Handbook of Land and Water Grabs in Africa: Foreign direct investment and food and water security 2012022401, 9781857436693, 9780203110942, 9781136276736

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Handbook of Land and Water Grabs in Africa

Africa as the last ‘frontier’ of global agriculture has suffered from under-investment in the past 60 years. Today, it is widely perceived as the region where the outcome of global food and water security in the 21st century will be decided. The global rush for land and water has alarmed decision-makers, the media and global civil society in the past five years: the term ‘land grabs’ was coined as a term to describe a new phase of foreign direct investment in African farmland, joined more recently by the term ‘water grabs’ to draw attention to the water resources embedded in food (virtual water). Water is the key resource in the investment processes involved in land acquisition. However, most of the analyses to date remain speculative, without taking the issue of water resources into consideration. This volume seeks to shed light on a global phenomenon by analysing past land acquisition processes, current developments, investors, and the impact on water resources, livelihoods and society in Africa. It is the most comprehensive publication to date on the new enclosure of Africa’s farmland. The editors have assembled a group of expert contributors to examine the issues involved, offering a comprehensive overview of the topic to academics, students, professionals and those with an interest in land and water resources in Africa. The Handbook is divided into five sections: Part Part Part Part Part

I: II: III: IV: V:

The history of land grabs and the contradictions of development Investors’ profiles and current investment trends The political economy of land and water grabs Environment Livelihoods

Tony Allan is Professor Emeritus, School of Oriental and African Studies and King’s College London (University of London); Martin Keulertz is a PhD researcher at King’s College London; Suvi Sojamo is a PhD researcher at Aalto University Finland; Jeroen Warner is Assistant Professor, Risk and Disaster Studies, University of Wageningen, the Netherlands.

Handbook of Land and Water Grabs in Africa Foreign direct investment and food and water security

Editors: Tony Allan, Martin Keulertz, Suvi Sojamo and Jeroen Warner

First edition published 2013 by Routledge 2 Park Square, Milton Park, Abingdon, OX14 4RN, United Kingdom Simultaneously published in the USA and Canada by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2013 Routledge The right of the editors to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging in Publication Data Handbook of land and water grabs in Africa : foreign direct investment and food and water security / editors, Tony Allan ... [et al.]. – 1st ed. p. cm. Includes bibliographical references and index. 1. Investments, Foreign–Africa. 2. Land tenure–Africa. 3. Land use–Africa. 4. Natural resources–Africa. 5. Food security–Africa. 6. Water security–Africa. I. Allan, J. A. (John Anthony) HG5822.H36 2012 332.673096–dc23 2012022401 ISBN: 978-1-85743-669-3 (hbk) ISBN: 978-0-203-11094-2 (ebk) Typeset in Bembo by Taylor & Francis Books Europa Commissioning Editor: Cathy Hartley

Contents

List of illustrations Acknowledgements The editors and contributors Abbreviations Introduction: Can improving returns to food-water in Africa meet African food needs and the needs of other consumers? J. A. (Tony) Allan

ix xii xiv xxiii

1

PART I

The history of land grabs and the contradictions of development 1.1 Enclosure revisited: putting the global land rush in historical perspective Liz Alden Wily

9 11

1.2 Land alienation under colonial and white settler governments in southern Africa: historical land ‘grabbing’ Deborah Potts

24

1.3 Sudan and its agricultural revival: a regional breadbasket at last or another mirage in the desert? Harry Verhoeven

43

1.4 The contradictions of development: primitive accumulation and geopolitics in the two Sudans Clemens Hoffmann

57

1.5 The experience of land grabbing in Liberia Niels Hahn

71

v

Contents

PART II

Investors’ profiles and current investment trends

89

2.1 Chinese engagement in African agriculture: fiction and fact Deborah Bräutigam

91

2.2 The global food crisis and the Gulf’s quest for Africa’s agricultural potential Eckart Woertz

104

2.3 A global enclosure: the geo-logics of Indian agro-investments in Africa Pádraig Carmody

120

2.4 Private investment in agriculture Mark Campanale

134

2.5 Domestic land acquisition in West Africa: the rush for farmland by urban ‘businessmen’ Thea Hilhorst and Joost Nelen

146

2.6 ‘Land grabs’ and alternative modalities for agricultural investments in emerging markets Phil Riddell

160

2.7 Change in trend and new types of large-scale investments in Ethiopia Philipp Baumgartner

178

2.8 Tapping into Al-Andaluz resources: opportunities and challenges for investment in Morocco Nora Van Cauwenbergh and Samira Idllalene

193

2.9 A blue revolution for Zambia? Large-scale irrigation projects and land and water ‘grabs’ Jessica M. Chu

207

PART III

The political economy of land and water grabs 3.1 Claiming (back) the land: the geopolitics of Egyptian and South African land and water grabs Jeroen Warner, Antoinette Sebastian and Vanessa Empinotti 3.2 Land and water grabs and the green economy Martin Keulertz vi

221

223

243

Contents

3.3 The political economy of land and water grabs David Zetland and Jennifer Möller-Gulland

257

3.4 Will peak oil cause a rush for land in Africa? Fabian Kesicki and Julia Tomei

273

3.5 How to govern the global rush for land and water? Julia Ismar

286

3.6 Keep calm and carry on: what we can learn from the three food price crises of the 1940s, 1970s and 2007–2008 Johann Custodis

299

3.7 Constructing a new water future? An analysis of Ethiopia’s current hydropower development Nathanial Matthews, Alan Nicol and Wondwosen Michago Seide

311

3.8 Inverse globalisation? The global agricultural trade system and Asian investments in African land and water resources Martin Keulertz and Suvi Sojamo

324

PART IV

Environment

335

4.1 Green and blue water dimensions of foreign direct investment in biofuel and food production in West Africa: the case of Ghana and Mali 337 Fred Kizito, Timothy O. Williams, Matthew McCartney and Teklu Erkossa 4.2 Green and blue water in Africa: how foreign direct investment can support sustainable intensification Holger Hoff, Dieter Gerten and Katharina Waha

359

4.3 Groundwater in Africa: is there sufficient water to support the intensification of agriculture from ‘land grabs’? 376 Alan M. MacDonald, Richard G. Taylor and Helen C. Bonsor 4.4 The water resource implications for and of FDI projects in Africa: a biophysical analysis of opportunity and risk Mark Mulligan

384

4.5 Analyse to optimise: sustainable intensification of agricultural production through investment in integrated land and water management in Africa Michael Gilmont and Marta Antonelli

406

vii

Contents

PART V

Livelihoods

419

5.1 Expectations and implications of the rush for land: understanding the opportunities and risks at stake in Africa Ward Anseeuw, Lorenzo Cotula and Mike Taylor

421

5.2 China–Africa agricultural co-operation, African land tenure reform and sustainable farmland investments Yongjun Zhao and Xiuli Xu

436

5.3 Competing narratives of land reform in South Sudan David K. Deng

446

5.4 Struggles and resistance against land dispossession in Africa: an overview Elisa Greco

456

Index

viii

469

Illustrations

Figures 1.2.1 1.3.1 1.3.2 2.2.1 2.2.2 2.2.3 2.7.1 2.7.2 2.7.3 3.2.1 3.4.1 3.4.2 3.7.1 3.8.1 4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 4.1.6 4.1.7 4.1.8 4.2.1

4.2.2

Land alienation 1869 to 1960 Sorghum production Wheat production Africa top 20 agro exports 2009 Africa top 20 agro imports 2009 Number of announced Gulf agro projects and MoUs 2008–11 Total land requested by investors per year Total annual land requested in hectares (by domestic, joint and foreign investments) Agricultural land earmarked for investments by region Fifth-cycle water management Biofuel conditions in Africa Biofuel production costs based on various estimates Hydropower dams and power transmission lines (existing and planned) in Ethiopia Global Virtual Water Flows Schematic showing possible changes in water fluxes, ecosystems and livelihoods Case study sites of FDI in biofuel and food production in Ghana and Mali Long-term decadal averages of rainfall and evapotranspiration Representation of catchment areas with LSLA modelled in WEAP for moisture fluxes estimates in Ghana Annual moisture fluxes in Yendi and Kobre catchments for the pre-FDI period Representation of catchment areas with LSA modelled in WEAP for moistures fluxes estimated in Ghana Annual moisture fluxes in Yendi catchment (5,000 ha) for the post-LSLA period (2008–10) Annual moisture fluxes in Kobre catchment (10,000 ha) for the post-LSLA period (2007–10) Blue, green and total water availability per capita, average crop water productivity / calorie water requirement, and water-limited food self-sufficiency potential, aggregated to country level Simulated increase in agricultural biomass production per country in response to a hypothetical shift of 25% of evaporation to transpiration and harvesting of 25% of cropland runoff for plant watering

25 51 51 107 108 111 182 183 188 249 276 281 312 329 339 346 347 348 349 350 351 352

363

370 ix

Illustrations

4.3.1 A series of groundwater maps for Africa 4.3.2 Groundwater occurrence in different hydrogeological environments in Africa 4.4.1 Per-pixel distribution of (a) cropland, boolean, (b) cropland, fractional, and (c) pasture 4.4.2 The Ramankutty (a) cropland and (b) pastures datasets as mean fractional cover by sub-basin 4.4.3 Calculated water balance (mm/yr) by sub-basin 4.4.4 Dry matter productivity 4.4.5 Water productivity means per sub-basin 4.4.6 The global distribution of climate class ID#7023 4.4.7 The productivity gap ratio for (a) intensive croplands, (b) extensive croplands and (c) extensive pastures 4.4.8 Sensitivity to land use change index (SLUC) 4.4.9 (a) Downstream population weighted SLUC, (b) per capita water balance and (c) pressures on water quality according to the Human Footprint Index 4.5.1 Five water paradigms and development trajectory 4.5.2 Classic model of water mobilisation, productive capacity and cumulative investment, illustrating hydro-retrenchment 4.5.3 Revised model of water mobilisation, productive capacity and cumulative investment, following a pathway of holistic optimisation

378 380 388 389 390 392 394 395 396 398 399 408 409 415

Tables 1.2.1 1.2.2 1.2.3 1.2.4 1.3.1 2.1.1 2.6.1 2.6.2 2.6.3 2.6.4 2.7.1 2.7.2 2.7.3 3.1.1 3.1.2a 3.1.2b 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.4.1 3.7.1 x

Alienated land in southern Africa: the impact of colonialism and white settlers Legislated land division in Southern Rhodesia 1930–69 Land division by agro-ecological regions, Zimbabwe 1980 Land division by agro-ecological regions, Namibia circa 2000 Approved versus implemented foreign investments for Khartoum State and national projects China National Agricultural Development Corporation in Africa circa 2000 Unemployment rates in selected sub-Saharan countries in 2008 Composition of sub-regions in sub-Saharan Africa Unrealised agricultural potential in 2006 and 2080 Objectives matrix Characteristics of investments by origin Regional distribution of land as stated in licences Investments by district level for Gambella Region (1992–August 2010) Egypt and South African domestic and foreign policy geopolitics compared Water investment and geostrategic objectives, Egypt South Africa’s water investment and geostrategic objectives in Lesotho and the DRC Data coverage on land deals in SSA Analysis of SSA deals: control of corruption Analysis of SSA deals: voice and accountability Analysis of SSA deals: good governance Index of water vulnerability Biofuel targets and policies of key countries Ethiopia’s hydropower projects

26 34 37 37 53 95 167 168 169 171 184 186 188 236 236 236 264 265 265 268 269 275 319

Illustrations

4.1.1 Comparative analyses of land acquisition process, land-use patterns and potential livelihood impacts of two FDI large-scale plantations studied in Ghana 4.1.2 Comparative analyses of land acquisition process, land-use patterns and potential livelihood impacts of two FDI large-scale plantations studied in Mali 4.1.3 Agro-climatic characteristics and land-use regimes for both current and FDI cases of the study sites in Ghana and Mali 4.1.4 Crop phenology characteristics used to estimate the field Kc values for various crops 4.1.5 WEAP model scenarios, details and key assumptions used for the modelling framework 4.1.6 Estimated annual and growing season crop rainwater requirements 4.1.7 Crop water requirement (mm) and deficit for the LSLAs in Ghana and Mali 4.1.8 Temporal variation of average monthly moisture fluxes for Yendi with fallow and simulated with Jatropha during pre-FDI years 4.2.1 Land resources and productivities in selected African and investor countries 4.2.2 Water resources and productivities in selected African and investor countries 4.2.3 Agricultural inputs at country and household level for surveyed African and selected investor countries 4.2.4 Nutrient balances of N, P and K (in kg ha-1 yr-1) for selected SSA countries in 2000 4.2.5 Irrigation technologies and machinery and storage buildings available at household level 4.2.6 Selected WOCAT results for Ethiopia, Kenya and South Africa 4.4.1 Calculated metrics for the sub-basins containing indicative sites for proposed interventions

342 344 345 347 348 349 351 353 361 364 366 368 369 371 400

Boxes 2.5.1 2.5.2 2.8.1 3.7.1 3.7.2

Controlling water runoff and erosion Production by inward investors Transfer the ‘Almendian miracle’ to Morocco Ethiopia: CRGE points the way forward The Mekong and the Nile – some lessons

154 155 196 315 316

xi

Acknowledgements

In the contradiction lies the hope! (Bertolt Brecht)

This handbook is an eclectic compilation of chapters on the recent phenomenon of foreign and domestic investment in African farmland. It aims to be unbiased without taking sides for or against investment in rainfed and irrigated agriculture. ‘Land grabbing’ or Foreign Direct Investment in farmland has become a highly controversial topic for decision-makers, media and global civil society. It is hoped that this book will broaden readers’ knowledge and especially their perspectives on inward investment in Africa. It also highlights the contradictions and contentious discourses that currently make the process difficult to evaluate. The editors would like to express their gratitude to all contributors and the host institutions (King’s College London – KCL, Aalto University and Wageningen UR) for their exceptional co-operation in the past months. A special thanks for their helpful comments during the editing stage goes to the following scientists and water and economic development professionals: Nick Clifford, Andrew Brooks, Mike Chadwick, Naho Mirumachi, Ragnar Lofstedt, Deborah Johnstone, Rachel Groom, Elizabeth Larson, Thomas Zellers and Garry Glass (all KCL), Michael Gilmont (KCL) for his immense support with editing and proofreading, Toni Colman, Bruce Lankford and Mark Zeitoun (University of East Anglia), Colin Green (Middlesex University), Quentin Outram (University of Leeds), Nico Grove (University of Weimar), Genevieve Lamond (University of Bangor), Saleh Eissah (University of Dundee), Hans van Dijk (Wageningen UR), Stephen Chan, Adam Hanieh, Eli Elhadj and Salem El Maiar (all School of Oriental and African Studies, University of London), Patta Scott-Villiers (Institute of Development Studies, University of Sussex), Chris Perry, Brian and Lynne Chatterton (Independent Consultants), Robert Akerlof (University of Warwick), Paola Minoia (University of Helsinki), Olli Varis, Matti Kummu, Miina Porkka and Virpi Stucki (Aalto University), James Keeley (International Institute for Environment and Development – IIED), Malin Falkenmark and Ana Cascão (Stockholm International Water Institute), Tanja Pickardt and Johannes Baumgart (Deutsche Gesellschaft für Internationale Zusammenarbeit – GIZ), Ramsey Isak (University of Kent) and Karin ‘Wibby’ Kirschner from Ashurst for her kind hospitality. We would also

xii

Acknowledgements

express our sincere gratitude to Cathy Hartley from Routledge, who has been an exceptional and very helpful editor and interface with the editorial staff at Routledge. The cover image was taken by Esa Sojamo in January 2010 in Sidama region, Ethiopia. It shows local people herding cattle and collecting the remains of a harvest on land that had been leased by foreign investors.

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The editors and contributors

Editors Tony Allan [BA Durham 1958, PhD London 1971] heads the London Water Research Group at King’s College London and School of Oriental and African Studies (SOAS). He specialises in the analysis of water resources in semi-arid regions and on the role of global systems in ameliorating local and regional water deficits. He pointed out that it is normal for economies to be net food importers and that it has proved to be easy until recently to achieve water and food security by importing water-intensive food commodities. He coined the concept of virtual water. His ideas on water security are set out in The Middle East water question: hydropolitics and the global economy and in a new book entitled Virtual Water (Tauris, 2011). He is currently working on why the accounting systems in the food supply chain are dangerously blind to the costs of water resources as well as of misallocating them. In 2008 he was awarded the Stockholm Water Prize in recognition of his contribution to water science and water policy. Martin Keulertz is a PhD researcher at King’s College London. His research analyses the recent surge of Foreign Direct Investment in East Africa from a water security perspective by investigating the alternatives to demand-side water management in the Middle East through investments in Sub-Sahara Africa. His further research interests relate to the role of ‘virtual water’ in the global political economy of food trade. He takes a critical approach to the role of agribusinesses in the unofficial trade of ‘virtual water’ resources at a time of global political and economic change. Suvi Sojamo is a PhD researcher at Water and Development Research Group at Aalto University, Finland, and an active member of the London Water Research Group of King’s College London and the University of East Anglia, UK. Her research focuses on water governance in agro-food value chains and networks and the role of the world’s largest food and agribusiness corporations in global water security. Jeroen Warner is assistant professor in the Disaster Studies group, University of Wageningen. After taking his MSc degree in International Relations at the University of Amsterdam, focusing on water conflict and hydro-hegemony in the Middle East in 1992, Jeroen has researched, published, lectured and given training on domestic and transboundary water conflict and co-operation, governance, risk and security issues. He has published many articles, among which his ‘Hydrohegemony framework’ with Mark Zeitoun (2006) is xiv

Contributors

particularly well cited, as well as several books including Multi-Stakeholder Platforms for Integrated Water Management (Ashgate, 2007) and The Politics of Water (Routledge, 2009), which he co-edited with Kai Wegerich. A new co-edited book, Making Space for the River, comparing interventions, is due in 2012 (International Water Association).

Contributors Liz Alden Wily (PhD) is a political economist who works as an independent scholar and technical adviser to agrarian governments and aid agencies on rural tenure matters. She is a Fellow of the Rights and Resources Initiative, a global consortium of agencies, and is an affiliated Fellow of the Leiden Law School. Ward Anseeuw, a development economist and policy analyst, is a research fellow at the Agricultural Research Centre for International Development (CIRAD) seconded to the University of Pretoria. He has conducted research for the last 10 years in southern Africa and the African continent, more particularly on the issues of agricultural and land policies, agrarian and land reforms, land conflicts and large-scale land acquisitions. He has published extensively on these issues in scientific journals and with renowned publishers. Marta Antonelli is currently a PhD researcher at King’s College London (KCL). Her research focuses on water and food security in the Middle East and North African region. She is also working as a researcher in the EU FP7-WASSERMed project (Water Availability and Security in Southern Europe and the Mediterranean). Philipp Baumgartner currently works as a junior researcher and PhD student at the Centre for Development Research (Zentrum für Entwicklungsforschung – ZEF), University of Bonn. His PhD research analyses the impact of large-scale agricultural investments (FDI) in food production on poverty reduction and commercialisation of rural factor markets in East Africa. Further research concentrates on the economics of land degradation, the role of China in Africa, institutional change and rural transformation, and heterodox analysis of corruption. He holds an MA in regional studies (University Passau, Germany) and an MSc in Political Economy of Development (School of Oriental and African Studies, UK). Philipp Baumgartner has worked with the World Bank’s Social Development Department on political economy of policy reform and social impact analysis, as well as with the Welthungerhilfe on local-level impacts of large-scale land acquisitions in Sierra Leone and Cambodia. Helen C. Bonsor is a hydrogeologist at the British Geological Survey (BGS). Her main research interests include characterizing and modelling large-scale groundwater resources, and use of satellite data for large-scale assessments of groundwater resources. Since joining BGS in 2008 she has contributed to research for the British Department for International Development and WaterAid looking at groundwater resilience to climate change in Africa and links to livelihoods, as well as the likely impacts of climate to water resources in subSaharan Africa and South-East Asia. Deborah Bräutigam is professor in the School of International Service at American University, Washington. Her research focuses on China–Africa relations, foreign aid, industrialisation, state-building and development. She is the author of The Dragon’s Gift: The Real xv

Contributors

Story of China in Africa (Oxford University Press, 2009) as well as publications on foreign aid and governance, taxation and state-building, global networks and comparative development in Africa and Asia. Her blog, chinaafricarealstory.com, continues to delve into myths and realities of China’s African engagement. Mark Campanale has some 20 years’ experience in sustainable financial markets. His areas of knowledge lie in the finance of clean technology companies, sustainable asset management and ecosystems services, principally forests. Recruited as one of London’s first sustainable investment analysts in 1989, Mark Campanale is a co-founder of the sustainable investment businesses, first at Jupiter Asset Management with the Ecology Funds (1989–94); subsequently at NPI with Global Care Funds (1994–9), AMP Capital with the Sustainable Future Funds (2000–01) and Henderson Global Investors with the Industries of the Future Fund (1999–2006). Also a co-founder Director of the UKSIF – the Sustainable Investment and Finance Association (1990–2008), Mark Campanale served on the World Business Council for Sustainable Development working group on capital markets leading up to the 1992 Earth Summit; was a member of the Steering Committee of UNEP Financial Sector Initiative (1999–2003); serves as Honorary Treasurer, The Rainforest Foundation (UK, 2004–); Advisory Board member of 3iG, the International Interfaith Investment Group; is Adviser to Halloran Philanthropies; and is founder Director of The Social Stock Exchange, funded by the Rockefeller Foundation. He is a non-executive director of the Carbon Assets Fund, for Carbon Capital Markets (2006–); and a senior advisor to Four Elements Capital. Mark Campanale’s recent assignments include raising capital for forestry, ecosystems services and clean technology private equity funds. He holds an MSc in Agricultural Economics from Wye College. Pádraig Carmody teaches development geography at Trinity College Dublin, where he also co-ordinates the TCD-UCD Master’s in Development Practice. He is a graduate of that university and completed a PhD at the University of Minnesota. His most recent book is the The New Scramble for Africa (Polity, 2011). Jessica M. Chu is a PhD candidate in the Department of Anthropology and Sociology at the School of Oriental and African Studies, University of London. She is conducting her PhD fieldwork in Zambia on the topic of the cultural economy of ‘land grabs’ and has worked as a research fellow for the Zambia Land Alliance. Lorenzo Cotula is a senior researcher in law and sustainable development at the International Institute for Environment and Development (IIED), based in the UK. At IIED, Lorenzo leads work on land rights and on natural resource investment. He undertakes research, capacity building, advocacy and advisory work at field, national and international levels. Johann Custodis is a research fellow at the Department of Economics at the University of Warwick. His research focuses on labour economics and agriculture in the pre-modern period and during and after the Second World War. Johann received his PhD in economic history from the London School of Economics and Political Science in 2010. He is currently working in the Centre for Global Competitive Advantage in Warwick University on Historical Patterns of Development.

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Contributors

David K. Deng is the Research Director for the South Sudan Law Society, a civil society organization dedicated to promoting the rule of law and respect for human rights in South Sudan. Since graduating from New York University (NYU) School of Law in 2010, Deng has published reports on land investments in South Sudan for the Oakland Institute, Norwegian People’s Aid (NPA) and the Land Deal Politics Initiative, among other organizations. With support from the Center for Global Justice and Human Rights and the Public Interest Law Center at NYU School of Law, the United States Institute of Peace and NPA, David Deng has also developed a handbook on community engagement to help promote responsible investment and sustainable development in South Sudan. Deng is a specialist on South Sudanese land law and land-related human rights issues. Vanessa Empinotti is an agronomist with a Master’s degree in soil science from Federal University of Rio Grande do Sul, Brazil, and a PhD in Geography from Colorado University, Boulder, USA. Her areas of expertise are water governance, public policy, gender, participation, and the relationships between social movements, the state and the private sector. Over the past 17 years she has worked as a researcher and consultant with international experience in the area of natural resource management. Currently she is a post-doctoral fellow at PROCAM, University of São Paulo, Brazil, where she works in the subject of water governance, the water footprint and the private-sector. Teklu Erkossa is a researcher in soil/water and agronomy with the International Water Management Institute based in Addis Ababa, Ethiopia. He holds a doctorate in soil science from the University of Hohenheim, Germany. He has extensive research experience in soil science, watershed management, agronomy and modelling of crop water productivity. Dieter Gerten holds a PhD in freshwater ecology from Potsdam University and now leads a research group on ‘Planetary Opportunities and Planetary Boundaries’ in the Research Domain of Earth System Analysis at the Potsdam Institute for Climate Impact Research (PIK), Germany. He teaches environmental and hydrological courses at the University of Potsdam, Humboldt University of Berlin and the University of Basel, Switzerland. His research focuses on climate impacts on ecosystems, global freshwater resources, vegetation– water interactions, and religious aspects of water use. He has published more than 50 peerreviewed papers in scientific journals and books; recent key publications are, among others: ‘Global water availability and requirements for future food production’ (J. Hydrometeor., 2011); ‘Causes of change in 20th century global river discharge’ (Geophys. Res. Lett., 2008); Religion in Environmental and Climate Change (co-edited with S. Bergmann, Continuum, 2012). Michael Gilmont is a PhD researcher at King’s College London, analysing the political process shifts towards an increasingly discursive approach to water policy. His research draws upon a comparative analysis of ongoing reform in water development and allocation in Australia’s Murray-Darling Basin, California and Israel. He has previously carried out research into modelling climate change impacts on the water resources of Yemen, and has worked as a research assistant for the Royal Geographical Society. Elisa Greco holds a PhD in African Studies (2010) from the University of Naples – L’Orientale, Italy. She has widely researched unreported land struggles, contestation around privatised estates and tendencies towards land concentration in Tanzania. Her research interests include xvii

Contributors

the land question and the agrarian question, with a focus on Eastern Africa. She is critically analysing the history of plantations and focusing on agrarian labour as a global issue. Niels Hahn received his PhD in Development Studies from the School of Oriental and African Studies, University of London. His research interests include the political economy of armed conflicts, international relations, critical approaches to neoliberalism, states, governance, imperialism, psychological warfare, propaganda, and great power rivalry. His research and teaching is based on his experience from the humanitarian sector, which includes working in five conflict zones, such as Afghanistan, Ethiopia/Ogaden, Liberia, Somalia and Sudan/ Darfur. Thea Hilhorst is a senior adviser at the Royal Tropical Institute in Amsterdam. Her research focuses mostly on land governance, local institutions, natural resource management, all in relation to livelihoods – mostly in sub-Saharan Africa. She also works on these issues in programmes and projects with national and international organisations, both governmental and non-governmental. In the Netherlands she co-ordinates the IS Academy on land governance, LANDac. Holger Hoff is senior research fellow at Stockholm Environment Institute and research fellow at Potsdam Institute for Climate Impact Research. His main research interests are in global and regional water, food and environmental security under global and climate change. He is advising German and Swedish development co-operation on climate adaptation and integrated natural resource management. Clemens Hoffmann holds a position as Assistant Professor in International Relations at Bilkent University, Ankara, Turkey. He received his doctorate in International Relations from the University of Sussex in 2010, where he also worked as a post-doctoral research fellow. His research focuses on historical and contemporary processes of state formation and secessions and their resource dimensions. His regional interests include the Eastern Mediterranean and East Africa. Samira Idllalene is a scholar at the department of Law and Economy of the Cadi Ayyad University in Safi, Morocco. She developed a PhD on ‘Coastal management and sustainability – the case of Morocco’ at the University of Bretagne Occidentale, Brest, France. She is currently working on legal and institutional aspects of coastal management especially in Mediterranean countries. Her work focuses on comparative law dealing with these aspects. Julia Ismar holds an MSc in International Relations from the London School of Economics and Political Science. She is currently working at the Institute for Social and Development Studies (IGP) in Munich on ‘Sustainable Water Management in a Globalised World’, a project funded by the German Ministry for Education and Research. Her research focus is water governance and development, with a special emphasis on the Middle East and East Africa. Fabian Kesicki wrote the chapter during his time as a PhD student focusing on energy and emissions modelling at the UCL Energy Institute. He currently works at the International Energy Agency in Paris.

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Contributors

Fred Kizito holds a doctorate degree from Oregon State University, Corvallis, in Soil Science and Water Resources Engineering. He is a researcher with International Water Management Institute based at the West Africa sub-region office in Accra. His research focuses on soils/ water resources management, ecosystem services and modelling landscape biophysical processes. He has participated in several multi-disciplinary teams on impacts of land use practices on hydrological variations in eastern and southern Africa as well as Sahel farming agro-ecosystems. Matthew McCartney is a principal researcher specializing in water resources and wetland and hydro-ecological studies. Until the end of 2011 he was based at the International Water Management Institute’s (IWMI) office in Addis Ababa, Ethiopia. He is now IWMI’s head of office in Vientiane, Laos. His experience stems from participation in a wide range of research and applied projects often as part of a multi-disciplinary team. He was a steering committee member on the UNEP Dams Development Project and is currently a member of the Ramsar Science and Technical Review Panel. Alan M. MacDonald is a principal hydrogeologist at the British Geological Survey where he leads international groundwater research. Much of his work focuses on the science base for sustainable development and management of groundwater, particularly in the context of poverty reduction and climate change. He has published extensively on groundwater and is author of the book Developing Groundwater: A Guide to Rural Water Supply (Practical Action Publishing, 2005) and editor of Applied Groundwater Studies in Africa (Taylor & Francis, 2008). Nathanial Matthews is a PhD researcher at King’s College London focusing primarily on the water–energy nexus and more specifically hydropower development. He has a background in political science and environmental analysis and has experience in Southeast Asia and Africa. Wondwosen Michago Seide is a part-time lecturer at the Department of Geography and the Environment, Addis Ababa University (AAU). He earned an MSc in Water Science, Policy and Management, University of Oxford, and an MA in Environment and Development and BA in Political Science and International Relations from AAU. Currently he is a consultant to the Institute of Development Studies, University of Sussex, where he is involved in two research projects: the water–energy–climate change nexus and the future of pastoralism. Jennifer Möller-Gulland currentely works at PricewaterhouseCoopers (PwC) in Germany within the Economics Practice. She mainly focuses on macroeconomic analyses, such as water risk in (global) supply chains. Previously, she worked as a water economist at the Ecologic Institute, as international think tank for environmental and development policy, in Berlin and at the United Nation Water–Decade Programme on Capacity Development (UNWDP). She graduated cum laude in International Economics and Finance (B.Sc.) from Tilburg University and earned her M.Sc. in Water Science, Policy and Management from the University of Oxford. Mark Mulligan is a Reader in Geography at King’s College London. In 2004 he was awarded the Royal Geographical Society–Institute of British Geographers Gill Memorial Award for ‘innovative monitoring and modelling’ of environmental systems. Mark is founding editor of the open-access e-journal Advances in Environmental Monitoring and Modelling; he has a keen xix

Contributors

interest in field research as well as simulation modelling and remote sensing, and develops and maintains a series of very large environmental databases which are freely accessible from these pages. Mark is senior fellow at the United Nations Environment Programme World Conservation Monitoring Centre (UNEP-WCMC), adjunct Doctoral Graduate Faculty at Texas State University 2007–09, trustee of PROAVES UK and chair of the conservation advisory board for the Healthy Planet Foundation. Joost Nelen is senior adviser of ‘rural economic development’ for the Netherlands Development Organization SNV. He is based in Ouagadougou, Burkina Faso. His advisory work and research is in rural economic development, wherein he addresses chain development for dry land commodities, social and environmental impact assessments, action research in food security and land tenure, and last but not least, change processes of local, national and international farmers’ and pastoralists’ organisations related to the above matters. Alan Nicol is a Research Fellow at the Institute of Development Studies, University of Sussex. He previously was Director of Programmes at the World Water Council, Director of the RiPPLE Research Programme Consortium in Ethiopia and Founder and Head of the Water Policy Programme at the Overseas Development Institute. Dr Nicol is a political scientist by training and has extensive experience in Africa, the Middle East and South Asia. Deborah Potts is a Reader in Human Geography at King’s College London. Her research interests focus on sub-Saharan Africa, particularly southern Africa, and the study of urbanization and migration, livelihood trends, land tenure, low-income housing and rural–urban linkages in that region. Recent publications include a book on African cities and livelihood change, Circular Migration in Zimbabwe and Contemporary Sub-Saharan Africa (James Currey and University of Cape Town Press, 2011); ‘Making a livelihood in (and beyond) the African city: the experience of Zimbabwe’ (Africa, 2011); and ‘What do we know about urbanisation in sub-Saharan Africa and does it matter?’ (International Development Planning Review, 2012). Phil Riddell is both an independent adviser on agricultural water policy and management and a director of an investment advisory boutique targeted at commercial African agriculture. Much of his work focuses on Africa, where in recent years he has been involved in leading numerous irrigation policy and water sector investment strategy studies for both the public and private-sectors. Publications resulting from such studies include FAO’s Water Report No. 31, Demand for the Products of Irrigated Agriculture from Sub-Saharan Africa (co-author 2006); a SADC Water Sector Position Paper for the High Level AU meeting on Water for Food and Energy (Sirte, 2008); the Rockefeller-funded, Impact Investing in Commercial African Agriculture (GIIN, 2009) and Global Food Security, Africa’s Opportunity and the Resource Governance Imperative (GWP, 2011). For the last 10 years he has also worked closely with the WWF, not least on a joint ICRISAT/WWF programme to validate and take to scale the System of Rice Intensification and the Sustainable Sugar Initiative. During the same period, Phil has designed transboundary water management dialogues; supervised the conceptual design of the Nile Basin Decision Support System; participated in various social assessments for IWRM in East Africa and South-East Asia; and has constructed a distributed agricultural water productivity model of the entire Nile Basin for the FAO. Antoinette Sebastian has held senior management positions at the US Department of Housing and Urban Development with responsibility for US environmental policy, community xx

Contributors

planning and environmental justice, and worked for USAID in India, Indonesia and Thailand on urban environmental issues, housing, poverty and women’s development. Awarded by the University of Maryland (College Park, Maryland), her doctorate examined transboundary water conflict and co-operation (and the shadows of the past) in sub-Saharan Africa in the Orange and Okavango River basins. She is currently an independent scholar. Mike Taylor manages global policy with the secretariat of the International Land Coalition, based in Rome. He is a social anthropologist, working on land rights, natural resource management and sustainable development. Richard G. Taylor is a Reader in Hydrogeology at University College London. His research primarily focuses on the role of groundwater in enabling communities in low-income communities to adapt to the pressures of rapid development as well as climate variability and change. His ongoing work involves long-term collaborations with governments, research institutions and NGOs in sub-Saharan Africa and South Asia. He is Co-Chair of the International Association of Hydeogeologists’ Commission on Groundwater and Climate Change, a core member of the UNESCO-IHP GRAPHIC Programme, and co-chaired the Groundwater and Climate in Africa Conference (www.gwclim.org) held in Kampala, Uganda, in 2008. Julia Tomei is a PhD student at the UCL Energy Institute. Her research focuses on biofuels, specifically how European demand for biofuels is transformed into local outcomes, using Guatemala as a case study. Nora Van Cauwenbergh has over six years’ experience in river basin planning and governance in the Mediterranean, focusing on Almeria in south-east Spain. After concluding her PhD in 2008 (UCL, Belgium) on participatory decision support for natural resources management, she continues to investigate governance structures, stakeholder processes and the relevance, accuracy and use of intuitive, soft knowledge of stakeholders as compared to knowledge provided by modelling in decision support. She is currently working on groundwater governance at the Department of Integrated Water Systems and Governance of UNESCO-IHE, Institute of Water Education in Delft, the Netherlands. Harry Verhoeven completed a doctorate entitled ‘Water, civilisation and power. Sudan’s hydropolitical economy and the Al-Ingaz revolution’ at the University of Oxford’s Department of Politics and International Relations (St Cross College) in 2012. He is the convenor of the Oxford University China–Africa Network and Oxford Central Africa Forum, and is the author of the Chatham House publication ‘Black gold for blue gold? Sudan’s oil, Ethiopia’s water and regional integration’ (2011). Katharina Waha is a PhD candidate at the Institute of Earth and Environmental Science, University of Potsdam, and a research assistant at Potsdam Institute for Climate Impact Research. Her research is on the analysis of interactions between atmosphere and biosphere at the global scale under current and future climate with a special focus on agricultural ecosystems. For sub-Saharan Africa she assesses climate change impacts on agriculture and applies and further develops the global dynamic vegetation and water balance model LPJmL for this purpose. Timothy O. Williams is the International Water Management Institute’s (IWMI) Director for Africa. In this capacity, he provides strategic direction and oversight for IWMI’s research and xxi

Contributors

research-related activities in Africa conducted out of offices in Accra (covering the West Africa sub-region), Addis Ababa (covering the East Africa sub-region) and Pretoria (covering the southern Africa sub-region). He holds a doctorate in agricultural economics from the University of Oxford. He has over 25 years of experience in agricultural development, integrated natural resource management and policy advisory work. He served for three years (2003–06) on the Scientific and Technical Advisory Panel to the Global Environment Facility (GEF). Eckart Woertz is a visiting fellow at Princeton University and senior research fellow associate at the Barcelona Centre for International Affairs (CIDOB). Formerly he was Director of Economic Studies at the Gulf Research Centre (GRC) in Dubai, UAE, and worked for financial services companies in Germany and the UAE. He has consulted for international and regional organizations such as UNCTAD, the Jeddah Chamber of Commerce and Industry and the Saudi Ministry of Economy and Planning. He has dealt extensively with economic diversification, sovereign wealth funds, food security, and the impact of the global financial crisis on the GCC countries. His recent publications include ‘Oil, the dollar, and the stability of the international financial system’ (Handbook of Oil Politics, Routledge, 2012), ‘Arab food, water, and the big landgrab that wasn’t’ (Brown Journal of World Affairs, Fall/ Winter 2011), and the edited volume GCC Financial Markets (Gerlach, 2012). His forthcoming book Oil for Food will be published by Oxford University Press in 2013. He holds a PhD in Economics from Friedrich-Alexander University, Erlangen-Nuremberg, where he conducted research on structural adjustment politics in Egypt. Yongjun Zhao is assistant professor of natural resource governance, sustainable society and globalization studies and programme coordinator in the Globalization Studies Groningen and the Faculty of Law of the University of Groningen, the Netherlands. His research focuses on the social and institutional dimensions of natural resource governance concerning land tenure reform, land administration, land acquisition, land market, community forestry, water resources management, rangeland management, food security, rural development and governance in China and Africa, and China’s engagement with Africa on agricultural and sustainable development issues. His new book China’s Disappearing Countryside: Toward Sustainable Land Governance for the Poor published by Ashgate is due in 2012. He was the governance adviser with the United Kingdom Department for International Development. Xiuli Xu is Associate Professor of Development Studies at the College of Humanities and Development Studies, China Agricultural University in Beijing. Her research interests include development policy and intervention analysis, community-based natural resource management and development studies in China. She has numerous international collaboration experiences with development partners, and she was a visiting scholar based in the Centre for Development Studies at the University of Cambridge from October 2010 to October 2011. David Zetland is a senior water economist in the Department of Environmental Economics and Natural Resources at Wageningen University in the Netherlands. He received his PhD in Agricultural and Resource Economics from UC Davis in 2008. He blogs on water, economics and politics at aguanomics.com and is the author of The End of Abundance: Economic Solutions to Water Scarcity (Aguanomics Press, 2011).

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Abbreviations

BRICS EU FAO FDI GoL ha IMF km m m. NGO OECD OPEC UDI UN UNCTAD UNEP UNESCO US(A) USG

Brazil, Russia, India, China, South Africa European Union Food and Agriculture Organization Foreign Direct Investment Government of Liberia hectare International Monetary Fund kilometre metre million non-governmental organization Organization for Economic Co-operation and Development Organization of the Petroleum Exporting Countries unilateral declaration of indipendence United Nations United Nations Conference on Trade and Development United Nations Environment Programme United Nations Educational, Scientific and Cultural Organization United States (of America) US Government

xxiii

Introduction Can improving returns to food–water in Africa meet African food needs and the needs of other consumers? J. A. (Tony) Allan

Why this handbook now, and understanding some global contexts The clever players realise that success will come to those who recognise that an inward investmentled African green revolution will mainly meet the food needs of the extra 1 billion Africans and not just the additional demand for food from Asia and the Middle East. It is generally agreed that societies and their political economies take new directions when there has been an emblematic event (Hajer 1995) Emblematic events can be environmental, economic or political. The biggest impacts result from those that are associated with civil or interstate armed conflict. Unfortunately Africa has more than its share of the sub-national civil armed conflict. For this reason alone, inward investment in sub-Saharan water and land will be high risk in many economies that have significant potential. The current post-emblematic global economic hiatus has generated unusual levels of anxiety over food insecurity. The governments of food- and therefore water-insecure economies, especially those with a high proportion of low-income families, are concerned that they might have to pay unaffordable prices for food. For over a century politicians and consumers have become addicted to the low and falling world food prices, especially for wheat and other staples that come from a few pivotal producers – the US, Canada, Brazil and Australia. These global prices have been determined by perverse but very seductive US and European Union (EU) subsidies (Paalberg 2011). This chapter analyses the consequences of a number of interrelated emblematic events of the 2007–11 period. The first major component of this suite of emblematic events was the global credit crisis, which became evident in 2007. It is widely judged to be the worst crisis of capitalism since the 1930s. Second, there was a separate cluster of commodity price volatilities that affected international commodity markets – especially global energy prices. The 2008 global food price volatility was amplified by pressures in the minerals and fertilizer markets. For three decades since the 1970s food commodity price spikes have tracked global energy price spikes. Historically, however, long-term international food commodity price trends were very different from the long-term trend in the global oil price. Global oil prices were held unnaturally level for 70 years – from the early 1900s to 1973 – by the oligopoly imposed by US and 1

J. A. (Tony) Allan

European interests. After the frightening oil price volatility of the 1890s, US and European state and corporate interests found the capacity to make an extraordinary pact that ensured that there were no oil price spikes until 1973. The US$2 per barrel price stayed in place decade after decade. During this era of unnaturally flat oil prices global food prices fell steadily. However, unlike the oil price, the downward trend in global food prices was interrupted by occasional major price spikes. There was a major food price spike after the so-called world wars of the 1940s (Kesicki and Tomei in Chapter 3.4 of this volume). Global food prices resumed their decline throughout the second half of the 20th century, but from 1973 periodic oil price volatility strongly impacted global commodity prices and food prices in particular. Oil exports, and global oil prices, were seriously disrupted by the Yom Kippur War of 1973 and the Iranian revolution of 1979. Once the 1970s oil price volatility was over, global food commodity prices resumed their downward trend in the 1980s and the 1990s. There was a minor price spike – non-energy related – in 1995–96 caused by some regional droughts. This price event was fanned by perceived uncertainties sparked by the launch of the World Trade Organization in 1995. The food price spike quickly proved to be a speculative surge and global food prices resumed their decline. The author can recall being disappointed and at the same time chastened by better-informed economist friends who well understood the political economy of global food commodity trade. They were never in any doubt that food prices would resume their decline. Oil prices began to rise again after 2001 in a global economy that was rumbling towards an unprecedented US and European debt crisis. By 2006 global food prices were tracking rising oil prices. Trends in global energy and food prices are being reviewed here as they reveal much about the global political economy of energy and food and especially in whose interests these global systems have been managed. The 1970s revealed that the levers of power in the global oil market had shifted into new hands. Meanwhile the political economy of global food supply chains has remained in the hands of a very similar coalition of dominant states and their transnational corporations that used to dominate the global oil market. The chapters in this book show that this coalition of interests that dominates global food supply chains (Allan 2011b) is not playing a significant role in inward investment in African water and land resources. The active investors are first, sovereign wealth funds in oil-exporting states and some other major net food importers in the Middle East. Second, there are investors from Asia: Indian investors are very active, those from China less so. There are chapters analysing and explaining these initiatives. Third, there are other speculative private-sector entrepreneurs with funds sourced in the major global financial centres. None of these new players is working closely with the expertise that underpins the success of the transnational private-sector traders and food manufacturing corporations (Allan 2010, 2012). These corporations have often been involved as major players for 150 years. They understand the climate and environmental risks as well as the bottlenecks created by poor and dysfunctional institutional and physical infrastructures. They have experienced the hazards of contracting, complying with changing tariffs and with complex global trading regimes. This expertise is hard to tap and the analysis in the chapters has also not been able to benefit from the difficult-toaccess wisdom of the private-sector managers in global food supply chains. Whatever is happening in Africa, the global food system has been, and remains, mainly a mechanism that serves the interests of rich Organization for Economic Co-operation and Development (OECD) economies. These rich economies account for most of the international food commodity trade (de Fraiture et al. 2003). For example, one third of the international food trade by volume is accounted for by transactions between EU member states. A further major proportion is accounted for by imports into the EU, the US, Japan and the Republic of Korea (South Korea). The US is, however, also a major net exporter of food commodities. On the 2

Introduction

supply side, trade is also dominated by a tiny number of OECD and emerging economies – the US, Canada, Australia, Brazil and Argentina. These economies are the pivotal food commodity exporters that keep the world food and water secure.

The water–food–trade nexus Drawing attention to the link between food security and water security is a major purpose of this book. Most economies have enough land to be potentially food self-sufficient. They lack, however, the water resources to produce enough food to make them food self-sufficient. It is not widely understood that the vast majority of the water consumed by an individual or an economy is embedded in its food consumption (Allan 2001, 2011). Food-water accounts for 90% of the water consumption of societies and their economies. Non-food-water – that used at home and in jobs – accounts for only 10% of water consumption. In practice it is normal for an economy to be a net food importer. Most African economies are net food importers although they have resource endowments that, if well invested in and developed, would underpin net food-exporting outcomes. World-wide local green and blue water resource endowments are inadequate to meet food needs in about 75% of the world’s economies. The world is not land-scarce. It is short of land with water. Africa is an appropriate destination for responsible inward investment as there are green water1 resources that currently only produce very low crop and livestock yields. There are also blue water resources that could support additional food production provided they are deployed with the protection of ecosystem services as one of the developmental priorities.

Some global conditions that shape options for investors and destination economies The states and markets of Europe and the USA have progressively enhanced their energy security and food security since the beginning of their industrialisation in the early 19th century. This 200-year process has been put in place by non-transparent processes that align markets and states in operating the international political economies of energy and food. The most important pact has been over energy, and since 1900 over the precious and wonderfully flexible and convenient energy sources of oil and gas. The global hegemony enjoyed by the pact between big oil – the so-called seven sisters as they were known up to the mid-1990s, allied with the governments of the US, the UK and the Netherlands – was paralleled by an equally invisible pact between the brands and the non-brand food corporates and the governments of North America and some European economies. The outcomes were, first, the unnaturally flat world oil prices between 1900 and 1973 and, second, the concurrent falling world prices for food. For those of us who can remember the 1950s and the 1960s, we know that it was normal to assume that the oil price would always be $2 a barrel. When the hegemony was revealed to be powerless after 1973, the influence of pacts between the by then big five major oil companies and the governments of the USA and two European governments progressively faded. The Organization of the Petroleum Exporting Countries (OPEC) national oil companies and other national oil companies now call the tune. There is no single agent or coalition in the market that can determine the price of oil. Uncomfortable price volatility is and will be the norm. The global trade in food has not witnessed a shift in power such as that experienced in the oil and gas markets. International trade in food is still operated by the major corporations of the US and Europe. Japanese traders have also played an important role since the 1960s. The recent emergence of traders of global stature based in Singapore with strong links with the People’s 3

J. A. (Tony) Allan

Republic of China is a sign that power may be shifting. Perhaps the world is facing an imminent 1973 moment – this time not over oil but with respect to global food–trade relations. The chapters in this book would have been easier for the authors to write if the outcome of the current global contestation over the control of food production and trade were clear. The oil and gas production and trade narrative since the 1970s has shown that the consuming economies can lose a significant level of control over a supply chain. They can even be tempted to use armed force to assert their entitlement to access to energy resources and attempt to slow down the shift in market power. There has been no such temptation to resort to force with respect to food security or the closely linked food-water security. On the contrary, the international food supply chains have been very effective in keeping the world at peace and without any temptation to engage in resource wars (Allan 2001). The threatened water wars have nowhere materialised despite the progressive increase in the number of economies that are net food importers. Over the past half-century, it has become normal to be a net food importer, not least in Africa. At least 160 out of about 220 world economies are net food and net embedded water ‘importers’ (Allan 2011a). Despite the seven-fold increase in demand for food since 1800 there have been no significant inter-state water wars. There has been a great deal of conflict short of armed conflict. Even failed states do not go to war over water. Centuries of increasing farm production with steadily improving returns to land and water have forestalled such armed conflict. This farm productivity plus regional food commodity trade have prevented inter-state armed conflict, although at the sub-state level violence can occur between farmers and villages. Despite this very strong evidence, recurring Malthus-inspired analysis continues to conjure the threat of inter-state armed conflict over essential inputs such as water. In practice farmers and their advancing adaptive and productive capacities and the effective food supply chains have kept the demons of resource conflict over food at bay. Water resource productivity and food security have always been very tightly linked. Recognition of this link is vital to understanding the role and potential of the current phase of inward investment in water and land resources in Africa.

