/ 30 May 2009

Made in China, in Africa

Yolandi Groenewald reports on the concerns regarding land acquisition by foreigners in Africa

Poor people in Africa risk losing the few resources they have, as Asian nations — principally mainland China — buy up vast tracts of land on the continent at rock-bottom prices.

Other nations involved in what some have termed the new ‘land grab of the 21st century” and ‘neo-colonialism” include South Korea and India.

In Mozambique, Madagascar and Malawi locals have raised concerns and in some cases even resisted moves by Asian nations to buy land.

A new study by the International Institute for Environment and Development (IIED), commissioned by the UN Food and Agriculture Organisation and the International Fund for Agricultural Development (Ifad), has rung alarm bells about the ease with which African nations part with their land, to the detriment of the poor.

The IIED studied cases in Ethiopia, Ghana, Mali, Madagascar and Sudan, finding that land-based investment has been rising in the past five years, totalling about 2.5-million hectares.

Media reports have estimated that this year a million Chinese farm labourers will be working in Africa, a trend that has upset some Africans. Mozambicans, for example, have resisted the settlement of thousands of Chinese agricultural workers on leased land.

Interestingly, the report found that there are no known examples of single Chinese land acquisitions in Africa in excess of 50 000ha where deals have been concluded and projects implemented.

The report said that China’s ‘friendship farms” in various African countries are formally owned by a Chinese parastatal organisation, but are mostly medium-scale, usually below 1 000ha in extent.

The study concedes that Asian investment in Africa could bring opportunities such as guaranteed outlets, employment, infrastructural and higher agricultural output. However, it warns that the land deals could cause great harm if local people are excluded from decisions about the allocation of land and their land rights are not protected.

In Madagascar negotiations with the South Korean Daewoo Logistics Corporation to lease 1.3-million hectares for the cultivation of maize and oil palms fuelled the political instability that led to the overthrow of the government earlier this year.

In Malawi locals protested when the government pledged their land to Chinese investors to construct a cotton-processing plant, but backed off when they were taken to neighbouring Zambia to see the job-creating effects of Chinese investment.

Zambia has embraced Asian investment. Chinese farms are said to produce a quarter of the eggs sold in Lusaka.

At the moment private deals are far more common than government-to-government deals, but governments are using a range of tools to support private deals indirectly.

For the most part Asian countries and companies are buying up African land to help them bolster food and energy security at home, the report found.

China wants to grow palm oil for biofuel on 2.8-million hectares in the Democratic Republic of Congo, which would be the world’s largest palm oil plantation. It has also proposed growing biofuels on two million hectares in Zambia.

Sudan, the study found, is another African country that has embraced Asian investment. Investors come bearing gifts of seeds, better jobs, schools, clinics and road infrastructure.

The report found that many countries do not have adequate mechanisms to protect local rights and shore up local interests, livelihoods and welfare.

Lack of transparency and checks and balances in contract negotiations could promote deals that are not necessarily in the best interest of local people.

One of the authors of the report, Sonja Vermeulen, said: ‘In many countries provision for including local people in decision-making is usually absent or poorly implemented and this increases the risk of them losing access to land and other resources.”

But she and co-author Lorenzo Cotula cautioned that land acquisitions vary greatly and that blanket statements about land-grabbing are highly misleading.

‘Ultimately, whether international land deals seize opportunities and mitigate risks depends on their terms and conditions — the business models used, how costs and bene­fits are shared and who decides on these issues and how,” said Cotula. ‘This calls for proper regulation, skilful negotiation and public oversight.”

‘I would avoid the blanket term ‘land-grabbing’,” said Rodney Cooke, Ifad’s director of technical advisory division. ‘Done the right way, these deals can bring benefits for all parties and be a tool for development.”

Alexander Mueller, who heads the FAO’s environment and natural resources department, said the land investments should be seen in the context of global environment and food-security challenges.

‘This new trend is a result of the recent food crisis and volatility of food prices, among other factors,” Mueller said. ‘Developing guidelines for land governance, or a code to regulate international investments, might be useful to improve decision-making and negotiations.”