Transcript Large Land acquisition phenomenon, drivers and

Development for the Wealthy
Nidhi Tandon
What is now
What is coming
What could be
Colonization, Decolonization, and Capitalism
Anthony Hall
Investors of all stripes and shades are
rushing to stake their money on “the
only source of genuine wealth and
well-being for humanity” in the form
of the finite properties of this small
planet.
A Bishop, a Chief and a land deal: converting
the Church to an agro-fuel Inc. Macha, Zambia
The Brethren in Christ
Church (mission in Macha
was founded in 1906 n
the fertile farming district
of Choma.. It claims 1215
hectares appropriated
from the indigenous
Tonga people in early
1900’s. The land was
given to the church by the
British South African
company in 1920.
Guinea
USD45m., 100,362 hectares
FARM LANDS OF GUINEA,
INC.
“unlocking the riches of an
African Agricultural Treasure
Trove”
Backed by Govt. Ministry of
Agriculture
Soya beans and maize
Ethiopia
USD2.2m,. 2.9million ha
Ethiopian
EthiopianInvestment
InvestmentAgency
Agencyrecords
show
that
1,100
foreign
records
show
that
1,100investors
foreign
have
registered
since 2005since
, 72 foreign
investors
have registered
investments
haveinvestments
requested over
2005 , 72 foreign
have
5,000
ha. over 5,000 ha.
requested
Over
Over2.9
2.9million
millionha
haof
ofland
landin
intotal
total
was
wasrequested
requestedwith
withaatotal
totalplanned
capital
expenditure
of 36.5 million
planned
capital expenditure
of birr
/36.5
US$million
2.2 million.
birr / US$ 2.2 million.
Mozambique
USD 174m,. 7 million ha
2010 CEPAGRI report puts total area of
land to be made available for large-scale
agricultural activities at just under
7,000,000 hectares (19.4% of total
arable land) of which 54% was
considered suitable for large-scale
agriculture and agro-fuel and the
remaining 46% would be allocated for
other purposes including forestry and
grazing.
Sector
Area
(hectares)
USD Planned Projected
Investment Employment
Agro-fuels
89,012
19,464,516
9,542
Forestry
312,916
144,458,572
20,000
Food
31,856
10,318,719
3,012
433,784.98 174,241,807
32,554
Mozambique
* - Emvest Limpopo
* - EmVest Biofuels
* - Deep Water Produce
Swaziland
* - EI Ranch
South Africa
Zimbabwe
* - EmVest Nuts
*- Ariston Holdings
* - EmVest Evergreen
* - EmVest Foods
* - SA Farming Operations
Zambia
* - EmVest Livingstone
“In South Africa and Sub Saharan Africa the cost
of agriland, arable, good agriland that we're
buying is 1/7th of the price of similar land in
Argentina, Brazil and America. That alone is an
arbitrage opportunity. We could be moronic
and not grow anything and we think we will
make money over the next decade.”
 Susan Payne, CEO, Emergent Asset
Management Limited
NATIONAL FRAMEWORKS
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Government’s Letter of
Intent to the IMF
Bilateral Investment
Agreements (BITs)
National Development
Plans
Poverty Reduction
Strategy Papers (PRSPs)
INTERNATIONAL FRAMEWORKS
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Multilateral Investment
Guarantee Agency (MIGA)
World Trade Organisation
(WTO)
Carbon Finance (CDM)
International Chamber of
Commerce (arbitration)
Lome and Cotonou trade
agreements
EU Economic Partnership
Agreements (EPA)
“The economic growth potential of large scale investments is skewed
due to an inadequate regulatory framework governing FDI in the
sector ... The regulative framework does not provide the opportunity to
protect and stimulate the domestic economy. No obligation to use
inputs from the domestic economy combined with tax relief on imports
of inputs can lead to an enclave industry with few links to the domestic
economy. Mozambique has chosen to offer a mild tax regime, with
significant reduction on the corporate tax. At the moment there are no
restrictions on exports. This can lead to situations where goods that
are in demand in the domestic economy are instead exported. There
are also no restrictions on profit repatriation; therefore there is no
guarantee that profits are reinvested in the domestic economy”.
