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From: wolda002@umn.edu
Date: Fri Aug 06 2010 - 19:59:32 EDT
World Bank warns on ‘farmland grab’
By Javier Blas in London
Published: July 27 2010 21:02 | Last updated: July 27 2010 21:02
Investors in farmland are targeting countries with weak laws, buying arable
land on the cheap and failing to deliver on promises of jobs and
investments, according to the draft of a report by the World Bank.
“Investor interest is focused on countries with weak land governance,”
the draft said. Although deals promised jobs and infrastructure,
“investors failed to follow through on their investments plans, in some
cases after inflicting serious damage on the local resource base”.
In addition, “the level of formal payments required was low”, making
speculation a key motive for purchases. “Payments for land are often
waived ... and large investors often pay lower taxes than smallholders ...
or none at all.”
The report, The Global Land Rush: Can it yield sustainable and equitable
benefits?’ is the broadest study yet of the so-called “farmland
grab”, in which countries invest in overseas land to boost their food
security, or investors – who are mostly locals – buy arable land. The
“farmland grab” trend gained notoriety after an attempt in 2008 by
South Korea’s Daewoo Logistics to secure a large chunk of land in
Madagascar for a very low price and vague promises of investment. The deal
contributed to a coup d’état in the African country.
The draft was leaked to the Financial Times by a person who said they
wanted to prevent the World Bank releasing the report in the middle of the
summer holiday period.
The Washington-based body said the report was a work in progress and
revisions were being made. “When it is released in August, we believe it
will contribute much-needed data and other information to this complex
subject.”
The World Bank advocated in its draft the launch of a Land Transparency
Initiative modelled on the Extractive Industry Transparency Initiative,
which commits governments, mainly in developing countries, to disclose
revenues from oil and mining groups to improve transparency on the deals.
Critics noted that eight years after its launch, only Liberia, Timor-Leste
and Azerbaijan, were full members of the EITI. But the draft said: “By
establishing a consistent format for reporting on land acquisition and
monitoring [the] process over time, it could provide access to information
sorely missing.”
The draft highlighted a few successes in land acquisition – mostly in
Latin America and also in Tanzania – but the overall picture it gave was
one of exploitation, warning that investors either lacked the necessary
expertise to cultivate land or were more interested in speculative gains
than in using land productively.
It stated that “rarely if ever” were efforts made to link land
investments to “countries’ broader development strategy”.
“Consultations with local communities were often weak,” it added.
“Conflicts were common, usually over land rights.”
The report said some countries allocated land to investors that was within
the boundaries of local communities’ farmland.
Data on farmland deals is sketchy, mostly relying on local media reports.
But the World Bank’s draft report said official data for a few countries
showed large transfers, including 3.9m hectares in Sudan and 1.2m in
Ethiopia between 2004 and 2009. The demand for farmland is unlikely to slow
down due to higher commodity demand and prices.
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