Impacts of global conditions on African farmers and economies Developing economies, and particularly those of Africa, have, however, been very poorly served by global trading systems. It is not possible to examine all the benefits and disbenefits of globalisation, distorted as they have been by farm politics in OECD economies (Paalberg 2011). Two centuries of OECD–farmer relations with international private-sector food supply chains together with additional intense farmer engagement with legislators in Europe and the USA have contributed very significantly to the progressive fall in world food commodity prices. Subsidised crop prices for major staples such as wheat and corn became the norm. For decades after 1950 the world price for staples such as wheat were competed down by prices determined by the US Department of Agriculture and EU subsidies. The consequences for African farmers have been very negative. They could never gain from the tendency of local crop commodity prices to increase when there was a local drought. The absence of higher prices in the local market meant that sub-Saharan farmers are never able to invest. Half-cost food was always available on the world market and could be delivered by a well-organised system of US shippers in the case of US food assistance. In the decades after 1950 these political economy processes brought up to five-fold increases in crop productivity and returns to water in emerging and OECD economies. In the same decades crop and livestock productivity fell or stayed level in Africa.

4

Introduction

These operating and trading asymmetries have been compounded by other elements of the global system. Most of the global transactions are actually handled by a small number of major privatesector transnational companies based in OECD countries. These are the so-called non-brand traders – ADM (US), Bunge (US), Cargill (US) and Dreyfus (French), known widely as the ABCD companies (Sojamo 2010). There are also scores of well-known brands in global food supply chains such as Unilever, Nestlé, Coca-Cola, Pepsi, Mars and brewers such as SABMiller. These corporations control the relevant assets and understand the key technologies as well as the investing, hedging, banking, insuring, trading practices and, above all, the risks. In addition they have accumulated the best available knowledge on the status and dynamics of global conditions that underpin food production. They are also best informed on changing meteorological, trading and market conditions. Replicating this basket of skills and global market power is beyond the current capacities of any single nation state or of any foreseeable coalition of states and/or international agencies. A new world trading order is not, however, beyond the anxious imaginations of the current membership of the United Nations (UN) Security Council. A different basis for global food security is certainly not beyond the imaginations of the political classes of the Brazil, Russia, India, China, South Africa (BRICS) economies. Or even beyond the dreams of a number of governments of economies enjoying unprecedented levels of sovereign wealth buoyed by a flood of oil-generated revenues. Those engaging in inward investment in water and land in Africa are aware that there may be a tipping point, beyond which the key players and the levers of market power in the food supply chain could in future increasingly be operated from Asia and Brazil. The clever players realise that success will come to those who recognise that an inward investment-led African green revolution will mainly meet the food needs of the extra billion Africans and not just the additional demand for food from Asia and the Middle East (Riddell, Chapter 2.6 of this volume; Olam 2011: 81). Investing in this dual project – feeding Africa as well as supplying the global market – should be the priority for investors. The chapters reveal that this insight has not yet been embraced by most investors and would-be investors.

Which farmers need to be helped? The centuries of adaptive capacity of farmers who manage 90% of our water borders on the sensational in some parts of the world. By increasing their returns to green and blue water collectively the world’s farmers now feed seven times the population of two centuries ago. They have expanded farming into new areas but the main advances in crop output have been achieved, first, by increasing the productivity of green water and, second, by supplementing soil moisture by irrigating about 30% of crop production. Adaptive farmers managing rainfed tracts – in some regions they are called dryland farmers – have not had major negative impacts on ecosystems. However, the over-allocation of blue water for irrigation has everywhere been an adaptive approach that has led to serious negative impacts on water ecosystems. The badly inspired approach to managing blue water and its negative impacts has been taken furthest in industrialised OECD economies of which there are about 35. The five BRICS economies have also vastly increased their water productivity of green water and blue water. Their over-allocation of blue water has been just as harmful as in the OECD economies. The chapters in this book focus on the developing economies of Africa. These are characterised by current very low green water and blue water productivity. They have also attracted the lowest levels of farm investment compared with other continents. African green water and blue water resources have the potential to support the 2010 population of just over 1 billion 5

J. A. (Tony) Allan

(United Nations 2010). Currently sub-Saharan Africa is a significant net food importer, but with appropriate investment it will be able to feed a population of double the current 1 billion population anticipated by the second half of the century. Will Africa’s rainfed tracts and its blue water be sufficient to feed some of the other 1 billion people outside Africa who will also need additional food supplies by 2050 and beyond? The mood of Africa’s water-insecure governments and some would-be investors is to assume that both Africa’s future population and some of the rest of the world’s population can be fed from Africa’s water and land. The chapters in the book show that only a minority of inward investors are aware that there are predictable local food commodities shortages that could be supplied in low-risk, short-supply chains and more profitably than commodities exported overseas (Riddell, Chapter 2.6 of this volume). The answer to the question of which farmers should be helped is that, first, family farmers must be helped out of subsistence systems with appropriate investment and the support of transport, food commodity preservation, transport and market infrastructures. Second, where suitable livelihood and environmental conditions exist, investment, and where necessary new farming skills, should be combined first with green water resources and then, very carefully, with groundwater and surface water resources to advance sustainably intensified crop and livestock production

Concluding comments This introductory discussion has shown that the 2008 and 2011 food price spikes have moved private investors and the political classes of food-importing economies to revisit their assumptions on food security. The price spikes have been almost as extreme as those of the 1970s. They have been triggered again by oil and other associated commodity price increases. The global economic hiatus of 2008 and its aftermath have played an unfathomable role as the combination of financial and commodity price crises is unprecedented. This handbook has been put together to help investors, farmers, traders and the other food supply chain players understand how foreign direct investment in African water and land resources could impact food availability and therefore food commodity prices. The foodsecuring initiatives and projects being considered and launched in Africa and reviewed in the chapters of this book are shown to be different from the inward investment of the late 19th and the first half of the 20th centuries. Conditions are different because, first, global power relations have changed and could be changing very significantly during this decade. Second, the investors are different as they are mainly agents from emerging economies and from Gulf and Middle Eastern countries. Third, there are many new voices highlighting human and livelihood rights and the need to protect ecosystem service priorities that did not exist a century ago. In one dimension the conditions are similar. The concern of most observers focuses on the governance capacities of African public and market institutions as their capacity to regulate fiscal, taxation, land tenure and employment relations are weak. The chapters of this book have been assembled now because there is a need on the part of would-be investors to understand the history of previous phases of inward investment in land and water in Africa. In other chapters the economics of investment in food production are analysed. There are also chapters that review the environmental conditions with which investors will have to grapple, such as the root-zone and groundwater endowments and the risks associated with using these often scarce and low nutrient resources, which can be subject to major annual and seasonal variation. The major message to investor is that Africa’s blue water resources are substantial. But surface water in many river basins is already closed. The groundwater 6

Introduction

resources are significant but in most regions cannot support intensive development. Investor must avoid writing the African chapter in the global story of the over-allocation of blue water to irrigation. Other chapters examine existing local livelihoods and the potential of inward investment to enhance or disenhance them. An important element of these discussions is the emphasis given to the important role that investment in African water and land resources plays in meeting the food needs of the future extra 1 billion African population. Finally there are chapters that highlight land tenure issues and the human rights of local communities in most of the regions of Africa. Food commodity prices started to fall again during 2011 and we have to live another decade to know whether we are about to witness a new world order of rising food prices after centuries of falling prices. This author judges that the global mood as reflected in the current mobilisation of interest in under-utilised sub-Saharan land and water resources will result in increased crop and livestock production and productivity. There is a very long history of farmers across the world responding to higher market prices. It would be good for African natural resources and for its future social, economic and environmental security if this phase of inward investment were sustainably intensifying. Africa could avoid the mistakes of over-allocating its blue water resources by learning from the USA, Australia (Gilmont and Antonelli, Chapter 4.5 of this volume) and the former Soviet Union as well as India and China. These economies are all taking decades to remedy the over-allocation of blue water.

Note 1 Green water is soil water in the root-zone that is held in the soil profile long enough for it to produce a crop. Green water accounts for 70% of the food consumed by society. Blue water is water diverted and pumped from surface and ground waters that is associated with irrigated crop production. Blue water is added to green water by farmers and together they account for about 30% of global crop production. Both green and blue water evapo-transpire via crop production on developed tracts that prior to development transpired the local green water via natural vegetation. Green and blue water account for the total food-water, which is 90% of global farm economy water consumption. The 10% of water that is non-food-water – for domestic and industrial uses – is always blue water.

References Allan, J. A. (2001) The Middle East Water Question: Hydropolitics and the Global Economy, London: I. B. Tauris. ——(2010) ‘Prioritising the processes beyond the water sector that will secure water for society – farmers in political, economic, and social contexts and fair international trade’, in L. Martinez-Cortina, A. Garrido and E. Lopez-Gunn (eds) Re-thinking Water and Food Security, Fourth Marcelino Botin Foundation Water Workshop, Leiden and Oxford: CRC Press and Taylor & Francis. ——(2011a) Virtual Water: Tackling the Threat to Our Planet’s Most Precious Resource, London: I. B. Tauris. ——(2011b) ‘The role of those who produce food and trade it in using and “trading” embedded water: what are the impacts and who benefits?’ in A. Y. Hoekstra, M. M. Aldaya and B. Avril (eds) Proceedings of the ESF Strategic Workshop on Accounting for Water Scarcity and Pollution in the Rules of International Trade, Amsterdam 25–26 November 2010, Value of Water Research Series No. 54, Enschede: Water Footprint Network, University of Twente. ——(2012) ‘Food–water security: beyond hydrology and the water sector’, in B. Lankford, K. Bakker, M. Zeitoun and D. Conway (eds) Water Security, London: Earthscan. de Fraiture, C., Cai, X. M., Amarasinghe, U., Rosegrant, M. and Molden, D. (2003) ‘Does international cereal trade save water? The impact of virtual water trade on global water use’, Comprehensive Assessment Research Report 4, International Water Management Institute, Colombo, Sri Lanka.

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Hajer, J. M. A. (ed.) (1995) The Politics of Environmental Discourse: Ecological Modernization and the Policy Process, Oxford: Clarendon Press. Olam (2011) Annual Report, Singapore: Olam International Limited. Paalberg, R. (2011) Food Politics: What Everyone Needs to Know, New York: Oxford University Press. Sojamo, S. (2010) ‘Merchants of virtual water – the “ABCD” of agribusiness transnational corporations and global water security’, unpublished MSc thesis, King’s College London. United Nations (2010) Population and Vital Statistics Report, UN Department of Economic and Social Affairs, New York: United Nations.

8

Part I

The history of land grabs and the contradictions of development

1.1 Enclosure revisited Putting the global land rush in historical perspective Liz Alden Wily

The context: majority legal landlessness in Africa Africa as focus As the site of most large-scale land and resource transfer at this time, sub-Saharan Africa is the reference point of this chapter. While advocates point to Africa’s arable potential, they acknowledge that suitable zones are largely remote and limited to certain parts of the sub-continent and require immense infrastructural support to be brought under industrial production (FAO 2009; Deininger and Byerlee 2010). Doubts have also gathered that industrialising agricultural production takes sufficient account of water needs, the realities of skewed and fragile water availability including erratic rainfall, the propensity for mismanagement and loss, and the already taut dependence of millions of immediate and downstream smallholders upon stressed water-bearing ecosystems (Smaller and Mann 2009; Baumgart 2011; Keulertz 2011; Woodhouse and Ganho 2011). Sub-Saharan Africa is also the only sub-continent where population will double by 2050 (to 2 billion people at current rates),1 where (along with South Asia) most of the population is rural (63%) and, despite urbanisation, may remain the majority given higher rural than urban fertility rates (Shapiro 2009). This is also the region where rural poverty is already most widespread,2 where good governance indicators are most widely poor,3 and where climate change is anticipated to be most directly damaging upon livelihood.4

Land ownership in Africa More directly relevant for discussion of tenure is the fact that most of the land mass comprises barely cultivable barren and marginal land (19%), forest/woodlands (26%) and shrublands, savannahs and grasslands (28%).5 As well as much of this being overlaid with lucrative commercial mining, oil and timber concessions, half a billion rural people also already use these resources intensively for the mix of forest products, hunting, fishing, transhumant cultivation

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and livestock grazing, indispensable contributors to farm livelihood, especially among the poor (IUCN 2011). It is also pertinent that so little of the sub-continent is subject to formal entitlement as legally recognised private properties. Ahead of the recent spate of large-scale divestment to investors involving 100 million or more hectares (Anseeuw et al. 2012), titled lands were estimated as embracing no more than 10% of the total regional land area (Deininger 2003). Outside Kenya, where around 27% of the land area is privately titled, the majority of these rural titled lands are made up of the former (and not so former) white-owned farms of South Africa, Namibia and Zimbabwe. This does not mean that the remaining 90% of the land mass is not owned, let alone unused, because it is not formally titled and/or cultivated. On the contrary, as I have explored elsewhere, virtually no land in Africa is unowned but exists as the individual, family or collectively held property of local communities, as acquired and sustained through self-organised, village-based customary regimes (Alden Wily 2011a, 2011b, 2011c). This indigenous (or ‘customary’) system of land ownership, use and regulation in fact embraces three-quarters of sub-Saharan Africa excluding water bodies. Even when several million hectares of terrestrial protected areas (deemed to be state assets) are subtracted, this still amounts to an astounding 1.7 billion hectares (Alden Wily 2011a). Outside of limited highly fertile areas (such as in Rwanda), remarkably little of this customary estate is permanently cultivated or owned by individuals/families – not surprising given that only 1% of the region is permanent cropland, and arable land as a whole absorbs only 8.5% to 12% of the land area.6 This means that most of the 1.7 billion hectares noted above are retained by rural populations as collectively owned and used assets. Aside from environmental and soil realities, including aridity, retention of such shrub and grasslands, forests and marshes as community property has two purposes: first, to limit elite capture from within communities as class formation accelerates, and in circumstances where farm landlessness is already problematic in some states (Jayne et al. 2005); second, to maintain lucrative wood, non-wood, pasturing, fishing, wildlife and other values which are lost when naturally collective assets such as forests are privatised and cleared. Meanwhile, local notions of customary estates as real property have crystallised over the last century as capitalist transformation and commoditisation penetrates, as population and resource pressures grow, and as the periodic bouts of land taking take their toll. Private house and farm plots have become more exactly defined and sellable. Boundaries between the overall land areas of village communities have become more interestingly exact, and outsider access to common resources within the village more guarded and conditional (Alden Wily 2007, 2011d). Many communities, already desperately poor, are equally willing to lease out, if not fully alienate, part or all of these collective assets, including rangelands and woodlands, should the rent and conditions be fair. Where additional benefits are on offer, such as promises of better roads to the community, water provision, access to new farming technologies and especially jobs, such deals are actively welcomed.

The core problematic So what, therefore, is the problem? The problem is that Africans as a whole (there are exceptions) are not being given this opportunity. Decisions to alienate or lease their lands (mainly through renewable leaseholds) are made and executed not by themselves but by their governments. Nor do governments act in this capacity on behalf of their citizens (other than in the amorphous sense of ‘nation’) but as the legal owners of lands which are not under 12

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registered title. Unregistered customary lands, we have seen above, may amount to 90% of a country area. It is the ownership status of these lands which is at stake. Both the state and communities claim to be owners. One looks to national law (based on imported European norms) and the other to customary law. While national law (and therefore state ownership) takes precedence, overlapping and contested rights set the interests of governments and their people far apart. The solution does not appear after all to lie in conversion of customary interests into statutory tenure forms. Even where launched at scale and compulsory, the process of individualisation, titling and registration as it is known, has proven problematic and usually incompletely adopted and short-lived (Bruce and Migot-Adolla 1994). The procedure is remote, lengthy, expensive and often unreliable. More seriously, securing a formal title extinguishes all customary incidents of property. This typically means that as well as secondary access rights falling by the wayside, immediate family members must surrender their ownership share in favour of the individually titled household head. Customary jurisdiction is also extinguished at registration, owners foregoing accessible community-based protection of rights for an unreachable and often demonstrably corruptible state system (Hunt 2005). Nor is titling attractive where only homesteads are eligible, leaving the larger and ultimately more valuable shared land assets more vulnerable than ever. Even more modern titling programmes, such as currently operational in Madagascar, Rwanda and Ethiopia, set aside non-homestead lands as state property (Alden Wily 2011b). Retention of other laws adds force to such ‘land thefts’, as in persisting forest laws which deem all forest to be the private property of the state, as well as establishing that all waters, including community ponds and lakes, belong to the state.

Rural populations as tenants of the state In short, legal denial of customary land interests as amounting to real property turn most of the rural population of sub-Saharan Africa into tenants of the state. Even their lawful occupancy and use may be restricted to dwelling and farm plots. Depending upon the law, such rights may themselves be permissive only, in force for only so long as the state does not require their lands for more important purposes or actors such as investors. The reality for millions of rural Africans in 2012 is that they are, as a Tanzanian judge observed in 1994, ‘little more than squatters on their own land’.7

Putting the land rush in perspective Clearly, legal dispossession of multitudes of rural Africans pre-dates the current land rush. Indeed, it could not advance at such speed and scale without a platform of denial that most of the lands targeted are already owned. The current rush now helps materialise legal dispossession on the ground. As the legal owner, governments are lawfully selling (or mainly leasing) lands from under the feet of their citizens. As owners, they need not, at a stretch, even consult with the occupants and users ahead of eviction, let alone involve them in contractual negotiations. This is particularly so in respect of lands outside of village settlements or permanent farms. These, given their lack of permanent habitation and size, are inevitably the main source of large estates being transferred, along with abandoned state farms which were taken from local communities a longer time past (Alden Wily 2011a; Schoneveld 2011). On their part, buyers and lessors can expect to take governments at their word when they say the land is unowned or, if uncultivated, that it is vacant, unused and idle. Acquirers have no obligation to conduct or require discovery of rights or their adjudication. The fact that the sellers or 13

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landlords of their new properties are mainly governments must also be reassuring; governments may be assumed to be au fait with the fact that should deals be broken, international arbitration may be brought into play. The nesting of most foreign deals under bilateral investment treaties doubles this surety. The responsibility to those affected by land takings is not their concern.

Towards fairer law Of course, there are exceptions to the above. Due mainly to what now looks like a short-lived wave of tenure reformism begun the 1990s, seven of the sub-continent’s 50+ states now recognise customary landholding as having the force of real property (Ghana, Mozambique, Uganda, Tanzania and South Sudan, Burkina Faso, South Africa; Alden Wily 2011b, 2011c). On paper at least, this gives majority rural properties constitutional and judicial protection, whether these are formally registered or not, and irrespective of whether the owner is an individual, family or community. The last is critical as it allows unfarmed collective assets such as community forests and pastures to be acknowledged as community property. Yet provisions in the reformed laws of each of the above have major shortfalls, and application of the law itself is flawed. Nine other states afford less fulsome protection of customary estates. Their common shortfall is either to continue to require formal registration for the right to be upheld (e.g. Angola, Namibia and Côte d’Ivoire) or to limit acknowledgement of ownership to houses and farms; this makes it difficult (or impossible) for groups and communities to secure their common properties, leaving these wide open to state-supported elite capture in the name of development (Madagascar, Benin, Burkina Faso, Botswana, Namibia, Liberia and South Africa). For rural populations in other African states and who may number 630 million people or 1.2 billion people in 2050, customary landholding remains entirely beyond the pale of legal propertyholding (ibid.). Most remain permissive occupants and users of state lands.

The land rush as an instrument of primitive accumulation The rest of this chapter explores how this parlous situation has come about. Using a selection of past land rushes as vehicle, it tracks the evolution of legal devices now used in Africa to maintain much of the continent as terra nullius (lands empty of owners), and governments by default their owners. In the process it will become clear that the devices used are merely instruments of wider forces, particularly of expanding capitalism (Bernstein 2010), carefully contrived to justify and sustain deprivation of the means of production of institutionally weaker classes even if they constitute the majority and provide the backbone of agrarian production. Seen from this perspective, the rush affecting Africa at this time is more surge than new event. Its modus operandi is familiar, engendering mass transfer of land rights through the most primitive means of accumulation for wealth creation, state-supported land appropriation in the name of development (Patnaik and Moyo 2011). The weakness of the modern African state also comes into view. This is seen in the failure of land policies to protect legitimate if untitled majority interests (and often environmental sustainability) in allowing strategies to be dictated by barely concealed private interest which helpfully dovetails with vested global land acquisition interests. Analyses of neopatrimonialism help explain contradictions. While their thesis that Africa is on a unique trajectory may be set aside, Chabal and Daloz (1999) aptly describe how personalised state institutions and decisionmaking are sustained. Analyses of shadow states (Reno 2000; Funke and Solomon 2002) and the emergence of a transnational capitalist class (Sklair 2001), sharing and supporting interests of local elites, add to understanding of how state investment in popular needs and demands 14

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remains so consistently secondary to buying the loyalty or at least compliance of powerful individuals and groups. As North et al. (2009) explore, the point at which elites find it more profitable to allow themselves and their competitors to be regulated by genuinely public accountability remains remote in most natural states. In property matters they want to secure their own rights but not see rights so uniformly secure that their manoeuvrability in structuring socio-economic relations to their own advantage is constrained (p. 77). While vastly different in their paths of analysis, Marxist perspectives broadly concur when it comes to performance of the state as an instrument of accumulation wielded by a dominant social class (Bernstein 2004, 2010; Patnaik and Moyo 2011). Paths of global capitalism, the nature of the immature state and the current phase of land grabbing affecting Africa are not wisely mooted in isolation. Meanwhile Borras and Franco (2012) get down to practical business by examining just how far current globalisation is in fact resulting in dispossession; they show that land security is not enough on its own, that land reform beneficiaries whether in Brazil, Mozambique or the Philippines may just as easily lose titled lands as untitled lands, if the conditions of linked state and capital are right. This brings us to a main conclusion of this chapter, elaborated later, that the law is not enough on its own; that particularly in polities, where rule of law is a casualty of poor governance, both legal and extra-legal means can be found to facilitate the most primitive form of accumulation of all – accumulation through direct taking of poor people’s lands and resources. Finding alternative routes to growth and modernisation is imperative. First, however, we need to step back and sample experiences wherein tools for legally dispossessing majorities were developed.

Land rushes of the past Dispossessing the Irish For this, let us go to Ireland in 1603. In order to revitalise the long-flagging conquest of Catholic Ireland, James I of England needed a free but legal means of taking possession of lands beyond the Pale (Morrissey 2004). The Pale was the limited zone of English settlement around Dublin. ‘Legal’ was important, for this was also the era in which dispersed law and jurisdiction among numerous civil and church courts was being modernised into a post-medieval ‘common law’. Lawyers and a new centralised court system were also coming into their own as regulators of the fragile marriage of the kingdoms of Scotland and England, of which Ireland was intended to be part (Dorsett 2002). The problem facing the King of England and his advisers was the awkward fact that the Irish not only considered themselves the owners of their lands but had a sophisticated legal system governing it, a rich customary law known as Brehon, first written down in the eighth century (Ginnell 1894). Most clans had their own Brithem (lawyer) to guide practices and resolve disputes among the different levels of family, service-based (officials had special land privileges) and collective property. The task of the English was therefore both complex and simple: to establish that customary Irish landholding did not amount to real property, so that the King could lawfully take over these ‘unowned’ lands. The first step was easy. In engineered cases of Gavelkind (1604) and Tanistry (1606, 1608) Sir John Davies for the defence argued that, as a conquered people, the laws of the Irish could not survive (superior) English law; that, as a Christian kingdom, Ireland must follow the more 15

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Christian (i.e. Protestant) law of England; and that ‘the backward Irish’ could only benefit by coming under the ‘just and honourable English common law’ (Dorsett 2002: 9–13). This still left the tricky business of establishing that Irish land tenure could not be upheld by English common law itself. For this the Court at the King’s Bench seized upon the Irish practice of Tanistry, in which land heirs were elected to avoid clan and family lands falling into the hands of possibly incompetent eldest sons. Sir John Davies laid out the case for the superiority of primogeniture under English common law. As law must serve ‘public good’, and public good requires ‘certain ownership of land’, the practice of election demoralised the expectations of the eldest son; ‘even debauchery could result’. Indeed, such customs as election were the ‘true cause of the barbarism and desolation of the Irish’. Nor did election meet the test of reasonableness required by modern English common law; it was obvious, Davies insisted, that the oldest son was naturally the most worthy man of blood and surname. Getting to the nub of the matter, such customs were also ‘prejudicial to the profit and prerogative of the King of England’, who if allowing clan-based tenure to continue would deprive himself of the (lucrative) benefits and powers of being the ultimate owner (ibid.). Thus it was established that the Irish did not in fact own their lands, and had a backward regime of land tenure which had to be suppressed for the good of the Irish themselves. In the absence of owners, the King of England was free to help himself to their lands. Plantations, as they were called, were allocated at speed to some 100,000 new Scottish and English settlers by 1641. This made tenants and serfs of the Irish on their own customary lands (Morrissey 2004), triggering the centuries of rebellion and bloodshed most now know about.

Dispossessing Americo-Indians Let us now turn briefly to another landmark court ruling, this time in the newly independent United States of America. This arose in a similarly engineered case designed to prove that indigenous populations did not actually own the lands they occupied and used, and again to facilitate state-supported land-takings at scale. This was the case of Johnson and Graham’s Lessee v. William M’Intosh heard by the American Supreme Court in 1823 (US Supreme Court 1823). In order to invalidate the Indian sale of some 43,000 square miles of land to private investors (and in which results he had personal interests), Chief Justice Marshall set about proving that Indians had illegally sold that tract. For this he elaborated the ‘right of discovery’; this purported to grant discoverers not only political sovereignty over territories they took, but primary ownership to all lands within those territories. Echoing back to the Davies arguments, property can only devolve on the instructions of English law; English law says the King owns original title in lands, and as descendant of the British Crown, only the new American States could lawfully sell on those lands. Indians held ‘a mere right of usufruct and habitation, without power of alienation’ (p. 569). In any event, Marshall argued in a new twist, Indians could not have been real owners as they were not cultivators clearing, settling and developing the land in visible ways; they therefore could not have acquired ‘proprietary interest in the vast tracts of territory which they wandered over … they had no individual rights to land’ (p. 570). Although Mills was yet to develop his defining thesis on property, John Locke and Adam Smith had already established that property only comes into being by man’s labour. Additionally, Marshall ruled, Indian lands were in fact vacant, Indians having fled from bloody wars ahead of colonial agriculturalists, leaving the soil ‘no longer occupied’ (p. 591). Finally, he observed, Indians are heathens and savages and the force used to acquire title by conquest therefore ‘finds some excuse in the character and habits of the people’ (p. 589). 16

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Still, mindful of the liberal Indian policies emerging from some of the States, Marshall was careful not to ignore native interests entirely. He concluded: ‘It has never been contended that the Indian title amounted to nothing. Their right of possession has never been questioned. The claim of government extends to the complete ultimate title’ (p. 603). Possession, or occupancy, and title and ownership were thus carefully separated in the canons of law, enabling colonisers to ignore the fact that the continents and islands they captured were in any sense owned.

Dispossessing the English poor The English themselves did not escape dispossessory land law. Having endured centuries (1285) of being deemed tenants as the lands of England were allocated over their heads to nobility, and facing realisation of dispossession, matters came to a head with the 19th-century Parliamentary Enclosures (Linebaugh 2010). As industrialisation expanded, the fragile reality of occupancy and use rights to 20 million hectares of pastures, meadows, moors and other commons came harshly into focus, with private capital hungry for lands and the financial killings which could be made from selling lands for roads, railways, factories and mechanical agriculture. Parliament, made up of wealthy (land)lords, was intimately involved and had been enacting site-specific laws since 1773 to legalise privatisation of this or that commonage. The General Inclosure Act 1845 administered the coup de grâce, unifying and accelerating the process. Of course, these private gains were declared as being in the public interest. Public interest, observes Hobsbawm (1962: 184), ‘was no more than … enlightened self-interest and profit seeking to transform the great mass of the rural population into freely mobile wage-workers’. It was, the equally famous social historian Thompson remarks, ‘a plain enough case of class robbery … played according to the … rules of property and law laid down by a parliament of property-owners and lawyers’ (Thompson 1991: 237).

The first great land rush in Africa European states had been no more dilatory than England in devising legal means of dispossessing populations on the basis of their own feudal tenure norms. When the 14 plenipotentiaries met in Berlin in 1884–5 to divvy up Africa into preferential trade zones, they were well equipped to ignore the fact that Africa was already owned. Thus, the early international law arising out of Berlin, the General Act of the Berlin Conference on West Africa, 26 February 1885, only required the signatories to inform each other when they expanded their coastal enclaves (Article 34) and to establish sufficient authority ‘to protect existing rights’ – meaning their own, not those of natives (Article 35). Natives were not entirely forgotten; the Powers (as they called themselves) were to have a watching brief over the moral well-being of Africans and to promote religious, scientific or charitable institutions ‘to bring home to them the blessings of civilization’ (Article 6). Initially, the ‘Scramble for Africa’ was economic: to capture the rubber, copper, timber and other materials needed to feed weak industry in Europe, to meet the demands of rising mass consumption for goods like cocoa, coffee, sugar and tea, and to find new markets to which to sell the millions of manufactures lying unsold in the Great European Depression of the 1870s and 1880s (Hobsbawm 1987: 62–7). As always the case in the financial crises which accompanied the depression and underlying agrarian production crisis in Europe, there were also numbers of wealthy entrepreneurs with money burning holes in their pockets looking for new sites and activities in which to invest (ibid.). Inevitably, the economic protectionism driving Berlin commitments segued swiftly into political protectionism, as trading nations and their companies found it necessary to create colonies or at least protectorates to secure their advantage. 17

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Proof that Africa was unowned became a crucial task in this project. Without this the greater expanse of the African hinterland could not be taken at will nor for free. Solutions were delivered in tens of sovereignty-cum-land laws enacted around the continent between 1896 and 1918.8 Broadly, these established European heads of state as the ultimate owners of all lands and resources within a colony. Only from their hands could acknowledged real property derive; this could arise initially through registration of documents of approved past purchases from natives, especially applicable within coastal enclaves or mission areas, or more commonly through formal land grants by local governors, either in absolute title or in the form of permits or concessions. These were duly recorded in Torrens-like registers, describing both the parcel and the new owner. Laws of 1899, 1906 and 1910 in the French Congo (Gabon), for example, fixed the procedures very precisely. Their provisions applied only to Europeans, although French possessions made some concessions to African elites, with whom they had long been trading partners such as gold, oil palm, rubber or slaves. Broadly, however, African majorities could at most obtain permits to lawfully occupy and use land. In some cases, such as in German Cameroon, chiefs who could prove ownership could secure title, but only a handful had the means to do so (Alden Wily 2011d). Laws also occasionally specified that areas of native occupation should be demarcated, designed less for natives than to control the rapacious land grabbing of European settlers and companies. To double-lock valuable resource areas against local claims – laws were routinely introduced to declare all forests and ‘wastelands’ (such as rangelands with no permanent habitation) as government land, the purpose of enactments in Sudan in 1901 and 1905. Colonisers were not entirely successful in suppressing all African land rights in all areas. This was sometimes as a result of resistance and rebellion (e.g. the case in German South West Africa) and sometimes through Africans using the Europeans’ own laws against them in the courts (Ghanaian and Nigeria chiefs were adept). Capture of African lands was also partial on the ground given the limited reach of colonial administrations into remote hinterlands (Alden Wily 2011c).

Post-war acceleration of local land loss Nevertheless, as the reality became evident that there might not be enough land for both enterprise and Africans after all, as impatience with African rebelliousness grew, and as the depressing market realities of post-First World War Europe emerged, application of laws tightened after the First World War or laws were reissued with stronger limitations upon African land rights.9 A veritable land grab by European and American enterprises ensued from the 1920s. European ‘profiteers’ became ‘investors’, allocated lands to commercially produce sisal, cotton, rubber and oil palm for needy home markets. Land grants and concessions to French, American and British companies multiplied, such as in the grant to Firestone of up to a million acres to grow rubber in Liberia or lands in Kenya to Brooke Bond and Del Monte to produce tea and fruit. State-controlled enterprises were also launched, such as through the Office du Niger, set up in 1932 to green the desert in what is modern-day Chad, Burkina Faso and Mali. White settlement in most eastern and southern African states multiplied (nine-fold in Nyasaland (Malawi) in three years alone (Kanyongolo 2008)). Without the barriers of reserves, Africans in the Lusophone territories of Angola and Mozambique fared worst; having already endured the arrival before 1900 of 10,000 criminals shipped to find land for themselves, Angolans were now confronted with even larger waves of immigrants, and in circumstances where the new fascist regime in Lisbon (1926) did not feel bound by prewar pledges towards peaceful native occupancy in at least some parts of the hinterlands (Clover 2005). 18

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Around the continent, African labour itself became a controllable commodity, through reservations, hut taxes and coerced movement and production laws (Bryceson 1980). The end of the Second World War saw another surge in land alienations. By 1954 white settler expansion in Namibia reached over a third of the country (Werner 1993). In Tanganyika, the British launched the Groundnut Scheme (1946), funded partly by multi-nationals but administered directly by the British Ministry of Food and implemented by former British army officers promised land at the end of the war (Raikes 1975). While the UN was sympathetic to the rising bout of African land grievances (such as brought before it by Meru elders in Tanganyika in 1950), the substance of domestic land laws changed not a whit in these years in respect of majority land interests. If anything, local African elites had by the 1950s themselves thoroughly taken on the utility of arrangements whereby administrations are the de jure or de facto owners of African lands, and which could be allocated uniquely to themselves (Ghai and McAuslan 1970). Within the customary sector land concentration and sales were advancing, to the advantage of especially those in positions of authority in the ubiquitous native councils around the continent. The East African Royal Commission on Land Tenure (1953–55) sealed the fate of customary tenure in establishing any form of communal jurisdiction or landholding as an impediment to agricultural growth. The plan was that this should speedily give way to individual English freehold entitlements, to be engineered through compulsory adjudication and titling of smallholders’ farms. This would enable ‘energetic and rich Africans to acquire more land and bad ones less land thus creating landed and landless classes … a normal step in the evolution of a country’ (Swynnerton 1954: 9–10). The same positions were advocated in Francophone Africa (Hesseling 2009). As African states reached independence, UN agencies and new bilateral donors (the former colonisers) stepped in with encouragement and funds for this route to modernisation.

Independence without liberation These conditions help explain the failure of liberation from colonialism by more than 40 African territories between 1956 and 1975 to remove the legal subordination of their citizens’ land rights. Most post-colonial land laws left untitled lands yet more trenchantly the property of the state and vulnerable to reallocation in the name of development, including to members of government itself and aligned elites (Alden Wily 2011b). Nor did mass conversionary titling of peasant holdings take off outside of Kenya and where it ran out of steam by the 1980s, confronted with the lack of permanent farming in the dry two-thirds of the country (Bruce and Migot-Adholla 1994). Meanwhile, state-driven commercialisation schemes involving millions of hectares were launched through the 1965–90 era, such as the peanut and cotton schemes in the Niger Basin, the sesame and sorghum schemes in Sudan, the wheat schemes in Tanzania or the privatised ranching schemes in Kenya and Botswana, along with yet further acceleration of forest and mining concessions throughout the Congo Basin. While foreign investors were actors and beneficiaries, the gains to local elites were such that success in land alienation was secured, even though the schemes did not significantly transform production, create jobs or even last (Golan 1990; Niamir-Fuller et al. 1994; Galaty 1999; Suliman 1999). Where affected communities have experienced loss of their lands (in the case of Sudan leading to in civil war) new legislation is introduced to remove any doubts as to the legality of land takings, such as through the Unregistered Land Act, 1970 in Sudan, the Land Reform Decree, 1975 in Uganda, or the Rural Lands (Planning and Utilisation) Law, 1973 in Tanzania, used to systematically extinguish occupancy and use rights in targeted areas up until 1989. 19

Liz Alden Wily

By 1990, with notable exceptions (among which Ghana and Botswana stand out), millions of rural Africans had even less tenure security than they had possessed a century earlier when confronted with the first land grabs of colonisation. While the laws of dispossession had not significantly altered over the long 20th century, the risk of losing land in practice had grown exponentially. Social transformation could be blamed, including a similar mix of population explosion, agrarian crisis, sharp rises in consumption, polarising interests of majorities and elites, the latter aided and abetted by the state and manipulated claims of public purpose, with which 19th-century Europe had become so familiar.

Land law reform to the rescue – or not Land reforms began to alleviate the threat of land loss for millions of Africans from the 1990s. It has become apparent since that the prominence given by social reformers to the achievements of a handful of laws may have been misplaced. First, the anticipated domino effect has been slight. If the Ugandan Constitution of 1995 is taken as the start-point of reforms on the sub-continent, less than one-third of states have followed suit over ensuing years, and with increasing dilution of provisions hardly measuring up to Uganda’s initial radical stance.10 Second, removing the suppression of indigenous land rights has usually arisen only as a sop to stronger intentions to free up the market in land, as not just urged for decades but ultimately required by World Bank-led structural adjustment terms (and for which poverty alleviation programmes emerged as counterpoint palliatives). That is, social tenure reform could be seen today as a side-event to legal changes which remove restrictions upon foreign land access, permit the state to earmark tracts of land for priority industrial land enterprise and limit onerous development conditions on commercial landholders and restrictions on farm size, allowing local and foreign enterprise a freer hand, including potentially to accumulate, hoard and speculate if not develop the lands. The investment promotion laws which have accompanied land law reforms over the last two decades (or been enacted without them) are arguably the better mirror of state reformism than the relatively few legal instruments which establish the devolutionary institutional land administration regimes through which millions of poor can procedurally realise or defend their rights. Third, and related, even reformed land laws which acknowledge customary rights as having force as real property systematically leave loopholes through which lawful if involuntary land loss may slip, encouraged by the land rush. Common techniques include widening the legal scope of public purpose to cover private purposes on the grounds that these may aid the economy; specification of the value of undeveloped (unfarmed) community lands as worth a 10th or less of permanently farmed lands, thereby making the price of lands for investors attractively cheap and compensation payable to even acknowledged customary owners minimal; empowering the state to declare investment zones at will and in ways which supersede citizen rights; limiting the numbers of persons an investor must consult with in order to secure local consent to developments on community land; or, as noted earlier to be the case in most of the 15 reformed land laws thus far, to limit protection of land rights to house and farm lands. The land rush also brings to the fore extra-legal techniques, such as the coercive persuasion adopted by Liberian President Sirleaf Johnson following local resistance to losing potentially 100,000 hectares to a private company,11 or the request/order to communities in Tanzania that they surrender under-utilised land to the Investment Promotion Centre. When all else fails, pliant parliaments may be persuaded to change the law to limit recognition of customary estates, such as pledged in Tanzania by the Kilimo Kwanza Programme (2009)12 or in Mozambique where limiting the size of community domains has been mooted. Courts can also play a role in proscribing customary rights, as recently illustrated in Uganda.13 20

Enclosure revisited

However, a main point made in this chapter is that the vast majority of rural Africans do not yet even have the advantages of reformed land laws which at least in principle protect their property interests. While their dispossession in national laws long precedes the current land rush, its progress to reinforces its ill effects. Large land transfers make long-standing legal dispossession real on the ground, sometimes including houses and farms (Anseeuw et al. 2012; Schoneveld 2011). Additionally, by state transfer of these lands into usually renewable formal leaseholds, the likelihood of communities retrieving these lands is remote. This is so even should the enterprise of the lessor fail. Either the land under lease reverts to government for reallocation or the investor sells it onwards to recover funds, even if bankrupted. Just such a case is reported in Tanzania, where a compliant community has lost not just its land but the benefits which led it to consent to the transfer in the first place.14 Further, the land rush tends to crystallise unjust old norms into hard practice, and most particularly those which deny that customary rights are due respects as viable property rights. The will for reform is reduced. As the land rush gathers pace, brakes to reformism are discernibly being applied. Many of the some 20 states which had tenure reform on the agenda, or even new policies or draft laws to hand, are now scurrying to restructure reforms as land market reforms, or abandoning tenure reform altogether.15 Thus, while land law reform must be flagged as still worthy of pursuit, it is doubted that this can be achieved in the time needed to limit the current surge of dispossession in Africa. Nor is land law reform sufficient on its own. Realistically, only more profound governance change, including greater localised institutional empowerment, can prompt governments to invest in the overdue need to pursue strategies of agrarian transformation and economic growth which build upon, rather than do away with, citizen ownership of land and resources. Openings towards this have been forged, such as in contract farming arrangements with smallholders and (rarer) opportunities for communities to be the lessors to big business themselves, and partners in viable commercial land-based enterprise. That is, the urgency of modernisation is not in question, but the routes to achieving this are. At this point, political will towards new and less dispossessory and fairer, if slower, paths to transformation seems slight. Nor does the most likely alternative, violent resistance to land takings, proffer a way forward. Presumption that this will lead to real change, including just land rights reform, have forgotten the outputs of civil wars in Rwanda, Burundi, Sierra Leone, Liberia and Sudan, change is pledged, land rights placed squarely on the post-conflict reform agenda but with so far salutary returns for poor rural majorities. Meanwhile, the key instrument of just social regulation, formal law, continued in practice to oppress and dispossess.

Notes 1 2 3 4 5 6

www.prb.org/Publications/Datasheets/2011/world-population-data-sheet/data-sheet.aspx. 72% of the population live on less than US$2 a day (see note 1). http://info.worldbank.org/governance/wgi/sc_chart_print.asp. www.ifpri.org/publication/impact-climate-change-agriculture-factsheet-sub-saharan-africa. http://earthtrends.wri.org/searchable_db/index.php?theme=9. www.tradingeconomics.com/sub-saharan-africa/permanent-cropland-percent-of-land-area-wb-data.ht and http://earthtrends.wri.org/searchable_db/index.php?theme=9. 7 Judge Nyalali, Civil Appeal No. 31, Court of Appeal of Tanzania. 8 For example, laws enacted in all 13 French possessions in 1900, 1904 and 1906; in the Belgian Congo Free State in 1885, 1886 and 1906; in Sudan in 1899, 1903, 1905, 1918; in Kenya in 1901, 1902 and 1915; in German Tanganyika, Ruanda and Burundi in 1891 and Cameroon in 1896. 9 For example, in new land laws of 1925 and 1939 in Sudan and in a 1925 law promulgated throughout all Francophone territories in 1925. 21

Liz Alden Wily

10 Ultimate title by the state was removed altogether, and landholding under customary tenure was given equal force with freehold, leasehold and mailo tenures. Overnight most Ugandans ceased to be tenants of the state. 11 www.nytimes.com/2012/01/21/opinion/in-liberia-a-nobel-laureates-problem.html?_r=1. 12 http://farmlandgrab.org/post/view/19826. 13 www.monitor.co.ug/News/National/-/688334/1320030/-/b0vn0kz/-/index.html. 14 www.guardian.co.uk/environment/2011/oct/30/africa-poor-west-biofuel-betrayal. 15 In different ways Malawi, Zambia, Swaziland, Burundi, Mauritania, Liberia, Nigeria, Chad, Sudan, Botswana, Ghana and Cameroon are examples. Details provided in Alden Wily (2011b).

References Alden Wily, L. (2007) So Who Owns the Forest? An Investigation into Forest Ownership and Customary Land Tenure in Liberia, Moreton-in-Marsh: SDI Liberia and FERN. ——(2010) ‘Making peace impossible? Failure to honour the land obligations of the Comprehensive Peace Agreement in Sudan’. Online. Available at: www.oxfam.org.uk/resources/learning/landrights/downloa ds/making_peace_impossible_land_obligations_in_central_sudan.pdf. ——(2011a) The Tragedy of Public Lands: Understanding the Fate of the Commons under Global Commercial Pressure, Rome: International Land Coalition. ——(2011b) ‘“The law is to blame.” Taking a hard look at the vulnerable status of customary land rights in Africa’, Development and Change 42(3): 733–57. ——(2011c) Rights to Resources in Crisis. Reviewing the Status of Customary Land Tenure in Africa, Washington, DC: Rights and Resources Group. ——(2011d) Whose land is it? The status of customary land tenure in Cameroon. Moreton-in-Marsh: Centre for Environment and Development, FERN, The Rainforest Foundation UK. Anseeuw, W., Alden Wily, L., Cotula, L. and Taylor, M. (2012) Land Rights and the Rush for Land. Findings of the Global Commercial Pressures on Land Research Project, Rome: International Land Coalition. Baumgart, J. (2011) Assessing the Contractual Arrangements of Large-scale Land Acquisitions in Mali with Special Reference to Water Rights, Berlin: GIZ. Bernstein, H. (2004) ‘“Changing before our very eyes”: agrarian questions and the politics of land in capitalism today’, Journal of Agrarian Change 4(1 and 2, January and April): 190–225. ——(2010) Class Dynamics of Agrarian Change, Agrarian and Peasant Studies Series, Halifax and Sterling: Rernwood Publishing and Kumarian Press. Borras, J. and Franco, J. (2012) ‘Global land grabbing and trajectories of agrarian change: a preliminary analysis’, Journal of Agrarian Change 12(1): 34–59. Bruce, J. and Migot-Adholla, S. (eds) (1994) Searching for Land Tenure Security in Africa, Washington, DC: World Bank. Bryceson, D. (1980) ‘Changes in peasant food production and food supply in relation to the historical development of commodity production in pre-colonial and colonial Tanganyika’, Journal of Peasant Studies 7(3): 281–309. Chabal, P. and Daloz, J.-P. (1999) Africa Works. Disorder as Political Instrument, Oxford: James Currey; Bloomington and Indianapolis: Indiana University Press, in association with the International Institute. Clover, J. (2005) ‘Land reform in Angola: establishing the ground rules’, in J. Clover and C. Huggins (eds) From the Ground Up: Land Rights, Conflict and Peace in Sub Saharan Africa, Nairobi: African Centre for Technology Studies, pp. 347–80. Deininger, K. (2003) Land Policies for Growth and Poverty Reduction, World Bank Policy Research Report Washington, DC: World Bank. Deininger, K. and Byerlee, D., with Lindsay, J., Norton, A., Selod, H. and Stickler, M. (2010) Rising Global Interest in Farmland Can it Yield Sustainable and Equitable Benefits? Washington, DC: World Bank. Dorsett, S. (2002) ‘“Since time immemorial”: a story of common law jurisdiction, native title and the case of tanistry’, Melbourne University Law Review 3: 1–26. FAO (2009) ‘How to feed the world 2050. The special challenge for sub-Saharan Africa’, Rome: High Level Expert Forum. Funke, N. and Solomon, H. (2002) ‘The shadow state in Africa: a discussion’, Occasional Paper No. 5, Development Policy Management Forum, Addis Ababa. Galaty, J. (1999) ‘The rhetoric of rights: construing Maasai land claims’, ALARM Working Paper No. 7, Centre for Basic Research, Kampala.

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Enclosure revisited

Ghai, Y. P. and McAuslan, J. P. W. B. (1970) Public Law and Political Change in Kenya, Oxford: Oxford University Press. Ginnell, L. (1894) The Land in the Brehon Laws, A Legal Handbook. Online. Available at: www.aughty.org/ pdf/clan_ceiles_land.pdf (accessed 4 August 2011). Golan, E. (1990) ‘Land tenure reform in Senegal: an economic study from the peanut basin’, Research Paper 1001, Land Tenure Centre, Madison, Wisconsin. Government of Tanzania (2009) Kilimo Kwanza Resolution, Dar es Salaam. Hesseling, G. (2009) ‘Land reform in Senegal: l’histoire se repete?’ in J. Ubink, A. J. Hoekema and W. J. Assies (eds) Legalising Land Rights, Leiden: Leiden University Press, pp. 243–70. Hobsbawm, E. (1962) The Age of Revolution 1789–1848, London: Abacus (reprinted 2011). ——(1987) The Age of Empire 1875–1914, London: Abacus. Hunt, D. (2005) ‘Some outstanding issues in the debate on external promotion of land privatization’, Development Policy Review 23(2): 199–231. IUCN (2011) The Value of Investing in Locally Controlled Forestry. Online. Available at: www.rightsandresour ces.org/publication_details.php?publicationID=2231. Jayne, T., Mather, D. and Mghenyi, E. (2005) ‘Smallholder farming in difficult circumstances: policy issues for Africa’, Paper presented at the Conference on the Future of Small Farms, 26–29 June, Wye, UK. Kanyongolo, F. (2008) ‘Law, land and sustainable development in Malawi’, in K. Amanor and S. Moyo (eds) Land and sustainable Development in Africa, London and New York: ZED Books, pp. 82–99. Keulertz, M. (2011) ‘Drivers and actors in large-scale farmland acquisition in Sudan’, PLASS, Cape Town: University of Western Cape. Linebaugh, P. (2010) ‘Enclosures from the bottom up’, Radical History Review 108: 11–27. Morrissey, J. (2004) ‘Kilnamanagh and the frontier: surviving the new English of the early seventeenth century, Department of Geography, National University of Ireland, Galway. Online. Available at: www.courts.ie/Courts.ie/library3.nsf/pagecurrent/3CBAE4FEB856E917B80256 (accessed 4 August 2011). Niamir-Fuller, M., Lugando, S., Kundy, T. and Mustafa, K. (1994) Barabaig Displacement from Hanang District to the Usangu Plains: Changes in Natural Resource Management and Pastoral Production in Tanzania, London: Institute for International Development. North, D., Wallis, J. and Weingast, B. (2009) Violence and Social Order: A Conceptual Framework for Interpreting Recorded Human History, Cambridge: Cambridge University Press. Patnaik, U. and Moyo, S. (2011) The Agrarian Question in the Neoliberal Era: Primitive Accumulation and the Peasantry, Oxford: Pambazuka Press. Raikes, P. (1975) ‘Ujamaa and rural socialism’, Review of African Political Economy 3: 33–52. Reno, W. (2000) ‘Clandestine economies, violence and states in Africa’, Journal of International Affairs 53(2, Spring): 433–60. Schoneveld, G. (2011) ‘The anatomy of large-scale farmland acquisitions in sub-Saharan Africa’, Working Paper 85, CIFOR, Bogor, Indonesia. Shapiro, D. (2009) ‘Falling birth rates in sub-Saharan Africa. Signal move towards greater economic security’, unpublished thesis, Penn State. Sklair, L. (2001) The Transnational Capitalist Class, Oxford: Wiley-Blackwell. Smaller, C. and Mann, H. (2009) A Thirst for Distant Lands: Foreign Investments in Agricultural Land and Water, Winnipeg: International Institute for Sustainable Development. Suliman, M. (1999) ‘The Nuba Mountains of Sudan: resource access, violent conflict, and identity’, in D. Buckles (ed.) Cultivating Peace: Conflict and Collaboration in Natural Resource Management, Washington, DC: International Development Research Centre, World Bank Institute, pp. 205–20. Swynnerton, J. (1954) A Plan to Intensify the Development of African Agriculture in Kenya, Nairobi: Government Printer. Thompson, E. P. (1991) The Making of the English Working Class, Harmondsworth: Penguin (first published by Victor Gollancz, 1963). US Supreme Court (1823) Johnson and Graham’s Lessee v. William M’Intosh. Werner, W. (1993) ‘A brief history of land dispossession in Namibia’, Journal of Southern African Studies 19 (1): 135–46. Woodhouse, P. and Ganho, A. (2011) Is Water the Hidden Agenda of Agricultural Land Acquisition in subSaharan Africa? Online. Available at: www.iss.nl/fileadmin/ASSETS/iss/Documents/Conference_paper s/LDPI/12_P_Woodhouse_and_A_S_Ganho.pdf.