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exemption of customs duties and VAT on capital goods as
well as the respective spares and accessories
reductions in profit tax (80% until 2015 and 50% from 2016 to
2025);
numerous deductions on taxable income;
profits repatriation authorized for a period of 25 years
repatriation of the invested equity if foreign direct
investment Authorization is not renewed;
easy and cheap access to water including the Limpopo river
(with no restrictions) and the HICEP main canal for which
XXX has to pay not for the volume of water used but for the
surface irrigated, at 250 Meticais/ha/year ($8.09/ ha/year.)
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Legal protection on property and rights,
including industrial property rights;
No restriction on borrowing and payment of
interest abroad;
Unrestricted transfer of dividends (payments to
shareholders) abroad;
Arbitration according to international rules for
the resolutions of disputes on investments (such
as those framed by the International Chamber of
Commerce);
Internationally endorsed services on issues
related to investment risk insurance.
Legality vs. Legitimacy
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ILO International Labour Standards
International Standards on Agro-fuel production
FAO Good Agricultural Practices (GAP) protocol
Extractive Industries Transparency Initiative (EITI)
Committee on World Food Security (CFS) land discussions
in Rome in October 2010 submitted draft guidelines while
calling for a moratorium on all large-scale land
investments.
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Zambia Land Alliance – Civil Society
Communiqué
Community level arbitration of land disputes
Pre-investment Environmental and Social
assessments
Land Grab x3
Foreign investment in land ventures
capitalize at least three times:
purchase or leasing of land at
exceedingly competitive rates
 sale of a valuable in-demand
commodity on the international
market
 extraction of a large proportion of
the profit directly to investors.
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Cheap labour, cheap land, infrastructure being
developed
“Uncrowded space” of opportunities, including
gold, minerals, water, agriculture
Important trading partner for the West
Relatively insulated from global credit crisis as was
never an integral part of credit cycle
Land mass greater than USA, China and Europe
combined
China
USA
European Union (27)
India
Argentina
Japan
Total surface land
9,598,094
9,629,091
4,328,039
3,287,263
2,780,400
377,873
30,000,760
Africa (54)
30,312,382
Timberland investments have outperformed
any other asset class regarding return and
volatility over the past 60 years. They
performed better than real estate, bonds or
gold… which makes timber investments a
perfect inflation hedge … trees will just
continue to grow in volume and value
exponentially. Klaus Biskup, Director of Sales
& Marketing, EccoWood European CEO Journal
April 2011
Sergey Gudoshnikov, economist at the
British International Sugar Organization,
sees the interest of many companies
explained by the yields which are in
southern Africa “considerably higher
than Brazilian yields”, making it “one
of the lowest-cost production regions
in the world.”
What is coming
What are the implications of
Zambezi River Basin:
“A pre-investment document”
USD 50
million/year
crops& Agric
USD 80
million/year
fisheries
USD 2.5
million/year
medicinal and
natural products
Humphrey Elekani, Governance Director, ActionAid
Zambia, Nov. 11th 2010
“Customary land has no ($) value; it cannot be
bought or sold as it belongs to the people.”
In other words, customary land is priceless, no
economic value can accurately compensate for its
common public value.
He adds, “If we put a dollar value on customary
land, we are headed for chaos”.
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P: The perceived value of land and nature is
altered from how it can sustain life for
generations to come to what it can ‘earn’ on
the market today and in the short run.
Q: When more and more of the planet’s land
assets are valued using a $ metric on a global
market, in other words, when nature is
commoditized, what is at stake?
R: An entire value system is at stake.
P: We assume that land tenure security;
equitable access to land; and the protection of
natural resources; are central tenets to
maintaining the assets of the silent majority in
rural areas
 Q: Why is it, that in the face of the economic
exploitation of land and labour in the land-grab
context, we focus on the legalities of land rights
as a solution for the rural poor?
 R: The legal system is a tool of the rich and
powerful – it delivers verdicts, not justice
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P: Foisting individual land rights on the
poorest or least powerful members of
community does not automatically secure
them power, wealth or income stability.
Q: Why is it we assume ownership prevents
landlessness? How do we protect the
vulnerable?
