amid the
confusion, someone panicked and gave the order to the troops guarding the
palace to open fire. Scores died. The leaders of the army decided they'd had
enough and stormed the palace, causing the president to flee.
A typical African coup d'état? Not quite. Certainly there were allegations
of corruption in high places. The president had bought a private jet - from
a member of the Disney family - for his own personal use. He was accused of
unnecessary extravagance, of mismanaging public funds and confusing the
interests of the state with his own. But something else had whipped up the
protesters in Antananarivo, the capital of Madagascar, earlier this year,
when the government of Marc Ravalomanana was overthrown in the former French
colony.
The urban poor were angry at the price of food, which had been high since
the massive rise in global prices of wheat and rice the year before.
Food-price rises hit the poor worse than the rest of us because they spend
up to two-thirds of their income on food. But what whipped them into action
was news of a deal the government had recently signed with a giant Korean
multinational, Daewoo, leasing 1.3 million hectares of farmland - an area
almost half the size of Belgium and about half of all arable land on the
island - to the foreign company for 99 years. Daewoo had announced plans to
grow maize and palm oil there - and send all the harvests back to South
Korea.
Terms of the deal had not originally been made public. But then the news
leaked, via the Financial Times in London, that the firm had paid nothing
for the lease. Daewoo had promised to improve the island's infrastructure in
support of its investment. "We will provide jobs for them by farming it,
which is good for Madagascar," a Daewoo spokesman said. But the direct cash
benefit to Madagascar would be zero - in a country which can barely produce
enough food to feed itself: nearly half of the island's children under the
age of five are malnourished.
The government of President Ravalomanana became the first in the world to be
toppled because of what the United Nations' Food and Agriculture
Organization recently described as "landgrabbing". The Daewoo deal is only
one of more than 100 land deals which have, over the past 12 months, seen
massive tracts of cultivable farmland across the globe bought up by wealthy
countries and international corporations. The phenomenon is accelerating at
an alarming rate, with an area half the size of Europe's farmland targeted
in just the past six months.
To understand the impotent fury that provokes in impoverished farmers,
consider the reaction if something similar happened in Britain. The
international development policy consultant Mark Weston has a vivid image to
help: "Imagine if China, following a brief negotiation with a British
government desperate for foreign cash after the collapse of the economy,
bought up the whole of Wales, replaced most of its inhabitants with Chinese
workers, turned the entire country into an enormous rice field, and sent all
the rice produced there for the next 99 years back to China," he suggests.
"Imagine that neither the evicted Welsh nor the rest of the British public
knew what they were getting in return for this, having to content themselves
with vague promises that the new landlords would upgrade a few ports and
roads and create jobs for local people.
"Then, imagine that, after a few years - and bearing in mind that recession
and the plummeting pound have already made it difficult for Britain to buy
food from abroad - an oil-price spike or an environmental disaster in one of
the world's big grain-producing nations drives global food prices sharply
upwards, and beyond the reach of many Britons. While the Chinese next door
in Wales continue sending rice back to China, the starving British look
helplessly on, ruing the day their government sold off half their arable
land. Some of them plot the violent recapture of the Welsh valleys."
Change the place names to Africa and the scenario is much less far-fetched.
It is happening already, which is why many, including Jacques Diouf, head of
the United Nations Food and Agriculture Organization, has warned that the
world may be slipping into a "neo-colonial" system. Even that great champion
of the free market, the FT, described the Daewoo deal as "rapacious" and
warned it is but the most "brazen example of a wider phenomenon" as rich
nations seek to buy up the natural resources of poor countries.
The extent of this new colonialism is vast. The buyers are wealthy countries
that are unable to grow their own food. The Gulf states are at the forefront
of new investments. Saudi Arabia, Bahrain, Kuwait, Oman, Qatar - which
between them control nearly 45 per cent of the world's oil - are snapping up
agricultural land in fertile countries such as Brazil, Russia, Kazakhstan,
Ukraine and Egypt. But they are ' also targeting the world's poorest
countries, such as Ethiopia, Cameroon, Uganda, Zambia and Cambodia.
The amounts of land involved are staggering. South Korean companies have
bought 690,000 hectares in Sudan, where at least six other countries are
known to have secured large land-holdings - and where food supplies for the
local population are among the least secure anywhere in the world. The
Saudis are negotiating 500,000 hectares in Tanzania. Firms from the United
Arab Emirates have landed 324,000 hectares in Pakistan.