23

1.2 Land alienation under colonial and white settler governments in southern Africa Historical land ‘grabbing’ Deborah Potts

Introduction The current era of land and water ‘grabs’ in sub-Saharan Africa is attracting much critical analysis. There is, however, a long and troubled history of ‘land grabbing’ in the region. Key features of that history can contribute to contemporary analysis because there are lessons and insights to be derived from the past and the historical literature on the fate of the land and indigenous occupants is rich and detailed. This chapter will provide an overview of how land alienation from indigenous peoples was accomplished in the past, the geographical patterns of land division established, and the outcomes of the process for indigenous rural livelihoods. Where appropriate, consideration will be given to the water issues involved in the choice and use of land alienated from the African population and comparisons made to the current issue of land ‘grabbing’. As most of sub-Saharan Africa was incorporated into formal colonial rule towards the end of the 19th century, the fate of indigenous farmers and their access to their essential means of production, land, was influenced by the interaction of a set of factors. Most importantly, did the particular area they occupied attract a large number of white settlers who wanted to farm? Second, was their land reasonably ‘healthy’ for European settlement? In southern Africa, a third factor was the nature of the administrative control exerted from the European metropole: was the area British, German or Portuguese and, if British, was it a protectorate, a colony or chartered by the British Crown to a private company? Or was it not yet incorporated, having been claimed by the Boers, the descendants of Europeans whose history of residence in southern Africa dated back to 1652? A fourth, crucial factor was how densely settled the indigenous farmers were: were there very large numbers of them and how effectively could they defend themselves against forced expropriation of their land? None of these factors was determinant. In relation to the last point, even the most determined and militarily organised groups could be overcome if enough troops armed with superior guns were mustered by the occupying Europeans, as evidenced by the fate of the Zulu people 24

Land alienation in southern Africa

against the British in the Anglo-Zulu war o f 1879. Also agricultural land was not necessarily the goal the European occupiers sought: many British and Portuguese settlers had no intention o f farming i f they could avoid it. The first settlers in the Pioneer Column which crossed the Limpopo in 1890 and moved on into the area that was to become Southern Rhodesia preferred mining claims and prospecting to agriculture, hoping for the discovery o f a ‘second Rand’ : another gold reef on the scale o f the Witwatersrand in the Transvaal. This was also the hope o f the instigator o f their migration to settle these areas, Cecil Rhodes, whose British South Africa Company (BSA) held a British royal charter under which it eventually claimed the vast central African territories o f Southern and Northern Rhodesia. Early Portuguese explorations o f the interior were also mainly seeking mineral wealth. Once Portugal had laid its claims to the regions o f contemporary Angola and Mozambique during the Scramble for Africa in the 1880s, it struggled for generations to lay effective claim to these vast areas since there were far too few Portuguese settlers wanting to come and occupy them and those that did much preferred urban areas, often being migrant peasants who aspired to something other than farming (Bender 1973, 1978; N ew itt 1973). The occupation o f much o f southern Africa was not, therefore, mainly driven by white set­ tlers who were experienced farmers with a desire to claim huge landholdings from which to make their fortunes. Nonetheless, well over 1.5 million square kilometres were alienated from the indigenous people for settlers and white-owned companies to farm (see Table 1.2.1; and Figure 1.2.1 which provides a guide to the temporal sequencing o f the process in six o f the countries involved).

ANGOLA

NORTHERN RHODESIA

SpUTHERN' RHODESIA

~7

BECHUANALAND PROTECTORATE s o i JT h w e s t ,

AFRICA

Swaziland TRANS VASE

O

Piggs Peak

o

SWAZILAND

CD

ORANGE FREE: STATE

ALIENATED BY 1860 ALIENATED BY 1860- 191*

NATAL

Big Bend

O UNALIENATED

0

200 100

400 KM 200

Siteki i

Manzini

CAPE OF GOOD HOPE

ALIENATED BY 1915-196®=

0

Mbabane

BASUT0LA5B

\

300 MILES

o 0

25 KM

0

10 MILES

Golela

AREAS RESERVED FOR SWAZIS 1909- 1910

Figure 1.2.1 Land alienation 1860 to 1960. Source: adapted and redrawn from map in Silitshena (1990).

25

Surface area sq km

1,221,000

391,000

753,000

17,000 582,000 118,000

824,000

Country

South Africa

Zimbabwe

Zambia

Swaziland Botswana Malawi

Namibia

1950 1970 1902 1974 1990

mid1930s 1972

1930 1964 1969

1913 1936

Year

7,612 25,899 14,973 2,2256

32,374 24,2813

198,899 144,513 182,409

1,142,890 1,071,115

Area

7,256 258,998 82,199

48%

42% 48% 81%

40% 93%

287,3265 705,367

4.5% 3.2%

44% 4.8% 13% 2.6% 52%7

30% 46% 47%

7% 13%

% Land area

117,620 179,708 182,409

91,900 c. 154,000

Area

‘African’ land sq km

51% 37% 47%

93% 87%

% Land area

Alienated land/private freehold/ ‘European’ sq km1

14% 48% 17%

56% 4%

19%6 17% 7%

% Land area

Other land2

Table 1.2.1 Alienated land in southern Africa: the impact of colonialism and white settlers (1sq km = 100 hectares)

1902 ‘certificates of claim’ ratified

1840s: ‘reserves’ first established in Natal 1913: Native Land Act 1936: Native Trust and Land Act 1890s: ‘reserves’ first established 1930: Land Apportionment Act 1969: Land Tenure Act ‘Other’ land = Crown Land (c. 40 million ha) generally still occupied by Africans

Significant dates and notes

Notes Areas may not add precisely to total and percentages may not add exactly to 100. These data are collated from diverse sources over many years, each source usually using different units (e.g., acres, hectares, square miles) which have been converted here to square kilometres. They provide a reasonable indication of the general scale of land division between different categories. 1 Depending on country and year, alienated land unavailable to the indigenous smallholder African farming sector can be variously described, with the designation ‘European’ a reasonable shorthand in some cases, but not all; see text. 2 Other land includes a variety of types including state land, game reserves, forestry land, national parks, etc. In Botswana most of this was the very dry western areas and most outside national parks remained available to indigenous farmers. 3 Included unassigned land, forest areas, undetermined areas. 4 Zambia: 37 million hectares of this ‘African’ land was in Barotseland which had special status within colonial Northern Rhodesia. 5 State-held land: either leasehold or freehold. 6 Freehold and leasehold land. By 1974 most leasehold land was mainly African-owned estates, mainly in tobacco. 7 This is the percentage of agriculturally usable land.

Deborah Potts

Historical land alienation in southern Africa to 1960: motives and processes Settler farming versus peasant production: West Africa versus southern Africa The historical geographical expression of the four factors discussed above provides the basis for understanding patterns of land alienation in sub-Saharan Africa up until about 1960: from then newly independent governments began to effect some changes through land reform programmes, although southern Africa was very late in this respect because of the intransigence of its white settler regimes. It is important to note that land policies in southern Africa (and Kenya) differed from other regions in that elsewhere it was generally in the colonial interest to promote peasant agriculture, which required that they retained access to most of their land. This was in part because in West Africa the ratio of Europeans to indigenous Africans was too low for any government seriously to consider exploiting the region’s agricultural potential via white settler farming with the enormous impact on land ownership patterns this would have caused. The underlying population parameters in southern Africa were different because its history of European contact was so different. To understand what occurred in southern Africa, it helps to start with a broad comparison between that region and West Africa where land outcomes were very different. As noted, European settler farming on a large scale, which would have a serious impact on the availability of land for indigenous African farmers, could only really occur where there were many potential European settlers. This rather obvious point is one reason why the colonial impact in West Africa in terms of land alienation was so different from that in southern Africa. The colonial division of sub-Saharan Africa was largely driven by strategic concerns about claiming areas which had (or might have) important resources or were needed to provide routes to those resources, in order to prevent these from coming under the control of other, competing European powers. Once boundaries were roughly fixed, however, there was the question of how best to realise financial gains from these resources. Minerals were exploited in similar ways but agricultural resources (land and water) were not. Very broadly, in West Africa, with its densely settled indigenous populations south of the Sahel and very hot and humid coastal zones, it was determined that the best way for the colonial enterprise to make money, and raise taxes to cover its administrative costs, was to encourage the existing farmers to produce agricultural products deemed profitable for the European colonisers and their ‘home’ markets. With absolute control of agricultural and marketing policies it was not difficult to direct what was produced. Produce like groundnuts, cotton, coffee, cotton, palm oil and other tropical agricultural commodities were thus grown, taxed and exported, largely by indigenous farmers on their ancestral land, providing profits for the European-owned commercial enterprises involved in the trade and any subsequent processing and manufacturing, and revenues to cover colonial administration. There were exceptions and plantation agriculture, where it developed, did involve alienating land from local people. However, the demand by Europeans for land to own and farm during the colonial period was relatively limited, despite some hundreds of years of prior European contact with West Africa (mainly for the slave trade). Heat, humidity and malaria played a part in this. Many of the areas alienated in southern (and East) Africa were at around 1,500 metres above sea level, which significantly mitigated these conditions: that the main areas of European settlement in Nyasaland and Kenya were the Shire Highlands and the ‘White’ Highlands was no coincidence.

28

Land alienation in southern Africa

Land alienation in southern Africa: 1652 to circa 1900 White settlement on a permanent basis dated back to 1652 and the establishment of the Dutch East India Company’s victualling post at what was to become Cape Town for its ships on their way to India and South-East Asia. The Huguenot settlers who agreed to settle there had a strong desire to create their own society and took little note of the Company’s strictures about not causing problems with the local population or moving beyond the confines of the area under Company control. Almost immediately they began to take over land beyond that area, and the process continued for the next 100 years with little to stop them. The farms they established tended to be enormous – one norm was the idea that each man mapped out his farm by riding his horse for half an hour: that distance would be the radius of the circle described by his land (approximately 6,000 acres). With typically very large families, generations of Boers or Afrikaners, as they came to be called, took up land stretching throughout what became Cape Province up to the River Gamtoos in today’s Eastern Cape by 1770 (Davenport and Hunt 1974). In the tip of Cape Province there is a Mediterranean climate, similar to that of southern Europe, where vineyards and similar produce can be grown. However, to the north in the interior the climate becomes increasingly arid. This means that in the absence of irrigation, the most agro-ecologically feasible agriculture is based on extensive livestock ranching. This climatic ‘water’ factor partly lay behind the extraordinary rate at which land was claimed for Boer farms, since their farming systems were so extensive. To have access to enough soil water to reliably provide enough vegetation for grazing large herds for a whole year required massive farms. This land was, however, occupied. Thus the early process of establishing a politically and culturally autonomous new, white European society in the Cape meant the utter destruction of the existing societies and the theft of their land. Had the originally small numbers of Boers been faced with the sorts of established farming societies and political institutions found along much of the West African coast, this would have been impossible. However, in this part of the Cape the indigenes were KhoiKhoi and San people. The KhoiKhoi were pastoralists, as the Boers then became, their agricultural systems dictated largely by the agro-ecology. The San were hunter-gatherers. The Boers had no difficulty overcoming the thinly distributed and poorly armed KhoiKhoi and taking their land and livestock and they rapidly incorporated them into their farming economy largely as slaves, working as herders for the new ‘owners’ of the land that had been theirs (Willcox 1976). The San suffered the appalling fate that would face the Herero in South-West Africa 250 years later: they were slaughtered. Alienating African-occupied land was thus achieved with little difficulty for the first 100 years of white settlerdom. However, the eastward expansion of Boer farmers then tried seriously to encroach on to land held by more sedentary Bantu-speaking agricultural societies, who had been first encountered in 1702 on the Fish River (Willcox 1976). They were much more numerous and able to defend themselves. The latter half of the 18th century was characterised by conflict and livestock raiding on this eastern frontier of white settlement, and the first ‘round’ of southern African land alienation by Europeans was ended. At the end of the 18th century the British annexed the Cape and the next round began. The history of the 19th century of land alienation in South Africa, and the three landlocked British territories, Bechuanaland, Basutoland and Swaziland, which came to be administered from the Cape, is exceedingly complicated (Kowet 1978; Silitshena 1990; Bowen 1993; Murray 1981; Shillington 1981; Davenport and Hunt 1974; Willcox 1976) and cannot be covered here in any detail. Key pointers of some relevance to the study of contemporary land ‘grabbing’ are thus singled out. The simplicity of the Boer approach to taking land for agriculture was replaced by a range of different strategies reflecting contemporary strategic judgements. Over the next 100 29

Deborah Potts

years, up to the end of the 19th century and the Anglo-Boer War, the outcomes for the many different African ethnic groups within today’s South Africa with respect to their land depended on these shifting judgements, and apparent safety in one decade with the British upholding the ‘paramountcy of native interests’ could easily be replaced by renewed land alienation by either the British or the Boers in the next. The advent of British rule in the Cape led, 30 years later, to a mass exodus of Boers seeking new lands to the north and their establishment of various independent republics, of which the most significant were the Orange Free State and the Transvaal. During this time the capacity of groups to (try to) defend their interests did have some influence on whose land was taken, and the density of settlement also had some effect. Thinly populated areas were easily incorporated into European freehold systems. It is usually argued that the swiftness with which the Boers took over so much land in the mid- to late 19th century in the northern interior of what was to become South Africa was because many established farming populations were moving to avoid the military uprising of the Zulu kingdom which, by unfortunate coincidence, was simultaneously occurring.1 Thus the current land ‘grab’ tends also to seek out less densely settled areas and is not looking to establish huge farms in areas like south-east Nigeria, Rwanda, Burundi, southern Malawi or round Mount Kilimanjaro in Tanzania: some of Africa’s most densely settled rural areas. On the other hand, and in tension with this previous point, densely settled areas are often so because their agro-ecological characteristics are relatively favourable to agriculture. Often the key issue is rainfall (amount and/or reliability), although slope and soil fertility can also be important. These are the very areas which farmers seeking to alienate land for themselves usually recognise as more desirable and profitable. Thus, unoccupied lands are also unlikely to be the target of land ‘grabs’. A further factor was that, in theory, British colonial administrations were meant to protect the ‘natives’ interests’. After failing to hold their lands by force, as the 19th century progressed some indigenous groups under extreme threat of losing their land from encroaching Boers sought, in desperation, to be ‘protected’ by being incorporated into the British colonial fold. Unfortunately the boundaries then set by the British, which were to define that ‘nation’s’ available arable land in perpetuity, did not tally with the historical extent of the agricultural territories these groups had occupied and used. For example, ‘[t]he present boundaries of Lesotho were fixed in the Treaty of Aliwal North of 1869, by which the Basotho were forced to cede much of the land they had previously occupied and farmed’ (Murray 1981: 10, citing Sanders 1975). British strategic considerations relating to appeasing either the Boers or the Zulu, denying the Boers access to the sea, and ensuring British freedom of movement to regions north of the Transvaal, all played a part in the colonial ‘protection’ eventually extended to Basutoland (Lesotho), Bechuanaland (Botswana) and Swaziland. However, as for Lesotho, significant areas of Swazi territory became part of contemporary South Africa – in this case subsequently largely to become, under the apartheid regime, the Swazi ‘homeland’ of KaNgwane. In the case of Swaziland most of the colony had, in addition, already been claimed by white settlers. For Bechuanaland, proportionately very little land was lost to white settlers even though the area claimed exceeded that alienated in Swaziland; it covers a vast area but is generally a very dry country and was thus to some extent ‘protected’ by its agro-ecology. However, much of that which was alienated was along its eastern borders with the Transvaal which, by Botswana’s agro-ecological norms, had better water resources. In terms of its arable, irrigable (rather than grazing) potential, this was a significant loss. The maps in Figures 1.2.1 depict the outcomes of these general processes for land in Bechuanaland and Swaziland around the end of the 19th century. For Basutoland and Bechuanaland, subsequent British ‘protection’ did, however, hinder or prevent further land alienation by settlers as is evident from Figure 1.2.1. 30

Land alienation in southern Africa

For South-West Africa, German colonisation provided no such protection and an underlying philosophy of German control there was to transfer land from the indigenous people to German ownership. The extent of that transfer in the early years of colonialism was shaped by the numbers of settlers, as the colony covered a vast area, and the geography of existing African occupation. Here by far the most agro-ecologically superior land, with the best rainfall, lay in the north, bordering Portuguese Angola (Werner and Kruger 2007), but this was the most densely settled by various groups, including the relatively numerous Ovambo, which ‘protected’ it from dispossession (Pankhurst 1996). The extremely arid coast, affected by the cold Benguela Current, was of no interest to farmers although its southern stretches were taken over by European mining interests and entry was ‘forbidden’ thenceforth to anyone to prevent surface diamonds from being taken. However, in 1904 the Germans destroyed the Herero in this colony when they rose against the seizure of their land; the Herero lost perhaps three-quarters of their total population in what is now recognised as the 20th century’s first genocide. The alienation of land often occurred by straightforward conquest. However, in many cases treaties and agreements were drawn up with local rulers, chiefs or headmen which European settlers subsequently referred to as giving them full, legal rights to the freehold of the land they then occupied. However, as endless subsequent scholarship and oral history has demonstrated, the nature of most of these agreements was largely illegal, usually immoral and often absurd. Often, local leaders were agreeing only to temporary usufruct rights with no conception that the land was being commodified and permanently alienated from their communities; in other cases they had absolutely no jurisdiction over the land in question (as the Europeans involved were generally aware); and where payment was offered it was ridiculously small (and even then often not actually paid). One example from the end of the 19th century may suffice to illustrate: in Nyasaland, taking advantage of African trustfulness, ingenuousness, and inexperience, individuals and companies obtained ownership of land on which large numbers of Africans lived and tilled the soil … John Buchanan, a coffee planter, bought 3,065 acres in the future city of Blantyre for a gun, thirty-two yards of calico, two red caps, and several other tiny items. (Hyam 2010: 109) For the British territories north of South Africa, land seizures began in the last two decades of the 19th century and will be discussed below. It should be noted that structuring the analysis temporally is a simplifying device. There were many temporal overlaps in approach and processes. In South Africa, the Anglo-Boer War at the end of the 19th century did mark the end of the second ‘round’ of land dispossessions in South Africa and its neighbours, Bechuanaland, Basutoland and Swaziland. However, for South-West Africa, Southern and Northern Rhodesia, and Nyasaland, the era of the Scramble for Africa and the carving up of the continent at the Berlin Conference of 1885 was the start of a new, and different, round of land alienation in the region.

Land alienation in southern Africa: end of the 19th century onwards The impact of commercial rule: the British South Africa Company The early decades of alienation of land north of the Limpopo River in what became Northern and Southern Rhodesia occurred under the jurisdiction of Cecil Rhodes’s BSA from 1890 to 1923. Commercial interests thus predominated even more than in areas administered as colonies 31

Deborah Potts

or protectorates. As already indicated, at first the BSA and the settlers hoped their profits and fortunes would come from mineral finds. These proved to be insufficient to cover BSA costs and after about a decade settlers were urged to take up land and farm, with the hope that this would generate more income (Palmer 1977). The original pioneers had in any case been ‘entitled’ to 12 square kilometres of land each. Much of the land occupied by the Matabele people under their king, Lobengula, had been alienated in the first few years of BSA control, after their conquest by Rhodes’ forces in 1893 when they rose against the European occupation. Their agricultural systems involved both arable farming and livestock, with cattle a central element. Their occupation in southern parts of Southern Rhodesia of what is known as ‘high veld’ land was crucial as this was relatively tsetse-free: tsetse flies carried sleeping sickness for domestic stock and people. Their conquest led to the confiscation of their land and their cattle and their being pushed into lower-lying, much hotter and drier areas (Gwaai and Shangane) in the ‘low veld’. The Mashona people further north also rose against the occupation and theft of their land in 1896, as for a second time did the Matabele. Again the Company forces were eventually victorious. The high veld land further north had much higher agro-ecological value than that occupied by the Matabele, essentially because of better rainfall, and white farmers taking up land here could operate mainly arable farms. The Eastern Highlands, along the border with Mozambique, were the best land agro-ecologically, with the most reliable rain, suitable for horticulture and, in the higher areas, coffee and tea. The influence of this on patterns of land alienation in the early years of white settlement in Southern Rhodesia is evident from Figure 1.2.1: as can be seen, much of the high veld (a band of land running across the middle of the country from south-west to north-east) and the Eastern Highlands had been taken by 1914. Protection of the ‘native interest’ was scant under the auspices of a commercial company. The jurisdiction over Southern (and Northern Rhodesia) passed to Britain in 1923 when BSA administration ended. However, there was a crucial difference between the two which was to affect subsequent land outcomes. Southern Rhodesia’s white minority population was large enough by then to opt for ‘responsible self-government’ which allowed the white settlers their own Parliament and the right to pass laws. Although the Colonial Office was theoretically still in charge of issues to do with ‘native interests’, which obviously included land policies, it rarely exercised its powers, essentially ceding the right to dispose of African land to the settlers (Palmer 1977). Northern Rhodesia had a far smaller settler population and became a colony which placed a layer of colonial officialdom between the naked self-interest of the white settlers and the indigenous Africans. Alienation of farm land was thus somewhat constrained. In fact, land in Northern Rhodesia was generally of better agro-ecological quality, with better rainfall, than in Southern Rhodesia. Population densities were also low. Thus it was ripe for a process of land theft and white farming settlement. However, it was a huge territory far to the north of South Africa, from which the waves of white settlement of the Rhodesias had largely begun. To some extent, its location and size mitigated against white settlement reaching the levels necessary for serious uptake of its land, on the scale experienced in South Africa, South West Africa and Southern Rhodesia, before it passed into the hands of the British Colonial Office. Agro-ecological suitability for settler farming was thus only a part of the picture of the region’s land alienation.

Mediation of land alienation in Protectorates: Nyasaland and Swaziland In Nyasaland, vast areas of land had been claimed by individual Europeans and large Europeanowned companies towards the end of the 19th century. In the Shire Highlands, in the southern region of the territory, experimentation began with various export crops, such as tea, coffee, rubber and indigo, in the 1880s (Pachai 1972; White 1987). This region became the centre for 32

Land alienation in southern Africa

European-controlled and farmed land during the colonial period, although tobacco estates were also later established in the central region. Far more land than that effectively occupied and farmed in this way was actually alienated at first, however, in the sense that it was claimed by Europeans in various ways. Nyasaland then became a British Protectorate, as crucially opposed to a chartered company territory. In 1892, Sir Harry Johnston, the first British commissioner, reported on the various land claims. With at least some regard for their ‘legality’ and impact on local people, he repudiated some but none the less accepted 69, covering around 15% of all land (Jul-Larsen and Mvula 2009, citing Pachai 1973). Certificates of claim were issued for Europeans for these legitimised land claims and ‘waste and unoccupied land’ was placed under the control of the British Crown from which subsequent leases to settlers could be made. According to Hyam (2010: 109) the process ‘left the Africans in [full] control of no more than two-fifths of the total land area of Nyasaland’. Vast areas in the northern and central regions were granted to the African Lakes Company, later transferred to the BSA. However, this did not translate to most African farmers being evicted or converted into labour tenants in the same way as was occurring in the southern Shire Highlands, although the later establishment of very large forest reserves, such as Vipya, in the north did affect African land occupation (McCracken 2003). The BSA claim was relinquished in 1930 and the land became Crown land. Although further mass land alienation across the territory for European farming was limited by its protectorate status, in the south Johnston’s confirmation of European ownership of 1.4 million hectares (Krishnamurthy 1972) had drastic implications for the indigenous population. Here, in this densely settled region, there was deep anger and distress over the land already taken. This led to a violent uprising in 1915 led by John Chilembwe, who to this day remains a nationalist hero in Malawi; this event helped to focus the colonial authority’s appreciation of the need to be careful with land allocations. Similar colonial intervention occurred in Swaziland, where King Mbandzeni had, prior to the establishment of full British Protectorate status, conceded more land than his entire kingdom contained, and ‘the documents that killed us’ passed into local folklore. The British intervention in this process culminated in the setting aside of ‘native reserves’ which, in 1910, covered only approximately half of Swaziland’s area (see Figure 1.2.1). This was deeply unsatisfactory for the Swazis, and in 1923 they sent a deputation to London to try to overturn the subsequent British colonial decision to recognise two-thirds of these overlapping concessions, but this failed (Hyam 2010: 108, 109).

Land Acts: South Africa and Southern Rhodesia The importance of the nature of the state as an influence on land outcomes in southern Africa has been demonstrated. In 1910 South Africa became an independent nation and direct British influence which had extended for a brief decade across its four provinces (Cape, Natal, Transvaal and Orange Free State) after the end of the Boer War was ended. Crucially, the British failed to ensure that the indigenous African population would have voting rights; thus was the scene set for a further 84 years of land and agricultural policies which would disadvantage them in almost every way imaginable. The same general political conditions emerged in Southern Rhodesia as it achieved ‘responsible’ self-government in 1923. In both cases an early result was the passing of crucial Land Acts which underpinned the division of land between whites and blacks for decades. In South-West Africa, the First World War led to independent South Africa being given, by the League of Nations, the mandate to administer the colony from 1917, with the proviso that this should be in the ‘interest of the native population’: a condition which it 33

Deborah Potts

promptly ignored. The general attitudes and legislative approaches towards African land rights which operated in South Africa soon followed in its mandated territory, where a significant amount of land had already been alienated under the Germans (see Figure 1.2.1) (Green and Kiljunen 1981). In 1913 South Africa passed its notorious Natives Land Act. In 1930 Southern Rhodesia passed the Rhodesia Land Apportionment Act. In both cases the legally defined division of land between the races was disgracefully unfair. The essential features are shown in Tables 1.2.1 and 1.2.2. In South Africa the Europeans took 93% of the land; the African majority (then 67% of the population) received 7% (the so-called ‘scheduled’ areas). In Rhodesia a very much smaller white minority was apportioned 51% of the land, and most of the African population were assigned 22%. Of crucial significance for understanding both the subsequent effects of these Acts and their real purpose is that Africans were forbidden to purchase land outside of their designated areas. Before then they could buy land, and some had purchased freehold farms. In Rhodesia a small amount of land was set aside for ‘native purchase’. Both Acts also prevented Africans owning any urban land in ‘white’ areas. The Acts were a devastating legislative blow for African farmers in these territories. With so little land relative to European, farmers their capacity to compete in agricultural markets was seriously undermined. Indeed, that in part was the intention. The Acts were subsequently revised, as shown in Tables 1.2.1 and 1.2.2. The extra 6% of land added in 1936 in South Africa could make little difference to the essential issues, as African populations grew. In any case, not only did this extra ‘quota’ land have to be purchased by the government from ‘willing’ white farmers before being added to ‘African’ lands (and some had still not been so assigned by 1994), but the population in these areas was being artificially further increased by evictions from European land. Precisely the same processes occurred in Rhodesia as the various redivisions of land occurred in 1964 and 1969. The 1969 Land Tenure Act, assigning 42% of land to each race, occurred after elements of Rhodesia’s white settler minority illegally declared a unilateral declaration of independence (UDI) from Britain in 1965. The majority of whites were urban but ‘defending’ the ‘right’ to hold on to the farmland alienated so long before was an important force in this political move. By then many of the farms acquired by force, without compensation, from the African population had been sold and bought by other whites. In South Africa the African farming areas took on a new role after the National Party took power in 1948 and full-blown apartheid was ushered in. Political imperatives meant that they were redesignated as ‘homelands’ or ‘Bantustans’: areas in which various different African ethnic Table 1.2.2 Legislated land division in Southern Rhodesia 1930–69 (% total land) Year

European areas

African areas

Other1

Indigenous tenure Purchase areas 1930 Land Apportionment Act 19642 1969 Land Tenure Act

50.8

22.4

7.7

19.1

37.0 46.7

41.6 41.5

4.4 3.8

17.0 8.0

Source: Derived from data in Sibanda 1979. Notes: 1 ‘Other’ includes, depending on year, unassigned land, unreserved area, forest areas, national lands. 2 There were various changes to the land division set out under the 1930 Land Apportionment Act. This was the situation by 1964, a year before Rhodesia's Unilateral Declaration of Independence (UDI).

34

Land alienation in southern Africa

groups would hold political rights. The move was particularly aimed at the African urban population. Similar ideas were mooted in South-West Africa (Namibia) from the 1960s. Southern Rhodesia also moved in this direction. The outbreak of liberation wars in both Namibia and Rhodesia, both fuelled in part by their histories of land alienation, made this particular use of African land areas hard to put into effect. In South Africa some extraordinary urban policies relating to influx controls on rural–urban migrants, African urban housing and decentralised industrial locations in South Africa, which were driven by efforts to reduce the African urban population on ‘white’ South African land, drove up the populations in many ‘rural’ African areas way beyond any realistic practice of agricultural livelihoods. Combined with mass evictions from white farmland fuelled from the 1960s by the progress of agricultural mechanisation, these processes led to 3.5 million people being forced off white land and into the homelands from 1960 to 1980 (Surplus People Project 1983), further adding to the pressure within these areas. In some areas the densities of population reached by the 1980s meant that they could be described as ‘rural slums’ (Murray 1983). Thus did the processes of historical land alienation in South Africa culminate in the utter destruction of agricultural potential for many black South Africans.

Making European agriculture competitive The history of land alienation in southern Africa can never be understood merely in terms of unequal and unfair land division, although the basic facts are so startling that it is perhaps unsurprising that many analyses do not go beyond this inequality. However, the profitability of owning the means of production, whether land or capital, is crucially influenced by the institutional setting. Without agrarian infrastructure and state support, even owning most of the land need not prove to be a successful and sustainable path to profitable and productive agricultural enterprises. Farms need labour. In southern Africa, most indigenous communities had their own land and agricultural livelihoods. Their labour had not been ‘freed’ in the Marxist sense of being fully proletarianised and divorced from the means of production, rendering labourers dependent upon finding waged labour in capitalist enterprises such as commercial farms, mines and industries. The extent to which this issue directed settler state and colonial policies in this region cannot be overstated – it was probably more important than taking the land because very often land seizures occurred to reduce the independence of African labour and force men into the labour ‘market’, rather than to obtain more land to farm, per se. There is a vast literature on this issue for the region; key contributions include Palmer and Parsons (1977) and Arrighi (1970). Taxes, payable in cash, played a part in ‘forcing’ young men to seek work on European farms and other enterprises, if pay and conditions were too poor to encourage them to seek those jobs as a free choice. However, land alienation was a key tool for providing labour, as contemporary reports demonstrated, with European farmers constantly clamouring for more, very cheap, labour and pointing to the need to reduce African access to land (by alienating more) so that families could not survive without access to cash remittances from a wage labourer. The prohibition on land purchases outside the ‘reserves’ demonstrated that the real purpose of the Land Acts was to limit Africans’ legal rights to land in order to undermine their agricultural livelihoods. Labour prices were also driven down by casting far afield, to poorer colonies with fewer competing wage opportunities, for workers. The various European-controlled governments and authorities in the region actively collaborated to provide a vast pool of recruitable labour which could freely cross colonial boundaries (Paton 1995). The whole of southern Africa became bound up in a migrant labour system centred mainly on the demands of South Africa and Southern Rhodesia, as well as Northern Rhodesia and South-West Africa. 35

Deborah Potts

Providing land and ‘freeing’ labour were not, however, enough to make many European farms successful. African farmers on their own land, even as this became increasingly scarce, were more knowledgeable about local conditions and suitable crops, were often eager to take advantage of agricultural markets as they developed, and had the enormous advantage of control of unpaid family labour. In short, for some crops and in reasonable agro-ecological conditions, they could out-compete large, commercial farms. Examples include maize, the staple food crop, cotton and certain types of tobacco. Thus, again, European farmers lobbied the state to hinder this competition which was undermining their profits. A vast range of legislated prohibitions and obstacles to African commercial agriculture resulted, tailored to the specific local commercial farming ‘needs’. For example, burley tobacco could not be grown in Nyasaland without a licence (Tobin and Knausenberger 1998), and African-grown maize in Southern Rhodesia was all classified at the lowest grade, no matter what its quality, often making it unprofitable to market (Palmer 1977). At the same time, as in Europe, large commercial farms on white-owned freehold land received substantial state support for agricultural credit, inputs, irrigation and marketing while this was largely withheld from African peasants. Eventually the combination of all these statesanctioned and institutionalised factors – dwindling access to land, ‘forced’ migrant labour and denial of agrarian support – did largely break the back of the smallholder commercial peasantry in the region in the areas where smallholder success was deemed not to be in the interests of white settlers.

Agro-ecology, water, market access and land alienation The value of agricultural land is strongly related to available water. While one might expect that white settlers would have seized the best land in this respect in southern Africa, intervening factors of indigenous population geography and the timing and geographical patterns of European settlement mean that actual outcomes were far more complex. In very general terms, the ‘expected’ pattern emerged only in Southern Rhodesia. Here much of the high veld and the Eastern Highlands – the most valuable land in agro-ecological terms – became white farmland. The colonial state’s agricultural authorities mapped out the territory according to agro-ecological value, categorising areas as regions I to V, or X (see Table 1.2.3). Other factors besides amount and variability of rainfall (which are inversely related) determined these categories, but rainfall is the key factor. Each category was associated with a list of advised agricultural practices: the rainfed crops and/or livestock most likely to succeed. Region I was the most valuable, mainly concentrated in the well-watered Eastern Highlands. Regions I and II had a very good to good chance of yielding decent rainfed crop yields, including the production of the local food staple, maize. The riskiness of rainfed crops only increased for each subsequent agro-ecological region. Advice was that rainfed crops should be avoided as a commercial enterprise in IV and V, which were more suited to extensive or very extensive livestock ranching. Region X covered areas deemed entirely unsuitable to agriculture, mainly owing to aridity. Table 1.2.3 shows clearly how advantaged European farmers were as they had claimed the vast majority of areas I and II, where profitable farming was easiest. African farming areas under indigenous tenure were concentrated in the worst regions, accounting for half of all the land in the drier areas of IV, V and X with large parts of the rest in national parks, etc. Yet smallholder farmers in many of these areas were (and still are) desperately trying to cultivate crops, despite the fact that the technical agricultural advice is that this will usually fail under normal rainfall regimes in those regions, let alone a drought. Unsurprisingly, yields are poor and many crops fail in most years. While this is often cast in the media as ‘a drought’, in strict technical terms this is not correct as the rainfall 36

Land alienation in southern Africa

levels may not have departed much from long-term patterns – the problem is that the division of lands pushed African farmers into low-lying, hot and arid areas which historically had not been much used for livelihoods based on arable agriculture. Table 1.2.3 also shows that European farms included large parts of areas III, IV and V, but much of this was under livestock ranches, supported by Rhodesia’s sophisticated meat marketing system and associated para-statal Cold Storage Commission. In South Africa, the pattern was mixed. The areas occupied by African farmers traced a rough horseshoe of discontinuous, fragmented bits and pieces of land from the homeland of Ciskei in the Eastern Cape, north along the coast towards Swaziland and then west and then south along the border with Bechuanaland. The agro-ecological value of this land varied enormously. However, one estimate is that its share of South Africa’s rainfed agricultural potential was roughly proportionate: 13% of the land and about 20% of the potential. Much of the better rainfall area was in KwaZulu but here the often mountainous terrain constituted another problem for farming. Many ‘homelands’ to the north and west were very dry and agro-ecologically most suited to livestock farming. In Namibia, the pattern was different again. As in Southern Rhodesia, the country was divided into agro-ecological regions and, as Table 1.2.4 indicates, the vast majority of the land suited to rainfed agriculture is found in the African areas under indigenous tenure, for the reasons previously described. Much of the European farmland is vast livestock ranches, many of which are not even suited to cattle, but to smaller livestock. Access to naturally well-watered land in southern Africa was not, therefore, based on any simple racial division. However, Europeans on drier areas had various options which allowed many to develop successful commercial farms (although it should be noted that thousands of white farmers were also driven into debt and/or off the land by droughts, despite all their Table 1.2.3 Land division by agro-ecological regions (%), Zimbabwe 1980 Land category

National and unreserved lands African lands (indigenous tenure) African purchase areas European areas

Agro-ecological regions I

II

III

IV

V

X

16 13

6 21

12 39

18 50

23 49

24 48

— 71

4 69

4 45

4 28

2 26

2 2

Source: Sibanda 1979: Table 7.

Table 1.2.4 Land division by agro-ecological regions (%), Namibia circa 2000 Agro-ecological regions1

Land category

Freehold (commercial) Indigenous tenure Non-agricultural land

1,2 — 90 10

3,4,5 36 57 7

6,7 70 30 —

8,9,10 66 9 34

11 — — 100

Source: adapted from Table 1 in Wermer and Kruger, 2007. Note: 1 The regions with better access to water are 1, 2 with each subsequent region increasingly arid and less suited to rainfed agriculture. The official designations are: 1, 2: short-maturing crops and large stock farming; 3 ,4, 5: short/long maturing crops or large stock farming; 6, 7: mixed livestock farming; 8, 9, 10: small stock farming; 11: unsuitable for agriculture.

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advantages; e.g. see Murray 1992). One option was to hold such huge farms that livestock numbers were sufficient to allow a reasonable income. Another, and more recent, option was to turn vast landholdings over (or back) to wildlife, far more suited to the natural vegetation and rainfall regimes than cattle, and derive livelihoods from tourism and hunting. The third option, of particular significance to the topic of this book, was to irrigate crops or greatly increase possible livestock numbers by installing boreholes. The extraordinary changes wrought in the agricultural landscape and its productive potential for livestock by borehole technology (and fencing) in South Africa’s Karoo is compellingly analysed in Archer (2000). In Southern Rhodesia many European farms used irrigation on some part of the farm. In the hot low veld, huge irrigated corporate sugar plantations were established which were highly productive, in sharp contrast to the adjoining native reserves where people struggled to grow food in the very dry environment. Even in areas with higher rainfall where rainfed crops were possible, many farms had some irrigated areas, often from small dams on their own land, which greatly increased yields and the reliability of production (Hughes 2006). The growing season was also extended beyond the six months of the rainy season. In Namibia, the only large areas of irrigated land were under European ownership. In South Africa, there is extensive use of rivers for irrigation, and dams and associated infrastructure were a major item of government expenditure in the 20th century, with nearly all the agricultural water allocated to European farms. In all three countries livestock ranches were made far more productive by the thousands of windmill-driven boreholes that so characterised their landscapes. In all three, state support for irrigation for European farms was extensive (Derman et al. 2007; Turton et al. 2004; Werner and Kruger 2007). By contrast, one of the most successful indigenous irrigation systems – smallscale irrigation from shallow wells on patchy wetlands, which include the dambos found across Zimbabwe, Zambia and Malawi – was prohibited in Southern Rhodesia ostensibly for environmental conservation reasons but in reality to prevent crops being raised to compete with European farm produce (Wilson 1986; Bell et al. 1987; Potts 2000). In Mozambique and Angola white immigration increased significantly after the Second World War, before which time agriculture was more based on African smallholder farming. Export crops from this sector had been developed under conditions of essentially forced labour in many areas and the system had an evil reputation (Isaacman 1996; Bender 1978). In Angola, white-owned coffee plantations (rocas) led to land alienation around Huambo on the central plateau and elsewhere – in the early 1970s the country was the world’s fourth largest coffee producer – but in such a vast country the effect was localised. Of greater potential significance were large irrigation schemes mooted in the latter years of colonialism, partly to lay firmer claim to these colonies which the Portuguese, like the other white settler states, were determined not to leave. These were planned, for example, for the Kunene River in southern Angola and the Limpopo in Mozambique and were expected to accommodate many thousands of farmers, but the violent ending of Portuguese rule in both colonies meant the schemes were abandoned at the time. Besides access to water, another vital influence on profitable commercial farming is access to markets. Yet again any scrutiny of maps of large-scale farms in the region which are, or were, European-owned demonstrates their superior access to roads, railways and urban centres for inputs and markets. Again this was deliberate policy. It is an important aspect of understanding land alienation impacts in Northern Rhodesia/Zambia, for example. Here only a very small fraction of total land was alienated by white farmers (see Table 1.2.1) but it was concentrated along the ‘line-of-rail’: the country’s transport lifeline throughout the colonial period. This significantly advantaged the competitive edge of their production over more distant, smallholder African farms (Muntemba 1982; Palmer 1983). 38

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The lessons of the past What can be learned from the history of land alienation in this region for the analysis of contemporary land and water ‘grabs’ in sub-Saharan Africa? First it is helpful to outline the points that are different and unlikely to be replicated. Current ‘land grabs’ are faced with sovereign states and are not operating in a colonial system where the interests and rights of indigenous people can be quite so easily ignored. Outright genocide and military conquest as routes to obtaining land are no longer possible. Some sort of payment for land acquired for use will occur – hence land will not be ‘alienated’ in the southern African sense. The contemporary process is partly influenced by issues of food security for other countries with fewer water and land resources of their own, with the objective of exporting the produce. This was not central to southern Africa’s historical processes of land alienation for, although commercial profit was crucial, broader issues of competing imperial strategies were at play. Export crops played their part but production for domestic markets was also important. Also European farming was bound up with the establishment of very specific local cultural traditions and, above all, settlement and identification with the country – features which the purely commercial motives of the current round will not replicate. However, the fate of the citizens who now occupy land in African countries where ‘land grabbing’ is occurring will undoubtedly depend on the nature of the state and its relationship with its people. That was true in colonial southern Africa: white settler states trampled on indigenous people’s land rights to promote white settlers’ livelihoods and resistance was met with force, but in the protectorates and colonies there was at least the possibility that the government would prevent some of the worst excesses of ‘land grabbing’. Local officials could make a difference in particular areas at particular times even if central governments were indifferent, and good relationships between colonial officials and local traditional authorities could protect certain communities. There was a degree of local agency, in other words. These factors are bound to be crucial in the current ‘land grabs’. Much of the desirable land in this round of agricultural investment is occupied or claimed by local farmers and pastoralists already. Land laws will vary from country to country and it is tempting to assume that this will be a key differentiating factor for the fate of local farmers. However, past history indicates that it is far more likely that laws, per se, will not protect local farmers. The key will really be whether and how state officials will promote and uphold the rights (inscribed in laws or not) of their rural citizens, when faced with a conflict of interests between wealthy and powerful land ‘grabbers’/investors and generally poor smallholder farmers or pastoralists. In the final analysis, the issue of whether the representatives of the state truly wish to represent and protect rural people, or are more interested in other outcomes, is crucial. Corrupt practices by the land ‘grabbers’ are likely to be important factors. The question of whose interests are being served and represented in policy decisions is thus the essential starting point. This can, however, work both ways: land ‘grabbed’ today in ways which set up strongly felt grievances among local people whose views are, for the moment, dismissed may not be protected by its apparently ‘legal’ tenure in the future if political forces change and local people’s rights are reasserted. The history of southern Africa in this respect which led, after violent struggles, to its contemporary land reform programmes is highly illustrative. The other lesson is that land, per se, is only the beginning. As exemplified by the history of southern Africa, farmers are naturally attracted to land with water – from rain or other sources. There is plenty of dryland in many African countries but land with access to water tends to be taken up already. This sets up the scenario for conflict. Investors will also want infrastructure: roads and input stores, fuel and mechanics. If these are not already available for local farmers, it will be inequitable if 39

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the state helps to provide them and will damage the competitiveness and livelihoods of local farmers unless they have equal access. Crucially, big farming enterprises need labour. The lessons of southern Africa are that this could be very negative for local labour markets if the deals struck with the state lead to poor wage rates and conditions. On the other hand, well-regulated conditions could enhance local livelihoods. The recent varied experiences of Zimbabwean white farmers who have tried large-scale farming in other countries like Mozambique and Nigeria are indicative. Where the state has been supportive, as in one part of Nigeria, their farming has been ‘efficient’ and productive, but at huge cost to the local population in lost land, and in the opportunity cost of the budget spent on infrastructure for the farmers which could have had even better outcomes if it had been spent on local smallholders (Hammar 2010; Mustapha 2011). This last point leads to a further insight from southern Africa’s history, which is that there should be no presumption that large-scale exportable surpluses can only be derived from large-scale ‘alien’ ‘land grabbing’ commercial farms. Again and again throughout the region the entrepreneurialism and potential of the local peasantry has been demonstrated, a more recent example being Zimbabwe’s positive ‘agricultural revolution’ of the 1980s (Rukuni and Eicher 1994) when smallholders overtook the large farmers’ prior domination of the maize and cotton markets. The potential and economic, developmental and political advantages of spending the budget for supporting the large farmers on the peasantry instead requires consideration by all involved. In sum, the outcomes of ‘land grabbing’ today can only partly be theorised in terms of political ecology, which focuses on how power relations influence access to natural resources (e.g. land and water), because ultimately those power relations are rooted in the political economy and, as the bitter history of southern Africa demonstrates, commercial farmers demand far more from the state than just natural resources.

Note 1 There is a fierce debate among southern African historians about the roots of the Zulu-induced Mfecane (the forced migration) at this time. One view is that there were exogenous causes related to European incursions, in this case the impact of slavery further north in contemporary Mozambique.

References Archer, S. (2000) ‘Technology and ecology in the Karoo: a century of windmills, wire and changing farm practice’, Journal of Southern African Studies 26(4): 675–96. Arrighi, G. (1970) ‘Labour supplies in perspective: a study of the proletarianization of the African peasantry’, Journal of Development Studies 6(3): 197–234. Bell, M., Faulkner, R., Hotchkiss, P., Lambert, R., Roberts, N. and Windram, A. (1987) The Use of Dambos in Rural Development, with Reference to Zimbabwe, final report of ODA project R3869, Loughborough: Loughborough University. Bender, G. (1973) ‘Planned rural settlements in Angola 1900–68’, in F.-W. Heimer (ed.) Social Change in Angola, Munich: Welt-Forum Verlag. ——(1978) Angola under the Portuguese: The Myth and the Reality, Berkeley: University of California Press. Bowen, P. (1993) A Longing for Land, Aldershot: Avebury. Davenport, T. R. and Hunt, K. (eds) (1974) The Right to the Land, Cape Town: David Philip Publishers. Derman, B., Hellum, A., Manzungu, E., Sithole, P. and Machiridza, R. (2007) ‘Intersections of law, human rights and water management in Zimbabwe: implications for rural livelihoods’, in B. van Koppen, M. Giordano and J. Butterworth (eds) Community-based Water Law and Water Resource Management Reform in Developing Countries, Wallingford: CAB International Publishing. Green, R. and Kiljunen, K. W. (eds) (1981) Namibia: The Last Colony, London: Longman. Hammar, A. (2010) ‘Ambivalent mobilities: Zimbabwean commercial farmers in Mozambique’, Journal of Southern African Studies 36(2): 395–416.