R: Community rights are being eroded
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The EU-25 has agreed on a binding target to
reach a 20% share of renewable energy source in
total energy consumption by 2020 (currently
~7%)
2/3 of the renewable energy is expected to come
from biomass
A Poyry/McKinsey study forecasts a 200 million
m3/year wood deficit in Europe by 2020
If the target is enforced, we can expect upward
pressure on global wood/biomass prices
UK’s GHG Emission reduction targets among the
most aggressive in EU
SIX European countries (Italy, Norway,
Germany, Denmark, the United Kingdom,
and France) are among the largest investors
in FDI stock in agriculture and in agri-fuel,
their role cannot be ignored and deserves
closer examination.
FOOD CROPS
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African Palm
Coconut
Groundnut
Maize
Sweet Sorghum
Sugarcane
Sunflower
Sesame
Soya
AGRO-FUEL AND OTHER
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Jatropha
Wood Chips
Biochar
Oil & Grain
crops
Agrofuel
crops
Timber
FUEL
Replacing petroleum
lifts the lid on the emerging
global grab on plants, lands,
ecosystems, and traditional
cultures.
The New Biomassters Synthetic Biology and the Next
Assault on Biodiversity and
Livelihoods is a critique of what
OECD countries are calling 'the
new bioeconomy.' Concerted
attempts are already underway
to shift industrial production
feedstocks from fossil fuels to
the 230 billion tones of
'biomass' (living stuff) that the
Earth produces every year -not
just for liquid fuels but also for
production of power,
chemicals, plastics and more.
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Exotic timber
plantations, can use up
to 2.5 times more water
than native forests.
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Ecologists have
discovered that timber
plantations in Hawaii use
more than twice the
amount of water to grow
as native forests use.
The International Food Policy Research
Institute (IFPRI) predicts that depending on
rates of agro-fuel expansion, by 2020, the
global price of corn will increase by 26% to
72% and the price of oilseeds between 18%
and 44%. With every 1% rise in the cost of
food, 16 million people are made food
insecure. How will farmers be empowered to
protect their food crops from being sold and
used as fuel crops?
… one power station operator in the
UK estimated they would need 2.4
million tonnes of biomass (wood) per
year which would require at least one
million hectares of tree plantation to
feed this one power station alone...
What could be
Land is a sovereign issue
To sovereign or to unite
Sovereignty
is a people
issue
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Indigenous People’s Movements
International Treaty on Plant Genetic Resources
Alternative farming frameworks (organic, IFOAM)
Convention on Bio-Diversity
People’s environmental movements around the world
Use of all forms of media to support activism
Making sure women have a voice
In the land grab context, there is a difference
between the ‘legality’ and the ‘legitimacy’ of
the agreement, often they are legal in the
strict sense of the word, but their
legitimacy as far as rural people are
concerned is highly questionable
 By engaging more people on a
broader range of questions – such as
How will rural women be empowered to understand the
value of their land, to articulate their priorities and needs,
and to claim these rights in a way that does not jeopardise
the future of their families?
 How can rural women be supported in developing
negotiation skills around the current and future value of
farmland, water and natural resources?
 How can we ensure that women do not fall into a trap of
the idea of land ownership in a context where even those
(men) who have secure rights are not able to hold on to
their tenure!
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WASHINGTON POST May 22 2011
World Rainforest Movement - Monthly Bulletin - Issue 166 - June 2011
“When the missionaries came to Africa they had
the Bible and we had the land.
They said 'Let us pray.' We closed our eyes.
When we opened them we had the Bible and
they had the land.”
The simple truth about access to resources is
that unless we are able to address the politics
of access, dealing with structural issues of
injustice, we are left with hollow quick fix
solutions bereft of ethical or ideological
values. In the pursuit of ‘efficiency at all
costs”; we put women in a very vulnerable
position because theses costs are simply too
high for them to bear.
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“Plumpinut” vs
healthy locallygrown foods
Confidence about
the future of our
water and natural
assets
Being answerable to
future generations!
And just as this interest has grown, so has a counter
movement to question the validity, viability and potential
violations that unregulated and intense investment
brings, led by farmer associations, civil society
organisations and environmental groups. As national
elites jockey to become shareholders in their own country’s
natural wealth, the interests of the masses who cannot
afford to become shareholders are simply swept away.
Faced with this enormous tidal wave, it becomes an urgent
imperative to work through as many avenues as possible
to hold all shareholders, public and private alike,
accountable to the socio-economic and environmental
development impacts of their investments.