But they are not the only buyers. Countries with large populations such as
China, South Korea and even India are acquiring swathes of African farmland
to produce food for export. The Indian government has lent money to 80
companies to buy 350,000 hectares in Africa and recently lowered the tariffs
under which Ethiopian agri-products can enter India. One of the biggest
holdings of agriculture land in the world is a Bangalore-based company,
Karuturi Global, which has recently bought huge areas in Ethiopia and Kenya.
Food is not all the new colonialists are after. About a fifth of the massive
new deals are for land on which to grow biofuels. British, US and German
companies with names such as Flora Ecopower have bought land in Tanzania and
Ethiopia. The country whose name became a byword for famine at the time of
the Live Aid concerts has had more than 50 investors sign deals or register
an interest in the cultivation of biofuel crops on its soil.
From Ethiopia's point of view, the economic logic is straightforward: the
country is an importer of oil and is therefore vulnerable to price
fluctuations on the world market; if it can produce biofuels it will lessen
that dependency. But at a cost. To keep the foreign biofuel investors happy,
the government doesn't force any companies to carry out environmental impact
assessments. Local activists claim that 75 per cent of the land allocated to
foreign biofuel firms are covered in forests that will be cut down.
More worrying is the plan by a Norwegian biofuel company to create "the
largest jatropha plantation in the world" by deforesting large tracts of
land in northern Ghana. Jatropha, which can be cultivated in poor soil,
produces oily seeds that can produce biodiesel. A local activist, Bakari
Nyari, of the African Biodiversity Network, has accused the company of
"using methods that hark back to the darkest days of colonialism... by
deceiving an illiterate chief to sign away 38,000 hectares with his
thumbprint". The company claims the scheme will bring jobs, but the
extensive deforestation which would result would deprive local people of
their traditional income from gathering forest products such as shea nuts.
The failed Daewoo land deal in Madagascar may have been intended to be the
biggest landgrab planned to date, but it is far from the only one.
So what is the cause of this sudden explosion of land acquisition across the
globe? It has its roots in the food crisis of 2007/8, when prices of rice,
wheat and other cereals skyrocketed across the world, triggering riots from
Haiti to Senegal. The price spike also led food-growing countries to slap
export tariffs on staple crops to minimise the amounts that left their
countries. That tightened the supply still further, meaning food prices were
driven up more by a situation of policy-created scarcity than by supply and
demand.
This situation also made many rich countries that are reliant on massive
food imports question one of the fundamentals of the global economy: the
idea that every country should concentrate on its best products and then
trade. Suddenly having unimaginable quantities of cash from oil was not
enough to guarantee you all the food you needed. The oil sheikhs of the Gulf
states found that food imports had doubled in cost over less than five
years. In the future it might get even worse. You could no longer rely on
regional and global markets, they concluded. The rush to grab land began.
The logic was clear. The highly populous South Korea is the world's
fourth-biggest importer of maize; the Madagascar deal would replace about
half of Korea's maize imports, a Daewoo spokesman boasted. The Gulf states
were equally open: control of foreign farmland would not only secure food
supplies, it would eliminate the cut taken by middlemen and reduce its
food-import bills by more than 20 per cent.
And the benefits could only increase. The fundamental conditions that had
led to the global food crisis were unchanged, and might easily worsen. The
UN predicts that by 2050, the world population will have grown by 50 per
cent. Growing the food to feed nine billion people will place enormous
pressure on the Earth, eroding soils, denuding forests and draining rivers.
Climate change will make all that worse. Oil prices will continue to rise,
and with them the cost of fertiliser and tractor fuel. Demand for biofuels
would further cut land available for food crops. The 2007/8 price crunch
might just be a foretaste of something worse. The times of plenty are
already over. Next, there might not be enough food to go round, even for
those with lots of money.
We have not really noticed it here, because the UK, like the US, still
instinctively seems to place unlimited faith in the ability of the market to
provide. But other countries have begun to devise a long-term strategic
response.