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Hughes, D. M. (2006) ‘Hydrology of hope: farm dams, conservation and whiteness in Zimbabwe’, American Ethnologist 33(2): 269–87. Hyam, R. (2010) Understanding the British Empire, Cambridge: Cambridge University Press. Isaacman, A. (1996) Cotton is the Mother of Poverty: Peasants, Work and Rural Struggle in Colonial Mozambique 1938–61, London: James Currey. Jul-Larsen, E. and Mvula, P. (2009) ‘Security for many or surplus for the few? Customary tenure and social differentiation in southern Malawi’, Journal of Southern African Studies 35(1): 175–90. Kowet, D. K. 1978 Land, Labour Migration and Politics in Southern Africa: Botswana, Lesotho and Swaziland, Uppsala: Scandinavian Institute of African Studies. Krishnamurthy, B. (1972) ‘Economic policy: land and labour in Nyasaland, 1890–1914’, in B. Pachai (ed.) The Early History of Malawi, London: Longman. McCracken, J. (2003) ‘Conservation and resistance in colonial Malawi: the “dead north” revisited’, in W. Beinart and J. McGregor (eds) Social History and African Environments, Oxford: James Currey; US and Canada: Heinemann. Muntemba, M. (1982) ‘Women and agricultural change in the railway region of Zambia: dispossession and counterstrategies 1930–70’, in E. G. Bay (ed.) Women and Work in Africa, Boulder, CO: Westview Press. Murray, C. (1981) Families Divided: The Impact of Migrant Labour in Lesotho, Cambridge: Cambridge University Press. ——(1983) ‘Struggle from the margins: rural slums in the Orange Free State’, in F. Cooper (ed.) Struggle for the City: Migrant Labor, Capital and the State in Urban Africa, Beverly Hills, CA: Sage. ——(1992) Black Mountain: Land, Class and Power in the Eastern Orange Free State 1880s–1980s, Edinburgh: International African Library, Edinburgh University Press. Mustapha, A. (2011) ‘Zimbabwean farmers in Nigeria: exceptional farmers or spectacular support?’ African Affairs 110(441): 535–61. Newitt, M. (1973) Portuguese Settlement on the Zambezi: Exploration, Land Tenure and Colonial Rule in East Africa, London: Longman. Omer-Cooper, J. (1987) History of Southern Africa, London: James Currey. Pachai, B. (ed.) (1972) The Early History of Malawi, London: Longman ——(1973) Malawi: The History of the Nation, London: Longman. Palmer, R. (1977) Land and Racial Domination in Rhodesia, Berkeley: University of California Press; London: Heinemann. ——(1983) ‘Land alienation and agricultural conflict in colonial Zambia’, in R. Rotberg (ed.) Imperialism and Hunger: East and Central Africa, Lexington: Lexington Books. Palmer, R. and Parsons, N. (eds) (1977) The Roots of Rural Poverty in Central and Southern Africa, London: Heinemann. Pankhurst, D. (1996) ‘Similar but different? Assessing the reserve economy legacy of Namibia’, Journal of Southern African Studies 22(3): 405–20. Paton, B. (1995) Labour Export Policy in the Development of Southern Africa, Basingstoke and London: Macmillan, in association with the Institute of Social Studies, The Hague. Potts, D. (2000) ‘Environmental myths and narratives: case studies from Zimbabwe’, in P. Stott and S. Sullivan (eds) Political Ecology: Science, Myth and Power, London: Edward Arnold; New York: Oxford University Press, pp. 45–65. Rukuni, M. and Eicher, C. K. (eds) (1994) Zimbabwe’s Agricultural Revolution, Harare: University of Zimbabwe Publications. Shillington, K. (1981) ‘Land loss, labour and dependence: impact of colonialism on the Southern Tswana c. 1870–1900’, PhD thesis. Sibanda, C. (1979) The Tribal Trust Lands of Rhodesia: Problems of Development, Norwich: Geo Abstracts for the Centre for Development Studies, University College of Swansea. Silitshena, R. (1990) ‘Impact of colonialism on land use in Central and Southern Africa’, in P. Olson (ed.) Struggle for the Land, Lincoln: University of Nebraska Press. Surplus People Project (South Africa) (1983) Forced Removals in South Africa: The Surplus People Project Report, Cape Town: Surplus People Project. Tobin, R. and Knausenberger, W. (1998) ‘Dilemmas of development: burley tobacco, the environment and economic growth in Malawi’, Journal of Southern African Studies 24(2): 405–19. Turton, A., Meissner, R., Mampane, P. and Seremo, O. (2004) A Hydropolitical History of South Africa’s International River Basins, Pretoria: African Water Issues Research Unit, University of Pretoria.

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Werner, W. and Kruger, B. (2007) Redistributive Land Reform and Poverty Reduction in Namibia, South Africa: PLAAS, University of Western Cape. Livelihoods after Land Reform: Country Paper. White, L. (1987) Magomero: Portrait of an African Village, Cambridge: Cambridge University Press. Willcox, A. (1976) Southern Land: The Prehistory and History of Southern Africa, Cape Town: Purnell Books. Wilson, K. (1986) ‘Aspects of the history of vlei cultivation in southern Zimbabwe’, Harare, University of Zimbabwe Department of Engineering Dambo Workshop, unpublished paper.

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1.3 Sudan and its agricultural revival A regional breadbasket at last or another mirage in the desert? Harry Verhoeven

The history of Sudan is a history of crushed developmental dreams and agricultural revolutions aborted. Ever since the days of Anglo-Egyptian colonialism, the discourse in and around Sudan has centred on the twin images of a land of drought and hunger on the one hand and a land of agricultural promise and abundance on the other. Successive regimes in Khartoum have consolidated a hydropolitical economy focused on the water–food nexus by the Nile and launched their own radical designs for a green revolution, coupled to a deeper integration of Sudan into the global economic system; while this has benefited domestic and foreign elites, its legacy in Sudan’s peripheries is one of inequality, environmental degradation and violent conflict. As growing Malthusian worries pushed food and water security to the top of the international agenda in the first decade of the new millennium, Sudan’s current rulers, the military– Islamist Al-Ingaz regime, are once again launching an audacious plan to realise Sudan’s ‘agricultural destiny’. The Agricultural Revival (Al-Nahda Al-Zira’ayah) seeks to partner the country’s extensive land, labour and water resources with Gulf Arab capital and technology to push up productivity and output, helping the North transition away from an oil-based economy to an agricultural powerhouse after the secession of South Sudan in July 2011. However, in spite of the triumphant rhetoric and investment buzz that accompanies Khartoum’s Agricultural Revival Programme (ARP), the first results of the agricultural reforms and the associated hyper-expensive Sudanese Dam Programme are not encouraging. Production growth is virtually flat, and despite a flurry of announcements the economic landscape seems to be dominated by speculation and political deals, not by game-changing commercial investments or policies that reach out to the millions of smallholders who continue to be overlooked. The promised Renaissance of the army generals and Islamists suffers from exactly the same problem as all previous attempts at turning Sudan into the breadbasket of Africa or the Middle East: as long as the megalomaniac logic of such initiatives continues to revolve around political objectives, eschewing arguments about economic incentives, social inclusion and environmental sustainability, an agricultural revival will remain a mirage in the desert.

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‘Sudan Poised’: a brief history of cornucopian optimism and the realities of agricultural policy Regardless of the actual subject of the meeting, in most workshops or interviews with technocrats and politicians from the Ministries of Agriculture, Water Resources and Irrigation, Finance or Foreign Affairs, one’s interlocutor will at some point emphasise the idea that Sudan, whatever its flaws and problems, is ‘really’ an agricultural country with unique potential, possibly ‘one of three countries that can feed the world’.1 The notion of ‘Sudan Poised’, a nation on the brink of a green revolution that would turn one of the world’s most impoverished states into one of the remedies of food security problems in the wider region, is an enduring one. It has been internalised by generations of Sudanese graduates as well as international administrators and Middle Eastern investors – a powerful ‘environmental narrative’ (Roe 1991) with huge persuasive powers, and terrible policy outcomes. ‘Sudan Poised’ goes back to the early 19th century, when Napoleon’s France invaded Egypt and brought Western science and Enlightenment ideas about rationality, centralisation and universalism to North Africa (Said 1979). The authoritarian regime of Muhammad Ali Pasha used these concepts in an attempt to resurrect Ancient Egypt’s greatness: by unleashing the ‘sacred’ knowledge of measuring, quantifying and planning, Egyptian agriculture would again churn out the agricultural surpluses that once made it the most advanced civilisation in the world and thus form the economic basis of Cairo’s return to superpower status. Engineers would capture the Nile and Egypt’s riverbanks through canals, dams and irrigation systems, taming the erratic floods and putting water and land at the disposal of scientific genius and the world economy; cutting-edge academics, export-oriented economics and Machiavellian regional politics were seen as mutually reinforcing, a recipe for progress to a higher stage of civilisation in the Nile Valley (Cuno 1992: 27). Muhammad Ali invaded the Sudanic Kingdoms to Egypt’s south in 1821, on the one hand to use their gold, ivory and slaves for economic expansion and, on the other, to push as far as he could to the sources of the Nile to secure the Achilles’ heel on which his grand plans rested. The Pasha managed to increase the productivity of Egyptian agriculture, though at a terrible human price, and the occupation of Sudan led to the concentration of wealth and political power at the meeting point of the two Niles – Khartoum – a shift away from the dominance of the Darfur Sultanate in the West and the Funj Kingdom of Sennar in the East. After defeating the Mahdiyya, British administrators thus inherited a strongly developed riverain centre, reliant on slave labour and taxation of agriculture by the Nile, and peripheries ruled through pragmatic patronage arrangements and punitive raids (Johnson 2003: 4–7). Prime Minister Salisbury backed Lord Kitchener’s invasion of the Mahdist state on the grounds of preventing possible destabilisation of Egypt via the Nile by other European colonial powers or Imperial Ethiopia, but the Anglo-Egyptian Condominium was initially uninterested in Sudan itself (Pakenham 1991: 316–35). This began to change as British administrators were looking for ways to pay for occupation and quell political resistance: the peripheries would be managed through indirect rule, but the central state could be funded through a scaled-up version of the Egyptian model of irrigated farming via dams and canals. The Condominium encouraged private pump projects by the Nile – mostly run by the elites of Sudan’s mighty religious sects, Ansar and Khatmiyya – and set up the centrally managed Gezira scheme between Blue and White Nile south of Khartoum as the beating heart of the colonial hydropolitical economy. Gezira brought thousands of Sudanese farmers into the monetary economy and generated a surplus for the bureaucracy, its cotton constituted a cheap input for Britain’s textile industry (Barnett 1977). 44

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While Sudan was portrayed as a land of great scarcity, underdevelopment and backward practices, Gezira was intended to form its polar opposite, creating abundance for the country and international markets through modern technology; local Sudanese communities were not asked for their opinion (Sanderson 1985). While this made sense from the standpoint of colonialism, it also locked in patterns of inequality that empowered international traders, bureaucrats and local powerbrokers at the expense of keeping large numbers of people chronically vulnerable. ‘Development’ thus obeyed a logic that has remained central to understanding Sudan ever since: a concentration of wealth and power around Khartoum; a selective integration of those resources in peripheral regions useful for accumulation at the centre and systematic neglect of their needs; a belief in powerful external interventions that can engineer transformational change in Sudan; a disregard for traditional subsistence farmers, who are asked to submit to ‘technocratic’ wisdom and vacate their lands; and repeated attempts at tying the national hydropolitical economy to global economic dynamics (Verhoeven 2011a; Johnson 2003). After Sudanese independence in 1956, visions of agriculture-led development by the Nile resurfaced. Political leaders across party lines promised that with the British and Egyptians gone, resources would be freed up for investment that would benefit the Sudanese people instead of foreigners; Sudan’s great resource potential was praised, the country was on the brink of a breakthrough. Yet as the years went by, precious little changed: the hydropolitical economy by the Nile, dependent on the whims of international markets and under the control of the state and the traditional sectarian forces, was strengthened, not weakened, and regional inequalities were maintained. Sudan grew ever more dependent on cotton and gum arabic, and the few major investment projects undertaken by the governments of General Abboud and Prime Ministers Mahjoub and Sadiq Al-Mahdi further entrenched Sudan’s position as commodity provider of Western economies. Dams at Roseires and Khasm Al-Girba, as well as the Managil extension of Gezira, were entirely in line with the classic development strategy of Khartoum of irrigated agriculture to supply overseas partners; the terms of trade gradually worsened (Niblock 1987; Wallach 1984). Most producers remained locked in semi-feudal relations of production under sectarian rule. No agricultural revolution – or more general dynamic of macro-economic development – was forthcoming. Impatience with Sudan’s dominant political parties and their broken promises led to unrest in the armed forces and ultimately a Nasserite coup by General Ja’afar Nimeiri. He installed a leftist regime that vowed to realise Sudan’s destiny as a ‘great country’ – not just the biggest in Africa, but also an agricultural superpower that could feed both sub-Saharan and Arab populations. Against a background of mounting concerns, as voiced by the Club of Rome (Meadows et al. 1972), about the earth running out of resources and the dangers of a population bomb (Ehrlich 1971), Nimeiri positioned Sudan as the answer to Western economists’ fears: he suggested that possibly up to 200 million acres were lying fallow and that, with foreign technology and capital, Sudan’s surplus in land, labour and water could finally be used productively. Reports from the World Bank and bilateral donor agencies enthusiastically endorsed the Sudanese president’s plans, which gave a central role to irrigated agriculture by the Nile but also to mechanised rain-fed farming in non-traditional zones of production, ostensibly so that the blessings of development could be equally divided and that more ‘empty’ lands could be drawn into the strategy. Nimeiri’s vision of Sudan as a regional ‘breadbasket’ quickly gained traction in the 1970s. The twin oil crises of 1973 and 1978–79 triggered the biggest food price spikes of the century. Gulf Arab sources poured hundreds of millions of dollars into Sudanese agriculture to grow sorghum, sugar and wheat through partnerships under the aegis of the Arab Authority for Agricultural Investment and Development to address the ‘food gap’ on the Arabian Peninsula (Kaikati 1980: 100; Kontos 1990: 652). Capital-intensive mechanised production began all along the Tenth 45

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Parallel latitude, as the Registered Land Act turned all communally owned land into state property. A new class of army officers, bureaucrats of the Sudanese Socialist Union and bankers with strong ties to Islamic finance used legal, extralegal and illegal mechanisms to acquire large plots, damaging the livelihoods of cultivators and blocking the migration corridors for pastoralist communities (Ahmed 2008): nothing was to stand in the way of development. While the outside world got excited about ‘Sudan Poised’, Nimeiri wasn’t merely aiming at increased export revenues to fund industrialisation and a more prominent place for Sudan in the world. This was a frontal attack against Sudan’s sectarian forces: through the Breadbasket, he hoped to break their political control over the peripheries – the zones where the mechanised farming was most intense were opposition strongholds – and to build a new middle class of administrators and entrepreneurs loyal to him, definitively shifting the political point of gravity to his modernising elite. For Nimeiri, it didn’t matter so much through which instruments certain lands were brought under cultivation or how sustainable farming practices around the Tenth Parallel were, as long as it allowed him to expand his networks, shoring up domestic and external political support. The mirage of long-term hegemony in Sudanese politics increasingly clouded his understanding of the on-the-ground dynamics. By the late 1970s, Sudan’s economic outlook began to darken and political upheaval followed soon afterwards. Foreign investment wasn’t nearly as transformative as Khartoum had hoped and gradually dried up, while export revenues fell and Sudan’s public debt rose to almost US$10 billion, a consequence of Nimeiri’s bureaucratic expansion, subsidies and infrastructure development, none of which did much to improve Sudan’s economic foundations. While land expropriations continued relentlessly, with ‘capital-intensive farmers’ moving quickly from one area to another after having exhausted the land, the International Monetary Fund (IMF) was brought in to stabilise the economy but successive agreements faltered dramatically. The victims of the Breadbasket became ever more food-insecure as did the country as a whole: contrary to other Sahelian nations that suffered immensely, Sudan had successfully coped with drought in the 1970s but now famine returned with a vengeance (O’Brien 1985). The export of food crops continued unabated, happening in parallel with the import of American food aid – apparent contradictions only explicable within the logic of accumulation by local and global elites at the expense of marginalised groups – reminiscent of the dynamics between Ireland and the British Empire during the 19th-century Potato Famine. Growing impoverishment of large swathes of the population due to Nimeiri’s disempowering nationalisation of the land and water, his neglect of the peripheries and his focus on improving Sudan’s foreign exchange position had brought whole communities to the edge: drought was merely the final step in extended processes of structural violence that pushed them over the edge, both in Darfur (1981–83) and in the North–South border areas of Bahr Al-Ghazal and Abyei, South Kordofan. The latter were not coincidentally regions where mechanised farming had been introduced; the renewal of civil war there unleashed a man-made food crisis in which tens of thousands of people died between 1983 and 1990 (Keen 2008). The cornucopian discourse and investment binge of the Breadbasket ultimately left all parties with a painful hangover. Gulf Arab investors saw by and large meagre returns on their projects and were frustrated by bureaucratic incompetence, while Sudanese administrators bemoaned the lack of stamina and long-term commitment needed to make an agricultural revolution work. Nimeiri’s dream of permanent political dominance evaporated and the famine and spiralling inflation ultimately contributed to his overthrow in 1985. The largest price was paid by the people of Central Sudan: ‘Sudan Poised’ made them hungrier, less safe and more vulnerable as rhetoric of a green revolution turned into a nightmare of displacement, conflict and famine that lasted until the early 2000s. 46

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Al-Nahda Al-Zira’ayah: an Islamist green revolution? Sudan’s long-running civil war between Khartoum and the Sudan People’s Liberation Army/ Movement (SPLA/M) drew to a close with the 2005 Comprehensive Peace Agreement, which provided for a power-sharing mechanism, democratic elections and the right to self-determination of South Sudan through a referendum in January 2011 (ICG 2006). The cessation of hostilities, it was hoped, would allow for a peace dividend as resources would be shifted from military to civilian objectives, with oil, which Sudan has exported since 1999, providing the bulk of the cash. Poverty and inequality had been identified as root causes of the war; for the first time since Nimeiri, it was hoped that a government could prioritise economic development, relying on an agricultural reliance to promote inclusive growth. Ideas about economically empowering new groups had never really left the Sudanese political scene, but conflict and worsening foreign relations had inhibited the transformation of Sudan’s political economy that the Islamists of Sheikh Hassan Al-Turabi promised to the public. Turabi became the country’s most powerful man after a coup in June 1989 and prioritised a developmental agenda for his Al-Ingaz (‘Salvation’) regime: the military–Islamist takeover happened at a time of social disintegration, famine and economic collapse, with people queuing for fuel and food even in the wealthiest parts of the Nile Valley (Maxwell 1989). Turabi appointed a powerful Minister of Finance, Abdelrahim Hamdi, to put Sudan back on its feet through ruthless liberalisation, command-and-control and money printing, the Economic Salvation Programme (ESP). Agriculture spearheaded Hamdi’s offensive. In accordance with conventional thinking in Khartoum on what constitutes ‘development’, the Minister of Finance decided on a big push in irrigated wheat, a strategic food crop, in the hope of achieving self-sufficiency within two years. Turabi and Hamdi gambled that despite the scepticism of Sudan’s technocrats about the feasibility and usefulness of large-scale wheat cultivation by the banks of the Nile, a massive effort could yield major political benefits for Al-Ingaz and underline Turabi’s tabula rasa discourse: a new Islamic society was inevitable and Sudan was indeed, finally, ‘poised’.2 Hamdi instructed the Gezira scheme’s tenants to switch from cotton to wheat and made unprecedented funds available to bring more land under cultivation, supply it with more water and provide credit to whoever needed it. To everyone’s surprise, including the international community, which had begun isolating Khartoum after its support for Saddam Hussein during the Gulf War, the revolutionary leap forward paid off: in 1992, Sudan was able to announce that it was self-sufficient in wheat, even exporting 100,000 metric tons to Kenya. However, while this enabled Turabi to showcase perceived evidence of the Salvation Revolution’s blessings, self-sufficiency was only maintained for a year and neither the economic nor the agrarian crisis was resolved. The cost of massive input and output expansion was unsustainable, threatening to bankrupt Sudan, particularly as it was now cut off from international financial institutions and Gulf Arab sources, both of which had withdrawn almost totally, leaving the ESP without funds to implement new initiatives. Civil servants had warned that the switch away from cotton would do long-term damage to the industry, with its forward and backward linkages, as a whole, and required altogether different, costly irrigation techniques; many believed it made no sense to use Sudan’s Nile water quota in a zone where neither soil nor climate were suitable to internationally competitive wheat production. These fears were confirmed as the results became visible, but the regime kept silent about the fiasco and shifted the public’s attention to its jihad campaign in central and southern Sudan. The wheat self-sufficiency triumph-turned-debacle didn’t imply the shelving of Al-Ingaz’ ‘economic salvation’ – to the contrary. After a bitter power struggle in the late 1990s led to the 47

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overthrow of Hassan Al-Turabi as supreme leader, President Omar Al-Bashir and Vice-President Ali Osman Taha, the ‘new’ strongmen, set about reinventing the regime, reconnecting with the priority of economic transformation and the building of a new Islamic middle class. Khartoum undertook a diplomatic offensive, particularly vis-à-vis Egypt and the Gulf Arabs, its traditional diplomatic and commercial allies, that re-established political and economic relations, a vital precondition to advancing its developmental agenda. This coincided with the availability of petrodollars, but the reformed Salvation regime decided against becoming a simple rentier state (Beblawi and Luciani 1987)3: a more offensive political-economic strategy was needed, and irrigated agriculture lay at its heart (Verhoeven 2011b: 7–9). Al-Nahda Al-Zira’ayah (the Agricultural Revival) ambitiously sets out to succeed where Nimeiri’s Breadbasket failed, noting that ‘making rational use of the huge and diverse resources of the Sudan has been an unfulfilled promise and an outstanding challenge … since the early days of independence’ (SCAR 2008: 7). It explicitly stresses the need to diversify the economy away from its dangerous dependence on oil – accounting for almost 90% of export revenues by the late 2000s – and claims to learn the lessons of past failures in agricultural reform. The ARP is at pains to stress the importance of poverty reduction and equitable development, yet its main thrust is a renewed focus on irrigated agriculture by the Nile and capital-intensive production through partnerships between Sudanese producers and foreign investors; the model is one by which largescale commercial production for exports is assumed to have major trickledown effects on rural communities, heralding the elimination of subsistence production: ‘[Al-Nahda Al-Zira’ayah] necessitates a rapid transformation of the agricultural sector from a traditional sector characterised by low productivity and production into a modern, dynamic, commercial sector responding effectively to local and global changes’ (SCAR 2008: 80). The choice for irrigated production, integration into the global economy and large-scale commercialisation is not merely in line with the historical model of agro-development that successive regimes in Khartoum have pursued, but also, like Nimeiri, taps into wider international trends, cleverly seeking to leverage them for domestic purposes. As the very publication of this edited volume underlines, the post-2000 era has been marked by a remarkable, sustained rise in global commodity prices – similar to, though not as extreme as, the spikes of the 1970s – particularly in key food crops. This evolution has led major emerging powers and Middle Eastern investors to develop new food security strategies, most of which don’t rely solely on the market to secure their growing demand but attempt to obtain direct access to producing areas of proven value or great potential (Cotula et al. 2009; Woertz forthcoming). The Al-Ingaz leadership has consistently emphasised the idea of Africa as the final frontier of agricultural investment and Sudan itself as the great unexplored hope for food production, very much echoing the 1970s discourse about Sudan as the breadbasket of the continent and, possibly, the world: ‘Sudan … is in a position to make a big contribution to achieving the food security in Africa … We are committed to provide all the guarantees needed for corporations and businessmen who possess a genuine interest in agricultural investment’ (Sudan Tribune 2009c).’ The discourse is centred on ‘win–win situations’, whereby Sudan feeds the desert monarchies of the Gulf – which have finally made progress on phasing out water guzzling strategies like growing wheat in Arabia’s sands (Reuters 2008) – and foreign capital brings technology, expertise and management skills that are in short supply along the Nile and in the Sudanese interior. While, thanks to the presence of oil, finance might not be a main impediment to agricultural development in Sudan as it was in recent decades, Arab, Asian and/or Western investment remains key to boosting productivity, or so the ARP argues. To facilitate the expected massive inflows of foreign direct investment (FDI), Al-Nahda AlZira’ayah promises a whole range of measures, straight out of the World Bank textbook or the 48

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annual Doing Business report: ‘The role of the government will be confined to the creation of a conducive environment’ (SCAR 2008: 80). This includes cutting red tape; privatising governmentowned production enterprises; extensive tax waivers; near-full profit repatriation; and allowing long-term leasing of land (from 30 to 99 years). Particularly between 2008 and 2010, momentum seemed to be building whereby a wave of Gulf Arab investment, propelled by growing scarcity, global prices and cost overruns at home (FAO 2011), would make the capital available for the long-awaited transformation of Sudan’s agriculture. A flurry of government communiqués and newspaper articles announced one deal after another, with Saudi, Emirati, Qatari and Kuwaiti investors in the driving seat (Emirates 24/7 2010; Sudan Tribune 2009a, 2009b; Observer 2010), leading Al-Ingaz spokesmen to triumphantly predict that annual inflows from FDI might amount to a spectacular US$1billion annually for the foreseeable future; Minister of Agriculture Al-Muta’afi even began to make comparisons with Brazil’s agricultural miracle.4 This included investments of all kinds, from cattle ranching in North Kordofan and fodder production in River Nile State to enhanced sesame cultivation in Gedarif and ethanol production in White Nile State,5 as well as other food crops in Sennar, Shamaliyya and Gezira. According to the powerful Undersecretary of the Ministry of Agriculture Abdelatif Ijami: ‘In two to three years you will see something different in Sudan: it will really begin emerging out of the developmental wilderness.’6 The soaring optimism about Al-Nahda Al-Zira’ayah was further boosted through its partnership with Sudan’s grandiose Dam Programme that was set up in 2003 to expand power generation, store water for irrigation and further develop critical areas of the core of the Sudanese state. The bulk of petrodollars that accrued to the Sudanese treasury after 2000 was spent on security and defence but also on improving or constructing new hydro-infrastructure; at the end of 2011, the total cost of the Dam Programme was approaching $7billion–8billion,7 a colossal sum for Sudan, one of the world’s least developed countries. The dams are Al-Ingaz’s flagship, intended both to materially transform the economy and launch a new nation-building project, with Bashir and Taha portrayed as the wise statesmen who made peace with the South and are putting modernity at the heart of a ‘new Sudan’ (Verhoeven 2011c). The dams and the ARP gained ever more importance and urgency as the South set its sights on independence. Following the July 2005 death of SPLA/M leader John Garang, a visionary unionist, his successor Salva Kiir opted for a strongly separatist course – an independent South Sudan would take about three-quarters of proven oil reserves with it, necessitating the development of an alternative source of income, patronage and foreign exchange for Al-Ingaz (Verhoeven and Patey 2011). Electricity from hydro-power could then help fuel industrial expansion, but also electrify pump schemes historically reliant on diesel, thus lowering the cost of agricultural production. Moreover, the dams enable Khartoum to finally use up its quota of 18,5billion square metres, allocated under the 1959 Nile Treaty with Egypt (Ismael 1971), thereby facilitating the intended re-launch of irrigated agriculture in Sudan’s riverain core. Taha in particular began emphasising that Sudan had always been an agricultural country; as the regime’s key strategist and arguably most powerful man between 2000 and 2005, he became the patron of the ARP and rhetorically downplayed the importance of oil. He and other Salvation leaders also argued that Al-Nahda Al-Zira’ayah and the Dam Programme – which, taken together, I have termed Al-Ingaz’s ‘hydro-agricultural mission’ (Verhoeven 2011a) – could be vital in strengthening Sudan’s foreign relations. A complex, multi-dimensional international political economy has been developing between the People’s Republic of China, the Arabian Peninsula and Sudan, with flows of resources and billions of dollars between the different points of this triangle. China buys huge quantities of oil from both the Gulf Arab states and Sudan, but also exports weapons to Khartoum, builds the dams, invests in agriculture, owns expensive real estate and is awarded lucrative contracts for 49

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other infrastructural developments. Much of this activity is paid for by Al-Ingaz through petrodollars but also through intricate financial arrangements with Qatar, Kuwait and other Arab bilateral or multilateral partners (Dam Implementation Unit 2010), which are the main funders of the hydro-agricultural mission via a combination of grants, soft loans and commercial lending. In return for this generous support of the development of Sudan’s ‘new’ political economy, sovereign wealth funds and ‘private’ (often royal) investors from the Arabian Peninsula stand to gain from the additional irrigation waters and fertile land that the Sudanese government makes available under the umbrella of Al-Nahda Al-Zira’ayah. The whole system seems to yield major benefits for all involved, though Sudanese public opinion is far less enthused about food crops being shipped out to Arab destinations and the lightning expansion of Beijing’s activities in their country.

The breadbasket fiasco repeated? The limitations to the Agricultural Revival After a six-year interim period, South Sudan seceded on 9 July 2011 amid much jubilation in the world’s newest state. There was considerably less rejoicing in the North, because of the emotionally traumatic loss of one-third of the country, but also because of the darkening economic outlook that had become apparent from mid-2010 onwards. The Sudanese pound came under serious pressure as foreign exchange reserves shrank dramatically and the loss of most of the oil led to rising pessimism among investors, citizens and (privately) government officials alike about the future of the economy. Mounting fears about the future go hand in hand with growing signs that the Agricultural Revival is not delivering, despite all the rhetoric, and that, instead of Sudan emerging as a regional breadbasket, a repeat of the past now appears likely. Although it is too early to definitively write off Al-Nahda Al-Zira’ayah, the results that are appearing after four years of reforms are not encouraging. International and domestic advisers to the Sudanese government are sounding the alarm bells: agriculture is still locked in the same low productivity trap, and the same flawed assumptions of the past continue to dominate policy-making and the strategic vision of the ARP.8 Candid sources within Sudan’s water– agriculture establishment confirm the growing malaise and there is widespread dissatisfaction with the course charted by Ali Osman Taha, Minister of Agriculture Muta’afi and Al-Nahda Al-Zira’ayah architect Ali Geneif. Some Saudi businessmen highlight that the investment climate remains ‘repulsive’ (Sudan Tribune 2011). Sudanese agro-entrepreneurs complain about the fact that while fiscal incentives for production are present for domestic producers too, taxation at the state level and road checkpoints inhibit the functioning of markets and discourage output surges. Other sources claim that for all Al-Ingaz’s boasting about agriculture as Sudan’s comparative advantage, inadequate budgetary support is available to smallholders and commercial producers alike. Still others argue that the ARP is disproportionately biased towards Qatari and Kuwaiti ‘partners’, meaning that agricultural development in any meaningful sense is absent; one key adviser to the Minister complained that ‘Everything produced here goes to the Middle East … [As an investor,] you are untouchable … No proper foreign exchange earnings, no proper taxation’.9 Figures 1.3.110 and 1.3.211 demonstrate the disappointments of strategic crop production in the past few years. Rather than investment or incentive-fuelled expansion, sorghum production remains captive to climatic fluctuations (bad rains in 2009 lowered output figures, with the reverse happening owing to exceptionally favourable conditions in 2010), a continuation of the old pattern of weather dependence, contrary to the wishful thinking in Khartoum that this could be a problem of the past. Wheat output is arguably in even worse shape, as it is not dependent on unpredictable rainfall but relies on irrigation from the Nile – i.e. climatic factors 50

Sudan and its agricultural revival

1000 900

River Nile

800

Gezira

700

Sennar Blue Nile

600

White Nile

500

Gedarif

400

Kassala North Kordofan

300

South Kordofan

200

West Darfur

100

South Darfur

0 2007/2008

2008/2009

2009/2010

2010/2011

Figure 1.3.1 Sorghum production ('000 metric tons)

350 300

Shamaliyya River Nile

250

Khartoum

200

Gezira Sennar

150

White Nile 100

Kassala South Darfur

50 0 2007-2008

2008-2009

2009-2010

2010-2011

Figure 1.3.2 Wheat production ('000 metric tons) cannot be cited as an excuse. Production is flat or declining despite the buzz around FDI in Sudanese wheat: Saudi Arabia especially has often been m entioned as likely to change the face o f w heat production in Sudan as Riyadh shifts from domestic to regional production strategies. The statistics, however, hardly show any change in the key producing states and there is little reason to assume that will alter radically in the next three years. Some o f this was entirely foreseeable. Precious little learning seems to have happened from past experiences w hen Sudan was announced to be ‘poised’ —perhaps not entirely surprising given that the key ideologues o f Al-Nahda A l-Zira’ayah today, like Ali G eneif and Abdullah Ahmed Abdullah, were also leading figures under the Nimeiri regime, co-designing the Breadbasket fiasco. Simplistic models o f increasing inputs and increasing outputs remain dominant; there is no strategic vision o f water management (despite this being essential to Sudanese agriculture)

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beyond building the controversial dams; import and export markets continue to be riddled with licences, exceptions, (politically designed) monopolies and distorting subsidies; and smallholders are still considered to be more likely to be part of the problem than part of the solution. The ARP emphasises that the state should no longer play the same central role as in the past, but that in no way implies that the political character of the reforms and policies implemented has changed. The Agricultural Revival in practice continues to rely on a top-down approach, with Geneif, Muta’afi and Abdullah handpicking ‘strategic’ crops12 (despite environmental and agronomic advice against these), and there is an overriding assumption that ‘big is beautiful’. Most of the time, the energy and budget of Al-Nahda Al-Zira’ayah goes to a handful of agroindustrial enfants chéris with strong Gulf Arab connections, like the Kenana Sugar Company, and members of the ruling party on their board of directors. As I have argued elsewhere (Verhoeven 2011a), the bottom line of the ARP is not necessarily an agricultural revolution or inclusive development, but building a coalition of domestic constituencies and international alliances that entrench Al-Ingaz in power for another 10–15 years. The hydro-agricultural mission is the key instrument, but is not the end goal as such. While Al-Nahda Al-Zira’ayah has not yet triggered resistance of the proportions triggered by the Breadbasket reforms in the 1980s and 1990s, the hydro-agricultural mission is deeply unpopular in Sudan’s peripheries. The protests against the dams in Merowe and Kajbar in Nubia have turned lethal and continue despite fierce repression, including in Khartoum where in December 2011 youth of the Manasir tribe and sympathising students demonstrated against the forced displacement of more than 50,000 people to villages in the desert (Committee of Anti Dal-Kajbar Dams 2011). In 2011 serious protests, with major potential for violence, also rocked the key agricultural state of Sennar in eastern Sudan where Egyptian and Qatari investment, along the Blue Nile, has been sizeable and has infuriated many locals who no longer find employment on the big capital-intensive schemes that foreign investors have set up after traditional cultivators left their lands. A deal between Sudan and several Saudi businesses recently collapsed in Sennar because of worsening local protests. The same tensions surrounding Saudi investment are also visible in North Kordofan where big cattle-ranching projects are being established on the ancestral lands of several pastoralist groups, who are threatening violence against the foreigners and the Sudanese government if their complaints are not heard.13 Last but not least, the Kuwaiti-funded heightening of the Roseires Dam in Blue Nile State will oblige possibly up to 75,000 locals to move from their lands; this relocation is particularly sensitive as it occurs in a state that was the frontline for much of Sudan’s last civil war (1983– 2005) and where mechanised farming, mainly by joint ventures between Sudanese actors and Egyptian and Saudi partners (including Osama Bin Laden in the 1990s), completely changed local livelihood systems and contributed to the breakdown of societal arrangements essential for co-existence between cultivators, pastoralists and local government. The insertion of large tracts of the north, west and centre of Blue Nile State (UNEP 2007: 85) into the Breadbasket to produce strategic crops for the Middle East pushed one group of disaffected locals into the arms of the SPLA/M-rebels and another group was recruited by pro-government militia who were given carte blanche to loot (Johnson 2003: 83–4). Today, these grievances still fuel resistance against Khartoum and the dam-heightening is making it worse, as the additional electricity generated is sent to Northern urban centres and the water of the enlarged reservoir is for downstream irrigation in Sennar, with Kuwaitis as probable investors in the schemes. A heightened Roseires Dam has no benefits for Blue Nile, which was told to make yet another sacrifice for the development of the nation, and (implicitly) for the food security of the Arabian Peninsula. Civil war re-erupted in Blue Nile in August 2011. 52

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What is happening in Sudan illustrates some of the wider dynamics of the changing global economic system and the controversy on renewed large-scale investment in agriculture and quasi-inevitable social dislocation, possibly with violent consequences. A word of caution and nuance is nevertheless needed in the context of Sudan’s Al-Nahda Al-Zira’ayah and Gulf Arab investment: despite the plethora of advantages offered to capital-intensive schemes, the Sudanese reality is more complex than a simplistic ‘land grab’ by outsiders (Kugelman 2009; Woertz 2012). While it is undeniable that many high-profile deals regarding land acquisitions, water use and agricultural investment have been signed, it remains unclear how many have actually materialised into productive enterprise. Statistics at the Ministry of Investment are patchy and often classified, though I have been shown some data for Khartoum State, a major destination of FDI and projects of national interest, which illustrates the difference between eye-catching media announcements of investment deals and the reality on the ground. As is evident from Table 1.3.1, especially for agriculture a big implementation gap exists. Other statistics at the Ministry of Investment show that Egypt, Saudi Arabia, Jordan, Morocco, Kuwait, Qatar, Syria, the United Arabs Emirates, China and Pakistan have been the top investors in Sudanese agriculture in the past five years but that the amounts of funds injected into Sudan fall short of the hoped for $1billion per year; 25% of that figure seems more realistic.14 Moreover, there are indications that even on existing projects the intended transformation of Sudanese agriculture via free water, free land and foreign capital is not happening. The Hashemite Kingdom of Jordan signed an extremely advantageous (and recently confirmed) agreement with Al-Ingaz in 1998 (Sudan Tribune 2009), which allows cultivation of 2.5m feddan (1 feddan = 1.038 acres) north of Khartoum for cereals and animal fodder along the banks of the Main Nile for a period of 70 years. The deal enables full capital mobility, as well as the right to export all end products of Jordanian agricultural investments covered under the agreement. Jordanian firms have the right to employ only Jordanian staff and there are no domestic content requirements regarding machinery or tools used on the projects. However, through bureaucratic red tape and hidden taxes on the Sudanese side, unexpected financial constraints in Jordan and doubts about the productivity gains feasible on the lands allocated, the planned mega-investment has still not fully materialised (Jordan Times 2010). High-level discussions between the Jordanian and Sudanese government in 2010 have led to additional concessions by Al-Ingaz, which seems desperate for the deal to go through to signal that Al-Nahda Al-Zira’ayah is still alive and kicking. Yet above all, according to sources within several Sudanese ministries, the Jordanian dossier exemplifies why the Agricultural Revival is probably a misguided idea in its current conception (were the investment to go through, the gains for Sudan would be pitiful) and unlikely to ever live up to its utopian promises – yet another mirage in the desert that leaves everybody disappointed: the Khartoum government; the foreign investors; their Sudanese partners; and local populations.15 Table 1.3.1 Approved versus implemented foreign investments for Khartoum State and national projects Sector

Industry Services Agriculture Total

Number of projects Approved

Implemented

1001 865 100 1966

300 188 17 505

Percentage of approved to implemented 30% 18% 17% 20%

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Conclusion: time for a different model of agricultural development? The mounting evidence of the faltering big push in agriculture, on which the Al-Ingaz regime banks heavily, is unfortunately not yet triggering a fundamental rethink of the model of agricultural ‘development’ that successive regimes in Sudan have pursued. There is no question that both in Sudan and South Sudan there is plenty of potential for the production of a wide range of crops and that both should be able to feed their populations and possibly export substantial quantities of high-quality produce to neighbouring states. Both rain-fed and irrigated production can contribute to long-term growth and Sudan’s comparative advantage remains agriculture, not industry or services. However, what urgently needs to be abandoned is the paradigm that Sudan must, somehow, launch a green revolution to fulfil its destiny as a nation and catapult itself into modernity and regional power status. This paradigm, with its core notions of top-down centralisation, water as political power, servicing foreign markets before meeting domestic needs and lack of interest in smallholders, lies at the heart of recurrent fiascos that have increased food insecurity, inequality and violence in Sudan. The dream of becoming a regional breadbasket does not spur productivity improvements and a genuine pact between producers and the government; to the contrary, people in Sudan’s peripheries perceive such rhetoric as a sign of impending state intervention and new sacrifices for ‘development’, with the benefits accruing to the chosen few in Khartoum. Alternative departures are possible if the paradigm were to be ditched. The key conceptual shift that needs to be made is for Khartoum to start trusting the millions of people who practise small-scale agriculture or are involved in traditional pastoralism and to reinforce their livelihood strategies, broadening their options. This means an end to politically motivated expropriations, firm conditions on incoming FDI (including taxation, technology transfer and local employment requirements), and fiscal policies that encourage production and gradual expansion instead of seeing agriculture as a milk cow for the central bank and treasury. It means investment in agricultural research (including drought-resistant crops), making more credit available to small farmers and cleaning up Sudan’s Agricultural Bank (which at the moment favours the status quo and government cronies) as well as major efforts to improve water-harvesting systems which are at the moment underdeveloped. A new, strategic vision on water management is long overdue – including revisiting the controversial Dam Programme – and must be linked to a reassessment of the big irrigated schemes like Gezira and energy policies in general in Sudan. The new paradigm should not focus on green revolutions and export figures, but on adaptability, resilience and food security. All these measures are particularly crucial against the background of climate change in the Nile Basin. Awareness among Sudan’s political elites of the magnitude of the challenge is barely existent, even if ecological changes in Darfur and North Kordofan have already had far-reaching consequences, and the scenarios developed by different teams of scientists are bleak indeed (Conway 2005; Conway and Schipper 2011; HCENR 2007). Aggregate rainfall might increase or decrease, but is in any case likely to lead both to more flash floods and to more extreme droughts, as in 2009. Because the multidimensional impacts of climate change are highly unpredictable, complex and subject to a high degree of local variation, relying on centrally mandated policies by technocratic or political circles in Khartoum seems a bad choice; the best strategy is to help increase the resilience and adaptability of ordinary farmers, so they can draw on their extensive experiences in dealing with fluctuating and often threatening conditions to cope with climatic changes. Such a paradigm shift remains unlikely, as it would herald a fundamental break with the dynamics of state-building and the logic of political power in Sudan, but nevertheless the case needs to be made again for a radical turnaround. The argument here is not that this would be beneficial because it would remove politics from the sector, as non-governmental organizations 54

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(NGOs) or international financial institutions sometimes argue. To the contrary, such a U-turn would constitute a genuine agricultural revolution and usher in a radically different politics: a transformation that many in Sudan’s marginalised and violent peripheries would welcome after two centuries of breadbaskets, ‘development’ and ‘progress’.

Notes 1 Interview with former Minister of Agriculture Abdullah Ahmed Abdullah, September 2011. 2 Interviews with Hassan Al-Turabi and Abdelrahim Hamdi, April 2010–September 2010, Khartoum. 3 Rentier states are states with a high dependence on income accrued from the export of a specific natural resource (e.g. petroleum) to the outside world, relying strongly on these rents to fund their budget rather than taxation of a wide range of economic activities, for instance. 4 Interview in Khartoum, February 2011. 5 Biofuels are not the focus of this contribution (other chapters in this volume expand on the issue), but it is worth noting that the new ethanol plant of the partially state-owned Kenana Sugar Company in White Nile State, which exports tens of millions of litres to the European Union (EU), is often hailed by officials in Khartoum as demonstrating how Sudanese companies are cutting-edge. Ethanol in Sudan, Africa’s largest sugar cane producer, is derived from molasses; there is thus no substitution effect (i.e. land previously used for food crop cultivation being sacrificed for the production of more lucrative biofuels to be sold on the world market), which makes it particularly attractive to Kenana’s European partners. The ethanol plant in White Nile might produce up to 200m litres annually. 6 Interview in Khartoum, August 2009. 7 These are personal estimates in which I have a quite a lot of confidence, based on years of extensive interviewing within Sudan’s water establishment and internal documents of the Dam Implementation Unit/Ministry of Electricity and Dams. 8 Interviews in Khartoum with experts at FAO, IFAD, WFP, UNDP and in several Sudanese academic institutions, August 2009–September 2011. 9 Interview in Khartoum, September 2011. 10 Alemu Asfaw, Chief Technical Adviser for several FAO projects in Khartoum, and his team are the source for the statistics. 11 Ibid. 12 Interviews with Geneif, Muta’afi and Abdullah between December 2010 and September 2011. 13 Interviews with local activists and international observers in Khartoum and London, September 2011– December 2011. 14 Data shown in March 2011 in Khartoum at the Ministry of Investment. 15 Interviews in the Ministry of Agriculture, International Cooperation, Investment and Water Resources and Irrigation, September 2009–September 2011.

References Ahmed, A. G. (2008) ‘Transforming pastoralism: a case study of the Rufa’a al Hoi ethnic group in the Blue Nile State’, Sudan Working Paper, Bergen, Chr. Michaelsen Institute. Barnett, T. (1977) The Gezira Scheme. An Illusion of Development, London: Frank Cass. Beblawi, H. and Luciani, G. (eds) (1987) The Rentier State, London: Croom Helm. Committee of Anti Dal-Kajbar Dams (2011) ‘The Sudanese government plan of demographic engineering of Nubia and the Chinese and Egyptian connection to it. A letter of protest and resistance’, Khartoum. Conway, D. (2005) ‘From headwater tributaries to international river. Observing and adapting to climate variability and change in the Nile basin’, Global Environmental Change 15: 99–114. Conway, D. and Schipper, L. F. (2011) ‘Adaptation to climate change in Africa: challenges and opportunities identified from Ethiopia’, Global Environmental Change 21: 227–37. Cotula, L., Vermeulen, S., Leonard, R. and Keeley, J. (2009) Land Grab or Development Opportunity? Agricultural Investment and International Land Deals in Africa, London: International Institute for Environment and Development. Cuno, K. M. (1992) The Pasha’s Peasants: Land, Society, and Economy in Lower Egypt, 1740–1858, Cambridge: Cambridge University Press.

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Dam Implementation Unit (2010) ‘Merowe Dam Project: a battle of dignity and independence of decision’, Khartoum: DIU. Ehrlich, P. (1971) The Population Bomb, London: Pan Books. Emirates 24/7 (2010) ‘UAE has over 2,800 sq km in Sudan farms’, 13 October. FAO (Food and Agriculture Organisation (2011) ‘GIEWS country brief on Saudi Arabia’, FAO/GIEWS. Online. Available at: www.fao.org/giews/countrybrief/country.jsp?code=SAU. HCENR (Higher Council for the Environment and Natural Resources) (2007) ‘National adaptation programme of action’, Khartoum: HCENR. ICG (2006) Sudan’s Comprehensive Peace Agreement: The Long Road Ahead, Brussels: International Crisis Group. Ismael, T. Y. (1971) The UAR in Africa. Egypt’s Policy under Nasser, Evanston: Northwestern University Press. Johnson, D. (2003) The Root Causes of Sudan’s Civil Wars, Oxford: James Currey. Jordan Times (2010) ‘Sudan mega-project hits new snag’, 7 July. Kaikati, J. G. (1980) ‘The economy of Sudan: a potential breadbasket of the Arab world’, International Journal of Middle Eastern Studies 11(1): 99–123. Keen, D. (2008) The Benefits of Famine. A Political Economy of Famine and Relief in Southwestern Sudan 1983– 1989, Oxford: James Currey. Kontos, S. (1990) ‘Farmers and the failure of agribusiness in Sudan,’ Middle East Journal 44(4): 649–67. Kugelman, M. (ed.) (2009) Land Grab? The Race for the World’s Farmland, Washington, DC: Woodrow Wilson Center for Scholars. Maxwell, S. (1989) ‘Food insecurity in North Sudan,’ Institute of Development Studies, Sussex, Discussion Paper No. 262. Meadows, D. H., Meadows, D. K., Randers, J. and Behrens, W.W. (1972) The Limits to Growth, London: Earth Island. Niblock, T. (1987) Class and Power in Sudan, Basingstoke: Macmillan Press. O’Brien, J. (1985) ‘Sowing the seeds of famine’, Review of African Political Economy, 33 (August): 23–32. Observer (2010) ‘How food and water are driving a 21st-century African land grab’, 7 March. Pakenham, T. (1991) The Scramble for Africa, London: Weidenfeld and Nicholson. Reuters (2008) ‘Saudi Arabia scraps wheat growing to save water’, 8 January. Roe, E. (1991) ‘Development narratives, or making the best of blueprint development’, World Development 19(4): 287–300. Said, E. (1979) Orientalism, New York: Random House. Sanderson, G. N. (1985) ‘The ghost of Adam Smith. Ideology, bureaucracy and the frustration of economic development in the Sudan, 1934–40’, in M. W. Daly (ed.) Modernisation in the Sudan, New York: Lilian Barber Press, pp. 101–20. SCAR (2008) ‘The Executive Programme for the Agricultural Revival’, Khartoum: Supreme Council for Agriculture Revival. Sudan Tribune (2009a) ‘Saudis to invest $266m in Ethiopia and Sudan’, 17 February. ——(2009b) ‘Jordan to move forward on agricultural investments in Sudan’, 10 April. ——(2009c) ‘Sudan will put its agricultural resources at Africa’s disposal’, 2 July. ——(2011) ‘Sudan criticized for “repulsive” investment policy’, 30 November. UNEP (United Nations Environment Programme) (2007) Sudan: Post-Conflict Environmental Assessment, Nairobi/Khartoum: UNEP. Verhoeven, H. (2011a) ‘Climate change, development and conflict in Sudan. Global neo-Malthusian narratives and local power struggles’, Development and Change 42(3): 679–707. ——(2011b) ‘Black gold for blue gold? Sudan’s oil, Ethiopia’s water and regional integration’, a Chatham House briefing paper, London, Royal Institute for International Affairs/Chatham House. ——(2011c) ‘“Dams are development”: China, the Al-Ingaz regime and the political economy of the Sudanese Nile’, in D. Large and L. A. Patey (eds) Sudan Looks East. China, India and the Politics of Asian Alternatives, Oxford: James Currey. Verhoeven, H. and Patey, L. A. (2011) ‘Sudan’s Islamists and the post-oil era. Washington’s role after Southern secession’, Middle East Policy 18(3): 133–43. Wallach, B. (1984) ‘Irrigation in Sudan since independence’, The Geographical Review 74(2): 127–44. Woertz, E. (forthcoming) Oil for Food. Middle East Food Security and International Agro-Investments, Princeton, NJ: Princeton University Press.

