Michael Kugelman

Michael Kugelman

Michael Kugelman is the Senior Program Associate for South and Southeast Asia at the Woodrow Wilson International Center for Scholars in Washington, DC. His work largely focuses on water, energy, food, land, and national security issues, particularly in, but not limited to, South Asia. His recent publications included the coedited volumes Empty Bellies, Broken Dreams: Food Insecurity and the Future of Pakistan (Vanguard Press, 2011) and Land Grab? The Race for the World’s Farmland (Wilson Center, 2009).

Wealthy Investors vs. the Land, Livelihoods, and Locals

Whenever we hear about stories like these, stories of such immense exploitation and predation, there is a tendency to think: How can this happen? How can obscenely rich investors run roughshod over the land, livelihoods, and rights of...

Michael Kugelman, author of Global Farms Race, shares his thoughts on the recent acquisition of Ecuadorian Amazon by the Chinese oil firm Andes Petroleum Ecuador.

Whenever we hear about stories like these, stories of such immense exploitation and predation, there is a tendency to think: How can this happen? How can obscenely rich investors run roughshod over the land, livelihoods, and rights of impoverished local communities, and with utterly no consequences?

It's a question I used to ask myself quite often as I began researching my book, The Global Farms Race, a study of how wealthy nations and investors acquire mammoth-sized expanses of precious agricultural land in some of the world's most food insecure countries.

The answer is sobering: It happens because it can.

Ecuadorian Amazon facing the Andes. Photo Credit: Dallas Krentzel Via Flickr
Ecuadorian Amazon facing the Andes. Photo Credit: Dallas Krentzel via Flickr

The power asymmetries at play help explain why. The investors are rich, powerful, and accountable to no one (except, in the case of private financiers, to their stockholders). They are aided and abetted in their investments by often-corrupt host governments that pay little mind to the needs of their constituencies. And then there are the affected communities, which are invariably poor and lacking in support networks—in other words, deeply vulnerable to the predations of powerful outsiders.

It is these power asymmetries that explain how a group of Chinese investors can waltz into Ecuador, stake out territory in dangerously close proximity to endangered tribes, and lay claim to an amount of pristine jungle the size of Los Angeles. These power asymmetries also explain how Indian corporate interests can grow food for export on farmland in conflict-riven Ethiopia previously cultivated for teff, a critical food crop. Or how agricultural investors from the United States, Europe, and East Asia have displaced hundreds, if not thousands, of local communities across Africa and Southeast Asia for their large agribusiness projects. I've discovered dozens of these cases, and they are all heartbreaking.

This isn't to say that some deals aren't stopped. Back in 2009, an unsuccessful attempt by the Daewoo corporation to acquire 1.3 million hectares of farmland in Madagascar set off widespread national protests that ultimately led to the deal being scuppered. Typically, though, these deals—despite the immense amount of land involved—remain secret, and the word often doesn't get out.

What my research revealed is that these deals tend to be cancelled, or at least modified in a way that reduces their harmful effects, only when host governments step up to say that enough is enough. The problem is that, like Ecuador, these governments tend to have a strong interest in seeing these deals through—because these schemes bring much-needed economic assistance—even though this assistance rarely percolates down to the masses.

Still, there have been some success stories over time. Argentina and Brazil have passed laws to limit foreign land ownership. Cambodia and Laos have even declared freezes on new land concessions.

What this all means is that international media coverage and shaming campaigns, as well as international civil society efforts to produce "codes of conduct" for international investors, are helpful—but ultimately limited in what they can accomplish. For actionable and meaningful results, we need to look to those that sign off on these deals to start with—the host governments.

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Hudson Valley World View: In Race for Farmland, Locals Lose

Imagine the Town of Poughkeepsie — all 31 square miles of it. Now imagine that this entire area is acquired by foreign land investors. And now imagine that the equivalent of 3,742 Poughkeepsies has been obtained by these financiers over the last...
Imagine the Town of Poughkeepsie — all 31 square miles of it. Now imagine that this entire area is acquired by foreign land investors. And now imagine that the equivalent of 3,742 Poughkeepsies has been obtained by these financiers over the last decade. This may sound far-fetched. And yet, over the last 10 years, capital-rich and land-hungry nations, along with private investors, have acquired about 116,000 square miles of farmland (roughly 30 million hectares), mostly in sub-Saharan Africa and Southeast Asia. This story begins in 2007-08, when the world was swept up in a global food crisis. Numerous Persian Gulf and East Asian countries were unable to grow sufficient food at home to meet national demand. They were also fed up with the volatilities of international commodities markets. So they decided to grow food overseas. Separately, agribusiness firms and land speculators recognized the high value of arable land in a world where growing populations were taxing natural resources. They began snapping up land as well. These overseas land acquisitions are not inherently bad. The developing world — where the majority of land has been obtained — is in dire need of agricultural investment. And most foreign investors have made tantalizing promises to local communities: improved agricultural technologies, increased employment and higher crop yields. The problem is that in most cases, these promises haven’t been kept. Investors often use their own laborers and rarely share their inputs with locals. Furthermore, about 60 percent of the land in these deals is cultivated for export. As a result, some of the world’s most impoverished and food-insecure communities can only watch as outsiders swoop in, lay claim to precious arable land, farm it, and then whisk away the output. Worse, some speculators, instead of farming land, simply sit on it as its value rises. This is all facilitated by weak land tenure. Investors easily seize territory often used — though not formally owned — by indigenous communities. And the latter get little support from their governments, which are often corrupt, undemocratic and happy to accommodate deep-pocketed investors. Host governments dangle generous incentives to prospective investors, including, in volatile Pakistan’s case, a private security force to protect land assets. The consequences are deeply troubling. Researchers have documented cases of displacement, as well as environmental damage. In some cases, violence has broken out when local communities offer resistance — not a surprise, given that these deals occur in some of the world’s most conflict-riven nations, such as Ethiopia and Sudan. Unrest has so far been localized, though in one country — Madagascar — opposition to a land deal galvanized the masses and helped trigger their government’s ouster. Asking foreign financiers to end their predatory and exploitative investment practices would be a fool’s errand. They are simply too powerful to be swayed (though a recently ratified U.N. “code of conduct” governing more responsible investment can’t hurt). Instead, conditions should be put in place that protect against such practices. Host governments should establish and enforce laws governing foreign land investment, and provide legal assistance and protection to vulnerable communities. NGOs should help people obtain land titles. And influential donors — such as the World Bank, whose private lending arm finances many of these deals — should condition their aid on beneficial outcomes. Examples include hiring specific numbers of local laborers and selling specific percentages of yields in local markets. Global trend lines suggest this problem isn’t going away. Populations continue to grow, land and food supplies continue to shrink and commodities markets remain volatile. The race for the world’s farmland has no finish line in sight. We need to ensure its fairness, and help protect its spectators. Originally posted in the Poughkeepsie Journal

The Global Farms Race Discussion

What are land grabs, and what do they mean for the environment, local livelihoods, and food security? Listen below as co-editor Michael Kugelman discusses his book...

What are land grabs, and what do they mean for the environment, local livelihoods, and food security? Listen below as co-editor Michael Kugelman discusses his book The Global Farms Race and its impacts.

 

 

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