The clearest public sign of that came in June when, just before the meeting
of world leaders at the G8 in Italy, the Japanese prime minister, Taro Aso,
asked: "Is the current food crisis just another market vagary?" He replied
to his own question: "Evidence suggests not; we are undergoing a transition
to a new equilibrium, reflecting a new economic, climatic, demographic and
ecological reality."
But the market is having its say, too: the cost of land is rising. Prices
have jumped 16 per cent in Brazil, 31 per cent in Poland, and 15 per cent in
the midwestern United States. Veteran speculators such as George Soros, Jim
Rogers and Lord Jacob Rothschild are snapping up farmland right now.
Rogers - who between 1970 and 1980 increased the value of his equities
portfolio by 4,200 per cent, and who made another fortune predicting the
commodities rally in 1999 - last month said: "I'm convinced that farmland is
going to be one of the best investments of our time."
After the disastrous involvement of financial speculators in housing - the
global recession had its roots in the development of mortgage-based
derivatives - it is hardly reassuring that the same financial whiz-kids are
turning to land as a new source of profit. "The food and financial crises
combined," says the Philippines-based food lobby group Grain, "have turned
agricultural land into a new strategic asset."
In one way, that ought to be a good thing for poor countries. Land is what
they have in plenty. And the agricultural sector in developing countries is
in urgent need of capital. Aid once provided this, but the share of that
which goes to farming fell from $20bn a year in the 1980s to just $5bn a
year in 2007, according to Oxfam. A mere 5 per cent of aid now goes to
rural-development agriculture, even though in the poorest places such as
Africa, more than 70 per cent of the population rely on farming for their
income. Decades of low investment have meant stagnating production and
productivity.
Landgrab deals ought, at least, to rectify that by injecting much-needed
investment into agriculture in these countries. That ought to bring new jobs
and a steady income to the rural poor. It should bring new technology and
know-how to local farmers. It should develop rural infrastructure, such as
roads and grain-storage systems, to the good of the entire community. It
should build new schools and health posts that will benefit all. It should
give African governments much-needed taxes to invest in developing their
countries. All of which should lessen dependency of food aid. Landgrabs
should produce a win-win situation.
That was the kind of big billing which the government in Kenya gave to the
deal it did recently with the state of Qatar. Just one per cent of land in
the Arab emirate is cultivable, so Qatar is heavily reliant on food imports.
The deal was that Qatar would get 40,000 hectares of land to grow food in
return for building a $2.5bn deep-water port at Lamu in Kenya.
Unfortunately, even as the negotiations with Qatar proceeded, the Kenyan
government was forced to announce a state of emergency because a third of
Kenya's population of 34 million was facing food shortages. President Mwai
Kibaki declared the situation a national disaster and appealed for
international food relief. Hungry voters often fail to understand the
long-term attractions of the economic advantages which could be brought to
Kenya by creating what would be only its second deep-water port and opening
up a third of the country - in the arid and neglected north-east - to
development. This is a country, after all, where people kill for land, as
was shown after the botched elections in 2007.
If the world food crisis tightens, as everyone seems to predict, it will
become ever more unpalatable politically for a government such as Kenya's to
countenance the massive export of food at a time of shortage. That is even
more true in a continent as politically unstable as Africa.
There is, in any case, already fierce opposition from many to projects like
this. The land offered to Qatar is in the Tana River delta. It is fertile
with abundant fresh water but it is home to 150,000 farming and pastoralist
families who regard the land as communal and graze 60,000 cattle there. They
have threatened armed resistance. They are supported by opposition
activists, who object less to the land being developed, but want it to grow
food for hungry Kenyans. Then there are the environmentalists, who say a
pristine ecosystem of mangrove swamps, savannah and forests will be
destroyed.
The environment is another major worry in many of the great rash of land
deals. Growing food crops in huge plantations is dominated by large-scale
intensive monoculture production using large quantities of fertiliser and
pesticides. The results are spectacular at first - which might satisfy the
yen of the outside investors for short-term profit. But it risks damaging
the long-term sustainability of tropical soils unsuited for intensive
cultivation and can do serious damage to the local water table. It reduces
the diversity of plants, animals and insect life and threatens the long-term
fertility of the land through soil erosion, waterlogging or increased
salinity. The intensive use of agrochemicals could lead to water-quality
problems, and irrigating the land-holdings of foreign investors may take
water away from other users.