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1.4 The contradictions of development Primitive accumulation and geopolitics in the two Sudans1 Clemens Hoffmann

1 Introduction The recent opening ceremony of the so-called Lamu Port and Lamu Southern Sudan–Ethiopia Transport Corridor (LAPSSET) has laid bare yet again the inherently contradictory nature of post-colonial development. The mega project creates a new East African transport corridor connecting land-locked South Sudan and Ethiopia with a 32-berth deep-sea water facility at the Indian Ocean. Among a variety of development objectives in the participating countries, the project is designed to offer an alternative export route for South Sudanese crude oil. Since its independence, the ‘world’s newest country’ has been at loggerheads with its former rulers in Khartoum over a transfer fee for using the pipeline, refineries and port facilities for the traditional export route through the Red Sea. Yet even though the project, if implemented, will have a tremendously positive effect on South Sudan’s development potential, local communities in Lamu claim they have not been consulted over the development of the UNESCO heritage site into a major infrastructure hub (Gari 2012; York 2012). This dispute reflects but one of the imminent contradictions South Sudan faces in its effort to catch up. Closer to home, Foreign Direct Investment (FDI) is sought to develop the post-war economy and increase state revenue (Sudan Tribune 2012a) as well as agricultural production as a means to boost food security (Lupai 2012). This strategy is influential across Africa (Bush et al. 2011: 188–9), but the Horn of Africa appears to be a special case due to its high vulnerability to food insecurity (USAID and Famine Early Warning System Network 2012). In fact, the UN World Food Programme (WFP) expects to feed up to half of South Sudan’s population in 2012 (WFP and FAO 2012). Measured by these objectives, the land investment activity in South Sudan to this day has not yielded great results. Acquisitions lacked good practice with regards to community consultation and environmental impact assessments (Deng 2011), while most transactions appear to remain merely speculative (Mosley 2012). It is not only food insecurity that remains a paramount issue for the Republic of South Sudan, however, but also the long-established need to diversify the economy after the dispute with the North has led to the loss of all oil revenues at a time when ‘internal’ and ‘external’ conflicts spiral and put heavy burdens on the stretched budget.

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In many ways, however, the contradiction between community rights and agricultural development, geared to increase production, either to meet local demand or to increase state revenue as an export commodity, is not unique to South Sudan in 2012. Sudanese history features a wealth of examples where contradictions turned into confrontation and armed struggle. Prior to the discovery of oil, the country’s conflict-ridden trajectory from traditional modes of subsistence to a modern capitalist regime of accumulation has by and large evolved ‘on the ground’ around transforming land and labour into productive sources of surplus value, thought to fill imaginary African and Arab breadbaskets respectively. Many conflicts and maybe even the division itself can be seen as a long-term result of this process of ‘mal-integration’ into the capitalist world economy (Ayers 2010). Despite the new South Sudanese Land Act and Land Policy explicitly addressing some historic conflict dynamics around land by inscribing John Garang’s slogan of ‘land belonging to the people’, some intrinsic contradictions should be on Juba’s radar. This chapter will provide an overview of historical and contemporary dynamics and transformations leading to these development contradictions. The core subject matter of this analysis is the process of appropriation and primitive accumulation of previously uncommoditised productive resources, notably land, labour, capital and, in the case of agricultural development, water. However, instead of merely identifying ‘dispossessed’ classes and ‘appropriating’ agents whose actions (or inactions) are assumed to be solely based on a self-interested profit motive, this chapter will further explore the complex set of global structural relations informing local agents and underlying their actions. While the literature has usefully reflected on transnational global markets as a driving force behind such processes, notably in the form of foreign capital, sometimes competing strategic orientations of different state powers – in other words, geopolitical relations and the ways in which they intermingle with market relations – have received less attention in the analysis. This chapter will try to remedy this shortcoming in the Sudanese context. This emphasis on the dualistic structure of world politics consisting of global markets and an interstate system should not be read, however, as an attempt to diminish local, individual agency in the process, or as reducing them to passive executors of global or geopolitical imperatives. Equally, it is not intended to see any of these spheres of social interaction as self-contained and unrelated to one another. Rather, this chapter aims to take into account regionally and historically specific social relations between macro-structures and local agents and, in doing so, provides a nuanced analysis of the process of accumulation in Sudan and South Sudan.

2 Primitive accumulation, development and the state 2.1 The concept of primitive accumulation Although the concept of ‘previous accumulation’ was first developed by Adam Smith (1982), it gained more prominence in Karl Marx’s historical materialist re-conceptualisation as the process of ‘primitive accumulation’. This is for Marx the historical process whereby producers are divorced from their means of production, notably the enclosure of land in 16th-century England (Marx 1981: Ch. 26). This act of dispossession of subsistence farmers from their primary means of production is, however, not seen as a ‘natural’ occurrence, but as a precondition, instituted by extra-economic – i.e. political and violent – means, so that market relations can engage in a process of impersonal, market-based appropriation later (Brenner 1985; Wood 1999). It involves not only the commodification of land via enclosing commons, but also the transformation of peasants into waged agricultural labourers. The essential objective of this process is the commodification not only of land but of all factors of production, turning land, capital and labour into marketable goods, generating the specific form of social reproduction 58

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known as capitalism. Marx’s own preoccupation was with the transformation of subsistence producers into wage labour, or the proletarianisation as the essential intermediary step in generating the future revolutionary class. In that sense, he was not morally averse to the process, and in fact saw it as part of a necessary, if violent, transformation. However, far from being a finite process whereby productive factors, once commodified, remain in the market sphere, primitive accumulation has to be understood more as a permanent, infinite process necessitated by capitalism’s expansion, and the need to overcome its inherent contradictions and to maintain the separation of producers from productive factors (De Angelis 2004; Luxemburg 1951). Even though Marx specifically refers to colonialism as one outcome of this process, expansion does not necessarily have to be seen as a territorial process only, but can involve constant transformations, in particular with regards to the changing nature of labour–capital relations within the ‘global north’, ‘north–south’ relations as well as incomplete transitions within the ‘global south’ (Harvey 2003). Given the Marxist leanings of many Third World nationalist revolutionary movements, including the Sudan People Liberation Movement (SPLM) during the initial phases of the struggle in 1983 (Berhanu 2011: 83),2 this concept has also found inroads into the development literature (Amin 1977). However, the major shortcoming in applying this concept to South Sudan is its presumption of a direct, stationary relation between producer and land. Dispossession in the transition from feudalism to capitalism in Europe thus required the extraction of direct producers from the land. In the case of more mobile forms of subsistence, like pastoralism or shifting cultivation, the opposite transformation is required (and pursued): namely, the settling of populations is a precondition for the commodification of land and labour. ‘Primitive accumulation’ in Africa is, thus, not always comparable to the processes in Europe. Apart from settling mobile populations, it also implies the monopolisation of land use and the dispossession of producers from their means of social reproduction. The role of states in general and postcolonial states in particular, rather than private entrepreneurship, is crucial in driving this socioeconomic transformation. In other words, colonial administrations as well as post-colonial state formations introduce capitalist social relations. Though they never introduce an ideal-typical European ‘mirror’ image, transformation always happens via a process of violent dispossession, rather than developing organically driven purely by an indigenous entrepreneurial spirit.3 This also includes the recognition that government accumulation can still be carried out with the objective of commoditisation, even if no privately owned capital is initially involved. Private ownership does not per se constitute a condition for commoditisation, as the state is frequently the appropriator par excellence in post-colonial contexts – itself appropriated by private interest, local, national, global or simply intangible. Hence, different geographical instances of accumulation and dispossession are heterogeneous while historical and contemporary dynamics are highly complex based on different social formations producing different forms of resistance (Glassman 2006: 622). In sum, the core premises of this analysis are that (a) accumulation and dispossession are a priori extra-economic, political processes, and (b) that they are necessarily permanent in scope due the enduring labour–capital dialectic.

2.2 Primitive accumulation in the two Sudans 2.2.1 Sudan A brief look at Sudan’s history reveals many instances of appropriation and dispossession, both in its colonial as well as its post-colonial history (e.g. Abdelkarim 1992; Ayers 2010). Here, the most frequently cited examples are the Gezira and Gedaref irrigated agricultural schemes, which introduced mechanisation and varying forms of mostly casual waged labour while strengthening 59

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the local merchant (or circulation) capital. Despite being institutionalised by the colonial masters and being run by private operators, the Sudanese state in its different articulations remained the key agent of development as all land remained de jure public property (Barnett and Abdelkarim 1991). Sociologically, however, what Ayers calls Sudan’s ‘mal-integration’ into the global political economy produced ‘a dependent class of “local resource extractors”’ (Ayers 2010: 163), a local appropriating capitalist class, who intensified resource extraction in Sudan in accordance with a global regime of growth and accumulation. On the flipside, they served not only to deplete Sudan’s ecology, but also to impoverish the vast majority of Sudan’s population by making them low-income wage earners. Primitive accumulation in Sudan arguably has a long tradition, though this history is rather complex and uneven. During the Turco-Egyptian and Anglo-Egyptian regimes, forms of private landownership were established, while private ‘foreign’ capital (Greek and Syrian) had started penetrating Sudanese agriculture and semi-feudal landlords were established. These were usually close to political power both prior to and after independence. This also implied integrating into a global economy, appropriating land, labour and subsequently surpluses together with European formal or informal colonisers. This was particularly visible in the export-oriented cotton production in Ghezira. In fact, cotton exports made for a trade surplus in the first years of the nowadays debt-stricken independent Sudan. As a result, it was the only post-colonial Arab state not declaring a large-scale land reform with independence (Awad 1971: 212), simply because it didn’t appear necessary to the established beneficiaries of a system of global wealth extraction. In other words, private and semi-statal forms of land acquisitions, but also the violent appropriation of free and unfree labour, had already developed as a ‘tradition’ in colonial and further into post-colonial Sudan. However, its uneven and partial nature had equally allowed pre-capitalist forms of subsistence, in particular nomadic livelihoods, to survive. The crucial turning point in trying to close these gaps was President Nimery’s 1970 Unregistered Land Act, declaring all unclaimed land (i.e. unless claimed by investors) state property. This modern-day form of enclosure established the legal basis for large-scale land acquisitions by Nimery’s socialist-labelled regime. While it was by no means the first such example, it certainly constitutes a highlight in the uneven development of land policy in post-colonial Sudan. Modernisation and land reform came packaged in an agenda of ‘Sudanism’ which was meant to overcome traditional, or rather fractional, rule. Nimery’s administrative reforms replacing the British system of ‘Native Administration’ were meant to implement a more centralised administration further facilitating land use. In reality, it represented only another step in the incomplete transition from traditional to modern authority (cf Mamdani 2009: 173), creating what Mamdani calls many Sudans within a single state (ibid.: 174). These were necessary steps to implement the ‘Arab Breadbasket’ strategy, geared to supply food to the Middle East while raising national income through crops exports. It rested on three pillars, namely Sudanese land and resources, Arab capital and Western know-how. The ‘know-how’ came from Washington as early as 1968, when the Mechanised Farming Corporation (MFC) was established upon request from the World Bank to secure loans and facilitate credit to farmers (Suliman 1994: 16). Subsequent expansion of mechanised farming was further funded by the World Bank under the MFC umbrella. The International Monetary Fund (IMF) structural adjustment programmes continued the encouragement of growing export-oriented cash crops rather than establishing food security at home. This resulted in the slow loss of self-sufficiency for Sudan, once running a trade surplus, and applied not least to the cultivation of wheat, which was considered unsuitable for an export-led growth regime by agricultural specialists. The Arab/African food basket ideology, in conjunction with the influx of foreign capital politically facilitated by the Washington Consensus, continued to open the Sudanese market and production. 60

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Domestically, the Unregistered Land Act coincided with the 1972 open door or infitah policy which had codified Sudan’s dependence on foreign capital (Elnur 2008: 40). Investment into the Arab Breadbasket was not only politically driven by the food strategy of Gulf states but also financially fuelled by the need to recycle OPEC petro-capital, especially after the 1973 oil crisis had cut off Western markets. However, expansion was driven not only by the imperatives of a global political economy, but also by the rapid soil depletion the somewhat thoughtless cultivation of newly introduced cash crops had caused. Expanding the frontiers of cultivation and eventual environmental degradation led to more land conflict, notably in the Nuba mountains, southern Blue Nile and eastern Sudan (Ayers 2010; Suliman 1999a, 1999b, 1999c). In short, through unsustainable farming, capitalist expansion was dependent upon territorial expansion as long as the economy would remain focused on primary commodity export. This led not only to increased prices and depressed wages but also to the continuation of unsustainable ‘shorttermist’ cultivation practices. These factors co-determined the ecologic and economic crisis still ongoing today, which is characterised by an enduring current account deficit, only disrupted by – in retrospect – a short era of oil riches. After Nimery’s fall, the 1986 interregnum of parliamentary democracy led to the rise of Islamist parties, possibly in reaction to socio-economic developments. In 1989 the continued economic failure led to another coup by an impatient ‘ruthless business and finance segment of the ruling elite’ (Suliman 1994: 19). The finance segment was based on an emerging Islamic banking sector majority-owned by Gulf investors. The Faisal Islamic Bank, for example, is 60% owned by foreign investors. Not only did Islamic banks enjoy tax breaks not available to other banks, but as a result of politically engineered privileges the lending and business practices of Islamic banks ‘revolutionised access to credit, and wrested the virtual monopoly of this vital sector from privileged groups (many of whom were of foreign extraction)’ (Elnur 2008: 70). In that sense, it was, according to Elnur, the single most important factor explaining the rise of the Islamist movement (ibid.). Its success in negotiating political and tax concessions from the state meant that it enjoyed a competitive edge over Sudan’s established banks, quickly outgrowing them. War, in turn, harmed primary production in Sudan and led to increasing economic pressure on the Khartoum bourgeoisie (or Jellaba), leading to a consolidation of mercantile capitalist activity with Islamic finance, fuelled by a growing oil income in the Sudanese capital. Accumulated capital, in part due to the endemic state of political instability, moved abroad, however, along with skilled labour and upper middle-class urban population throughout the 1980s and 1990s, destined for oil-producing Arab states and Europe. This consolidation of a strong class alliance, based in Khartoum, between agricultural capital, a merchant bourgeoisie and political elites was in fact quite similar to previous Umma and Mahdi administrations. Nimery’s socialist experiment can be seen as the exception to the rule here. What made the NCP’s regime different from its predecessors, though, was its much more pronounced Islamist agenda. Second, not only capital accumulated in the agricultural sector but also a petro dollarfuelled Islamic finance became major pillars for the regime (Elhiraika 1996; Khaleefa 1993). However, as capital wants to see quick returns on investments, the rapid and violent replacement of more sustainable forms of production in a subsistence economy by forms of production amenable to surplus extraction continued. Not only did this perpetuate social strain and conflict, it also exhausted ecosystems. The latest two instalments of these policies are the outsourcing of production in Gezira to Egyptian state investors, dispossessing farmers there (Ali 2010), and the hydro-engineering and irrigation developments in north Sudan and Blue Nile. Agricultural developments around the Merowe multi-purpose dam project, for instance, have led to the displacement of many Manasir, Amri-Hamdab and Nubian people far from their ancestral lands. The creation of new communities around new production areas is then marred 61

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with a policy of homogenisation in the form of Islamisation. Arguably, thus, flooding current and future hydro-engineering and agricultural projects follow the purpose not only of increasing production, but also of transforming livelihoods, expanding mechanisation along with controlling wage-labour relations. In sum, this amounts to what some call ‘demographic engineering’ (Hashim 2010), some of which is said to be achieved by settling Egyptian farmers in the Sudan (Ali 2010). These are a few examples epitomising the top-down approach to development which explains to some degree the various complex and persistent conflicts in the country. However, it is worth noting at this point that the web of personal relations as well as transnational connections which constitute Khartoum’s military–financial complex make the clear identification of agency as well as structures difficult.

2.2.2 South Sudan Compared to the vast history of failed, unsustainable or conflict-ridden agricultural development in North Sudan, South Sudan has seen little to no such investments or development in general, though plenty of conflict. Largely owing to a policy of neglect but also through decades of almost uninterrupted conflict and hostilities, large agricultural schemes are absent.4 This makes the newly founded Republic of South Sudan a peculiar place, which is markedly different not only from its northern neighbour but also from its East African neighbours Kenya, Uganda and Ethiopia, South Sudan’s main economic partners (Yongo-Bure 2007). Following the establishment of a semiautonomous government in Juba in the 2005 Comprehensive Peace Agreement (CPA), income was largely generated by oil revenues, which translated into one of the highest per capita incomes on the continent, comparable to that of South Africa. Paradoxically, owing to the legacy of Africa’s longest civil war, it also features one of the lowest human development indices as well as being severely food insecure in a region vulnerable to the effects of weather extremes, such as droughts and floods. Agricultural production and rural livelihoods remain by and large based on tradition. Because of its variable climate, both spatially as well as temporally, South Sudan traditionally features changing land-use patterns and a highly mobile population. Livelihoods are based on shared land use, which is the rule rather the exception. This also includes the farming areas of the socalled Equatoria Green Belt, where shifting cultivation is common. Arguably, these conditions don’t lend themselves easily to the introduction of a Western-style private property regime, let alone large mechanised schemes. While entrenched in local tradition, shared land-use practice was never entirely conflict-free and many use rights were negotiated using differing levels of violence. Currently, however, it leads to high levels of violence and scores of casualties. Decades of war have damaged old conflict-resolution mechanisms along with traditional authority while having proliferated fire arms. Several campaigns of disarmament have only been partially successful so far (Schomerus and Allan 2010: 10). Thus, conflict and displacement have led to the disorientation of wide parts of the population and a general deterioration of the traditional social order, which has only very inconsistently been replaced by modern state structures. In short, South Sudan has thus far failed to implement Max Weber’s famously defined modern state as ‘a human community (that) successfully claims the monopoly of the legitimate use of physical force within a given territory’ (Weber 1991: 78). Another aspect is the prevalence of pastoral or agro-pastoral livelihoods. Measured by the output of marketable commodities, this is by and large a non-productive sector. Farming is more traditionally rooted in Greater Equatoria, where soils are thought to be more fertile, but even here the legacy of conflict has destroyed many traditional farming skills. As far as land-use patterns are concerned, this does not necessarily lead to more stationary livelihoods more adaptable to capitalist modes of production. On the one hand, conflict has brought many 62

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pastoral communities to the region, increasing pressure on existing land and water resources. On the other hand, farmers have traditionally adhered to shifting cultivation. Lastly, if existing farms produce beyond subsistence levels, marketing skills are insufficient and necessary infrastructure for producer’s access to the market is either poor or non-existent, so that food supply remains dependent on imports from Kenya and Uganda as well as WFP handouts. Current South Sudanese development and agricultural policies are trying to attract FDI for the purpose of food production. Beyond local consumption, President Kiir and Vice-President Machar pointed to the potential export orientation of production when noting South Sudan’s capability of becoming the regional food basket, with ‘the entire world benefiting it’ (Uma 2010). Notions of South Sudan as the region’s breadbasket depend on the assumption of ‘resource abundance’, notably abundance of land (Lupai 2011). However, the seasonal use of land precludes such an easy and somewhat foregone conclusion. Awareness of the historical trajectory of Sudan’s ‘mal-integration’ into the world economy is therefore essential when these policies are implemented. Having said that, there are various obvious differences between north and South Sudan with the latter being incorporated into a regional East African economy, rather than developing a dependency on petro-dollars for its agricultural development. Equally, it is not exposed to the same climatic conditions as the north and might, therefore, be capable of introducing mechanised agriculture in a more sustainable manner compared to the unsustainable schemes that have led to environmental degradation north of the new border. Partly through historical experience, partly through the current debates about land grabs, the South Sudanese leadership is not unaware of potential problems (Nhial 2008). It aims to introduce legal safeguards against nonproductive investments or those only directed by high yields rather than food security, such as carbon sinks and biofuels. Equally, South Sudan might not be subjected to a similarly rapacious investment regime of Islamic/Gulf finance, even though the activities of a venture capital firm like the Jarch Group or the private Egyptian but state-dominated Citadel group, as well as other investment activities, give rise to some concern (Deng 2011).

3 The nation, the global and the geopolitical 3.1 Global capital accumulation Much of the literature on land grabs has rightly pointed to the issue of ‘global’ market forces as the core agent behind the process of land grabs across Africa, which, to some, constitutes a new wave and new forms of ‘primitive accumulation’ (Sassen 2010). Though some disagree that the observable forms of land investment in South Sudan can be seen as part of the pan-African phenomenon of land grabs (Mosley 2012), the government of South Sudan’s repeated rhetorical commitment to private investors5 as the key means of development in the new country begs some questions, not least because it also leaves the notion of a ‘right to self-determination’ incomplete at best. Inflow of private capital to compensate for lost oil revenue might help South Sudan in its determination to an independent destiny vis-à-vis the north; however, it creates new forms of dependencies, potentially leading to a damaging foreign debt cycle as was showcased in north Sudan. In that sense, the involvement of global commodity markets and the long-term impact of the capital flight from the sub-prime crisis6 on rising food prices can be seen as new forms of a phenomenon well known to Sudan. In other words, land grabs are not only a contemporary phenomenon. They are but the latest step in a long historical legacy of primitive accumulation happening across the globe with implications for both Sudans.

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As was described above, Sudan’s development and in particular its agricultural development were tightly interwoven with the international political economy long before oil revenue flowing. This history of international involvement can be traced back to the colonial establishment of cotton cultivation which had produced local intermediaries for the rising world economy of the 19th century. The trajectory since then has slowly led into the prolonged state of economic, ecologic, social and security crisis still ongoing, interrupted by periods of relative peace in the 1970s and oil wealth in the 2000s. Foreign indebtedness and trade deficits remained, though. Long gone were the days of the cotton-owed trade surplus of the first postindependence years. This history illustrates how the process of global capital accumulation subjects local social relations to systemic pressures. This also applies to the SPLM, which, beyond its developmentalist agenda, is subject to a wider political economic imperative that necessarily involves social contradictions inherent in capitalist development per se. However, while ‘global’ market forces certainly play a role in understanding the current process of primitive accumulation, carried out by a global market, international institutions and local elites, there are also geopolitical aspects that influence outcomes, which is a neglected aspect in many analyses.

3.2 Geopolitics The most obvious and most commonly referred to geopolitical aspect in Sudan as well as South Sudan is the effect of competition over the access to hydrocarbons, especially between ‘Western’ powers like the USA and ‘Asian’ players like the People’s Republic of China. As will be demonstrated in the following section, resource competition alone is insufficient for explaining the respective Sudan policies of major powers. Rather, this section will try to analyse these policies in their historical–social relation towards one another to account for a multitude of global and regional dynamics determining the actions of external powers in the region. Historically, geopolitics has always constituted a strong component of the history of the region. This reached from the long-lasting Egyptian influence and domination to the Ottoman Empire’s tributary relation (or Turkiyya) to the British Empire. While these relations of domination were formalised, post-colonial independence suggested a degree of self-determination that is not necessarily reflected in the scope of action provided to the respective leaderships in Juba and Khartoum. In other words, even without mobilising a neo-Marxist vocabulary of ‘neo-Imperialism’, ‘neo-colonialism’ or ‘Empire’, geopolitical social relations frame the past and future in the two Sudans alike.

The United States of America From today’s vantage point it seems difficult to believe that Sudan was a key US ally in the region during the Cold War. It shows, however, the malleability of global social relations, known as geopolitics, and the value in analysing those. This historic involvement is reflected in the key contribution to the CPA. Arguably, the United States continues to be a determining factor in the future of both Sudans. Today’s US foreign policy at the Horn of Africa is no longer characterised by Cold War strategising, however, but by the ‘war on terror’. The George W. Bush administration’s ‘strategic philanthropy’ (Barnes 2005: 16; Huliaras 2006), which led to the administration’s commitment to the Sudanese peace process, not only came about as a spontaneous reaction to the terrorist attachs on the USA on 11 September 2001 (9/11) but is historically rooted in a long history of involvement in the Sudan (Mamdani 2009; Woodward 2006). Regardless, the strong US position providing the leverage necessary to end 64

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the war was effected not by a long-term post-Cold War strategy for East Africa, aiming at installing a ‘client state’, but rather by the inadvertent combination of Cold War legacy commitments, like those to Uganda and Ethiopia, the perceived imperatives of the war on terror and the rise of the evangelical right in the USA. The end of the external ‘necessity’ of the Cold War had initially left US policy-makers in a state of disorientation towards the whole of Africa but especially in a region as geopolitically sensitive as the Horn. This is evidenced by the aborted Somalia mission followed by a wider disengagement under President Bill Clinton. While West, Central and East Africa, despite all their conflicts and instability, were arguably more subject to the influence of their respective former colonial powers, the Horn’s geopolitics are more fragmented. The proximity to natural resources and maritime energy routes makes it subject to competition by independent rising post-colonial powers. Notably this applies to the mostly hydro-political relations between Egypt and Ethiopia in the immediate neighbourhood and, in the periphery, Saudi Arabia, Iran, Israel and until recently Libya. It is precisely these ambitions that had also put them at the centre of Cold War dynamics, with such dramatic implications for the ‘internal’ social relations in Sudan (Mamdani 2009). Apart from these rivalries the region adjacent to the energy-rich Middle East is of natural geostrategic interest to powers aiming at global reach, but also to smaller middle powers active in the environment. For example, while being geographically far removed, Sudan has always played an important part in the Arab–Israeli conflict, prompting long-lasting Israeli involvement in East Africa and in Uganda especially. Similarly, Sudan currently has to balance its declared friendship with Iran with the long-standing financial and religious influence of the more proximate Saudis, who look at this ‘friendship’ with disapproval. Additionally, no clear regional hegemon has emerged, providing ample ‘room to manoeuvre’ to all players on the chessboard, including any regime Khartoum has produced (Marchal 2010: 81). Due to the geopolitically ambiguous post Cold War situation, the US had difficulties ‘in defining an overarching set of national interests’ which could have provided the context for a more interventionist policy (van de Walle 2009: 1). Consequently, the Clinton administration’s policy, preoccupied with peace-making in the Balkans, was one of ‘retrenchment and timidity’ with the active discouragement of intervention in the Rwandan genocide constituting a possible low point (van de Walle 2009: 2). Despite its ineffectiveness, the Bush campaign still criticised Clinton for being too committed to the continent. Paradoxically, Bush thus turned out to be much more pro-active in Africa as a whole, starting with his commitment to fighting HIV/ AIDS. If the increase in aid had come to many as a surprise, the increased engagement culminating in the 2007 creation of a dedicated command for the continent Africa Command (AFRICOM, without Egypt) can be seen as part of a redefinition of US interests in the continent post-9/11. As opposed to the Middle East, the Africa engagement did not suffer from a portrayal as unjustifiable neo-colonialism. Starting from what van de Walle calls ‘ad hoc humanitarianism’ it was especially the success of the CPA that led many commentators, including many vocal critics, to describe the administration’s record in Africa as a unique success in stark contrast to the rest of the Bush legacy (Mamdani 2011; van de Walle 2009: 6). While the war on terror began focusing more directly on Somalia, the continued US interest in the region also includes both Sudans. South Sudan as a reliable ally is supported by the ongoing militarisation of US Africa policy, epitomised most clearly by the launching of the Combined Joint Talks Force – Horn of Africa (CJTF-HOA) in response to the threat of Al Qaeda and affiliates in the region in 2002, but also by direct and indirect military aid as declared in President Barack Obama’s latest budget plan. Interestingly, militarisation and aid became intermingled under these circumstances, so that AFRICOM now manages one-fifth of the US aid budget to Africa (van de Walle 2009: 13). Relations with Khartoum away from the public image are not in any case as 65

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dreadful as is commonly believed. The main bone of contention is humanitarian access and the fact that the USA has not removed Khartoum from the list of states sponsoring terrorism, as initially promised. More generally, though, the NCP is no stranger to Washington. After the US strikes on Khartoum in the aftermath of the Kenyan and Tanzanian embassy bombings, the NCP leadership has demonstrated a highly co-operative spirit, especially with regard to intelligence co-operation, which is considered vital to US operations in Somalia. Official US policy, in particular those parts of the Republican party influenced by the evangelist right and those parts of the Democrats influenced by humanitarian lobbyists, continues painting a public image of hostility towards Khartoum (Mamdani 2007, 2009). However, the picture is far from black and white. Similarly, while the US role, especially in the drafting of the CPA, is crucial, its actions have to be understood in relation to other powers’ actions and events in the region and globally.

The People’s Republic of China By contrast, China’s involvement in both Sudans is frequently reduced to pure energy security policy (Mohan and Power 2008). While the heavy investments in Sudan’s oil industry certainly determine Chinese Government’s interests in the region, this does not come in the form of a strict anti-American support of Bashir and the NCP.7 Given that 70% of proven reserves are in the south, Juba is an equally important partner for China. With independence and the strong ties between the SPLM and the US, competition for natural resources and influence is certainly a factor, though the concrete nature this competition may take is unknown. Most likely it will be a matter of considerable complexity (Large 2008, 2009) also involving other powers, notably India (Narlikar 2010). Similar power constellations can be found in broader geo-strategic terms beyond the issue of energy security. China’s growing external trade requires securing global routes, a policy which has been articulated in the so-called ‘String of Pearls’ strategy, of which LAPSSET could be a part. While this could just represent legitimate and recognised maritime trade interests (Khurana 2008), it might equally lead to competition with India and the USA. Military and security implications are far from clear, though. In any case, the fact that it provides room for speculation is sufficient to make the String of Pearls relevant. For even if there is no ‘hard’ security issue at stake, the strategy exists at least as a perception, which in turn might influence naval policies of other powers, like the USA (Gertz 2005; Pehrson 2006).

The dialectics of geopolitics The discussion around the placement of AFRICOM and China’s String of Pearls strategy in the Indian Ocean provides two indicators of what underlies the respective Great Power strategies in the region beyond resource access. However, these should not be seen as two ‘tunnel visions’, blindly followed by these powers independent of their environment. Nor should analysis be limited to a ‘global’ competition between Beijing and Washington. More likely, the two powers are preoccupied with finding a new modus vivendi allowing each the continuation of their respective strategies of accumulation. This also includes the thus far highly fragile postCPA intra-Sudanese relations, which are to be strengthened instead of contributing to destabilising the region with Great Power competition. In fact, most states will be concerned with post-CPA stability – a desire that has become even greater at a time characterised by an increasing sense of post-revolutionary volatility and unpredictability in the Arab world. This short portrayal of the complexity of global political economic and geopolitical relations is by no means exhaustive. It simply goes to show that policy decisions are not taken in a 66

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vacuum, purely determined by what Robert Putnam once famously called ‘two-level games’ (Putnam 1988). Rather, they are the outcome of a complex web of social relations, ‘domestic’, ‘international’ and ‘global’ in scope, sometimes part of a wider policy, but also sometimes ad hoc reactions to other actors and emerging structures. Geopolitics is therefore better understood as the dialectical relationship between different historically and geographically specific foreign policies emerging from a social substance, rather than purely structurally generated socially empty Great Power competition (Waltz 1979). While competition is part of this dialectic, including the competition over resources for profit, it might equally follow different imperatives in different situations. It is therefore the dialectical relationship of powers and the unintended consequences this relationship has generated that constitute the geopolitical structure into which South Sudan was born. This is what delimits the new country’s scope of action. Within the dual structures of global markets and a pre-existing inter-state system South Sudan can adapt, react, influence and contribute, but it cannot determine the shape of its future entirely independently.

4 Conclusion An historical perspective on the contemporary process of primitive accumulation reveals various dialectical relationships determining the nature and scope of development in the Sudan and the newly independent South Sudan. The first of these relationships is that with its own history. Historically constituted social – productive – relations continue to influence the current trajectory of both Sudans. This is not to argue in favour of a path dependency, however, but rather that any analysis of the contemporary policy dilemmas requires a thorough search for their historical origins. Second, from a classical Marxist perspective, how the relationship between capital and direct producers develops is crucial for the future of production and, hence, wealth creation. This relationship needs careful calibration, usually by the state when undergoing capitalist development. In other words, the establishment of a waged labour force as the basis for a capitalist growth regime will have to separate direct producers from their means of production, implying a tremendous social transformation that requires careful negotiation. Third, the establishment of a private property regime is subject to similar conditions with regards to land rights. How the carefully crafted South Sudanese land policy will be implemented is crucial in this regard. Fourth, clearly identifying local agency in this process is problematic as it is subject to an increasingly volatile global regime of capitalist accumulation. This regime of accumulation is in turn itself embedded within global and regional geopolitical systems. Political decisions directing the future path of South Sudanese development are therefore themselves part of a ‘global’/’geopolitical’ dialectic, the complexity of which is sometimes difficult to penetrate analytically. Fifth, these difficulties should not obscure the view on an intra-elite competition, carried out locally and regionally as well as globally over the sources of surplus, with arable land being second only to oil in its desirability. Developmental contradictions are thus reproduced locally as well as globally, specifically within the agricultural/land development sector, reaffirming the view that ‘primitive accumulation’ has to be seen as a permanent, rather than finite, process. In the meantime, development in South Sudan, agricultural and otherwise, remains in its infancy. What some might see as a ‘privilege of backwardness’ provides incentives for devising ‘mega projects’ for others. This applies in particular when it comes to addressing the paramount issues of food security and pressures to diversify the economy away from hydro-carbons. However, the lesson that South Sudan can learn from its former northern foe is that big projects, more than offering valuable services for the population or a quick fix to food security and other problems, more than anything offer high levels of surplus to investors, which is frequently 67

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siphoned off by markets. Capital does not necessarily benefit the local population, who have to buy back services at inflated rates to accommodate investors’ expectations. Historical and contemporary experiences in the global north and elsewhere in Africa suggest that development in big projects involving foreign interests can have detrimental effects on communities. Capital thus accumulated, however, will find a way to turn profitable, especially if instability persists and the institutions of the new state remain weak. Thus, while big projects might seem an intuitive reaction to the current situation, small-scale community-based projects nevertheless offer more sustainable forms of development, a more direct return on the investment, but also a safeguard against the outbreak of similar patterns of conflict. This applies to the expansion of agricultural production as well as to hydro-engineering and other big projects. While this chapter has focused on questions of the relationship between land, social power and the environment in – by now – two countries, it has to be recognised that the sources of war and instability are equally located within the globally and historically constituted social relations briefly outlined here.

Notes 1 Parts of this research have been conducted under the EU FP7 CLICO project, for details see: www. clico.org. The author is grateful for the support. 2 Bernahu (2011: 83) quotes Article 5 of the SPLM legislation No. 1 of 1983 at length:

The Marxist–Leninist movement known as Sudan’s People’s Liberation Movement shall be the sole people’s political organisation established in the interest of the oppressed working masses of the Sudan people to liberate the country from the oppressive, corrupt and reactionary bourgeois government of Khartoum.

3 4 5

6 7

Thus, in the early stages of the struggle, arguably still dominated by the imperatives of the Cold War, the SPLM adopted an anti-capitalist, rather than anti-northern/Arab, language. This point has been made by various social theorists, from within both Marxist and Weberian traditions: Wood (2002); Tilly (1990). The Aweil Rice scheme is an exception that proves the rule. It has to be added that it is based on flood irrigation and in the early stages of donor-funded rehabilitation. Statements of this nature are frequently aired by South Sudanese politicians and Vice-President Riek Machar in particular. There is a concerted policy plan backing up such plans, as evidenced by the repeated invitations to investors (Sudan Tribune 2012b). The effect of the European debt crisis has yet to be established and cannot, therefore, be discussed here. The most striking example of its rather nuanced Sudan policy is China’s abstention when the Security Council Resolution referred the Darfur War Crimes to the ICC in 2005. Notably, the USA cast the same vote along with Brazil and Algeria, while Russia and the European permanent UN Security Council (UNSC) members voted in favour.

References Abdelkarim, A. (1992) Primitive Capital Accumulation in the Sudan, London: Routledge. Ali, A. A. (2010) ‘Egypt’s takeover of Sudan’s Gezira scheme’, Sudan Tribune. Omdurman, 19 December. Amin, S. (1977) Imperialism and Unequal Development, New York: Monthly Review Press. Awad, M. H. (1971) ‘The evolution of landownership in the Sudan’, Middle East Journal 25(2): 212–28. Ayers, A. J. (2010) ‘Sudan’s uncivil war: the global–historical constitution of political violence’, Review of African Political Economy 37(124): 153–71. Barnes, S. T. (2005) ‘Global flows: terror, oil and strategic philanthropy’, Review of African Political Economy 32(104/105): 235–52. Barnett, T. and Abdelkarim, A. (1991) Sudan: The Gezira Scheme and Agricultural Transition, London: Cass.

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Berhanu, D. G. (2011) Institutions and Investment in Sudan: Socio-economic and Institutional Foundations of Reconstruction and Development, Munster: Lit. Verlag. Brenner, R. (1985) ‘The agrarian roots of European capitalism’, in T. H. Aston and S. H. E. Philpin (eds) The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe, Cambridge: Cambridge University Press, pp. 213–328. Bush, R., Bujra, J. and Littlejohn, G. (2011) ‘The accumulation of dispossession’, Review of African Political Economy 38(128): 187–92. De Angelis, M. (2004) ‘Separating the doing and the deed: capital and the continuous character of enclosures’, Historical Materialism 12(2): 57–87. Deng, D. K. (2011) ‘The new frontier – a baseline survey of large-scale land-based investments in Southern Sudan’, Oslo, Norwegian People’s Aid. Available at: www.npaid.org (accessed 10 April 2011). Elhiraika, A. B. (1996) ‘Risk-sharing and the supply of agricultural credit: a case study of Islamic finance in Sudan’, Journal of Agricultural Economics 47(1–4): 390–402. Elnur, I. (2008) Contested Sudan: The Political Economy of War and Reconstruction, New York: Routledge. Gari, A. (2012) ‘Kenya: release list of those displaced by Lamu port, says Abdallah’, Nairobi Star, 6 March. Gertz, B. (2005) ‘China builds up strategic sea lanes’, Washington Times, 18 January. Glassman, J. (2006) ‘Primitive accumulation, accumulation by dispossession, accumulation by “extra-economic” means’, Progress in Human Geography 30(5): 608–25. Harvey, D. (2003) The New Imperialism, Oxford: Oxford University Press. Hashim, M. J. (2010) ‘The dams of Northern Sudan and the policy of demographic engineering’, International Journal of African Renaissance Studies 5(1): 148–60. Huliaras, A. (2006) ‘Evangelists, oil companies, and terrorists: the Bush administration’s policy towards Sudan’, Orbis 50(4): 709–24. Khaleefa, M. U. (1993) ‘Islamic banking in Sudan’s rural sector’, Islamic Economic Studies 1(1): 37–55. Khurana, G. S. (2008) ‘China’s “String of Pearls” in the Indian Ocean and Its security implications’, Strategic Analysis 32(1): 1–39. Large, D. (2008) ‘China and the contradictions of “non-interference” in Sudan’, Review of African Political Economy 35(115): 93–106. ——(2009) ‘China’s Sudan engagement: changing Northern and Southern political trajectories in peace and war’, The China Quarterly 199(1): 610–26. Lupai, J. K. (2011) ‘South Sudan potentially the region’s breadbasket’, Sudan Tribune, Juba, 24 August. Available at: www.sudantribune.com/The-Republic-of-South-Sudan,39942 (accessed 13 January 2012). ——(2012) ‘South Sudan: agriculture alternative to oil for development’, AllAfrica.com. Available at: http://allafrica.com/stories/201202211323.html (accessed I April 2012). Luxemburg, R. (1951) The Accumulation of Capital, London: Routledge. Mamdani, M. (2007) ‘The politics of naming: genocide, civil war, insurgency’, London Review of Books 29: 5–8. ——(2009) Saviours and Survivors, Cape Town: HSRC Press. ——(2011) ‘South Sudan: rethinking citizenship, sovereignty and self-determination’, Pambazuka News 527(05–04). Marchal, R. (2010) ‘The regional dimension of Sudanese politics’, in Heinrich Böll Stiftung (ed.) Sudan – No Easy Way Ahead, Berlin: H. B. Foundation, pp. 79–96. Marx, K. (1981) Capital: A Critique of Political Economy, Vol 1, London: Penguin in association with New Left Review. Mohan, G. and Power, M. (2008) ‘New African choices? The politics of Chinese engagement’, Review of African Political Economy 35(115): 23–42. Mosley, J. (2012) ‘Peace, bread and land – agricultural investments in Ethiopia and the Sudans’, Chatham House briefing paper, London: Chatham House. Narlikar, A. (2010) ‘India’s rise to power: where does East Africa fit in?’ Review of African Political Economy 37(126): 451–64. Nhial, N. D. (2008) ‘How does the government of Southern Sudan design the necessary regulatory framework to attract FDI into the agricultural sector?’ master’s thesis, Centre for Energy, Petroleum, and Mineral Law and Policy. Dundee: University of Dundee. Pehrson, C. J. (2006) ‘String of pearls: meeting the challenge of China’s rising power across the Asian littoral’, Strategic Studies Institute US Army War College. Putnam, R. D. (1988) ‘Diplomacy and domestic politics: the logic of two-level games’, International Organization 42(03): 427–60. 69

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Sassen, S. (2010) ‘A savage sorting of winners and losers: contemporary versions of primitive accumulation’, Globalizations 7(1–2): 23–50. Schomerus, M. and Allan, T. (2010) ‘Southern Sudan at odds with itself: dynamics of conflict and predicaments of peace’, D. S. Institute, London School of Economics and Political Science. Smith, A. (1982) The Wealth of Nations: Books 1–3, London: Penguin. Sudan Tribune (2012a) ‘Machar urges Wall Street investors to work in South Sudan’, Sudan Tribune, Paris, 9 March. ——(2012b) ‘South Sudan to host foreign investment conference’, Sudan Tribune, Juba, 9 March. Suliman, M. (1994) ‘Civil war in the Sudan: the impact of ecological degradation’, Environment and Conflict Project (ENCOP). ——(1999a) ‘Civil war in Sudan: the impact of ecological degradation’, in G. Kebbede (ed.) Sudan’s Predicament: Civil War, Displacement and Ecological Degradation, Aldershot: Ashgate, pp. 88–107. ——(1999b) Ecology, Politics and Violent Conflict, London: Zed Books. ——(1999c) ‘The Nuba mountains of Sudan: resource access, violent conflict and identity’, in D. Buckles (ed.) Cultivating Peace: Conflict and Collaboration in Natural Resource Management, Washington, DC: World Bank. Tilly, C. (1990) Coercion, Capital, and European States, AD 990–1990, Oxford: Blackwell. Uma, J. A. (2010) ‘Exploit South Sudan’s abundant resources, President Kiir tells investors’, Sudan Tribune, Juba, 3 October. USAID and Famine Early Warning System Network (2012) ‘Agro-climatic monitoring’. Online. Available at: www.fews.net/Pages/imageryhome.aspx?map=0 (accessed 10 January 2012). van de Walle, N. (2009) ‘US policy towards Africa: the Bush legacy and the Obama administration’, African Affairs 109(434): 1–21. Waltz, K. N. (1979) Theory of International Politics, Reading, MA: Addison-Wesley. Weber, M. (1991) From Max Weber: Essays in Sociology, London: Routledge. WFP and FAO (2012) FAO/WFP Crop and Food Security Assessment Mission to South Sudan, Rome: World Food Programme and Food and Agricultural Organisation. Online. Available at: http://documents.wfp. org/stellent/groups/public/documents/ena/wfp244901.pdf (accessed 22 February 2012). Wood, E. (1999) The Origin of Capitalism, New York: Monthly Review Press. ——(2002) ‘Global capital, national states’, in M. Rupert and H. Smith (eds) Historical Materialism and Globalisation, London: Routledge. Woodward, P. (2006) US Foreign Policy and the Horn of Africa, Aldershot: Ashgate. Yongo-Bure, B. (2007) Economic Development of Southern Sudan, Lanham, MD: University Press of America. York, G. (2012) ‘Africa’s ambitious mega-port project shrouded in skepticism’, The Globe and Mail, Toronto, 6 March.

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1.5 The experience of land grabbing in Liberia Niels Hahn

I know what modern capital does to poor and colored peoples. I know what European imperialism has done to Asia and Africa; but, nevertheless, I had not then lost faith in the capitalistic system, and I believed that it was possible for a great corporation, headed by a man of vision, to go into a country with something more than the mere ideal of profit. (W. E. B. Du Bois 1933, on Firestone’s land grab in Liberia)

Introduction This chapter focuses on the political economy of land grabs in Liberia as a root cause of conflicts. First, it is outlined and analysed why and how the American Colonization Society (ACS) in close collaboration with the US Government (USG) colonised the land on the west coast of Africa in 1822, and turned it into a republic in 1847. From that time and onwards, the ACS and the USG changed the control over the Liberian territory from direct colonial administration to indirect administration through a small social group of freed American slaves, often referred to as Americo-Liberians. Contrary to most of the literature that describes this land grab as relatively peaceful, this chapter shows that it was marked by violence, conflict and oppression. Second, the chapter provides an analysis of how the major US-based firm, Firestone Tire and Rubber Company, owned by Harvey Firestone, in 1926 succeeded in leasing one million acres (around 4,000 square kilometres) of land in Liberia for the establishment of one of the largest rubber plantations in the world. Although most scholars and commentators at that time were very enthusiastic about Firestone’s project in Liberia, as reflected in the above quote from Du Bois, the reality of corporate interests became apparent during the contract negotiations. Firestone’s land grab in Liberia created tensions between social groups within the country, and conflicts between external powers over the supply of cheap labour in the West African region, which opened up for renewed inter-imperial rivalry over the Liberian territory. The last part of the chapter shows that Liberia was seen as a neocolony by the pan-African movement and a source for formulating the Resolution on Neocolonialism in 1961. The pan-African movement influenced politicians and intellectuals in Liberia, and when the Government of Liberia (GoL) began to set limits to foreign capital in the 1970s, a military coup d’état took place in 1980, 71

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where President Tolbert was murdered and 13 key government officials were executed. This event marks a significant precursor for the destructive war that began in late 1989, and ended in the latter half of 2003.

From land grab to state formation The mainstream literature on Liberia promotes the notion that the country was founded in 1822 by freed black slaves from the USA with the support of the ACS, as reflected in Angstrom and Duyvesteyn (2001: 202), Bøås (2005: 75), British Foreign Office (1919: 11), Goodhand and Atkinson (2001: 19), Cook (2003: 2), Outram (1999: 163), Rowlands (2008: 13), Shick (1980: 3–4), Sibley and Westermann (1928), Smith (1987: xi), Tyler-McGraw (2007), US Department of State (2011), Webster and Boahen (1980: 123) and West (1933: 5–10). Much of this literature further indicates that the ACS was a philanthropic society that was interconnected with the ban on the slave trade, and presents the founding of Liberia as a relatively peaceful process. This notion has been challenged by relatively few scholars, such as Beyan (1991), Boley (1983), Burrowes (1989: 46–7), Clegg (2004), Frothingham (1855), Guannu (2009) and Kieh (1992). However, their critique remains marginalised, which is significant because when researching the archives and drawing on primary sources, it becomes clear that the ACS was not a philanthropic society, but rather the opposite. The ACS was established in 1816, predominantly by white slave-owners who feared for their lives as the slave rebellions intensified in the Americas. The real objective of the ACS was to get rid of the rebellious slaves, by sending them ‘back to Africa’. This is perhaps best captured in a statement by Robert Finley, president of the University of Georgia and co-founder of the ACS, who in 1815 stated that: The longer I live to see the wretchedness of men, the more I admire the virtue of those who desire, and with patience labour, to execute plans for the relief of the wretched. On this subject the state of the free blacks has very much occupied my mind. Their number increases greatly, and their wretchedness, as appears to me. Every thing connected with their condition, including their colour, is against them. Nor is there much prospect that their state can ever be greatly meliorated while they shall continue among us. Could not the rich and benevolent devise means to form a colony on some parts of the coast of Africa, similar to that of Sierra Leone, which might gradually induce many free blacks to go and settle, devising for them the means of getting there, and protection and support until they were established? Could they be sent back to Africa a threefold benefit would arise. We should be clear of them – we should send to Africa a population partly civilized and Christianized, for its benefit – and our blacks themselves would be put in a better situation. (Finley 1815) The ACS made several attempts to grab a piece of land in West Africa, and according to the society’s representative Eli Ayres, who led the land-purchasing negotiations in 1822, the ACS succeeded in persuading the local chiefs to sell the land to the Americans by ‘mixing flattery with a little well-timed threat’ (in Huberich 1947: 190). This threat was made by Captain Stockton of the US Navy, who put a pistol to the head of the king, Peter, and forced him to sell the land to the Americans (Akingbade 1976: 19; Kieh 1992: 26; Beyan 1991: 66; Boone 1970: 17; Harris 1985: 14; Sickle 2011: 110). Ayres states that the value did ‘not amount to more than three hundred dollars’ (in Huberich 1947: 191), for which they had ‘purchased a 72

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tract of country containing one million of dollars’ worth of land, with the best harbour between Gibraltar and the Cape of Good Hope … [with] an excellent place for watering ships’ (ibid.). In the following decades more American colonisation societies were established, such as the Maryland State Colonization Society (Hall 1961: 25), the Young Men’s Colonization Society of Pennsylvania, and the Colonization Society of the City of New York (Huberich 1947: 568). They grabbed additional land along the West African coast that was gradually integrated into the Commonwealth of Liberia (ibid.: 569). Although the American colonists argued that they had honestly purchased the land, the local people had a different opinion and resisted the American land grab. Therefore, the first decades of land grab in Liberia were marked by armed conflicts between the settlers, backed by the US Navy, and the indigenous people (Akingbade 1976: 90). Besides this, there were conflicts between the white colonial administrators of the ACS and the former American black slaves who were used as labourers to develop the land. The agent of the ACS, Ralph Randolph Gurley, notes that ‘on some occasions, not only the good order, but also the very existence, of the colony was endangered’ (Gurley 1844: 12). The black settlers wanted more influence, but Gurley remarks that this grant ‘could not be of political power’, and notes that the land was purchased by the ACS and not the settlers (ibid.). However, the black settlers continued to push for more political influence and ownership, and after the death of the white ACS governor, Thomas Buchanan, the mulatto businessman Joseph Jenkins Roberts, who was loyal to the white ACS agents, was appointed as governor of Liberia in 1841 (Guannu 2009). Britain and France had also their interest in the land, which resulted in an inter-imperial rivalry. The French and the British governments argued in different ways that merchants and local people in the area had a right to be protected, and pressured the USG on its role in the region and the status of the colonies.1 After a few years of dispute, Professor John Simon Greenleaf at Harvard University Law School was commissioned to write the constitution of Liberia. The land that had been taken by force was declared an independent state in 1847, often referred to as the first ‘Black republic’ in Africa, because the government was made up by the former American slaves. However, in reality it was indirectly governed by the USG and the ACS, and as Buell (1947: 1) notes, Liberia survived only ‘through visits of United States warships to Liberian ports and through more urbane gestures, the United States has posted a keep-offthe-grass sign on Liberian soil’ (ibid.: 1).

