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Land Grabbing and Development Models

Posted in Ethiopia, Foreign Aid, Foreign Direct Investment with tags , , on November 1, 2012 by michaelkeating

Marc Dubois is an international development consultant.

Since the 2007 spike in global food prices, the international media and myriad international organizations have picked up on a new phenomenon in globalization: ‘land grabs’. ‘Land grabs’ is the highly negative term given to purchases of agriculturally productive land in developing countries by, most often, foreign multinational agricultural firms. Since 2007, LDCs have rented or sold an acerage of farmland equal to 1.14 times the size of France, usually leased at between 3 and 10 dollars per hectare per year. The most common story behind the land purchases is thus: a developed country that has declining agricultural output, such as China, or population growth set to outpace domestic food production, like India, will financially support one of its agricultural firms to purchase cheap land in a developing country in order to produce foodstuffs or biofuel for export back to the home country. This phenomenon has occurred all across the globe, but most often in Africa.
There is a fierce debate in the development community over the value and the effects of this practice. In general, the investors purchase large areas of land, bringing with them the modern tools and techniques necessary for factory farming. Large-scale farming requires developed infrastructure, such as electricity, roads, and irrigation. In theory, developing countries that allow land grabs to happen will benefit from this introduction of advanced farming techniques and a productive partner in building up rural infrastructure.
However, some stakeholders in the international community, most notably civil society organizations that support peasant groups, argue that land grabs are detrimental and should be avoided for two reasons. The first is that the agricultural investors do little to develop the regions they inhabit. Indeed, there are persistent allegations that the Ethiopian government is actually breaking down rural society by forcing its rural citizens into villagization programs that free up land for investment. The second reason fundamentally challenges the basis of agricultural development: large-scale farms are less productive than small-scale farms. This debate erupted recently in a row between the Food and Agriculture Organization of the United Nations, which has recently come out in favor of large scale farming, and civil society groups that favor small-scale agricultural development.
There is no hard answer as to which agricultural technique is better for fostering economic development. But it behooves the international community to identify several fundamental truths regarding the argument. The first is that it is important for the development community to disregard their inclination to interpret African governments as hapless victims of wealthy international agricultural firms. Most of the time, LDC governments have well-developed reasons for allowing foreign agricultural firms to purchase their land at rock-bottom rates. They are not strong-armed into allowing land grabs due to international economic pressures; they genuinely seek infrastructure and economic development from the foreign firms.
The second truth is that while the jury is out on whether large-scale farming is more productive, it is almost certainly more ecologically damaging. Fertilizers, mass deforestation, and monocropping are all associated with large-scale farming, and all are environmentally harmful. With LDCs among some of the highest countries at risk for environmental catastrophes, environmental practices cannot be neglected. In evaluating development plans, it is important to remember that economic growth is not a goal in and of itself, and must be accompanied by environmentally sustainable economic activity. Small-scale farming is more adaptive to climate change, and generally requires fewer environmentally damaging inputs.
A third and final truth is that development programs regarding agriculture require input from the communities they impact. For example, in order to determine whether large-scale farming will work, the community near the prescribed site of the farm should be consulted on a variety of issues. If, for example, they cannot expect employment at the large farm, is there a city near by with the capacity to absorb those who choose to leave? If the city is at social and economic capacity, it might be best to work on developing small-scale agricultural productivity through land ownership grants and technology transfers, that way more food is produced for the nearby city and the rural population remains employed.
Whether land grabs are useful or harmful will ultimately be decided by how and where they are applied. The development community must respond to this reality and adapt development projects to account for rising international land sales.