Water is a key issue. In a sense, these aren't landgrabs so much as water
grabs, suggests the chief executive of Nestlé, Peter Brabeck-Letmathe. With
the land comes the right to draw the water beneath it, which could be the
most valuable part of the deal. "Water withdrawals for agriculture continue
to increase rapidly. In some of the most fertile regions of the world
(America, southern Europe, northern India, north-eastern China), over-use of
water, mainly for agriculture, is leading to sinking water tables.
Groundwater is being withdrawn, no longer as a buffer over the year, but in
a structural way, mainly because water is seen as a free good."
The world needs to begin to think more urgently about water. The average
person in the world uses between 3,000 and 6,000 litres a day. Barely a
tenth of that is used for hygiene or manufacturing. The rest is used in
farming. And the world's lifestyle, with factors such as increased
meat-eating, is exacerbating the problem. Meat requires 10 times more water
per calorie than plants. Biofuels are one of the most thirsty products on
the planet; it takes up to 9,100 litres of water to grow the soya for one
litre of biodiesel, and up to 4,000 litres for the corn to be transformed
into bioethanol. "Under present conditions, and with the way water is being
managed," the Nestlé chief says, "we will run out of water long before we
run out of fuel".
Indeed, in many places underground, aquifers are falling; in some regions by
several metres a year. Rivers are running dry due to over-use. And the worst
problems are in some of the world's most important agricultural areas. If
current trends hold, Frank Rijsberman of the International Water Management
Institute has warned, soon "we could be facing annual losses equivalent to
the entire grain crops of India and the US combined". Between them, they
produce a third of all the world's cereals.
Is there a way forward? The Washington-based International Food Policy
Research Institute believes so. It has recently produced a report containing
recommendations for a binding code of conduct to promote what Japan, the
world's largest food importer, called for at the G8 in Italy - responsible
foreign investment in agriculture in the face of the current pandemic of
landgrabs.
It wants a code "with teeth" to ensure that smallholders being displaced
from their land can negotiate mutually beneficial terms with foreign
governments and multinationals. It wants measures to enforce any agreement,
if promised jobs, wage levels or local facilities fail to materialise. It
wants transparency, and it wants legal action in their home countries
against firms that use bribes, rather than relying on prosecutions in the
Third World. It wants respect for existing land rights - not just those
which are written, but those which exist through custom and practice. It
wants compulsory sharing of benefits, so that schools and hospitals get
built and those living in areas around landgrabs get properly fed. It
suggests shorter-term leases to provide a regular income to farmers whose
land is taken away for other uses. Or, better still, it would like to see
contract farming that leaves smallholders in control of their land but under
contract to provide to the outside investor. It demands proper environmental
impact assessments. And it says foreign investors should not have a right to
export during an acute national food crisis.
No one is fooled that this will be easy. The local elites in developing
countries have a vested interest in the lucrative deals on offer. The
government in Cambodia has massively promoted landgrabbing, taking advantage
of the fact that many land titles were destroyed under the terror of the
Khmer Rouge. Mozambique has signed a $2bn deal that will involve 10,000
Chinese "settlers" on its land in return for $3m in military aid from
Beijing. The strategic considerations are clear. "Food can be a weapon in
this world," as Hong Jong-wan, a manager at Daewoo, put it.
But things are ratcheting up on the other side, too. Landgrabs are "a grave
violation of the human right to food", in the words of Constanze von Oppeln
of the big German development agency Welthungerhilfe, one of the most
prominent campaigners in the field. She speaks for many who have no voice
internationally - although they are making their presence felt well enough
in their own countries. A huge public outcry erupted in Uganda when its
government began talking to Egypt's ministry of agriculture about leasing
nearly a million hectares to Egyptian firms for the production of wheat and
maize destined for Cairo. Mozambicans have similarly resisted the settlement
of the thousands of Chinese agricultural workers on its leased lands.
Earlier this year, angry Filipinos successfully blocked a deal by the
Philippines government with China which involved an astounding 1,240,000
hectares. And last month the same activists exposed what they call a "secret
agricultural pact" between their government and Bahrain. With 80 per cent of
the 90 million population landless, the deal is "unlawful and immoral",
activists there say.
Food touches something very deep in the human psyche. Do not expect either
side to give up without a fight.
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The devastating effects of neocolonialism 
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