Firestone’s land grab The inter-imperial rivalry over the territory of Liberia increased after independence, particularly in the form of economic imperialism, where the governments of Britain, France and Germany in co-operation with private bankers and corporations provided loans to the Liberian government. As conditionality to these loans, foreign controllers and military advisers were deployed in key positions in Liberian government institutions (see Buell 1947; Johnson 2000; Stanfield 2000; Sundiata 2003). However, the imperial powers also backed their economic interests with military power. For example, in 1915, when the Kru ethnic group rebelled, the GoL suspected Britain of having encouraged this uprising (Davis 1975: 222; Guannu 2009). This suspicion was supported by the appearance of the British warship HMS Highflyer in Liberian waters. As this was reported to the USG, the US Secretary of State Robert Lansing informed the British government that if HMS Highflyer remained ‘in Liberian water more than twenty-four hours’ the USG would be concerned about British neutrality (Lansing 1915). HMS Highflyer left, and shortly after the American warship USS Chester arrived in Monrovia (Bundy 1915). The American warship provided the GoL with arms and ammunition and transported Liberian 73

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soldiers along the coast. If the Kru had won this war ‘it was believed they would have placed themselves under British protection’ (Buell 1947: 25). After the First World War, Germany disappeared from the region as a colonial power, but the inter-imperial rivalry between Britain, France and the USA continued. After the British government had launched the Stevenson Restriction Act in October 1922, which aimed at enhancing British control over rubber production and prices, the USG undertook a number of studies that would secure a reliable rubber supply to the US industry (Lawrence 1931: 17–38) by establishing rubber plantations in ‘territories under the American flag, or subject to American control’ (ibid.: 53). The Firestone Rubber Company, owned by Harvey Firestone, identified Liberia as the most promising place and negotiations between Firestone and the GoL opened in 1924. US Secretary of Commerce Herbert Hoover made it clear that these negotiations were ‘an important factor in the administration program for combating the high price of crude rubber, due to British export restrictions’ (Brown 1941: 193). The first of the agreements was signed between Firestone and GoL in mid-1924. Firestone leased 1 million acres (around 4,000 square kilometres) ‘suitable for the production of rubber or other agricultural products’ (Planting Agreement 1926: Article I) ‘at the rate of six cents per acre’ (ibid.: Article III, Point c), and should pay to the GoL ‘a revenue tax equivalent to one% um (1%) of the value of all rubber and other commercial products of its plantations shipped from Liberia’ (ibid.: Point d). Furthermore, Firestone set up a subsidiary called the Finance Corporation of America with the support of the National City Bank of New York that provided a loan of US$5 million, at 7% running over 40 years for the GoL, to build up the basic infrastructure. This loan would replace Liberia’s existing loans and get rid of the non-American foreign influence (Johnson 2000: 110). The Liberian legislature objected to the agreements, which they saw as a loss of sovereignty. Firestone wrote to the US State Department that the GoL ‘must accept the agreements without [a] single change if we go into Liberia’ (in Buell 1947: 31). France was in the process of grabbing more land from the border areas, and the GoL needed USG support in this border dispute (ibid.). The USG pressured the GoL to accept Firestone’s conditions, and by the end of 1926 all agreements were approved (Buell 1947: 33; Lowenkopf 1976: 39). The European receivers were replaced by ‘eight US officials headed by a Financial Adviser designated by the President of the United States’ (Buell 1947: 33), and an ‘officer of American nationality’ became in charge of the Liberian military forces (Loan Agreement 1926: article XII, 3).2

Land development and rivalry An initial survey carried out by Firestone indicated that the labour supply in Liberia would be almost inexhaustible, and in the concession agreement the GoL had agreed to ‘encourage, support and assist the efforts of the Lessee to secure and maintain an adequate labour supply’ (Planting Agreement 1926: Article II, Point h). However, as pointed out by the Research Director of the US Foreign Policy Association, Raymond Leslie Buell (1928: 8181–836), from an estimated total population of around 2 million, it would not be possible to release from the land, and recruit the required labour force without engaging in a system analogous to slavery. Already in 1927 the USG had reported that ‘Firestone is experiencing some difficulty in recruiting labor’ (in Sundiata 2003: 116). The GoL had over many years exported labour to other colonies in the region such as Spanish Fernando Po, which was more profitable than sending labour to Firestone (Sundiata 1974: 107). The American financial adviser stated that Firestone would be ‘in active competition with Fernando Po for a supply of labour, unless some powerful influence is brought to bear that will separate by compulsion the traffic from actual 74

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government support’ (Sundiata 2003: 116).3 Firestone accused the GoL of obstructing the development of the plantation, and the GoL accused Firestone of dominating a sovereign nation (Sundiata 2003: 100). As the tensions increased between Firestone and the GoL, the relations were de facto suspended by 1928 (Brown 1941: 198). At the International Labour Conference in Geneva in 1929, the USG accused Spanish planters of using forced labour at Fernando Po (Sundiata 2003: 117). Subsequently, the GoL was accused of being engaged in slavery and slave trading to Fernando Po, in violation of the League of Nations’ Slavery Convention of 1926. The GoL agreed to an inquiry by the League of Nations (Stanfield 2000: xxi), which established the International Commission of Inquiry into the Existence of Slavery and Forced Labour in the Republic of Liberia. The Commission was carefully composed to exclude Spanish representation and consisted of a representative from each of Britain, Liberia and the USA. In September 1930, the Commission concluded that it did not find signs of actual slavery and slave trading; however there was evidence of the export of forced labour. It recommend that the GoL should stop the export of labour to Fernando Po, encourage African-American immigration to Liberia, re-establish the authority of the chiefs, and appoint more Americans to administrative positions in the government (Sundiata 2003: 134). Subsequently, US Secretary Henry L. Stimson expressed that he was ‘profoundly shocked’ (Stimson, in Mower 1947: 292) by the findings of the Commission in Liberia, and demanded immediate reforms. The USG pressured President King and a number of Liberian government officials to resign. Secretary of State Edwin Barclay succeeded King as president, but the USA made its recognition of the Barclay administration dependent ‘upon the attitude taken by Liberia toward the report of the international commission’ (Buell 1947: 36). Britain, France and Holland saw the opportunity of transforming Liberia into a trusteeship under the League of Nations, which would marginalise US influence. They established the Brunot Commission in 1931, which noted that the Planting Agreement between Firestone and Liberia was ‘very favourable to the lessee’ (Sundiata 2003: 158). The Spanish representative in the League Committee further noted that ‘the coexisting in Liberia of a weak State and a powerful foreign undertaking gives rise to disadvantages’ in favour of Firestone (in Brown 1941: 201). The Brunot Commission developed a plan which suggested that the Firestone concession should be reduced and renegotiated with the assistance of League experts (Buell 1947: 40). It furthermore recommended that Liberia should be divided into three administrative zones, respectively under the control of Britain, France and the Netherlands (Sundiata 2003: 151–3). The USG objected to this plan, and Harvey Firestone proposed another to the League, to be led by an American commissioner.4 Stimson stated that unless ‘complete executive and administrative control is granted [an American] for a period of probably 10 years no genuine reforms or rehabilitation could be achieved in Liberia’ (in Sundiata 2003: 154). The GoL rejected all the plans, and tensions between the GoL and the USG reached a point where diplomatic relations ceased. Harvey Firestone suggested that the USG should intervene militarily to change the GoL, or change government through an internal coup. To the latter suggestion, the US State Department noted that ‘to encourage a revolutionary body would be to incur a frightful responsibility in case it failed to work out’ (Moffat, cited in Sundiata 2003: 182–3). Instead, the USG sent the Judge Advocate General of the US Army, Major General Blanton Winship, to Monrovia to restore relations between the two governments and solve the problems (West 1933: 29). In 1934, the plan of the Brunot Commission was abandoned (Sundiata 2003: 184). The British government stated in an official message to the USG that ‘Liberia is rendered dependent upon the United States Government by the extent to which her financial machinery is already in American hands and organised in conformity with a contract entered into between the Liberian Government and an American corporation’ (in Mower 1947: 294). 75

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Firestone became the prime engine for the development of the wage labour system in Liberia (Clower et al. 1966: 149). Former Liberian Minister of Agriculture Roland Massaquoi (2009) states that most literature presents this as a positive development where Firestone created good jobs and educated people, but that the reality was very different, marked by violence and slavery. The ‘involuntary labor recruitment under government auspices’ continued (Clower et al. 1966: 150). Most workers perceived the wage-labour system as slavery, which created a number of labour uprisings (Massaquoi 2009). Firestone had converted many key government officials into rubber producers, including President Tubman (Lowenkopf 1976: 68). This ensured that Liberian government officials would solve labour disputes quickly, because Firestone would stop purchasing rubber from the Liberian producers until labour uprisings had been solved (Massaquoi 2009). The GoL had provided a public court, a prison and a military barracks in Bonoway village, inside the Firestone Plantation, that could help quell the labour uprisings (Logan 2009; Brandy 2009). In addition, the labour unions functioned as a platform for negotiation when uprisings occurred. However, they were all under the control of the GoL; for example, the Congress of Industrial Organizations was headed by the son of President Tubman (Lowenkopf 1976: 100). The labour system came under further pressure in the 1950s and 1960s when more foreign corporations, such as Goodrich, the African Fruit Company, and the Liberia Company, began to lease land for agriculture in Liberia (Clower et al. 1966: 14). Liberian Assistant Minister of Agriculture James Logan (2009) notes that the foreign corporations needed a better recruitment system where the use of violence was less obvious. After the USG had introduced the Public Law 480 programme (PL 480, also known as Food for Peace) in 1954, Firestone began the import of cheap US-subsidised rice as part-payment of their workers, and dumped the surplus rice on the local market (ibid.).5 This was accompanied by massive advertising campaigns through the radio denouncing home-grown rice as ‘that country rice’, while favouring parboiled rice from the USA, campaigns which turned many Liberians against their own rice (Tipoteh 1982: 25). Rice prices were manipulated so that local rice farmers would earn less than the basic daily wage at Firestone (Lowenkopf 1976: 80). As the rice market became unattractive to the local rice producers, Firestone provided assistance to transform their fields into rubber plantations (Brandy 2009; Logan 2009; Massaquoi 2009). Firestone had already done this for some time by providing ‘free rubber seedlings to independent growers’ and technical advice ‘in connection with the development of their plantations’ (Browne 1955: 115). The number of Liberian independent rubber farms increased from 150 in 1941 (Dalton 1965: 578–9) to nearly 4,000 in 1967 (Lowenkopf 1976: 68). Firestone purchased ‘all their output for processing and export’ (Qureshi et al. 1964: 288), which was often produced by the children of the local farmers (Logan 2009).6 Firestone presented its strategy as a philanthropic project that provided cheap rice and created good jobs. However, Liberians who had become influenced by the pan-African movement perceived it as a form of primitive accumulation that transformed the peasants into low-paid wage-labour that could be exploited by foreign corporations and the national petit bourgeoisie (Brandy 2009; Logan 2009; Massaquoi 2009).7

Neocolonialism The influential pan-Africanist William Edward Burghardt Du Bois (1868–1963) had aided Firestone’s entrance in Liberia. Du Bois was considered one of the most influential panAfricanists in the first half of the 20th century, and he believed up until the 1930s that the suppression of black people was related to the colour of their skin (Martin 1976). This was the 76

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general perception of the early pan-African movement, but the experience from the labour crisis in Liberia influenced the pan-African movement to gradually see racism as subordinated to class. Pan-Africanists increasingly began to argue that slavery, imperialism, colonialism and exploitation were not rooted in racism, but racism was an instrument of the ruling class to divide the workers and peasants along the lines of skin colour, ethnicity, religion, gender and language (Asante 2008; Williams 2008). When the fifth pan-African conference took place in 1945, several of the key organisers had a socialist orientation such as George Padmore, the former head of the Negro Bureau of the Communist International of Labour Unions, Kwame Nkrumah, who became President of Ghana in 1957, and Du Bois, who had moved from the liberal right to the socialist left (Asante 2008). Two years before this conference took place, the USG had supervised the general election in Liberia (Buell 1947: 9–10), where William V. S. Tubman was elected president of Liberia. Tubman had previously worked as a lawyer for Firestone (Padmore 1996: 47), and he became the most US-friendly president in Liberia’s history (Guannu 2009). Former Liberian Secretary of State in Tubman’s administration, Ernest Eastman, notes that he and Tubman were instrumental in undermining the attempt of the pan-African movement to establish a united socialist Africa by forming the Monrovia Group shortly after the third All-African People’s Conference had taken place in Cairo, 1961. At this conference the pan-African movement had adopted the Resolution on Neo-Colonialism, which, Eastman notes, was of great concern to the Western powers (Eastman 2009). The resolution conceptualised neocolonialism as: the survival of the colonial system in spite of formal recognition of political independence … When the recognition of national independence becomes inevitable, they try to deprive these countries of their essence of real independence. This is done by imposing unequal economic, military and technical conventions [or] by creating puppet governments following false elections … Whenever such machinations appear insufficient to hamper the combativity and determination of popular liberation movements, dying colonialism tries, under the cover of Neo-Colonialism or through the guided intervention of the United Nations, the balkanisation of newly independent States or the systematic division of the political or syndical vivid forces, and in desperate cases … goes as far as plots, repressive measures by army and police, and murder … Neo-Colonialism manifests itself through economic and political intervention, intimidation and blackmail in order to prevent African States from directing their political, social and economic policies towards the exploitation of their natural wealth for the benefit of their peoples. (AAPC 1961) The Resolution further identified the USA, West Germany, Israel, Britain, Belgium, Holland, South Africa and France as the main perpetrators of neocolonialism, and notes that these neocolonial powers install ‘puppet governments’ through ‘fabricated elections’ and force African states into ‘economic blocks which maintains the underdeveloped character of [the] African economy’. The neocolonial state is infiltrated ‘through capital investments, loans and monetary aids’ and ‘direct monetary dependence’. Military bases, it continues, have been introduced as ‘scientific research stations or training schools’ and the foreign embassies are the ‘nerve centres of espionage and pressure points on the local African governments’. It identifies other agents of neocolonialism such as the national ‘military personnel in armed forces and police … who remain loyal to their former masters’ as well as ‘representatives from imperialist and colonial countries under the cover of religion, moral re-armament, cultural, Trade Union and Youth or Philanthropic Organisations’ (ibid.: d). Propaganda by radio, press 77

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and literature, controlled by imperial powers, is considered a central neocolonial instrument, as well as puppet governments in Africa that are being used by ‘imperialists in the furtherance of Neo-Colonialism, such as the use of their good offices by the neo-colonial powers to undermine the sovereignty and aspirations of other African States’ (ibid.: e–f). Kwaku Baprui Asante (2008), who at that time served as the Principal Secretary of the African Affairs Secretariat under President Nkrumah, notes that Nkrumah and the president of Guinea, Ahmed Sékou Touré, were instrumental in formulating the Resolution on NeoColonialism, which was partly based on the experience of Liberia.8 Tubman was offended by this resolution, and in co-operation with the USG the GoL took the lead in forming the Monrovia Group, which aimed at including as many African governments as possible, to oppose the socialist-oriented pan-African movement (Eastman 2009). As a response, the pan-Africanists established the Casablanca Group. However, this movement was much smaller, and at the Addis Ababa Conference that established the Organization of African Unity (OAU) in 1963, the Monrovia Group dominated the outcome and the formulation of the OAU Charter (Asante 2008). Nkrumah (1972: 422) later noted that the OAU was ‘rendered virtually useless as a result of the machinations of neo-colonialists and their puppets’. However, the pan-African movement had a significant impact on the liberation movements across Africa (Asante 2008), and the work of Nkrumah influenced the intellectual environment in Liberia (Bowier 2009; Fahnbulleh 2009; Tokpa 2009). Tubman tried to suppress the intellectual environment through repressive measures and the comprehensive intelligence system that was linked up with the US Central Intelligence Agency (CIA), which had its main base for Africa in Liberia (Fahnbulleh 2009). After the CIA had instigated the military coup in Ghana that removed Nkrumah from power in 1966 (Asante 2008; Stockwell 1992), Nkrumah relocated to Guinea, where he kept publishing books on resistance against neocolonialism and broadcast his political views until he died in 1972. This made it easy for many Liberians to get information and inspiration from Nkrumah, which radicalised their minds (Fahnbulleh 2009).

Liberian resistance When President Tubman died in July 1971, Vice-President William Richard Tolbert became president of Liberia, which marked a significant change in the Liberian political economy. Tolbert and many government officials had been inspired by Nkrumah (Sayndee 2009), and foreign investors feared that Tolbert would change the liberal economic environment that Tubman had ensured (Smith 1971: 18). Rumours circulated in Monrovia that the USG planned a coup d’état (Sayndee 2009), led by the Chief of Staff of the Armed Forces of Liberia (Dunn and Tarr 1988: 69). Security measures were taken and Tubman’s intelligence system was partly dismantled and restructured (Lowenkopf 1976: 178). The new administration gradually moved the economic systems from the liberal right towards the socialist left. Shortly after coming into power, Tolbert announced Liberia’s new economic direction. The GoL pledged ‘to support and protect legitimate foreign investments’, but it would include ‘closer resource control’. The primary aim was ‘industrialization of the nation’ as an ‘urgent priority’ (Tolbert 1971a: 108) and the approach was a ‘National Development Plan’ to ‘provide for a planned economic growth’ (Tolbert 1971b: 160). Tolbert spoke of Nkrumah as the ‘most renowned politician’ of the African continent, who could ‘analyze and visualize the results long before they occurred’, and emphasised that Nkrumah’s idealism ‘will live on as long as there is struggle for freedom, liberty, dignity and justice for mankind’ (Tolbert 1972a: 482–4). In 1972, the GoL established relations with the Union of Soviet Socialist Republics (Executive Mansion 1972: 507) followed by relations with a number 78

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of other socialist-oriented countries.9 At the OAU meeting in 1972 Tolbert echoed Nkrumah by noting that ‘economic emancipation must be underwritten by ourselves. Political independence, as we have learned by bitter experience, is only the beginning of the struggle, not the end. New forms of imperialism are continuously being formulated’ (Tolbert 1972b: 511). On Liberia’s 125th Independence Day on 26 July 1972, Tolbert introduced the GoL’s new direction on the Open Door Policy. He stated that Liberia’s minerals, forests and other natural resources are being steadily depleted. Our environment is being polluted and yet our people receive comparatively insufficient direct or indirect, immediate or future compensation. In keeping with the ‘partnership-in-development’ concept, we have provided as our contribution to the ‘partnership’ the natural resources, extraordinary investment incentives and a particularly favourable political and economic climate. In addition, we have allowed the foreign investor to repatriate his capital and his high profits. This we have done in the past and in principle … it is now time to think in terms of the conditions as they exist today and will exist tomorrow rather than those which prevailed in yesteryears. (Tolbert 1972c: 557–8) Tolbert defined the liberal policies as a violation of the laws of the country, and therefore the new government was ‘obligated to ensure that benefits derived from its policies accrue to the masses and not to a privileged few’ (Tolbert 1972a: 558). At that point, the government had started the process of reviewing all the concession agreements. About a year later, at the Third National Conference on Development Objectives and Strategy it was suggested that the GoL should ‘redefine the Open Door Policy’ and consider ‘how wide the door should remain open’ (MoPEA 1973). Tolbert’s policies ‘clashed with the powerful multinationals in Liberia, [in] particular Firestone’ (Dunn and Tarr 1988: 172), which reacted with an ‘exceptional arrogance’ and ‘negative reaction towards the Government of Liberia’ (van der Kraaij 1983: 78). The GoL sought to submit Firestone to the laws of the country and to ‘limit activities to present agricultural pursuits’ by excluding the rights of mining ‘with royalty of not more than 10%’. Furthermore, the GoL wanted to limit the concession area to the 181,000 acres actually used by Firestone (GoL 1976: Item 1, Concession area), and increase the real rent from 6 cents per acre per year to 50 cents per acre per year. Besides this, Firestone was required to provide ‘medical and primary school facilities in keeping with work force’ (ibid.: Item III, e), and include a policy for the ‘establishment and encouragement of economical viable communities’ (ibid.: Item VI, b). Firestone rejected almost all the requests (van der Kraaij 1983: 79), and the USG discouraged further foreign investment in Liberia (Tarr 2009). The negotiations, which were led by Minister of Finance Stephen A. Tolbert, were interrupted when he died in a plane crash in April 1975, which many people in the GoL saw as an assassination carried out by the CIA. On the 199th anniversary of American independence at the US Embassy in Monrovia, Liberian Minister of Foreign Affairs Charles Cecil Dennis stated that he participated in the celebration with ‘mixed feelings’ and described the USG attitude towards Liberia as ‘somewhat ambivalent’, expressing his wish for ‘a more reassuring relationship’ (cited in Dunn and Tarr 1988: 173). A few months later a Liberian review committee of US–Liberian relations concluded that ‘the so-called “special relationship” had declined significantly from the American point of view’ (ibid.: 173). The negotiations with Firestone resumed under the leadership of the Acting Minister of Finance, Edwin Williams (Tarr 2011), and a final agreement was reached in 1976, but many of the changes proposed by the GoL had been evaded. However, Firestone was subjected ‘to the laws of general application as pertaining to the Liberian Tax Code’ (van der Kraaij 1983: 79). 79

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Tolbert’s administration had opened up the political space for social movements and political opposition parties (Tokpa 2009), which made it possible for the USG to support movements such as the Progressive Alliance of Liberians (PAL) and manipulate public opinion. Former Vice-President of PAL Wesley Johnson (2010) states that PAL perceived the people from the CIA ‘like our friends’. Communication took place through telephone … and visits, personal talks in the Unites States and in Liberia, through letters, but coded letters … [so once when] a message reached the government they could not decode it … only the executive members knew what was in the messages … much of the knowledge was divided into cells – compartmentations – one cell would not know what another cell knew … we knew the coup would come but we didn’t know when or how it would take place. (Johnson 2010: 01:05–01:09 min.) PAL used left-wing Marxist rhetoric to mobilise the peasants and wage-labourers in Liberia, and denounced the GoL as a continuation of the Tubman regime (Dahn 2009; Johnson 2010; Matthews 1980). One of the goals of the Tolbert administration was to make Liberia self-sufficient in rice and reverse the effects of the PL 480 programme (Logan 2009). However, when the GoL announced in 1979 that it would raise the price of imported rice to stimulate local rice production, PAL argued that this was so the ruling elite would get more money on import tariffs, and suggested instead that Liberia should remove all tariffs on rice from the USA so the people could get cheap food. On 14 April 1979, PAL organised a major demonstration that ended in what became known as the Rice Riot (Dahn 2009). This demonstration got out of control and government forces shot at the demonstrators (Sayndee 2009; Tokpa 2009). Tolbert did not trust the armed forces of Liberia because many of the officers had been trained by the USG and maintained friendly connections with the American military mission. Therefore, Tolbert activated the mutual defence agreement he had signed with the government of Guinea. President Touré sent Guinean solders to Monrovia to help establish order. PAL denounced this action and stated that Tolbert was so unpopular that he could not even trust his own army (Fahnbulleh 2009). About six months after the Rice Riot, a confidential White House memo stated that the Rice Riot had severely damaged the GoL, and that Tolbert was unlikely to ‘survive until the end of his term in 1983’ (USG, cited in Dunn 2009: 103). A year later, on 12 April, a group of Liberian soldiers headed by Samuel K. Doe stormed the Executive Mansion and killed President Tolbert. According to Tolbert’s wife Victoria Tolbert, one of the men rejoiced and yelled, ‘Victory! … we got our twenty-five thousand dollars!’ (Tolbert 1996: 138–9). Shortly after, the coup-makers called the US Embassy, which, according to Toe (2009), endorsed the coup d’état because it was seen by the US Embassy as an expression of the general will of the Liberian people. American advisers moved into the Executive Mansion and helped the coup-makers in forming the People’s Redemption Council as a military junta headed by Doe, assigning American advisers to a number of ministries (Toe 2009). US Chargé d’Affaires Julius Walker notes that ‘Doe was scared. He had not really expected to be where he was’ and he feared that ‘forces were coming from all corners to attack him and he wanted America to send him strong support’ (Walker 1992: 62–3). The head of the US Military Mission in Liberia, Colonel Robert Gosney, deployed US soldiers in the streets of Monrovia to help the PRC restore law and order (Toe 2009). The US soldiers ‘got looters and shooters off the street’ by disarming them and locking them up in the Barclay military compound. There was ‘so much respect for the American presence there that the soldiers 80

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followed the Americans’ orders without question’ (Walker 1992: 64). A dusk-to-dawn curfew was imposed, airports and seaports were closed, telephones and telex machines were locked for international communication, and financial transactions were restricted (Cordor 1980: 80–81). In a speech to the nation on 14 April 1980, Doe justified the coup by emphasising that the armed forces of Liberia had removed the government because of ‘corruption on a massive scale’, where members of the Tolbert administration had represented ‘big companies when they should be speaking for the people’. He stated that ‘the People’s Redemption Council was organized not only to overthrow the Government, but, more importantly, to overhaul it’ (Doe 1980: 17, in Givens 1986). Subsequently, 13 key government officials from the Tolbert administration were executed (Givens 1986: 20), and most of policies of the former government were reversed. Political parties and movements were banned by decree, state-owned enterprises that had been established under the industrialisation policy were closed, and the liberal economic system was re-established, so foreign corporations could once again operate more freely in Liberia (Tarr 2009). However, this lasted only for a few years. As the Truth and Reconciliation Commission of Liberia (2009) notes, the Rice Riot in 1979 marked the beginning of a long and devastating armed conflict in Liberia.

Conclusion This chapter has provided an analysis of the experience of land grabs in Liberia, which shows how liberal capitalism has benefited foreign corporations and concentrated power and wealth in a small elite group of Liberians with close connections to foreign powers. The establishment of Firestone’s rubber plantation did not facilitate development in Liberia as many observers in the 1920s believed it would, as reflected in the quote from W. E. B. Du Bois at the beginning of this chapter. Instead it forced people off their land and converted thousands of Liberians into low-paid wage labourers, which resulted in labour uprisings and instability. The form of recruitment of labour shows how difficult it is to distinguish between slave labour, forced labour and free wage-labour, and it challenges the neoliberal arguments that promote wage-labour as a force for good without examining the actual working conditions. At the end of the first decade of the 21st century, Firestone is still being accused of using forced labour and child slave labour in the plantation. This is reflected in reports such as ‘Firestone – the mark of modern slavery’, published in 2005 (SAMFU 2005), and more significantly, the lawsuit against Firestone that has become known as the case of Flomo v. Firestone Natural Rubber Company, filed under the US Alien Tort Statute (ATS) in 2005. The Flomo case represents a group of 23 Liberian children ‘who all worked on the Firestone Plantation generally between the ages of 6 and 14’ (US District Court 2007: 2). The children alleged that they were forced to perform hazardous labour – ‘in violation of international norms’ – on the Firestone Plantation (Bergman 2011: 458), and they have been supported by organisations such as the International Labour Rights Fund (ILRF 2011), International Rights Advocates (IRA 2008) and Stop Firestone (2008). The ATS allows private parties to sue US-based corporations for the ‘worst forms of child labor’ (cited in Bergman 2011: 456), and the Flomo case is the ‘first case in which a plaintiff’s claims have survived the ATS jurisdictional bar and the pleading stage’ (Bergman 2011: 458). The Flomo case represented a small percentage of children working on the Firestone Plantation, whom Hoffman (2009) notes can be categorised as child slaves. As Firestone was ‘acquitted of any responsibility for slavery in Liberia’ by the League of Nations in 1931 (Akron Beacon Journal 1931), the US court also acquitted Firestone in the Flomo case. However, in its decision it was noted that ‘we have to consider why corporations have rarely 81

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been prosecuted criminally or civilly for violating customary international law’ (Court of Appeals 2011: 1018). Firestone is not the only company that has a problematic history in Liberia. Other foreign corporations are facing similar charges of displacement and slavery. In 2009, Malaysia-based Sime Darby Plantation Inc. signed a 63-year concession agreement with the GoL for the lease of 2,200 square kilometres of land for the production of palm oil and rubber (Sime Darby 2012). As in the case of Firestone in the 1920s, many Liberians state that they have been displaced from their land and forcefully converted into low-paid wage labourers. The foreign corporations argue that they are creating jobs and supporting the national economy, but many Liberian workers describe the working conditions as modern slavery, which has become a widespread perception in Liberia (Tokpa 2012). For example, in December 2011, the Liberian newspaper The New Dawn ran the headline ‘Slavery at Sime Darby’ (The New Dawn 2011). Liberia’s long experience with land grabs challenges some conventional perception on liberal capitalism and Foreign Direct Investment as a way to development. It is an example that can be helpful for critical analyses of land grabs in other African countries, and should encourage workers, peasants, intellectuals, trade unions, NGOs and politicians to look for alternatives to neoliberal capitalism.

Notes 1 See, for example, correspondences between the British government and the US government, Fox (1843) and Upshur (1843). 2 It is important to note that a similar system of American economic and military control over the Liberia state was re-established in 2003 with US-led UN military intervention, which many Liberian politicians see as re-colonisation (Wotorson 2006). 3 Fernando Po, better known as Bioko or Bioco, is an island in the Gulf of Guinea belonging to Equatorial Guinea. 4 At a meeting in the US State Department in January 1933, Harvey Firestone made it clear that he saw a ‘vast British conspiracy to do away with [their] rubber plantations in Liberia’ (Sundiata 2003: 165). 5 The USG adopted the Agricultural Trade Development Assistance Act, Public Law 480 (PL480), in 1954. President Dwight D. Eisenhower stated that this was the ‘basis for a permanent expansion of … [US] exports of agricultural products with lasting benefits’ to the USG (Eisenhower, cited in USAID 2004: 7). Under John F. Kennedy this programme became better known as Food for Peace (USAID 2004: 7).The Food for Peace Program led to the establishment of the UN World Food Programme (WFP) under the leadership of the Special Assistant to US President Kennedy, George McGovern, who was the director of the Food for Peace Program (Shaw 2001: 6–9). Today, WFP is predominantly funded by the USG with an annual contribution ranging between $1.1 billion and 2 billion, followed by the European Commission with an annual contribution ranging between $250 million and 355 million (WFP 2011). 6 In recent years Firestone’s use of child labour has received more media attention after the establishment of the organisation Stop Firestone and the lawsuit against Firestone in 2005 for the use of child labour in Liberia (Stop Firestone 2008) 7 Marx’s main concept of primitive accumulation relates to ‘the historical process of divorcing the producer from the means of production’, which appears primitive ‘because it forms the pre-historic stage of capital, and of the mode of production corresponding to capital’ (Marx 1982/1867: 875). The essential aim of this form of primitive accumulation is for the capitalist to make the labourer dependent on a wage (ibid.). In contrast to Smith (2005/1775), Marx notes that the processes of primitive accumulation ‘are anything but idyllic’ (Marx 1982/1867: 875), but ‘written in the annals of mankind in letters of blood and fire’ (ibid.). 8 Asante (2008) further notes that many scholars who later became influential Dependency theorists, such as Immanuel Wallerstein, came to Ghana to study the development of the pan-African movement. The conceptualisation of neocolonialism corresponds in many ways to Wallerstein’s concept of strong state/weak state relationship in the World Systems Analysis (see Wallerstein 2004: 55).

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9 The GoL established relations with Romania in 1974 (Executive Mansion 1976: 15); followed a number of other socialist-oriented countries, most significantly the People’s Republic of China in 1977, which pushed out the Republic of China from Liberia (Executive Mansion 1978: 216).

References AAPC (1961) All-African People’s Conference: Resolution on Neo-Colonialism, All-African People’s Conference, Cairo. Reprinted in I. Wallerstein (ed.) (2005) Africa: The Politics of Independence and Unity, Lincoln, NE: University of Nebraska Press. Akingbade, H. O. (1976) ‘The role of the military in the history of Liberia 1822–1947’, PhD thesis, Howard University, Washington, DC, History, Africa, p. 344. Akron Beacon Journal (1931) ‘League acquits Firestone of using slaves’, Akron Beacon Journal, 1 June. Angstrom, J. and Duyvesteyn, I. (2001) ‘Evaluating realist explanations of internal conflict: the case of Liberia’, Security Studies 10(3): 186–218. Asante, K. B. (2008) Interview on Pan-African resistance to neocolonialism with K. B. Asante, Principal Secretary African Affairs Secretariat – Office of President Kwame Nkrumah. Subsequently Ambassador of Ghana to Switzerland, Austria, and Ghana’s High Commissioner to London. Conducted and recorded by Niels Hahn on 30 October 2008 in K. B. Asante’s home, Accra. Bergman, J. (2011) ‘The Alien Tort Statute and Flomo v. Firestone Natural Rubber Company: the key to change in global child labor practices?’ Indiana Journal of Global Legal Studies 18(1, Winter): 455–79. Beyan, A. J. (1991) The American Colonization Society and the Creation of the Liberian State: A Historical Perspective, 1822–1900, Lanham, MD: University Press of America. Bøås, M. (2005) ‘The Liberian civil war: new war/old war?’ Global Society 19(1): 73–88. Boley, G. E. S. (1983) Liberia: The Rise and Fall of the First Republic, London and Basingstoke: Macmillan. Boone, C. C. (1970) Liberia as I Know it, New York: Negro University Press. Bowier, E. (2009) Interview with E. Bowier, Minister of Information 1987–1990. Conducted and recorded by Niels Hahn on 16 February 2009 at the Ministry of Information, Culture and Tourism, Monrovia. Brandy, O. (2009) Interview with Othello Brandy, Lead Consultant of the Land Commission at the Liberian Governance Commission, former Minister of Agriculture 2002–4 and former Ambassador to EU and the Benelux 1997–2002. Interview conducted and recorded by Niels Hahn on 20 February 2009 in his office at the Governance Commission, Monrovia. British Foreign Office (1919) Liberia. Historical Section of the Foreign Office, London. 98 – Confidential. Brown, G. W. (1941) The Economic History of Liberia, Washington, DC: Associated Publishers. Browne, V. J. (1955) ‘Economic development in Liberia’, Journal of Negro Education 24(2, Spring): 113–19. Buell, R. L. (1928) The Native Problem in Africa, New York: Macmillan. ——(1947) Liberia: A Century of Survival, Philadelphia: University of Pennsylvania Press and the University Museum. Bundy, R. C. (1915) File no. 882.00/504. United States Department of State/Papers relating to the foreign relations of the United States with the address of the president to Congress December 7, 1915 (1915)’, Foreign Relations of the United States. Available at: http://digicoll.library.wisc.edu/cgi-bin/ FRUS/FRUS-idx?type=turn&entity=FRUS.FRUS1915.p0743&id=FRUS.FRUS1915&isize=text (accessed 10 January 2012). Burrowes, C. P. (1989) ‘The Americo-Liberian ruling class and other myths – a critique of scholarship on Liberia’, Occasional Paper No. 3 (Spring). Institute for African and African-American Affairs, Department of African-American Studies, Temple University. Clegg, C. A. (2004) The Price of Liberty: African Americans and the Making of Liberia, Chapel Hill: University of North Carolina Press. Clower, R. W., Dalton, G., Harwitz, M. and Walters, A. A. (1966) Growth Without Development, Evanston: Northwestern University Press. Cook, N. (2003) ‘Liberia: 1989–97 civil war, post-war developments, and US relations’, CRS-Report-forCongress, Washington, Congressional Research Service, Library of Congress. Cordor, H. (1980) Liberia Under Military Rule: An Introductory Study of Liberian Before and After the Military Coup, Monrovia: S. H. Cordor. Court of Appeals (2011) ‘Boimah FLOMO et al., Plaintiffs-Appellants, v. FIRESTONE NATURAL RUBBER CO., LLC, Defendant-Appellee’. Available at: http://scholar.google.co.uk/scholar_case? case=4610835644669817272&hl=en&as_sdt=2,5 (accessed 26 March 2012).

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Dahn, M. (2009) Interview conducted by N. Hahn, Monrovia, with M. Dahn, founding member of the Progressive Alliance of Liberia (PAL) and subsequently Secretary General PAL. Deputy Minister of Education 2003–5. Dalton, G. (1965) ‘History, politics, and economic development in Liberia’, Journal of Economic History 25 (4, December): 569–91. Davis, R. W. (1975) ‘The Liberian struggle for authority on the Kru coast’, International Journal of African Historical Studies 8(2): 222–65. Doe, S. (1980) ‘Message to the nation: delivered by Chairman Doe, on April 29, 1980’, in W. A. Givens (ed.) Liberia – The Road to Democracy Under the Leadership of Samuel Kanyon Doe. The Policies and Public Statements of Dr Samuel Kanyon Doe, Bucks: Kensal Press. Du Bois, W. E. B. (1933) ‘Liberia, the League and the United States’, Foreign Affairs 11(4, July): 6682–95. Dunn, D. E. (2009) Liberia and the United States during the Cold War: Limits of Reciprocity, New York: Palgrave Macmillan. Dunn, E. and Tarr, B. (1988) Liberia: A National Polity in Transition, London: Scarecrow Press. Eastman, E. T. (2009) Interview, conducted and partly recorded by Niels Hahn on 16 April 2009, with E. T. Eastman, Secretary of State during Tubman’s administration. Minister of Foreign Affairs 1983–6, and Minister of Foreign Affairs in Taylor’s administration, in his home, Old Congo Town, Monrovia. Executive Mansion (1972) ‘Liberia and Russia to exchange ambassadors. June 9, 1972’, in Executive Mansion (ed.) Presidential Papers. Documents, Diary and Records of Activities of the Chief Executive. First Year of the Administration of President William R. Tolbert, Jr, July 23, 1971 – July 31, 1972, Monrovia: Executive Mansion. ——(1976) ‘Presidential diary and summary of events. August 1, 1974 – December 31, 1975’, in Executive Mansion (ed.) Presidential Papers. Documents, Diary and Records of Activities of the Chief Executive. Concluding Period of the First Administration of President William R. Tolbert, Jr, August 1, 1974 – December 31, 1975, Monrovia: Executive Mansion; Tiptree, UK: Anchor Press. ——(1978) ‘Presidential diary and summary of events’, in Executive Mansion (ed.) Presidential Papers. Documents, Diary and Records of Activities of the Chief Executive. The first two years of the Second Administration of President William R. Tolbert, Jr, January 1, 1976 – December 31, 1977, Monrovia: Executive Mansion; Tiptree, UK: Anchor Press. Fahnbulleh, H. B. (2009) Interview conducted and recorded by Niels Hahn on 5 May 2009 with H. B. Fahnbulleh, National Security Advisor of Liberia, co-founder of Movement for Justice in Africa (MOJA), former Minister of Foreign Affairs December 1981 – 4 July 1984, in his office at Ministry at Foreign Affairs, Monrovia. Finley, R. (1815) Letter from Finley written in February 1815, reprinted in the article: ‘Advises from Cape Palmas by the Liberia Packet’, Maryland Colonization Journal (1847) 4(1). Fox, H. S. (1843) ‘Letter from Mr Fox to Mr Upshur. Washington, August 9, 1843’, in D. Webster (ed.) Colony of Liberia, in Africa, I-Session, New York: World Public Library Association. Frothingham, O. B. (1855) From Slavery to Freedom: The African-American Pamphlet Collection, 1824–1909, Washington: American Anti-Slavery Society. (African-American Pamphlet Collection, Library of Congress.) Givens, W. A. (ed.) (1986) Liberia – The Road to Democracy Under the Leadership of Samuel Kanyon Doe. The Policies and Public Statements of Dr Samuel Kanyon Doe, Bucks: Kensal Press. GoL (1976) ‘Summary table of renegotiation of the 1926 Planting Agreement with Firestone, 1974–1975– 1976’, in F. P. M. van der Kraaij (ed.) The Open Door Policy: An Economic History of Modern Liberia, Bremen: Uebersee Museum, pp. 551–65. Goodhand, J. and Atkinson, P. (2001) Conflict and Aid: Enhancing the Peacebuilding Impact of International Engagement. A Synthesis of Findings from Afghanistan, Liberia and Sri Lanka, London: International Alert. Guannu, J. S. (2009) Interview conducted and recorded by Niels Hahn on 1 January 2009 at a café in Red Light, Monrovia, with J. S. Guannu, Associated Professor of Political Science at Cuttington University College at Suakoko. Appointed Assistant Minister of Foreign Affairs for Foreign Service at the MoFA in 1977. Liberia’s Ambassador to the US 1981–3. Minister of State for Presidential Affairs in the Interim Government of National Unity from 1990 to 1994. Gurley, R. R. (1844) ‘Letter from Mr Gurley to the President’, Colony of Liberia, in Africa, I-Session, Washington, World Public Library Association, pp. 10–12. Hall, R. L. (1961/2004) On Afric’s Shore: A History of Maryland in Liberia, 1834–1857, Baltimore, MD: Alan C. Hood. Harris, K. (1985) American Values Projected Abroad, Lanham, MD: University Press of America. 84

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Hoffman, P. (2009) Personal communication with Niels Hahn on 3 December 2009, in Friends House, 173–7 Euston Road, London. Paul is a partner at Schonbrun, De Simone, Seplow, Harris & Hoffman LLP in California. He has brought lawsuits against a number of international corporations and is in close contact with the people leading the case against Firestone. Huberich, C. H. (1947) The Political and Legislative History of Liberia, New York: Central Book Company. ILRF (2011) Stop Child & Forced Labor – Stop Firestone. Online. Available at: www.laborrights.org/stopchild-labor/stop-firestone (accessed 26 March 2012). IRA (2008) ‘Cases: Bridgestone-Firestone’, IRA Advocates. Online. Available at: www.iradvocates.org/ bfcase.html (accessed 26 March 2012). Johnson, C. S. (2000) Bitter Canaan: The Story of the Negro Republic, New Brunswick: Transaction Publishers. Johnson, W. M. (2010) Interview conducted and recorded by Niels Hahn on 6 December 2010 with W. M. Johnson, Liberian Ambassador to the UK, Vice Chairman of the INTG 2003–6, Vice Chairman of PPP 1978– 90, and subsequently Chairman of the PPP. Conducted in his office at the Liberian Embassy in London. Kieh, G. K. (1992) Dependency and the Foreign Policy of a Small Power – The Liberian Case, San Francisco, CA: Mellen Research University Press. Lansing, R. (1915) ‘Foreign Relations of the United States: papers relating to the foreign relations of the United States with the address of the president to Congress December 7, 1915 (1915)’, file no. 882.00/ 408, United States Department of State. Available at: http://digicoll.library.wisc.edu/cgi-bin/FRUS/ FRUS-idx?type=turn&entity=FRUS.FRUS1915.p0743&id=FRUS.FRUS1915&isize=text (accessed 10 January 2012). Lawrence, J. C. (1931) The World’s Struggle with Rubber 1905–1931, New York: Harper & Brothers. Loan Agreement (1926/1947) ‘The Loan Agreement of 1926 – between Liberia and Finance Corporation of America, as permanently amended’, reproduced in R. L. Buell, Liberia: A Century of Survival, Philadelphia: University of Pennsylvania Press and the University Museum. Logan, J. (2009) Interview conducted by Niels Hahn with J. Logan, Deputy Minister of Agriculture for Planning and Development since 2006, Monrovia. Lowenkopf, M. (1976) Politics in Liberia, Stanford, CA: Hoover Institution Press. Martin, T. (1976) Race First, The Ideological and Organizational Struggles of Marcus Garvey and the Universal Negro Improvement Association, London: Greenwood Press. Marx, K. (1982/1867) Capital: A Critique of Political Economy, Harmondsworth: Penguin in association with New Left Review. Massaquoi, R. (2009) Interview conducted and recorded by Niels Hahn on 14 May 2009 at the University of Liberia, Monrovia, with R. Massaquoi, Minister of Agriculture in the NPRAG from 1993 to 1997, Minister of Agriculture of the GoL from 1997 to 2002, Presidential Candidate for the NPP in 2005. Matthews, G. B. (1980/2004) ‘“We espoused the principles of African Socialism” (G. Baccus Matthews): an interview with West Africa Magazine, February 18, 1980’, in H. B. Fahnbulleh (ed.) Voices of Protest – Liberia on the Edge 1974 – 1980, Boca Raton, FL: Universal Publishers. MoPEA (1973) Economic Survey of Liberia 1973, Monrovia: Ministry of Planning and Economic Affairs. Mower, J. H. (1947) ‘The Republic of Liberia’, Journal of Negro History 32: 265–306. The New Dawn (2011) ‘Slavery at Sime Darby’. Online. Available at: www.thenewdawnliberia.com/index. php?option=com_content&view=article&id=4920:slavery-at-sime-darby&catid=3:general&Itemid=68 (accessed 10 February 2012). Nkrumah, K. (1972) Revolutionary Path, London: PANAF, pp. 438–45. Outram, Q. (1999) ‘Liberia: roots and fruits of the emergency’, Third World Quarterly 20(1): 163–73. Padmore, G. A. (1996) The Memoirs of a Liberian Ambassador, Lampeter: Edwin Mellen Press. Planting Agreement (1926/1947) ‘The Planting Agreement of 1926 – between Liberia and the Firestone Plantation Company, with amendments of 1935, 1936, 1937, and 1939’, in R. L. Buell and H. A. Wieschhoff, Liberia: A Century of Survival, Philadelphia: University of Pennsylvania Press and the University Museum. Qureshi, M. A., Mizoe, Y. and Collings, F. (1964) ‘The Liberian economy’, Staff Paper–International Monetary Fund 11(2, July): 285–326. Rowlands, M. (2008) ‘Civilization, violence and heritage healing in Liberia’, Journal of Material Culture 13 (2): 135–52. SAMFU (2005) ‘Firestone – the mark of modern slavery’, Save My Future Foundation, Monrovia. Sayndee, T. D. (2009) Interview conducted and recorded by Niels Hahn on 2 February 2009 with T. D. Sayndee, Director of the Kofi Annan Institute for Conflict Transformation at the University of Liberia, in his office at the University of Liberia. 85

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Shaw, J. D. (2001) The UN World Food Programme and the Development of Food Aid, New York: Palgrave. Shick, T. W. (1980) Behold the Promised Land: A History of Afro-American Settler Society in Nineteenth-century Liberia, Baltimore, MD: Johns Hopkins University Press. Sibley, J. L. and Westermann, D. (1928) Liberia Old and New: A Study of Its Social and Economic Background with Possibilities of Development, London: James Clarke & Co. Limited. Sickle, E. S. V. (2011) ‘Reluctant imperialist – the US Navy and Liberia, 1819–45’, Journal of the Early Republic 31(Spring): 107–34. Sime Darby (2012) ‘Sime Darby Plantation in Liberia’. Online. Available at: www.simedarbyplantation. com/Sime_Darby_Plantation_in_Liberia.aspx (accessed 10 February 2012). Smith, A. (2005/1775) An Inquiry into the Nature and Causes of the Wealth of Nations, London: S. M. Soares; MetaLibri Digital Library. Smith, J. W. (1987) Sojourners in Search of Freedom, The Settlement of Liberia by Black Americans, Lanham, MD: University Press of America. Smith, R. A. (1971) A Wholesome Functioning Society – President W. R. Tolbert, A Political Portrait, Monrovia: Providence Publications. Stanfield, J. (2000) ‘Introductory essay: Bitter Canaan’s historical backdrop’, in J. Stanfield, Bitter Canaan – The Story of the Negro Republic, New Brunswick: Transaction Publishers. Stockwell, J. (1992) ‘Black Power. Interview with former CIA Station Chief in Angola’, in A. Curtis (ed.) Pandora’s Box, London: BBC. Available at: www.youtube.com/watch?v=_fJpDJ7Sy4U&p= FC13400F B3E14C76. Stop Firestone (2008) ‘Lawsuit’. Online. Available at: www.stopfirestone.org/2008/05/lawsuit/ (accessed 16 May 2011). Sundiata, I. K. (1974) ‘Prelude to scandal: Liberia and Fernando Po, 1880–1930’, Journal of African History 15(1): 97–112. ——(2003) Brothers and Strangers – Black Zion, Black Slavery, 1914–1940, Durham, NC: Duke University Press. Tarr, B. (2009 Interview conducted and recorded by Niels Hahn, 23 April 2009, with B. Tarr, Special Assistant to Finance Minister Steve Tolbert 1972, Assistant/Deputy Minister for Revenues from May 1972 till end of 1974. Responsible for State Enterprises as Controller General for Public Enterprises in 1977. Minister of Planning in 1981–2. Minister of Finance in 1991–2. Interview conducted in his office at the corner of Johnson and Broad Streets, Monrovia. ——(2011) E-mail correspondence with Niels Hahn. Tipoteh, T.-N. (1982) Democracy: The Call of the Liberian People (The Struggle for Economic Progress and Social Justice in Liberia during the 1970s), Østervåla: Tofters tryckeri ab. Toe, A. (2009) Interview conducted by Niels Hahn on 28 January 2009 with A. Toe, Co-Chair of National Defence Committee. Member of National Security Council. Former member of the People’s Redemption Council. Representative of River Gee Country in the House of Representatives. Interview conducted in his office in the House of Representatives, Capitol Hill, Monrovia. Tokpa, A. (2009) Interview conducted and recorded by Niels Hahn on 26 January 2009, with A. Tokpa, Assistant Professor of Political Science at the University of Liberia. Former Head of the Liberia National Student Union (LUNSU), and former active member in the Movement for Justice in Africa (MOJA). Co-founder of the political party the New Deal Movement. Interview conducted near New Port Street in Monrovia. ——(2012) Phone interview conducted by Niels Hahn on 19 February 2012. Tolbert, V. A. D. (1996) Lifted Up: The Victoria Tolbert Story, Minneapolis: Macalester Park Publishing. Tolbert, W. (1971a) ‘President’s First Annual Message. December 21, 1971’, in Executive Mansion (ed.) Presidential Papers. Documents, Diary and Records of Activities of the Chief Executive. First Year of the Administration of President William R. Tolbert, Jr, July 23, 1971 – July 31, 1972, Monrovia: Executive Mansion. ——(1971b) ‘Nationwide broadcast, 10 September 1971’, in Executive Mansion (ed.) Presidential Papers. Documents, Diary and Records of Activities of the Chief Executive. First Year of the Administration of President William R. Tolbert, Jr, July 23, 1971 – July 31, 1972, Monrovia: Executive Mansion. ——(1972a) ‘President Tolbert’s speech at Nkrumah Symposium. May 13, 1972’, in Executive Mansion (ed.) Presidential Papers. Documents, Diary and Records of Activities of the Chief Executive. First Year of the Administration of President William R. Tolbert, Jr, July 23, 1971 – July 31, 1972, Monrovia: Executive Mansion. ——(1972b) ‘President Tolbert’s speech to OAU Summit. June 14, 1972’, in Executive Mansion (ed.) Presidential Papers. Documents, Diary and Records of Activities of the Chief Executive. First Year of the Administration of President William R. Tolbert, Jr, July 23, 1971 – July 31, 1972, Monrovia: Executive Mansion. 86

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——(1972c) ‘Independence Anniversary celebrations. July 26, 1972’, in Executive Mansion (ed.) Presidential Papers. Documents, Diary and Records of Activities of the Chief Executive. First Year of the Administration of President William R. Tolbert, Jr, July 23, 1971 – July 31, 1972, Monrovia: Executive Mansion. Truth and Reconciliation Commission of Liberia (2009) Final Report of the Truth and Reconciliation Commission of Liberia (TRC). Volume 1: Findings and Determinations, Monrovia: TRC. Tyler-McGraw, M. (2007) An African Republic – Black & White Virginians in the Making of Liberia, Chapel Hill: University of North Carolina Press. Upshur, A. P. (1843) ‘Letter from Mr Upshur to Mr Fox. Washington, September 25, 1843’, in D. Webster (ed.) Colony of Liberia, in Africa, I-Session, New York: World Public Library Association. USAID (2004) Celebrating Food for Peace, 1954–2004, Washington, DC: Agency for International Development. US Court of Appeal (2011) ‘Flomo v. Firestone natural rubber Co Llc. Boimah Flomo, et al., Plaintiffs–Appellants, v. Firestone natural rubber Co., Llc, Defendant–Appellee. No. 10–3675. Argued June 2, 2011 – July 11, 2011’. Available at: http://caselaw.findlaw.com/us-7th-circuit/1573873.html (accessed 9 February 2012). US Department of State (2011) ‘Background note: Liberia’. Available at: www.state.gov/r/pa/ei/bgn/ 6618.htm (accessed 13 April 2012). US District Court (2007) ‘US District Court for the Southern District of Indiana. “Plaintiffs” Motion and Memorandum of Points and Authorities for Class Certification. Case no.: 1:06-cv-00627-DFH-JMS’’. Available at www.iradvocates.org/Pls%20Motion%20Class%20Cert-FINAL.pdf (accessed 26 March 2012). van der Kraaij, F. P. M. (1983) ‘The Open Door Policy: an economic history of modern Liberia’, PhD thesis, Bremen, Uebersee Museum. Verdier, J. J. (2009) Interview conducted and recorded by Niels Hahn on 6 June 2009 with J. J. Verdier, Chairperson of the Truth and Reconciliation Committee of Liberia, in his office at the TRC in Monrovia. Walker, J. W. (1992) Interview conducted by Charles Stuart Kennedy on 2 April with J. W. Walker, US Chargé d’Affaires of the US Diplomatic Mission in Liberia, 1980, in the absence of Ambassador Smith. American Memory, the Foreign Affairs Oral History Collection of the Association for Diplomatic Studies and Training, Washington, DC, Library of Congress. Wallerstein, I. (2004) World Systems Analysis – An Introduction, Durham, NC: Duke University Press. Webster, J. B. and Boahen, A. A. (1980) The Revolutionary Years: West Africa since 1800, London: Longman. West, H. L. (1933) The Liberian Crisis, Washington, DC: American Colonisation Society. WFP (2011) ‘Contributions to WFP: annual contributions and five-year aggregate ranking’. Online. Available at: http://documents.wfp.org/stellent/groups/public/documents/research/wfp232961.pdf (9 April 2011). Williams, M. (2008) Interview conducted and recorded by Niels Hahn on 14 November 2008 with M. Williams, Director of the Centre for Africana Studies, African University College of Communication Studies. Interview conducted at Chec Afrique, Accra. Wotorson, C. (2006) Interview conducted by Niels Hahn on 30 June 2006 with C. Wotorson, Senior Senator in Liberia. Former Minister of Lands, Mines and Energy 1978–80. Presidential opposition candidate to Charles Taylor in 1997. Interview conducted in his office in the Senate, Monrovia.

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Part II

Investors’ profiles and current investment trends

2.1 Chinese engagement in African agriculture Fiction and fact Deborah Bräutigam1

I Introduction As global food prices skyrocketed in 2007 and 2008, researchers began to document a spate of media stories about large land grabs in Africa. Many of these stories featured Chinese companies, or, more commonly, just ‘China’, as central players in land acquisitions. The belief that the Chinese have been aggressively seeking large areas of land in Africa – to grow food to ship back to the People’s Republic of China, or for commercial biofuel production – has solidified into a widely accepted, unquestioned ‘fact’. It is not difficult to find examples of this belief. The Economist repeated (without endorsing) a report that more than 1 million Chinese farmers were cultivating crops in Africa (The Economist 2011). A prominent magazine, The Atlantic, repeated a story that the Chinese had set up a US$5 billion fund to invest in agriculture in Africa (French 2010). CBS news posted an article stating ‘It has been widely reported that China recently purchased half the farm land under cultivation in the Congo’ (O’Brien 2010). Think tanks published stories that China had ‘pledged’ to invest $800 million to modernise agriculture in Mozambique in order to export rice to China, secured 2.8 million hectares (ha) of land in the Democratic Republic of Congo (DRC), or were farming over 100,000 ha in Zimbabwe (von Braun and Meinzen-Dick 2009; Mo Ibrahim Foundation 2011). None of these stories has turned out to be true. As of 2011, Chinese engagement in African agriculture is both more diverse and shallower than is often believed. This chapter provides a brief overview of Chinese engagement in agriculture in Africa, and then a closer look at some of the key stories outlined above. It reviews the evidence marshalled to support the argument that the Chinese government, or its firms, were leading a land grab in Africa. It argues that as of 2012, there was surprisingly little evidence to support this common belief. Fieldwork by a range of researchers has pointed to interest by Chinese firms in agricultural investment, along with firms from many different countries. The pattern of Chinese interest is not particularly distinctive. What is perhaps surprising is how rare it has been, so far, for Chinese interest to move into actual investment, particularly given how pervasive the conventional wisdom is on this matter.

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The chapter relies on fieldwork conducted between 2007 and 2011 in China and a number of African countries, including Sierra Leone, Zimbabwe, Mozambique, Ethiopia and Zambia, as well as earlier research on this subject between 1983 and 1995 (Bräutigam 1998, 2009; Bräutigam and Tang 2009). For cases where fieldwork was not possible, interviews, secondary research and a careful review of information on the internet shed some light on the fate of projects that reached the media at an early state.

II Chinese engagement in agriculture in Africa: an overview China’s success in feeding one-fifth of the world’s population with only 8% of its arable land is well known. Thousands of years of intensification of farming in much of the country has led to very high yields per ha of land. China’s hybrid rice pioneer Yuan Longping, for example, has produced a variety that yields 13.9 mt/ha under trial conditions (Jin 2011). Labour-intensive cultivation practices such as the transplantation of irrigated paddy rice are common. Land-labour rations in China are generally quite different from those prevailing in much of Africa. Yet both Chinese and African policy-makers believe that China’s experience in agricultural development may be relevant for Africa’s own efforts.

Current policy on African agricultural engagement China’s current policy on engagement in agriculture in Africa can be seen in its January 2006 Africa Policy White Paper, and in the action plans resulting from several rounds of high-level meetings among Chinese and African officials under the Forum on China–Africa Cooperation, FOCAC (Government of China 2006). The 2006 Africa Policy White Paper commented that: Focus will be laid on the co-operation in land development, agricultural plantation, breeding technologies, food security, agricultural machinery and the processing of agricultural and side-line products. China will intensify co-operation in agricultural technology, organize training courses of practical agricultural technologies, carry out experimental and demonstrative agricultural technology projects in Africa and speed up the formulation of China–Africa Agricultural Cooperation Program. (ibid.) Two recent action plans following FOCAC ministerial-level meetings have emphasised agricultural co-operation. During the 2006 Beijing Summit of the Forum on China–Africa Cooperation, the two sides – China and African governments – pledged to ‘intensify their exchanges and co-operation in farming, animal husbandry, irrigation, fishery, agricultural machinery, processing of agricultural produce, sanitary and phytosanitary measures, food safety and epidemic control’ (FOCAC 2007). In 2009, China pledged to enhance co-operation in ‘agricultural infrastructure, grain production, breeding industry, exchanges and transfer of practical agricultural technologies, and in processing, storage and transportation of agricultural products’ (FOCAC 2009). China’s strategy for agricultural engagement abroad has a long-term perspective. They believe that aid, investment and other forms of co-operation should be used to increase food and agricultural output globally, and that they will need to import increasing amounts of food (including meat and feed grains) to supply the ever more affluent Chinese population. They are fully aware of the sensitivities of large-scale agricultural investment in Africa. Although Chinese companies have investigated a number of potential projects, generating many media stories, as 92

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of March 2012, there do not appear to be any documented cases of Chinese companies actually implementing investments in agricultural operations above 10,000 ha in Africa, and few above 5,000 ha. No doubt this will change at some point, but at the present moment the list of countries actively involved in large-scale farming in Africa does not appear to include China.

Instruments and institutions of engagement China’s agricultural engagement in Africa involves foreign aid, government-sponsored bilateral co-operation based on mutual benefit, private investment and trade (Bräutigam and Tang 2009). The Ministry of Commerce (MOFCOM) is a central actor. China’s foreign aid programme is run out of MOFCOM’s Department of Foreign Aid, while investment and some areas of co-operation are promoted by MOFCOM’s Department for Outward Investment and Economic Co-operation. For agricultural aid and other co-operation, MOFCOM co-ordinates with the International Economic Cooperation Centre of the Ministry of Agriculture and sometimes the equivalent department in the Ministry of Science and Technology. Several large Chinese agribusiness corporations are also relevant in Africa, including China National Cereals, Oils and Foodstuffs Corp. (COFCO), which focuses on agri-commodities trade and processing; China National Agricultural Development Company (CNADC), which has become the main state-owned company in production, established in 2004 after a merger of China National Fisheries Corporation, China Animal Husbandry Corporation, China Feedstuffs Corporation and China State Farm Agribusiness Corporation. National state-owned enterprises usually have provincial-level branches, such as the Heilongjiang State Farms Beidahuang Group. Other provincial companies include seed firms such as Chongqing Seed Corporation and Hunan Province’s Yuan Longping High-Tech Agriculture Co. Ltd. Chinese engagement in agriculture can be financed by China Development Bank (CDB) and China Export Import Bank (Eximbank), both of which provide commercial development finance and export credits; China Eximbank also provides concessional foreign aid loans. China Development Bank is the parent organisation of the China–Africa Development Fund (CAD-Fund), which is at the time of writing a $1 billion equity investment fund, with plans to expand in stages to $3, and then to $5 billion. CAD-Fund has a number of strategic partnerships with Chinese companies across a host of sectors. In agriculture, the strategic partnership with China State Farm Agribusiness Corporation (CSFAC) resulted in the establishment of a joint company to make agricultural investments. This has not yet resulted in much new (greenfield) investment in Africa, but has supported the transfer of some of CSFAC’s existing investments, such as the sisal farms in Tanzania (discussed below), to the new joint venture, enabling them to be re-capitalised.

Chinese agricultural aid Agriculture has always been important in China’s aid programme. In the 1960s, Chinese technicians and engineers built a number of state-owned farms for African governments under the aid programme. In Tanzania, for example, China began building the Ruvu State farm (2,834 ha of mixed farming), as early as 1965, while also providing irrigation and hydroelectric power, and meeting the farm’s recurrent costs until it was self-sustaining. The Mahonda State Sugar Cane Farm and Processing Factory was launched in 1974, on the island of Zanzibar, with a 1,216 ha cane plantation and factory. China’s most extensive agricultural aid project in Tanzania was the 5,575 ha Mbarali Rice Farm in Mbaye, with irrigation and drainage, hydropower, a piggery, dairy farm with 100 cows, poultry farm with 50,000 chickens, rice mill with an annual capacity of 8,000–8,010,000 metric tons (mt), and staff housing (Bräutigam and Tang 2012). 93

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In the 1970s and 1980s, large state farm projects became less frequent, and China began supporting projects targeting smallholder farmers (Bräutigam 1998). Altogether, between 1960 and 2009 Chinese aid teams built at least 142 agricultural farms and demonstration centres in Africa, although few were at the scale enjoyed by Tanzania’s state farms (State Council 2011). More than 44 African countries have hosted Chinese aid missions in agriculture. However, as with other donors, much of this aid was not sustainable. ‘We’ve assisted African agriculture quite a lot, but haven’t gotten much return’, a Chinese economic officer stationed in Africa noted in 1988 (Bräutigam 2009). The most important aid initiative in agriculture since 2006 has been the launch of 20 agrotechnology demonstration centres across Africa. Following requests from African governments, Chinese agribusinesses and institutes bid to receive grants (RMB 40 million to RMB 55 million, or $6 to $9 million) to build the centres. Each centre will specialise in activities decided by the host country. For example, Ethiopia wants its centre to demonstrate the complete value chain for horticulture exports. The centres follow a fairly standard model of a complex of buildings and a training and research cluster on about 2 ha of land, 5 ha to 10 ha of experimental plots, and 40 to 50 ha of fields, often equipped with irrigation and drainage channels. Together with China’s Ministry of Agriculture, MOFCOM originally conceived of its grantfinanced agro-technology demonstration centres as an experiment (Bräutigam 2009). Chinese companies and institutes, selected via a competitive tender system in China, would build the centres, and the Chinese aid budget would pay for equipment and Chinese personnel to help run the centres for three years. During that time, the Chinese companies and institutes would seek out income-generation activities that would enable the centres to fund their own revenue streams. They would also use their time at the centre as a platform to seek other commercial opportunities in the country: agricultural machinery sales in Zimbabwe, a hybrid rice seed market in Tanzania, for example. The experimental approach is an example of foreign aid coupled with mutually beneficial co-operation. It echoes the ‘responsibility system’ that has been widely practised in many of China’s own domestic government centres and agencies, allowing centres to retain a portion of the revenues (service fees, sales, etc.) from their own income-generating activities. Other recent agriculturally relevant foreign aid included the dispatch of 100 senior agricultural experts to Africa for a year of technical assistance (most countries received two or three experts); short-term training in China; and a youth volunteer program (China’s “Peace Corps”). In addition to these standard programmes, some African countries have received other agricultural assistance: vocational training, South–South Cooperation with the Food and Agricultural Organization (FAO), rural roads, etc. China also has provided zero-tariff entry for a large number of agricultural commodities and processed goods (cotton yarn, sisal fibre, finished leather, etc.) from Africa’s low-income countries.

Chinese investment in African agriculture: origins Chinese business investment in African agriculture began in the mid-1980s with a variety of new initiatives (Bräutigam 1998). State-owned companies began to offer their services as contractors for African investors at the same time that they were bidding to carry out agricultural construction activities for foreign donors. In the late 1980s, as part of structural adjustment programmes, African governments began to privatise many of their large state-owned farms. China’s state-owned agribusiness company, China State Farm Agribusiness Corporation (CSFAC), began to buy up or lease some of the old Chinese aid projects – for example, the Segou sugar complex in Mali, Magbass sugar complex in Sierra Leone, Koba Farm in Guinea, 94

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and Mpoli Farm in Mauritania. In 1990, CSFAC ventured into bidding on leases for other African government farms being privatised: two colonial-era sisal farms in Tanzania, and so on. Chinese private investors followed, targeting new ventures in countries like Zambia that allowed foreign land ownership. Although Chinese investors have expanded some of these ventures, few are larger than 5,000 ha (Table 2.1.1). The Koba Farm in Guinea is a good example of how this worked. China built a large, irrigated rice-promotion centre at Koba as part of its aid programme, in 1979. When the farm did poorly, a Chinese team returned to rehabilitate it between 1989 and 1992. In 1996, CSFAC established a joint venture at Koba with the Guinean Ministry of Agriculture and China Agricultural University. In these cases, the African side of the joint venture is usually the contribution of land. The Chinese held 80% of the shares, and Guinea 20%. In 2003, Koba Farm invited experts from a Chinese hybrid rice research centre to conduct trials at Koba. With the higher yields that resulted, CSFAC announced that promoting hybrid rice in Guinea ‘will alleviate grain shortages in Africa and also bring the CSFAC good economic returns’ (Bräutigam 2009: 248). With the rise of global food prices in 2007 and 2008, Chinese policy-makers and academics debated what role the government should play in encouraging Chinese companies to secure land overseas for food production. The Ministry of Agriculture was apparently in favour of more robust policies, and rumours circulated that they had submitted a draft plan to the State Council to encourage overseas land investments (Li 2008; Teng 2008). These rumours were denied, but the debate continued. Some argued that China could rely on the global market for Table 2.1.1 China National Agricultural Development Corporation in Africa circa 2000 Country

Investment date

Zambia

1990

Zambia Mali Guinea Ghana

1992 1995 1996 1997

Gabon

1998

Zambia

1999

Mauritania

1999

Tanzania

1999

Farms (hectares leased) China–Zambia Friendship Farm (667 ha) Zhongken Estates Ltd (3,573 ha) Sikasso tea complex (100 ha) Koba Farm (1,800 ha) CALF* Cocoa International Company Ltd (now apparently bankrupt) Eastern Agricultural Development Company (300 ha) Zhongken Friendship Farm Ltd (2,600 ha) Zhongnog Mauritania Agriculture Co. Ltd/Mpoli farm (638 ha) Rudewa Estate Sisal Farm and Kisangata Estate Sisal Farm (6,900 ha)**

Source: China State Farm Agribusiness Corporation, a subsidiary company of China National Agriculture Development Corporation. Notes: *CALF = China Agriculture, Livestock and Fisheries Corporation (now defunct). ** As of 2011, CSFAC had 1,200 ha under production at the two sisal farms, and planned to expand (Bräutigam and Tang 2012). Not all of the leased areas were put into production. Two other projects were planned for Togo and South Africa, but we could find no hard evidence that they were ever implemented.

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its supplies, and that overseas grain production would be too expensive save for a small number of crops such as soybeans. China’s policy guidance catalogues promoted overseas investment in rubber, oil palm and cotton: not grains. A CSFAC executive complained that the products his company was producing in Africa – wheat, corn, rice and soybeans – received no special incentives (Bräutigam 2009: 257). Neither investment nor trade data support the idea that the Chinese are using African products for their own food security – at least, not yet. Chinese imports of African agricultural commodities are relatively modest and focused on agro-industrial inputs. The list is headed by raw cotton (Burkina Faso), sesame seeds (Ethiopia) and tobacco (Zimbabwe). No African country exports grain to China and, as noted above, the Chinese government provides no special incentives for investment in this sector in Africa. As the Chinese economic counsellor in Tanzania said in 2008, ‘Agriculture is risky here. It is hard to have win–win’ (Interview 2008).

III Case studies: investigating myth and reality in Chinese agricultural investment in Africa Large-scale land investment carries multiple risks, especially in the vast parts of sub-Saharan Africa where property rights regimes are in flux, and where the rights of the poor, women and minorities are less likely to be protected. Yet studies have documented a large increase in requests for land leases (or sales) across the continent (GRAIN 2008). In this section, we ask: what actually happened to the oft-cited cases of large-scale Chinese ‘land investment’ in Africa? We consider three widely publicised cases: Zimbabwe, Mozambique and the DRC, where ‘China’ was thought to be making very large agricultural investments.

Zimbabwe: CIWEC and Nuanetsi Ranch: a 100,000-hectare investment? Reports on large-scale land investment in Africa often include an alleged ‘Chinese’ lease or purchase of 100,000 ha in Zimbabwe (e.g. Mo Ibrahim Foundation 2011: 19). However, this story turned out to be quite different from the initial reports and involved no Chinese lease or purchase at all (Bräutigam and Tang 2009: 696–7). It is a good example of how a reporter’s story that was actually accurate in some details, but not others, was read carelessly by many. It is also a good example of how a small effort at deeper investigation can reveal details about what actually happened. After the Mugabe government implemented a chaotic and violent land reform, maize output plunged. The Zimbabwe Agricultural and Rural Development Authority decided to develop virgin land at the 300,000 ha Nuanetsi Ranch for flood-irrigation of maize. Nuanetsi Ranch was owned by the Development Trust of Zimbabwe, a trust established by the late Joshua Nkomo, a former political rival to Zimbabwe’s president Robert Mugabe. A large, locally registered engineering firm, China International Water and Electrical Corporation (CIWEC), won the tender to clear 250,000 acres (about 101,000 ha) for flood-irrigated maize (Meldrum 2003; The Herald 2003). This contract was widely reported as an example of ‘Chinese farming’ in Africa (e.g. Mutton 2005; Eisenman 2005). However, although the reporter who broke the story, Andrew Meldrum, wrote that the Chinese would ‘farm’ this land, he did not actually report this as a Chinese investment, but as a construction contract. For example: ‘Harare has not revealed how much it will pay China for the development of the huge agricultural scheme’ (Meldrum 2003). CIWEC is one of the world’s largest engineering companies. Its business focuses on irrigation, hydropower and water supply. CIWEC was not leasing or purchasing this land, and was not intending to farm it. Local news articles stated that although the Chinese company had won a tender to clear and develop the land, local Zimbabweans would do the farming (The Herald 2003). Over a 96

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year later, reports emerged that CIWEC had abandoned work on the project after Zimbabwe was unable to make scheduled payments for the work (Mukaro 2005). On the failure of the CIWEC contract and other projects contracted to Chinese firms, a senior government official from Zimbabwe told a reporter: ‘it now appears our government negotiated in bad faith’ (du Venage 2006). Chinese investment in Zimbabwe was also mentioned in another context. China State Farm Agribusiness Corporation went to Zimbabwe in 2005 to explore investment possibilities. After looking around, CSFAC decided not to pursue an investment. According to an official in the Zimbabwe Ministry of Agriculture, the Chinese cited Zimbabwe’s poor business environment and security problems (Zim Online 2005; Bräutigam 2009). The bottom line for the story of ‘Chinese farming’ in Zimbabwe is quite different from the story that appears in headlines, tables and charts.

Mozambique: China pledges $800 million; Chinese farmers to grow rice to ship back to China? Mozambique frequently appears as another story of Chinese interest in large-scale agriculture. Several reports, all written by the same person, alleged that ‘Beijing’ intended to grow rice on a very large scale in Mozambique to ship back to China and to use Chinese farmers to do it, and had pledged $800 million towards this goal (Horta 2007, 2008). This story has been told in slightly different ways in different publications. In 2007, Horta wrote: In 2006, Beijing and Maputo signed a memorandum of understanding concerning the creation of a massive agricultural project in the Zambezi river valley area. Under this agreement, as many as 20,000 Chinese settlers may move into the valley to run large- to medium-scale farms destined to supply the ever more affluent Chinese market. (Horta 2007) However, in a 2008 story, Horta wrote that since 2006, China had been ‘aggressively’ seeking ‘large land leases in Mozambique’. He said that an MOU had reportedly been signed in ‘June 2007’ that would have allowed 3,000 [sic] Chinese settlers to move to Mozambique to run farms (Horta 2008). According to Horta, reports of this deal caused ‘an uproar’ in Mozambique: ‘The idea of moving thousands of Chinese settlers into the valley has caused great outrage locally, with many fearing the repetition of the dias negros (black days of oppression)’ (Horta 2008). Despite this, Horta continued, ‘In early 2008, the Chinese government pledged to invest $800 million in modernising Mozambican agriculture, with the goal of boosting rice production from 100 000 tons to 500 000 tons a year in the next five years’ (Horta 2008). Concluding the colourful story, Horta wrote: ‘One thing seems to be certain: China is committed to transforming Mozambique into one of its main food suppliers, particularly for rice’ (Horta 2008). Horta’s story has been included in most of the land-grab overviews and other research on Chinese agricultural interests overseas (Cotula et al. 2009; Stevens and Freemantle 2011). A policy brief by the International Food Policy Research Institute included Horta’s story: ‘US $800 million investment to expand rice production from 100,000 to 500,000 metric tons; political opposition to the deal. Discontinued’ (von Braun and Meinzen-Dick 2009). As summarised in another overview (GRAIN 2008): According to a study by Loro Horta, the son of Timor L’Este’s President Ramos Horta, the Chinese government has been investing in infrastructure development, policy reform, 97

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research, extension and training to develop rice production in Mozambique for export to China since 2006. Eximbank has already provided a loan of US$2bn and pledged an additional US$800m for these works, though more is expected. Some 10,000 Chinese settlers will be involved. Yet researchers who have gone to Mozambique have been unable to confirm key elements of this story: the US$800 million pledge, an agreement to import Chinese settlers to farm in Mozambique, an MOU to this effect between Beijing and Maputo, local outrage and ‘political opposition’, and so on. For example, a major study done by researchers from the International Institute for Environment and Development (IIED) with backing from the Food and Agriculture Organization (FAO) and the International Fund for Agricultural Development (IFAD), commissioned fieldwork in Mozambique (Cotula et al. 2009). In commenting on the ‘common external perception’ that China was seeking ‘to acquire land abroad as part of a national food security strategy’, the researchers concluded: ‘the evidence for this is highly questionable’ (ibid.: 55). Specifically citing Horta (2008) as an example of reports that China was negotiating for land in Mozambique (and elsewhere) as part of a food security strategy, the researchers noted: ‘the accuracy of these reports is hard to verify’ (ibid.: 55). Researchers trying to track down this story conducted interviews in Mozambique in 2009 and 2010 with dozens of Mozambican and foreign experts involved in foreign aid and agriculture, and reviewed four years of Mozambican daily newspapers as well as online media sources in English, Portuguese and Chinese (Bräutigam 2009; Bräutigam and Tang 2009; Ekman 2010). They failed to find anyone who had heard or read of an agreement of any kind to bring in large numbers of Chinese farmers, or knew of any stories of an ‘uproar’ or ‘great outrage’ among Mozambicans regarding such a plan, or who had heard of the alleged $800 million pledge. No hint of these things could be found in news reports in Mozambican papers or in the international media, aside from reports citing Horta; rather than China ‘aggressively’ seeking large land leases, ‘the now abolished Zambezi valley office (Gabinete de Promoção do Vale de Zambêze, GPZ) tried hard to get Chinese investment and failed’ (Hanlon 2011a, citing Ekman 2010). If Chinese investors wanted large land leases, it is not clear why they would have had trouble signing some. A 2012 Oakland Institute study showed that Mozambique ‘granted concessions to investors for more than 2.5 million hectares (ha) of land between 2004 and the end of 2009’ almost entirely to European and South African investors – there were no Chinese investors in their list (Hanlon 2011b). A closer look at Chinese engagement in Mozambique reveals a far less sensational story. Mozambique was a major rice producer under the Portuguese, but the irrigated polders fell into disuse after independence and decades of civil war. During the 1990s, Chinese companies came to Mozambique to explore investment opportunities in agriculture. A 1998 news report by China’s official news agency Xinhua noted: Mozambican leaders told Chinese ambassador Shao Guanfu late last year that they wanted China to largely [sic] invest in the agricultural development in the southern African country. They agreed with the ambassador that China has rich experiences in the development of agriculture and fishery, and the potential is great for their co-operation. Groups of experts have come from China to investigate the situation of farming, shrimp raising and sugar cane planting in Mozambique. (Xinhua 1998) 98

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A shrimp-farming project was one result of this round of discussions, but otherwise this round of discussions in 1997/98 led nowhere. It is not clear which side declined to pursue a farming investment (Ekman 2010). What is clear is that rice was central to Mozambique’s interest in Chinese investment. Horta made a curious assumption: ‘Mozambique’s increased rice production is clearly destined for export to the Chinese market, since the staple accounts for just a tiny fraction of the Mozambican diet’ (Horta 2008). In fact, by the 2000s Mozambique was consuming over 500,000 metric tons (mt) of rice annually. In 2006, the country imported 382,300 mt of milled rice (CARD n.d.). As the Philippines-based International Rice Research Centre noted, ‘Rice is considered a strategic crop in Mozambique where it is expected to contribute to ensuring food security in the country’ (IRRI n.d.). Mozambican policy-makers developed a strategy to become self-sufficient in rice production and, eventually, develop a surplus for export. The strategy focused on improved seeds, inputs, research and extension, and private investment. Four rice production clusters were identified: Xai-Xai, Beira, Quelimane and Nampula (CARD n.d.) Mozambican leaders asked for assistance from a number of international partners to assist their efforts to increase rice production: the International Rice Research Institute, the Bill and Melinda Gates Foundation, Japan, and China (IRRI n.d.; Macaohub 2006). In 2005, a delegation from Hubei Provincial Farming Bureau visited Mozambique to discuss co-operation in rice. Gaza Province (where the Xai-Xai production cluster was located) offered 1,000 ha of disused polder for Hubei to establish a rice demonstration farm (Teng 2008). After testing soil samples, and after ‘considerable discussion and negotiation’ Hubei Farming Bureau decided to invest in Mozambique (Teng 2008; Zhang 2008). Hubei Province signed a bilateral agricultural co-operation agreement with Gaza Province to set up a demonstration farm in XaiXai, while Gaza Province promised to donate 1,000 hectares of land (Zhang 2008). In 2007, Hubei’s planned investment of $1.2 million was approved by the Mozambican investment commission (Chichava 2010). The Mozambique Hubei–Gaza Friendship Farm was launched. When Mozambique requested one of the agrotechnology demonstration centres that were part of the FOCAC pledge, Hubei decided to bid for that project as well. They won the tender held in October 2007 in Beijing (Centre for Chinese Studies 2010: 73). The centre, built near Maputo, was opened in 2011. In July 2011, the Mozambique Hubei–Gaza Friendship Farm had 100 hectares of irrigated rice under cultivation, and planned to apply for additional land. They were conducting trials of improved rice varieties, mainly under a programme financed by the Bill and Melinda Gates Foundation (Chinese Academy of Social Sciences 2009). Hubei announced a joint agreement with the Xiangyang Wanbao Group, a minying (private) company with strengths in food procurement, processing and sales of grain, oil and animal food. Xiangyang Wanbao planned to invest 10 million RMB ($ 1.6 million) to develop another 333 ha of rice, and test soybeans, vegetables and other cash crops. If all went well, they hoped to be able to expand to 100,000 mu (6,667 hectares), while stimulating local farmers to develop 20,000 ha of irrigated rice (Hubei Farm 2011). Reports from Mozambican news media suggest that the farm has found that costs of production are quite a bit higher than they originally anticipated (Ekman 2012). Another Chinese company, the state-owned grain and oilseed trading company COFCO, received approval in 2005 for a large soybean processing plant to be located in Beira (Bosten 2006; Chichava 2010). Variously reported as $6 million and $10 million, this project apparently failed to be implemented. One of the authors of a major report on land grabbing interviewed a consultant for the Chinese state-owned grain and oilseed trading company, COFCO, who told them that COFCO had participated in talks ‘for a major land concession to grow rice and soybeans in Mozambique’ (Cotula et al. 2009: 37). 99

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Mozambique was eager to have aid and investment to increase productivity in rice production and to close the gap between their demand and their local supply. They had been in negotiations with the Chinese government for assistance, and with several Chinese companies toward this goal. A Hubei provincial company established a relatively small pilot project in Gaza province, with an initial investment of just over $1 million. The same company built an agricultural research centre near the capital, Maputo, focusing on rice – one of 20 agricultural centres pledged by the Chinese to Africa. Another Chinese company, COFCO, was involved in talks about a major land concession on which it hoped to grow rice and soybeans. All of this appears to be true, and ample evidence exists. However, there appears to be no evidence that Beijing ever pledged $800 million towards agricultural development in Mozambique, signed an MOU with Maputo to import thousands of Chinese farmers, or faced local ‘outrage’ and ‘political opposition’ over its agricultural engagement – whether only planned, or actually implemented – in Mozambique.

Democratic Republic of the Congo: ZTE agribusiness and oil palm Another project frequently appearing on lists of Chinese land investments in Africa is the ZTE (Zhongxing Telecommunications) alleged acquisition of 2.8 million ha in the DRC to grow oil palm (von Braun and Meinzen-Dick 2009; Mo Ibrahim Foundation 2011). This would be easily one of the largest land acquisition attempts by any company in Africa. There is more reality here concerning Chinese interest in a large-scale land deal than in the case of CIWEC in Zimbabwe or the case above of Mozambique. However, again, follow-up research reveals that there is less to it than suggested by the headlines. The first reports of this story appear to date to May 2007, when a reporter for Le Phare, Freddy Kilubi, broke the story that ZTE, one of China’s premier telecoms companies, active in the DRC since 2000, planned to invest $1 billion in a joint oil palm biofuels venture estimated to cover ‘3 million hectares’ (Kilubi 2007). In August 2007, the DRC Council of Ministers approved the proposed project, but at the considerably reduced level of 100,000 hectares (Documentation et Information pour l’Afrique 2007). However, in an interview of 14 January 2008 with reporters from the Congolese paper Le Potentiel, the Chinese ambassador in the DRC said that the ZTE project would cover ‘300,000 hectares’ of oil palm (Mulumba and Mukeba 2008). Nearly a year after the first report, in May 2008, an Associated Press (AP) report on Chinese land investments globally gave a figure of 2.8 million ha for the DRC project (Associated Press 2008). This AP report, published in the International Herald Tribune and other major papers, is the one cited in most of the Western coverage of this project. However, the same article also repeated the Zimbabwe story of CICEW ‘farming’ 250,000 acres of corn, and there was no indication that the reporters had actually visited the DRC or done interviews on this project. Although it might seem odd for a telecoms firm to invest in oil palm, ZTE has established a subsidiary, ZTE Energy, which in turn has a subsidiary, ZTE Agribusiness Corporation, with a focus on biofuels. In pursuit of biofuel opportunities, ZTE Agribusiness Corp. established active operations in Indonesia and Malaysia. Their website stated that ‘by 2019, the company will have 1 million hectare of palm plantation in the two countries’ (ZTE Energy n.d.). Another ZTE Agribusiness official said the company planned to ‘to invest 880 million dollars … on 200,000-hectare land abroad’ and hoped that this would become ‘one million-hectare overseas agricultural land in 10 years’ (Invest TEDA Newsletter 2009). In a July 2009 interview with China’s news agency Xinhua, ZTE’s Africa regional manager, Zhang Peng, claimed that ZTE’s planned project in the DRC alone would be ‘1 million ha’ and provide thousands of local jobs (Tai 2009). Interviews by a team from the Centre for International Forestry Research (CIFOR) 100

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in Kinshasa confirmed that an area had been agreed on by ZTE and the government, but that it was 100,000 ha, not 1 million ha (Putzel et al. 2011: 33). As of March 2012, the ZTE oil palm project was moribund. ZTE invested around $4.4 million to begin cultivating a mixed-use, 250 hectare farm (maize, soybeans, rice, meat, poultry, eggs) at Plateau de Bateke, near the capital, Kinshasa. Their first maize harvest was sold to the World Food Programme. However, they did not launch an oil palm plantation. Although an MOU was clearly signed between ZTE and the Congolese Ministry of Agriculture, this is an indication of intentions, and not a legal document. It comes nowhere near being a lease or a sale. ZTE’s interest did appear to be genuine. Delegations from ZTE seem to have visited DRC’s Ministry of Agriculture at least twice to discuss the project (Africa Asia Confidential 2010). Yet, five years later, in February 2012, the Congolese minister of agriculture mentioned the ZTE oil palm project as an example of ‘misinformation’ (Ulimwendu 2012). For their part, ZTE had apparently calculated that the transport costs would be too high in the DRC to make the project profitable (Interview 2010).

IV Conclusion We can conclude several things from this brief review of Chinese agricultural activities in Africa. First, Chinese interest in agriculture in Africa is not new, and appears to be driven at least as much by African government invitation as by purely commercial motives. Second, Chinese engagement covers the same kinds of activities that other major foreign powers cover. The Chinese government has given aid to boost agricultural productivity, and its companies have explored possibilities for profitable investment. Third, China’s government has more tools to encourage business, and can draw on instruments such as the China–Africa Development Fund and the China Development Bank to support agricultural activities in Africa. Under the general framework of ‘Going Global’, the Chinese government uses these tools to boost the opportunities for its firms overseas, and those opportunities have, for several decades, included agriculture. Finally, the conventional wisdom on Chinese engagement in Africa is that Chinese companies and its government have spearheaded the quest for large land acquisitions, for China’s own food security. The three cases discussed above are typically used as evidence for this. Yet as the discussion shows, once researchers begin to query each of these cases in more detail, there is far less there than meets the eye. The Chinese embrace of Africa is strategic, planned, long-term and still unfolding. Large-scale land acquisitions may be a future part of this engagement; however, as of early 2012, this has clearly not been the case.

Note 1 The author acknowledges very helpful research assistance from Nicholas Smith and Tang Xiaoyang. Funding for this research was provided by American University’s School for International Service, the International Food Policy Research Institute, and the Bill and Melinda Gates Foundation.

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Hubei Farm (2011) ‘Hubei–Gaza friendship farm agricultural development enters the phase of large-scale marketing operation’, 29 July. Interview (2008) Official, Chinese Embassy, Dar es Salaam, 8 January. ——(2010) Official, Chinese Ministry of Agriculture, Beijing. Invest TEDA Newsletter (2009) ‘TEDA and ZTE Agribusiness Company Limited sign an investment framework agreement’, 11 July. Online. Available at: www.allroadsleadtochina.com/2009/07/11/ invest-teda-newsletter/ (accessed 15 March 2010). IRRI (International Rice Research Institute) (n.d.) ‘Rice in Mozambique’. Online. Available at: http://irri .org/partnerships/country-profiles/africa/mozambique/rice-in-mozambique (accessed 9 March 2012). Jin, Zhu (2011) ‘Super rice yield sets world record’, China Daily, 20 September. Kilubi, Freddy (2007) ‘Un milliard USD de Pékin pour des palmeraies à huile en République démocratique du Congo’, Le Phare, 30 May. Available at: www.digitalcongo.net/article/44029 (accessed 15 March 2010). Li, Ping (2008) ‘Food security: hopes and strains in China’s overseas farming plan’, Economic Observer 374 (June). Macaohub (2006) ‘China to help Mozambique increase its rice production’, 31 March. Meldrum, Andrew (2003) ‘Mugabe hires China to farm seized land’, Guardian Unlimited, 13 February. Mo Ibrahim Foundation (2011) ‘African agriculture: from meeting needs to creating wealth. Online. Available at: www.moibrahimfoundation.org/en/media/get/20111113_Facts-and-Figures.pdf. Mukaro, Augustine (2005) ‘Chinese firm abandons Nuanetsi project’, Zimbabwe Independent, 8 April. Available at: www.theindependent.co.zw/local/12261.html (accessed 14 2008). Mulumba, Freddy and Mukeba, Claude (2008) ‘L’ambassadeur Wu Zexian: la Chine n’a pas de visées imperialists’, Le Potentiel, 8 January. Available at: http://cd.china-embassy.org/fra/xw/more/t399806. htm (accessed 7 March 2012). Mutton, Rochelle (2005) ‘Mugabe sells bankrupt Zimbabwe’s assets to China’, The Age (Johannesburg), 30 July. Available at: www.theage.com.au/articles/2005/07/29/1122144020857.html?from=top5 (accessed 14 May 2012). O’Brien, Robert (2010) ‘China’s Africa play’, CBS News, 19 January. Available at: www.cbsnews.com/ stories/2010/01/18/opinion/main6114041.shtml (accessed 7 March 2012). Putzel, L., Assembe Mvondo, S., Ndong, L. B. B., Banioguila, R. P., Cerutti, P. O., Tieguhong, J. C., Djeukam, R., Kabuyaya, N., Lescuyer, G. and Mala, W. A. (2011) ‘Chinese trade and investment in the forests of the Congo Basin’, Centre for International Forestry Research, Working Paper 67. State Council (2011) ‘China’s foreign aid’. Online. Available at: http://news.xinhuanet.com/english2010/ china/2011–04/21/c_13839683.htm. Stevens, Jeremy and Freemantle, Simon (2011) ‘China’s food security challenge: what role for Africa?’ in Standard Bank (ed.) Africa Macro Insights and Strategy, 18 November. Tai, Beiping (2009) ‘Chinese agribusiness company in DR Congo to offer thousands of jobs for locals’, Xinhua, 10 July. Available at: http://news.xinhuanet.com/english/2009–07/10/content_11686244.htm (accessed 15 March 2010). Teng, Xiaomeng (2008) ‘Policy proposal to buy and rent land overseas to grow grain submitted to the State Council’, 21st Century Business Herald, 8 May. Available at: www.21cbh.com/. Ulimwendu, J. (2012) Personal e-mail communication, International Food Policy Research Institute DR Congo office, Kinshasa, DRC, 6 February. von Braun, Joachim and Meinzen-Dick, Ruth (2009) ‘“Land grabbing” by foreign investors in developing countries: risks and opportunities’, IFPRI Policy Brief 13, April. Xinhua (1998) ‘China: Xinhua “roundup” on Sino-Mozambican economic ties’, Beijing Xinhua broadcast in English, 29 March, FBIS-CHI-98-088. Zhang, Yu (2008) ‘Zhongguo Nongken Haiwai Tuohuang’ [China state farm agribusiness corporation farming overseas] Oriental Outlook, 12 June. Zim Online (2005) http://reliefweb.int/node/187942 (accessed 7 March 2012). ZTE Energy (n.d.) ‘Palm energy: Southeastern Area’. Online. Available at: www.zte-e.com/en/prod.aspx? ID=699 (accessed 7 March 2012).

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2.2 The global food crisis and the Gulf’s quest for Africa’s agricultural potential1 Eckart Woertz

Introduction Gulf countries have been major land investors in the wake of the global food crisis of 2008, alongside Asian states and Western financial investors. With 70% of all announced projects Africa has been in the focus of this global investment trend (Deininger et al. 2011). The Green Revolution has not taken place on the continent and it is regarded by many as ‘agriculture’s final frontier’ (Thurow 2010). Development orthodoxy hopes that improved seeds and a belated expansion of irrigation and fertiliser applications could enhance productivity, whose growth rate has all but declined in developed agricultural regions since the 1990s (World Bank 2007; Paarlberg 2008). The Gulf countries’ interest has been primarily strategic. Like Japan or the People’ Republic of Korea (South Korea) they are concerned about the stability of food supplies. They are not interested in biofuels, which have accounted for a whopping 58% of large international land acquisitions (Anseeuw et al. 2012). Neither do they care for industrial input factors like cotton, timber or rubber for which they do not have meaningful processing industries. The King Abdullah Initiative for Saudi Agricultural Investment Abroad (KAISAIA) aims to acquire longterm rights to land in foreign countries in order to produce food for export to Saudi Arabia. It identifies 10 food items of strategic importance: rice, wheat, barley, corn, soybeans, oil seeds, sugar, animal feed, livestock and fish (Kingdom of Saudi Arabia 2010a). Rising food prices were not so much the issue for the Gulf countries when the global food crisis hit in 2008. They could easily afford them because of ample oil revenues. Their real concern was temporary export restrictions of food exporters like Argentina, India, Russia and VietNam. They faced a scenario in which they might not be able to purchase food at any price even if their pockets were lined with petrodollars. To make matters worse, the limits of domestic agriculture became apparent at the same time. The decade-old practice of mining fossil water aquifers has hit a wall of unsustainability. Saudi Arabia has announced that it would phase out subsidised wheat production by 2016. The failure of export markets during the global food crisis triggered historically rooted sensitivities of a region whose dependence on cereal imports was already well developed at the beginning of the 20th century. During the First and Second World Wars food supplies were 104

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threatened and interrupted at times (Schatkowski-Schilcher 1992; Wilmington 1971). More recently, the USA threatened to cut off food supplies in retaliation to the Arab oil boycott. As a reaction Gulf countries embarked in the 1970s on an ill-fated attempt to develop Sudan as a breadbasket (Oesterdiekhoff and Wohlmuth 1983a). This strategy failed, yet in many ways it was a precursor to the current land investment drive. Today, Gulf countries aim again at privileged bilateral access to food production in order to reduce exposure to market failure. Beside, Gulf agricultural companies hope for good profits via government subsidies and off-take agreements. This time investments have been announced not only in Sudan, but all over the globe. Because of their geographic proximity, African countries have ranked prominently. Yet implementation of announced projects has proven elusive. The widespread media perception of large-scale cultivation by Gulf countries abroad and export of agricultural produce to the Gulf countries is inaccurate (Woertz 2011). The lack of governance, infrastructure and commercial viability have been major impediments. The political backlash in target countries has been another factor. Customary land right holders have at times opposed controversial land grab investments. Still, the motivation behind Gulf land acquisitions is real and some projects are in the stage of early implementation. Some historic and cultural ties underpin the Gulf countries’ renewed interest in Africa. Trade via the Red Sea and the Sahara was substantial before the advent of European powers, Islam is the fastest growing religion in sub-Saharan Africa, and Arabic traces can be found in African lingua francas like Swahili and Hausa. The Arab League includes African countries and these countries are in turn members of the Organisation of African Unity (OAU). Arab states have lobbied against African co-operation with Israel, and during the Cold War and ideological rivalry with Arab nationalists, Saudi Arabia has tried to convince African states with a pan-Islamic narrative and aid. If Arab authors and politicians tend to stress commonalities and try to win over African countries for their foreign policy agendas, there have been reservations on the African side. Arabs have been perceived as condescending with thinly disguised attitudes of racial and cultural superiority (Unesco 1984; Hunwick 1991; Muhammad 2006). Slavery is a sore point. Saudi Arabia and the United Arabs Emirates (UAE) abolished it as late as the early 1960s. The Islamic narrative only reaches out to the Muslim part of Africa and some African countries have complained about a Muslim bias in Arab aid distribution. Still, cultural and political commonalities between African and Arab countries exist and can be put to good use in expanding the economic relationship. This chapter analyses the relationship between Gulf countries and Africa in the field of agroinvestments. First, it outlines the mutual interest in each other and the potential for conflict as well as for co-operation. Second, it gives an overview of the Gulf’s involvement in the Sudan breadbasket strategy of the 1970s and analyses lessons that could be drawn from its failure. Third, it deals with the current Gulf agro-investments in Africa and points to different approaches of various Gulf countries. Sudan, Ethiopia, and projects along the Senegal River merit special attention as they show signs of early implementation.

Outlining interests and potentials Water shortages severely limit future growth in agricultural production, much more than availability of land. The current wave of land acquisitions is a water grab, rather than a land grab, as Nestlé chairman Peter Brabeck-Letmathe has argued (Brabeck-Letmathe 2009). If one takes a look at the map of global water stress indicators of the International Water Institute, the Gulf and most of the rest of the Middle East appears in a dark red, which signals a physical water shortage: more than three-quarters of river waters are abstracted; renewable groundwater 105

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is used above replenishment rates. Most of sub-Saharan Africa on the other hand, shows a friendly purple on the map, which stands for an economic water shortage: renewable water reserves are there, but what is missing is the investment in irrigation infrastructure to make them accessible (Molden 2007: 11; World Bank 2007: 64). Non-renewable fossil water is not included in this definition. Nor is soil water that is encapsulated in the earth above the groundwater table, even though it produces a majority of crops world-wide via rain-fed agriculture (Allan 2011). Fossil water has been exploited at an alarming rate in the Gulf countries and has only a limited lifetime left, while soil water is close to nonexistent in the arid climate of the Arabian Peninsula. sub-Saharan Africa, on the other hand, has considerable soil water reserves beside its renewable surface- and groundwater resources. Biophysical surveys like the IIASA assessment of 2011 also show a large bank of theoretically available land in many African countries, barring competing uses like natural reserves, forests, urban expansion and customary land rights by pastoralists (HLPE 2011: 24; IIASA 2011). Hence, a win–win proposition seems to be evident, with Africa supplying the land, water and labour and Gulf countries the capital. This proposition is appealing to both sides of the bargain. African economies are still dominated by agriculture. Agriculture is not only crucial for food security; it has also been eyed as an engine of development. It could raise foreign exchange and facilitate an expansion into downstream industries like food processing. Another motivation is cash. As in the 1970s, rising oil prices have negatively affected the balance of payments of African developing countries. Agro-investments would be a way to claw some of this money back. Gulf countries, on the other hand, have the capital and an interest in privileged bilateral access to food production. Markets might fail, as in 2008. They also have a strong belief in technological fixes. At home limited water endowments were defied by drilling deeper into fossil water aquifers and desalinating sea water. Even the towing of Arctic icebergs and water pipelines from Turkey were contemplated at times (Pampanini 2010). Mastery of oil and water resources has been an important source of political legitimacy, especially in Saudi Arabia. Redistribution of these resources was indispensable for nation building. Benefits like water, food and public services were exchanged for political quiescence from an assertive clergy, recently conquered tribal areas and an unruly army of Bedouin (Jones 2010). Later, in the 1980s and 1990s, the Saudi programme of wheat self-sufficiency was used to reward cronies among royals and associated business families at high financial and environmental costs (Chaudhry 1997; Elhadj 2006). The history of agricultural modernisation in Saudi Arabia can be described as a land grab in itself, which left traditional small-scale farmers and pastoralists behind – not without compensating them with oil revenue-fuelled urban development, however (Woertz forthcoming). Technocratic project visions like the Sudanese agriculture–dam nexus that Harry Verhoeven describes in this volume (see Chapter 1.3) are easy to comprehend for this mind-set. As environmental limits in the Gulf become apparent, a new frontier in Africa seems to beckon. At this stage, Africa is a food net importer and its food exports to the Gulf are miniscule. Furthermore, the import and export profiles of the respective regions do not match. Gulf countries have some degree of self-sufficiency in vegetables, fruits and meat production, with domestic coverage of consumption roughly hovering between one-quarter and two-thirds (AOAD 2009). Their import needs are most pronounced in the case of cereals and green animal fodder, which Africa imports as well or does not produce in large quantities. Saudi Arabia phases out wheat production, so the cereal import dependence is set to increase, more than for fruits and vegetables, which benefit from a re-orientation of domestic agriculture to products that consume less water per value produced. Wheat and rice constitute about 40% of caloric intake in the Gulf countries (FAOSTAT 2011). In the 2000s Saudi Arabia bought a whopping 40% and more of globally traded barley (USDA 2011). Barley is in high demand for 106

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its burgeoning livestock industry alongside alfalfa. Resolution N o. 355, w hich decreed the phasing out o f w heat production, also encouraged alfalfa and barley imports through credit guarantees and tariff waivers and recom m ended the cultivation o f such fodder crops abroad (Kingdom o f Saudi Arabia 2010b: 549-50). Saudi Arabia is hom e to the biggest integrated dairy farm in the world, w ith 35,000 head o f cattle, and imports large quantities o f sheep to fatten them ahead o f the Ram adan and Hajj seasons. The livestock industry in G ulf countries continues to grow, particularly dairy and poultry production. In Saudi Arabia it has not been targeted for a phase-out like wheat pro­ duction. Still, the region is also a large meat importer. T he trend towards meatification o f diets started during the oil boom o f the 1970s and is ongoing. Saudi Arabia, Egypt and other M iddle Eastern and N orth Africa countries already consume one-quarter o f the globally traded poultry and will account for one-half o f its growth until 2019 (USDA 2010). Africa has similar im port profiles to the G ulf countries. It is still characterised by export o f colonial commodities like cocoa, tobacco, coffee and cotton, and imports o f cereals that have developed in the global food regime since the Second W orld W ar (McMichael 2009). M any planted crops in Africa like cassava, millet or sorghum do not match the dietary preferences in the G ulf countries, while the climatic conditions for the production o f w heat and barley are not suitable. Figures 2.2.1 and 2.2.2 give a snapshot o f Africa’s agricultural trade profiles in the wake o f the global food crisis and the announcem ent o f G ulf agro-investments. Consultation o f the Trade Map Statistics o f the International Trade Centre reveals that in 2007 African countries were only in tw o items am ong the top five exporters to the G ulf countries: South Africa and Egypt exported about US$200 million o f fruits each. D jibouti and Sudan played a role in the export o f live animals alongside Australia, Iran and Syria. A bout 80%-90% o f Sudan’s sheep exports go to Saudi Arabia, and Djibouti functions as an export hub for other countries in the H orn o f Africa like Somalia (CIJ 2006). In sum, Africa does not contribute to G ulf food security so far. R ather, it is the other way around. In 2011, the U N declared a famine for the first time since the 1980s in Ethiopia, Kenya and Somalia. G ulf countries participated in financing W orld Food Programme (WFP) food deliveries. Yet the potential in terms o f land and w ater reserves remains and hopes about future develop­ m ent potential abound. African countries have ranked highly in planned G ulf agro-investments, especially Sudan, Ethiopia and East Africa as they offer logistical proximity. Sudan was already in focus in the 1970s, w hen the G ulf countries thought o f developing the country as an Arab breadbasket after the USA had contemplated food embargos in retaliation to the Arab oil

6000000 5000000 o 4000000 o o in 3000000

2000000 1000000 0

Figure 2.2.1 Africa top 20 agro exports 2009

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9000000 8000000 7000000 6000000 o 5000000 o o m 4000000 3000000

2000000 1000000

0

Figure 2.2.2 Africa top 20 agro imports 2009

boycott. Social and environmental sustainability issues that have been raised w ith regard to land acquisitions today already occurred at that time.

The Sudan breadbasket vision and the Gulf T he Sudan breadbasket strategy was first formulated in the Basic Programme for Agricultural D evelopment, 1976—85 by the Kuwait-based Arab Fund for Social and Econom ic D evelop­ m ent (AFESD). Its propositions were then taken on by the Sudanese Six Year Plan o f Eco­ nomic and Social Developm ent (1977/78-1982/83) and the Food Investment Strategy (FIS) o f the Sudanese Ministry o f Agriculture (1977) (Oesterdiekhoff and W ohlm uth 1983a: 44-8). All o f them shared the assumption that there are vast swathes o f idle land in Sudan that could be put into production economically w ithout causing social disruption and environmental damage. An often quoted num ber was 200 million acres o f arable land o f w hich only 15 million acres were supposedly cultivated. All three documents focused on the m odern irrigated sector and mechanised rain-fed farming, not traditional agriculture. As rationale for the Basic P ro­ gramme the AFESD gave the rising Arab food gap, w hich could be ‘exploited’ and ‘threaten the freedom o f Arab decision-making’ (Spiro 1989: 494). The AFESD plan envisaged that Sudan w ould be able to supply 42% o f the Arab w orld’s imports in edible oils by 1985, 20% o f its sugar and 15% o f its w heat (Arab Fund for Econom ic and Social Developm ent 1976: 21; Governm ent o f Sudan 1977: 9). O ver the period o f 1976—85 investments o f $5.5 billion were planned (W aterbury 1976b: 8). Beside Sudanese funds, more than one-half o f the financing w ould come from foreign sources in a mixture o f soft and commercial loans and grants arranged for by AFESD. The proposal envisaged the establishment o f an ‘A uthority’ based in K hartoum that w ould administer the funds and w ould guarantee adequate returns. It was conceptualised as extraterritorial, w ith guarantees against nationalisation and rights for tax-free repatriation o f profits. Sudanese sover­ eign decision-making in the field o f agricultural investments was severely curtailed. In 1976, the summit o f the Ministers o f Finance o f the Arab League in R abat decided to create the Arab A uthority for Agricultural Investment and Developm ent (AAAID), but pledges by Arab gov­ ernments were only about a 10th o f the initial AFESD proposal. T he fund allocation o f the AFESD proposal had geographical preferences that are telling about the agricultural potential o f different regions, divergences in infrastructure development, and political struggles in Sudan. The north and east o f the country were to receive 60% o f the 108

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funds, the west 24% and the south only 16%. Institutions in Sudan have been dominated by a northern establishment (Cobham 2005; El-Tom 2003). The south has been systematically underdeveloped and served for a long time only as a source of ‘slaves, ivory and ostrich plumes’ to the north (Waterbury 1976a: 11). The west on the other hand has been equally underdeveloped, but contrary to the south it has shown an inclination to opt in politically rather than to opt out. At least until the eruption of the Darfur conflict in the 2000s. However, the investment case for the north-east was not mere political preference; it was also backed by hard economic facts. The north-east is rich in alluvial soils of fine heavy clay that are particularly suited for irrigation. Yields on irrigated land in Sudan have been on average four to five times higher than in rain-fed agriculture. The triangle south of Khartoum that is formed by the junction of the Blue and White Nile is home to Sudan’s first irrigation project, the Gezira scheme. Three-quarters of Sudan’s wheat and half of its rice were cultivated in this area at that time. The proximity to Port Sudan and relatively good railway connections were another plus, because of their importance for export facilitation. Together with international donors like the World Bank and USAID, Gulf development funds co-financed new irrigation projects like the Rahad scheme. Beside governmental institutions like AFESD and AAAID, private investors were present. Saudi business tycoon and arms trader Adnan Khashoggi acquired plots of land for cattle farming, which he never developed. Gulf International (GI), which was owned by the Kuwaiti royal and Minister of Foreign Affairs, Sheikh Sabah al-Ahmad al-Jaber, and the Sudanese–Kuwaiti business man Khalil Osman invested in insecticides manufacturing and crop-spraying services (Waterbury 1976b). ‘Horizontal expansion’ of mechanised farming in Sudan’s rain-fed areas was at the heart of agricultural development in the 1970s. It has been highly controversial because of its social and environmental impact. It also trailed the political agenda of successive regimes of subjugating peripheral areas like Blue Nile province or the Nuba Mountains (CIJ 2006: 50–1; Keen 1994: 94; Verhoeven 2012: chapter 7). The government as the formal owner of land outside the riverain areas gave away licences, often to cronies among civil servants and urban classes. By the 1980s, this expansion increasingly collided with customary land rights of shifting cultivators and pastoralists (O’Brien 1983). The incentive structure and insufficient regulation led to soil mining. Agricultural productivity usually fell below profitable yields after only five to seven years (Elnagheeb and Bromley 1992). Wasteland was produced on a continuous basis; mechanised farming was in fact ‘mechanised desertification’ (Catterson et al. 2003: 18). This process was largely driven by domestic actors. Gulf investors or their middlemen rarely put money into rain-fed projects and if they did so it was only for a limited time period until the early 1980s. Commercially, agricultural projects in the Sudan never paid off. Beside political unrest, the notorious corruption of the Nimeiri regime proved to be a major impediment. The frustrated Gulf countries supported an IMF structural adjustment programme in 1978. Projects of the AAAID were downsized in particular. Gulf money continued to flow, but concentrated on balance of payment support and on non-agricultural investments (Spiro 1989). International food prices corrected in the second half of the 1970s and the Arab confrontation with the West over oil issues subsided. Thus, Gulf countries no longer sensed the same urgency for the breadbasket strategy. They showed pronounced risk awareness and were never ready to follow up on the grandiose vision of the breadbasket plan. The Kenana sugar company was the only larger project where Gulf countries really invested, after securing extensive assurances such as guaranteed off-take agreements in hard currency. Otherwise they never ventured beyond pilot plants or got stuck in feasibility considerations. An inter-regional integration of food security as envisaged by the breadbasket plan failed. The corruption of the Nimeiri 109

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government prevented success. Gulf Arabs were not willing to pay a higher price than the world market at least for a transition period in order to facilitate a long-run adjustment towards regional self-sufficiency. They also did not support co-operation for the production of intermediate goods (fertiliser, machinery, irrigation equipment), which might have given the project a degree of depth and sustainability (Oesterdiekhoff and Wohlmuth 1983a, 1983b). However, the influence of Gulf countries via financial operations and food trade was more substantial. The Sudanese government granted economic privileges as a strategy of overcoming cash shortages and fostering alliances with cronies. Private commercial banks were legalised in 1978, at the time of the IMF programme, and Saudi Prince Mohamed al-Faisal and other shareholders founded the Faisal Islamic Bank (FIB). After 1979, there was a rapprochement of the Nimeiri regime with Islamist groups. Hassan al-Turabi, who would take over power in 1989, became general attorney in 1979 and in 1983 Shari‘a law was introduced. Islamic banks were treated as religious institutions. As such they were exempted from taxation and central bank oversight and were granted special privileges like preferred access to licences and export credits (O’Brien and Gruenbaum 1991: 199). FIB developed into the largest sorghum exporter of the country. Sorghum dominated rainfed acreage at 80%. The government promoted sorghum exports to balance the disastrous trade balance and to finance the import of wheat, which had become increasingly popular with city dwellers (Davies 1991: 312ff). Between 1979 and 1983 sorghum exports soared. An alternative policy proposal of building up food storage was not adopted. It would have helped to alleviate the famine of 1984–5 (Shepherd 1988: 61–3). Sorghum exports in 1981 and 1982 were particularly high because Saudi Arabia offered a special subsidy for imports of sorghum from Sudan. Via the link of subsidised food trade Saudi Arabia was effectively underwriting the socioecological disaster of the horizontal expansion of mechanised rain-fed agriculture, even without being directly invested in it. That being said, sorghum exports in the boom years of 1981 and 1982 constituted about 10% of production and must be seen in proportion. Gulf countries engaged in Sudanese agriculture, but they were hardly central to its plight and the crowding out of traditional farmers and pastoralists in the rain-fed areas. They never invested large quantities and Sudan never developed meaningful importance as a food exporter to the Gulf.

Current Gulf agro-investments in Africa Since 2008, the Cooperation Council for the Arab State of the Gulf (GCC) countries have announced international agro-investments on a large scale. Governments are trying to pave the way for sovereign wealth funds (SWFs) and private investors with bilateral framework agreements, co-financing and off-take agreements. The development funds that were already around in the 1970s, like the Abu Dhabi Fund for Development (ADFD), have been tasked with a more strategic approach that includes management of projects and not just disbursement of soft loans and grants. In other cases, new specialised SWFs have been created, like Hassad Food, the agricultural subsidiary of the Qatar Investment Authority. Saudi Arabia is a peculiar case as it has an influential domestic agro lobby, which hopes for new business opportunities as agriculture at home is scaled back. Saudi Arabia and Qatar have the most institutionalised approaches. The KAISAIA tries to spur government-sponsored private-sector investments. The Qatar National Food Security Programme (QNFSP) co-ordinates a multitude of government agencies in food security matters. It does not focus solely on agro-investments abroad, but also tries to achieve a considerable level of domestic self-sufficiency by investing in water-saving technology like hydroponics or greenhouses that run with solar-based desalinated water. QNFSP prefers investments in already 110

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existing agricultural companies instead o f acquiring land rights and building up farming opera­ tions from scratch. T he UAE and Kuwait have a less institutionalised approach. In the UAE private companies w ith royal shareholders dominate, in Kuwait SWFs. O il-poor Bahrain has only announced a few agro-investments and O m an none at all. It focuses its food security strategy instead on strategic storage. Figure 2.2.3 is based on the website www.farmlandgrab.org o f the N G O G R A IN , w hich collects global media reports about land grab investments. The figure compiles the announce­ m ent o f concrete projects and high-profile M emorandums o f Understanding (MoUs) by G ulf countries. M ere delegation visits and vague declarations o f intents were not included and the figure does not include all countries, only the most important. It gives an indication o f preferred investment targets, but not o f relative project size or status o f implementation. Sudan is again leading the field, followed by Pakistan, the Philippines and Ethiopia. Egypt, Turkey, Tanzania and Asian countries like Cambodia and Indonesia have also attracted considerable attention. Established food exporters like Australia, Argentina, Brazil, VietNam, Ukraine, Kazakhstan and Thailand have trailed in importance. At the end o f the scale there has been interest in countries like M orocco, Kenya, Mali or Senegal. Preferred target countries are food net importers, have insufficient infrastructure, weak protection o f land rights, and some o f them struggle w ith limited water resources like the G ulf countries (e.g. Pakistan). N one o f them contributes meaningful quantities to the substantial food imports o f the G ulf region at this stage, w ith the exception o f Pakistan in the case o f rice. Fruit exports from the Philippines and Egypt and live animals from Sudan also play a role in G ulf countries’ imports, but are hardly crucial for their food security. Sudan and Ethiopia are outright food insecure and the tw o largest recipients o f food aid o f the W FP. Target countries have also rapidly growing populations and will need to make up for this increase before developing any export capacity. For this reason the W orld Bank doubts that Sudan could develop into a major food exporter for the Middle East (W orld Bank, FAO and IFAD 2009).

16 14 12

10 8

6 4

2 n

Figure 2.2.3 Number of announced Gulf agro projects and MoUs 2008-11

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The choice of investment destinations is counter-intuitive and controversial. Advocacy groups have accused Gulf countries of engaging in land grabbing on a large scale. A worst case scenario would entail expropriation of smallholders and pastoralists and their migration to the cities without encountering sufficient job opportunities. The respective countries might then produce more and cheaper food, but they would do so for export, as many of its citizens could no longer afford it. In defence, Gulf officials have claimed that a win–win situation is possible. The triangular co-operation vision of the Sudan breadbasket strategy has been evoked, with developing countries supplying the land and Gulf countries the capital to bring in know-how from developed countries. With the global food crisis the improvement of agricultural productivity in developing countries has moved to centre-stage of international debates, similar to the discussions during the time of the World Food Conference 1974. In this sense Gulf countries are just following international investment trends, but there are also strategic considerations that are peculiar to them. The geographical proximity of Sudan and Ethiopia has the potential of offering logistical advantages. The ports of Port Sudan and Djibouti are nearby, even though their feeder infrastructure, like railway lines and roads, is in need of improvement. Saudi Arabia aims at expanding port facilities in Djibouti and Jeddah (WikiLeaks cable 09RIYADH1447 2009). Export considerations are the reason ADFD prefers projects in northern Sudan to those in the south, while Abu Dhabi-based Al-Qudra Agriculture does not consider investments that are more than 600 kilometres away from a port.2 The World Bank has pointed out that, globally, implementation of projects is lagging (Deininger et al. 2011). Only on one-fifth of projects did it find actual signs of cultivation, and in Pakistan it did not find any at all. Besides, most projects are much smaller in size than the numbers that have been circulated in the press and many of them are run by local investors, not foreign ones. The implementation gap and the importance of domestic investors can also be found in reports that are highly critical of large-scale land investments and displacements that often occur ahead of project implementation (Oakland Institute 2011; FIAN International Secretariat 2010)

Sudan Sudan shows a relatively high degree of activity. By 2010 the government had approved 132 projects with a total size of 4 million ha and a median size of 8,000 ha. Of these projects, 32% had a foreign partner, mostly from the Middle East (39 investors, 19 of them from Saudi Arabia). The majority of projects were approved for Sudanese investors, possibly jointly with foreign partners (Deininger et al. 2011). There exists a large implementation gap, as Harry Verhoeven points out in Chapter 1.3 of this volume. Only 17% of projects have actually been implemented. This echoes the findings of the World Bank on a global level. Sudan is a member of the Arab League and has been identified as a preferred investment target by the Islamic Development Bank, Saudi agro-businessmen and agricultural experts (Arab News 26 June 2011; al-Rasheed 2010: 171–8; al-Qahtani 2009: 11). A survey among a representative sample of 1,156 Saudi executives also had Sudan at the top of the list of preferred target countries (al-Rasheed 2012: 128ff). After Sudan’s support for Iraq’s Kuwait occupation and the aid hiatus of the 1990s, Gulf support resumed in the 2000s well before the global food crisis of 2008. Gulf development funds have been instrumental in financing the ambitious dam programme of the Sudanese regime, most notably the Merowe dam in the north and the heightening of the Roseires dam in Blue Nile province (Verhoeven 2012). After the completion of all dams Sudan would use its water allotment under the Nile water agreement of 1959 for the first time. 112

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Gulf countries have been traditionally close to the north and have been wary of a partition of Sudan, but they accepted it when it finally happened in July 2011. The Saudi Prince Badr bin Sultan purportedly holds a lease of 105,000 ha of land in Unity State and the UAE’s Al Ain National Wildlife has acquired land for a tourism project (Deng and Norwegian People’s Aid 2011). However, the overall preference is with the north. The head of the food security committee of the Riyadh Chamber of Commerce and Industry said that it would take a long time before Saudi Arabia could invest in South Sudan (Al-Sahafa, 9 March 2011). Gulf investors have led talks for contract farming arrangements on the Gezira scheme, whose privatisation started in earnest in 2009 after initial legislation in 2005.3 Qatar’s Hassad Food, UAE’s Amtar and Saudi Arabia’s Al-Rajhi International have projects for wheat and alfalfa cultivation in Abu Hamad, the Northern State and Berber respectively. Saudi-based HADCO, which was taken over by food processer Almarai in 2009, has announced a pilot farm for wheat and corn production north of Khartoum on 10,000 hectares (The Peninsula, 17 February 2009; Financial Times, 24 May 2009; Al-Riyadh, 12 January 2011). The ethanol production from molasses that started at the Kenana sugar company in 2009 is enhancing the value of a by-product of sugar production. Hence, it is not crowding out food production and is not meant as a core business in its own right.4 The preference for the north coincides with the Sudanese government’s push for an ‘agricultural revival’ (al-nahda al-zira’iyya). The programme of 2008 reads as a repetition of the breadbasket strategy with a taste of awareness for the environmental damage that has been done since then – combating desertification and restoring vegetative cover – otherwise: import substitution to save foreign exchange and export promotion to gain it; attraction of foreign capital and international strategic partnerships (Government of Sudan 2008). Agriculture and related industries are promoted as the core of the economy as oil income will dwindle in the wake of the separation of South Sudan. Wheat self-sufficiency was to be achieved by 2011, a task that was missed by a margin of 70%. Wheat cultivation in central Sudan did not pick up, because the plots there are too small according to Abdulgabar Hussein Osman, the Secretary General of the Nahda.5 Hence, the new plan is to cultivate wheat with centre pivot irrigation in the desert of the north, where larger plots are available and the colder winter climate is more suitable for wheat. Water is not only to come from the Nile, but also from the Nubian Sandstone Aquifer, whose waters are not of fossil origin but renewable, as Sudanese officials would allege with steadfast conviction.6 IAEA, UNDP and the Global Environment Facility (GEF), which have conducted a research project on the aquifer system since 2006, would beg to differ (IAEA, UNDP and GEF 2010). The plan is eerily reminiscent of the groundwater mining for Saudi Arabia’s failed wheat programme, and soils in northern Sudan are much less suitable than the ones in Saudi Arabia. Still, the cultivation of a flabbergasting 1.5 million hectares with the help of Gulf capital is ‘our main dream’, according to Osman.

Ethiopia Ethiopia offers a similar geographical proximity to Sudan and ranks highly on the investment agenda of Saudi Arabia. Both countries grow increasingly close. Ethiopia has adopted a strategy of agriculture-led industrialisation. It intends to lease 3 million hectares, an area the size of Belgium, to private investors until the end of 2013 (Arab News, 2 August 2011). This puts Ethiopia on a collision course with Egypt. Only Egypt and Sudan have rights to abstraction of Nile waters under the Nile waters agreement of 1959, which Ethiopia has openly questioned together with other African riparians (Oakland Institute 2011; Brown 2011). Egyptian officials have already named Gulf countries as party in the conflict and have identified their agro-investments as opposed to Egyptian interests (Al-Ahrar, 29 December 2010). 113

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Saudi billionaire Al-Amoudi has an Ethiopian mother and diverse business interests in the country ranging from steel, construction, gold mining and manufacturing to agriculture.7 A WikiLeaks cable remarks that he ‘enjoys a special relationship with the [Government of Ethiopia] and reportedly deals directly with Prime Minister Meles’ (WikiLeaks cable 09ADDISABABA2900 2009). His company, Saudi Star, has started to build a farm for rice in Gambela in the southwest of the country. It has leased 10,000 ha of land for 60 years at a price of $9.42 per hectare annually and plans to rent an additional 290,000 ha from the Ethiopian Government (Saudi Gazette, 24 March 2011). Al-Amoudi has announced he will invest $2.5 billion by 2020 in the project. He also owns Elfora Agro-Industries in the Oromia region. It is the largest livestock company in Ethiopia with a capacity for 65,000 cattle and 400,000 sheep. It was established in 1997 by acquiring state-owned livestock enterprises from the Ethiopian Government. Apart from exports to the Gulf, it supplies large hotels and the Ethiopian military (Oakland Institute 2011: 8). Al-Amoudi is actively lobbying for Ethiopia as an investment destination within Saudi circles. The King Saud University (KSU) has recommended Ethiopia as a starting point for foreign agro-investments (Muntadayat al-Waha, 15 December 2009). The high-level Saudi East African Forum in Addis Ababa in November 2009 gathered ministers and heads of state from Saudi Arabia, Ethiopia, Kenya, Uganda, Tanzania, Rwanda, Djibouti and Somalia.8 Beside AlAmoudi a number of other Gulf companies have announced investments, including Dubai World Trading Company, Dubai-based IFFCO and the Saudi Al-Jenat consortium (Reuters, 11 April 2009; Gulf News, 24 June 2011; Saudi Gazette, 29 March 2009). However, in 2011, Saudi Star was the only Gulf investor holding an actual land lease according to a database of the Ethiopian Government.9 The Saudi Star project is in its beginning, but the implementation gap might close as expansion work and land clearing progresses, often in conflict with the local population (Oakland Institute 2011; Rice 2009).

West Africa West Africa has not ranked highly in terms of project announcements, but Mali, Mauretania and Senegal are host to relatively advanced pilot projects for rice production by the Foras International Investment Company. Foras is the investment arm of the Jeddah-based Organization of the Islamic Conference (OIC). It was established in 2008 as a joint closed stock company on the initiative of the Islamic Chamber of Commerce and Industry. Beside the Islamic Development Bank (IsDB) it has a number of private investors from Saudi Arabia and other Gulf countries as shareholders, such as the owner of Americana Group, Nasser Kharafi of Kuwait, the Saudi Binladin Group or Saleh Kamel, the founder of the Dalla Al Barakah Group and Chairman of the Islamic Chamber of Commerce and Industry (GRAIN 2010). Should these pilot projects expand they would tie in with the financing contribution of Gulf donors in the 1970s and 1980s to the Senegal River Development Organisation (SRDO). SRDO was established in 1972 and funded controversial irrigation projects along the Senegal River which flows through Mali, Mauretania and Senegal (Vick 2006; Spiro 1989: 478). By smoothing out the flood cycles, parts of the river were made shippable for ocean-going ships and constant electricity production was possible. The river basin was converted from traditional flood irrigation of sorghum and millet to cultivation of rice, the staple food of urban classes. As the annual floods diminished, local communities had to give up their traditional forms of agriculture, which were integrated with fishing and livestock production. Wetlands and pastures receded, while farmers faced growing problems in financing the capital-intensive rice production which required fuel for the irrigation pumps, specific seeds and fertilisers. Rice cultivation became less and less competitive in the 1980s and 1990s. Structural adjustment programmes 114

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enforced a reduction of input subsidies and extension services. A devaluation of the domestic currency made input factors even more expensive, while rice imports were liberalised and subsidised out of consideration for the urban population. The hope that irrigated agriculture would be a remedy for increased droughts in the Sahel has not materialised. Food security for rural dwellers has decreased instead of increasing (Koopman 2004, 2009). The renewed push by Gulf investors for rice cultivation along the Senegal would need to address these past failures and its underlying socio-economic problems.

Win–win or land grab? The global financial crisis explains some of the implementation gap of Gulf projects as it reduced companies’ access to finance. Lack of commercial viability is another factor. The slump in commodity prices in the second half of 2008 also temporarily reduced the sense of urgency for agricultural projects. Yet the most important impediment was arguably the political backlash by disgruntled local stakeholders. The land might be underutilised, but it is not unused. Small-scale farmers and pastoralists dwell on it, often based on customary land rights and without formal title. They are under threat of expropriation and some governments displace them in order to empty the land for large-scale investors, as advocacy groups like GRAIN or the Oakland Institute have pointed out. Equitable solutions would only be conceivable if customary land rights’ holders were to get a fair share out of such deals in the form of jobs, business opportunities and compensation. While its private-sector arm, the International Finance Corporation (IFC), has been criticised for its support of large-scale agro projects (Daniel and Mittal 2010), the World Bank has pointed to several problems in its land investment report. Benefits for the local population on the projects that have seen implementation so far have been low. Job creation has been abysmal (Deininger et al. 2011). Projects are capital intensive and often run by expatriate labour. On many projects in Sudan the higher management and skilled labourers are imported from other countries such as Syria, Egypt, Yemen, Pakistan or the Philippines. Planned projects of Gulf countries in Kenya and Mauritania have met with resistance. The Merowe dam in Sudan, which was funded with Gulf money, caused the displacement of more than 40,000 people and led to violent protests. Even technocrats who are in favour of Gulf agro-investments prefer them to come from Gulf development funds instead of private Gulf investors. The latter have a reputation for falling for bombastic project designs, which they try to realise by obtaining subsidies from home and gaining access to high-ranking politicians, thereby sidelining due institutional process. The Saudi arms dealer Adnan Khashoggi and his relationship to former Sudanese President Nimeiri is mentioned as an example.10 The Gulf countries have not been sufficiently aware of such sensitivities and will need to engage with local stakeholder groups proactively if some of their announced projects are to witness implementation. It is important to speak not with central governments alone, but also to bring the local level of village communities on board. More transparency about the land deals and public outreach would be in the best interests of the Gulf countries. In the case of the once heated debate about Sovereign Wealth Funds, their participation in the Santiago process has helped to calm disquiet. In 2010, the food security issue gained renewed importance with rising commodity prices and the grain export restrictions by Russia. The focus of the Gulf countries has shifted somehow from developing countries that are food net importers to the established agro exporters such as Brazil and Australia. This may hint at a new sense of reality. Yet there is huge potential given Africa’s need for capital imports and the Gulf’s needs for food imports. If carefully undertaken, mutual benefits are conceivable. With the exception of Southern Africa, traditions of large-scale commercial agriculture are not widespread in Africa. Irrigation infrastructure such as the Gezira 115

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scheme needs to be rehabilitated and optimised. Sustainable modes of dryland farming need to be developed. Yet uncritical adaption of orthodox Green Revolution approaches should be avoided, given their track record of ecological backlash and high capital intensity that tends to sideline smallholders. Project developments would have to be gradual and would need to take the vested interest of the local population and customary land rights into consideration. A possible approach could be contract farming that provides credit, training and seeds to the local population (Cotula and Leonard 2010). Such an approach would be more promising than large-scale acquisitions of land and development of foreign-managed plantations, often with imported labour. In developing countries, Gulf countries currently aspire to such plantation approaches, even though they are more likely to run into domestic opposition in targeted countries.

Conclusion Gulf countries have tried to gain privileged access to food production in reaction to food export restrictions in the wake of the global food crisis in 2008. African countries with economic water shortages appear as natural partners, as domestic agriculture in the Gulf countries is downsized because mining of fossil water aquifers has run its course. Staple crops, fodder and meat are the interest of Gulf countries, not biofuels. African countries are themselves large cereal importers and their tropical climate is not suitable for the cultivation of wheat and barley. Trade profiles do not match at this stage. Sudan, Ethiopia and Tanzania have ranked highly in Gulf investment plans because of their logistical proximity. Project implementation has been patchy, because of missing infrastructure, shortfalls in governance, and political backlash by affected stakeholders in target countries. Belief in technological fixes, large-scale plantation and disregard for traditional small-scale farmers and pastoralists were characteristic of agricultural modernisation in Saudi Arabia. A replication of such programmes in target countries should be avoided. The inclusion of local stakeholders is crucial. Only if they receive benefits from Gulf agro-investments in the form of business opportunities, jobs or compensation will mutually beneficial scenarios be conceivable. Contract farming and other forms of co-operation are more likely to achieve such results than fully owned large-scale plantations.

Notes 1 I am grateful to the Oil, Energy and the Middle East Program at Princeton University for funding a research trip to Sudan in November 2011. 2 Interviews with executives of ADFD and Al-Qudra Agriculture. Abu Dhabi, 19–20 April 2009. 3 Interview with director of the board of the Gezira scheme, 22 November 2011. 4 Interview with executives of Kenana sugar company, Kenana and Khartoum, November 2011. 5 Interview, Khartoum, 20 November 2011. 6 Ibid., and interviews in Wad Madani, 22 November 2011. 7 See his personal website: www.sheikhmohammedalamoudi.info/ethiopia/. 8 See www.saudieastafricanforum.org/ (accessed 25 July 2011) and the ARTE documentary Planète à vendre, which aired on 19 April 2011. 9 See www.ethiopian-gateway.com/eaportal/sites/default/files/Saudi-Agreement.pdf (accessed 25 July 2011). 10 Interview with Minister of Water Resources and Irrigation under Nimeiri and with farm manager of a Gulf project, Khartoum, 21 November 2011.

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2.3 A global enclosure The geo-logics of Indian agro-investments in Africa1 Pádraig Carmody

There is no doubt, that Africa is the New World of the 19th century. What America was to Europe in the 16th and seventeenth centuries that Africa is now. (Harry Johnston, ‘British interests in eastern equatorial Africa’, 1885, quoted in Tilley 2011: 31) There is a sacred tie between the tiller and the land. Any attempt to snap the relationship is bound to face opposition. (Indian Minister of Finance P. Chidambaram, quoted in Shiva 2007)

Introduction: food, fuel and life wars A second Scramble for Africa is now underway (Carmody 2011a). This involves competition over a variety of natural resources from oil to coltan. However, it also involves socio-economic competition over what is perhaps the ultimate resource, as human life is dependent on it – land. Johnston perhaps misread the situation in the 19th century in the opening quote. The socalled ‘New World’ in the 16th century was composed of two different types of colonies – the ‘sugar’ colonies of the Caribbean and the ‘bread’ colonies of mainland North America (Williams 1994). However, in the 19th century Africa was valued for its natural resources and cash crops, primarily, rather than food staples. This is partly changing as land grabbing in Africa is often now for the production of food crops, and also biofuels and other cash crops, for export overseas. This is leading to a reconfiguration of Africa’s positionality in the global division of labour and also the nature of African states. While the economic dimensions of the land deals which have been concluded in Africa have received substantial media attention, the political dimensions of this process have been less described and explored. Through an examination of the experience of recent Indian agricultural investment in Africa, with a case study of Ethiopia, this chapter explores the geographic, political and economic motives (geo-logics) behind these recent developments. It concludes with reflections on what current large-scale foreign land acquisitions mean for the development and trajectory of capitalism on the continent, and the evolution of globalisation. 120

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Food prices hit record highs again in 2011, continuing a trend which began to attract global public attention during the price spike of 2007–08 (Bello 2009). There are a variety of reasons for rising prices including growth in global population and urbanisation, changing consumption patterns in Asia, in particular towards more meat-intensive diets which require vast quantities of grain and other feedstocks, and financial and land speculation and growth in the usage of biofuels globally (Weiss 2010). So-called first-generation biofuels are often derived from food crops, thereby decreasing supply and driving up prices substantially. The details of this have been explored elsewhere, but it is important to note here that the grain grown for fuel could have fed 330 million people for a year in 2009 (Smith 2010). Sometimes companies also purchase land for biofuels in order to meet carbon compensation or offsetting targets (Zoomers 2011). High input prices, particularly that of oil, which peaked at over US$147 a barrel in 2008, also drove food prices higher. Dramatically increased prices led to food riots and political unrest in much of the developing world and several developing countries responded with food export bans in an attempt to ensure domestic food security. Some countries, such as India, have also encouraged the development by ‘their’ companies of overseas agricultural investments and food supply chains, which are at least partially autonomous from the vagaries of the global market. According to the vice-president of an Indian bank, the Indian government’s ban on non-Basmati rice exports drove Indian companies overseas to produce rice for the global market (in GoI 2011). So large-scale Indian agro-investments abroad are also partly a function of capital accumulation, rather than food security, concerns. However, national ‘double movements’ where the society and polity attempt to re-embed the market (Polanyi 1944), as expressed through the export ban in India for example, are not necessarily progressive in their impacts in the context of globalisation, as described below. The trajectory of land deals overseas follows the global power gradient. Between 2004 and 2009 Ethiopia, Ghana, Madagascar, Mali and Sudan allocated land greater than double the size of the United Kingdom to foreign investors (Smith 2010). Dramatic increases in food prices mean many more people around the world are now malnourished, so the current global ‘food security regime’ is failing (Nally 2011a). However, agro-investments overseas may, paradoxically, contribute to increased hunger in the localities in which they are situated. What are the motivations and impacts of Indian agro-investments in Africa and how do they shed light on these global trends?

The geo-logics of Indian land grabbing in Africa Indian trade with Africa is booming; amounting to $45 billion in 2010–11, by some estimates, and increasing by 400% in the previous five years (Noury 2012). In 2006 India got 12% of its gold imports, 79% of its phosphates, 91% of its nuts and 16% of its copper from the continent (Naidu 2009). Nine out of every 10 rough diamonds around the world are cut and polished in India and they are the country’s single largest export, at around $14bn a year (AsiaPulse News 2008). Of the $10bn in rough diamonds imported each year into India, around 80% are thought to come from Africa. African trade is arguably of greater strategic importance for India than for the People’s Republic of China, given the structure of trade between the two and the importance of particular commodities such as diamonds, gold, cashew nuts and now food crops, in addition to oil and other minerals, also important to China (Carmody 2011b). Trade in agricultural products between the two regions is becoming increasingly important, and this is also driving new forms of investment. In the wake of the global food price crisis an Indian government committee recommended that Indian companies should be encouraged to shop ‘for land abroad for growing crops to meet consumption needs’ (Hooda Committee 121

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quoted in Rowden 2011: 16). Some 12% of investment by Indian companies in Africa is now in the ‘food, beverages and tobacco’ sector (Barka and Mlambo 2011). The import of edible oils is the second largest drain on India’s foreign exchange after crude oil. The situation is even more critical in the case of pulses (lentils), which provide most Indians their protein component of their food. Official estimates project that India’s pulses production will increase from around 14.86 million tons in 2009–10 to around 15.73 million tons in 2011–12 (a 6 percent increase). But demand for pulses is expected to rise faster from 18.29 million tons in 2009–10 to around 19.91 million tons in 2011–12 (9 percent). Increasing population and the reduction of poverty are both likely to contribute to demand rising faster than these official estimates. (Rowden 2011: 9) These trends are incentivising Indian offshore agro-investments. However, land deals are infused with multiple political and economic agendas and logics, making them ‘polymorphous crystallisations’ (Mann 1986). Grabbing is defined by the Oxford English Dictionary as seizing something quickly. While land grabbing in Africa has received a lot of attention recently, it has a long history in India (Gadgil and Guha 1995). Recently there has been substantial controversy around the practice of grabbing land for the development of Special Economic Zones in that country, although the land parcels involved are relatively modest in size when compared to recent land purchases and leases in Africa (Basu 2007). On the ‘push’ side of the equation, one factor driving the overseas expansion of Indian agrocorporations is declining ground water tables in northern and central India (Rowden 2011). These pressures are likely to intensify as, according to the US National Intelligence Director, for India, our research indicates the practical effects of climate change will be manageable by New Delhi through 2030. Beyond 2030, India’s ability to cope will be reduced by declining agricultural productivity, decreasing water supplies, and increasing pressures from cross-border migration into the country. (Quoted in Parenti 2011: 139) Differential production costs also pull investment to Africa. ‘The cost of agricultural production in Africa is almost half that in India. There is less need for fertiliser and pesticides, labor is cheap and overall output is higher’ according to a director of the Indian Lucky Group (quoted in Rowden 2011: 11). Indian investors can lease 60 acres in Africa for the price of what it would cost to lease one acre in the Punjab (Indian Express in GoI 2011) and the availability of contiguous land holdings is also a major advantage as ‘with a per capita holding of 1.5 acres in Punjab, agriculture is ceasing to be a sustainable activity’ (Vashisht 2010 quoted in Rowden 2011: 11). As labour is also ‘cheap’ in India it is land cost and availability that are decisive. There are a number of paradoxes at the heart of Indian efforts to source land in Africa. According to Parenti (2011: 143) in India ‘irrigation has suffered under a wave of neoliberal disinvestment. The state has removed important subsidies from small farmers; as a result, thousands of them have killed themselves’, even as Indian agro-conglomerates expand overseas. The current process of agrarian restructuring in India has been described as ‘immiserising growth’, as agricultural output rises but incomes fall (Vakulabharanam, quoted in Parenti, 2011: 147). Approximately 47% of Indian children are malnourished. So why is there such concern to source food in Africa, when domestic food security has not been a priority during the era of 122

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economic liberalisation from 1991 in that country? This points to the importance of capital and other economic logics in the overseas expansion. To maintain its recent 8% average economic growth rate India needs to increase its primary energy supply by three to four times its 2003/04 levels (Naidu 2010). It is also estimated that India will run out of coal in the next forty years. Consequently it currently needs, and will increasingly need, to import the majority of its energy needs, and it is projected that by 2030 India may be the world’s third largest consumer of energy after the USA and China (Naidu 2009). India now imports 11% of its oil from Africa, partly to fuel its rapidly growing car fleet (Arnold 2009). In the capital of India, Delhi, by itself, an extra 200,000 cars are added to the streets every year (Shiva 2008). Given its rapidly increasing demand for energy, India launched a National Mission on Biodiesel in 2003 (Smith 2010). In order to meet national biofuel production targets India needs to plant, or gain access to, an area roughly equivalent to that used for all farming in the United Kingdom by 2016–17 with Jatropha curcas – a tree from which biofuel can be produced (Smith 2010). However, this has encountered domestic resistance as local communities insisted on being given title to government-owned forest and wasteland before they would participate, and owners of marginal lands were not willing to grow jatropha unless given assured returns (Smith 2010). The fact that there is no democracy between countries, however, means that part of this demand can be exported to countries such as Ethiopia, where democracy is not an issue. This means many of these Indian companies operating in Africa are engaging in activities that involve huge displacement of farmers and changing patterns of production and consumption that would either be difficult or impossible for them to do in India. They would either be illegal or get embroiled in very significant political controversies because of the negative impact on local people (Ghosh 2011) Thus illustrating the tension between corporate capitalism and electoral democracy. However, the Indian government is keen to encourage this overseas investment trend and has facilitated land investments overseas through a $640 million line of credit from its Export– Import (Exim) bank to Ethiopia for the Tindaho Sugar Project, for example (GoI 2011). Sugar can be used to produce ethanol (a biofuel). The Indian Government also gave the Economic Community of West African States $250 million to establish a fund to promote biofuels (Smith 2010). Biofuels are meant to be a carbon-neutral or positive ‘fix’ for the ecological contradiction between fixed amounts of terrestrial resources and an ever-expanding global economy (O’Connor 1994). By accessing energy from the sun more directly through plant life they present themselves as an extra global fix to this dilemma. However, when the carbon costs of land clearance are also included in the analysis this often turns out not to be the case, as the sink resource of the global atmosphere and oceans are further depleted. Land grabbing and climate change have profound direct and indirect impacts for many of the poor in Africa. For example, the UN Intergovernmental Panel on Climate Change estimates that the value of African crops could fall by up to 90% by the turn of the century as a result of anthropogenically induced climate change (Toulmin 2009).2 Other estimates suggest the value of crops could fall by 50% as early as 2020. Land grabbing has implications for the pace of climate change as land conversion, noted above, often results in the release of carbon through forest clearance and burning, and new land uses are often far less effective in carbon sequestration. For example, according to one author of a report on the development of biofuel plantations, ‘the 123

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clearance of grassland released 93 times the amount of greenhouse gases that would be saved by the fuel made annually on that land’ (Fargione quoted in Shiva 2008: 80), thus actually accelerating the pace of climate change. One of the countries that has attracted the most Indian agro-investments in Africa is Ethiopia, to which we now turn.

Seeing like an (under)developmental state? The political logic and impacts of Indian land grabbing in Ethiopia According to Philip McMichael (1997: 645) ‘rather than conceive of globalisation phenomenally, as a trend, it is more usefully conceived of as a contradictory historical project – a mechanism of political and economic restructuring’. The question is: for whose benefit is it undertaken? Some 70% of foreign investment in agricultural land in Ethiopia is by Indian companies (Gebremedhin 2011). The most controversial of these deals has been by Karuturi, the world’s largest producer of cut roses, which it had previously started growing in Ethiopia. It has been pledged access to 800,000 acres of land on lease by the Ethiopian Government for food and other crops (Rugman 2012), with a rent of $1.18 per hectare for the first 100,000 hectares, compared to an average of around $360 a year in India (Ghosh 2011). The initial lease is for 50 years. There are no performance conditions, such as producing food for the domestic market, attached to these contracts, and because much of the production is highly mechanised they result in substantial labour displacement. According to one estimate, expected ‘job creation’ is only 0.005 per hectare, or 500 jobs per 100,000 hectares (Gebremedhin 2011). By way of comparison, South Africa is one of the world’s top 10 wine producers, but all of the country’s grapes for wine are produced on around 100,000 hectares. In fact, rather than attaching conditions the Ethiopian Government has incentivised these investments through exemptions from tax and import duties on inputs, and no restrictions on land and water use. Ethiopia is known as the ‘water tower’ of East Africa (Demmissie 2011) and consequently this is as much as ‘virtual water’ (Allan 1998), where water is used to produce agricultural commodities for export, as it is as a land grab. The Ethiopian Government does, however, collect land transfer costs of around $35 per hectare on the land, so there is a substantial monetary advantage arising from this. According to the Ethiopian Minister for Agriculture, ‘we give land because we cannot produce on that land. Because of lack of capital and technology, that’s why. They open a big opportunity for employment and of course generation of taxes and other financial gain’ (quoted in Rugman 2012). This gain also applies for the Indian companies, so political and economic logics articulate to generate new forms of dispossession and exclusion. On the demand side, food imports are incentivised as Ethiopian farm produce entering the country is now taxed less than domestic produce, according to an official of the Federation of Indian Export Organisations (Rowden 2011). In terms of biofuel investments, states are sometimes keen to promote these in order to gain access to energy supplies, particularly given recent high oil prices (Ness et al. 2009). However, there are livelihood implications as water in Ethiopia for food crops is diverted to biofuel irrigation systems (Meinzen-Dick 2010 in Matondi 2011). Other impacts include loss of access to land, grazing rights, wood, other ecosystem products such as meat, and loss of personal worth and sense of belonging (Matondi 2011). What does the Ethiopian case tell us about the nature of the state in that country and how Indian engagement is changing it? Is the state developmental, predatory or hybrid ([under] developmental) (Evans 1995)? 124

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There are clear financial incentives around the transnational contract of extraversion (Carmody 2010), where the Ethiopian state gets tax revenues and hard currency earnings from allying itself with foreign corporations, but in the Ethiopian case these are mostly used for developmental purposes, in contrast to many other states in Africa (Radelet 2010). This relates to the political economy of that country, as the Ethiopian government is dominated by the minority Tigrayan ethnic group, which was the target of a genocide under the previous regime (Meredith 2005), and this expenditure is important to attain acquiescence among the population more broadly and to secure continuing aid inflows to bolster the regime. Ethiopia is the largest recipient of aid in Africa and remarkably the third largest in the world. In 2008 aid amounted to 13% of gross national income and the equivalent of 133% of general government expenditure (Fengler and Kharas 2010). However, the constitution of state hegemony also involves force and some interesting ideological manoeuvres. According to the Prime Minister of Ethiopia, Meles Zenawi (2011: 140), ‘the neoliberal paradigm is a dead end incapable of bringing about an African Renaissance’. However, in terms of the shift in agricultural policy away from smallholder agriculture, current developments in Ethiopia would appear to fit with the neoliberal approach. For example: carefully analyzing the World Development Report 2008, Kjell Havnevik and his associates see the new World Bank paradigm for African agriculture as one based on the rapid development of contract and corporate farming. Smallholders are seen as largely noncompetitive, and the thrust of agricultural policy is to facilitate their conversion into large-scale contract farmers or workers for corporate farms. WDR 2008, in short, ‘is recommending global capital’s destruction of an independent smallholder agricultural sector’. (Havenevik et al. 2008 quoted in Bello 2009: 82) In Ethiopia the economic logic as elaborated by the Prime Minister is that developing countries cannot compete solely on the basis of factor endowments or by buying up the latest machinery. They need to assimilate technology developed elsewhere, and they need to continuously move up the technology ladder if they are to achieve continued growth and development. In other words, technological capability accumulation is as central to developing countries as it is to developed countries. The difference is that in developing countries, such accumulation takes place primarily through the assimilation of foreign technology rather than through the development of new technology. (Meles 2012: 163) However, there has been virtually no technology transfer in relation to agro-investment (Rahmato 2011), so there must be other logics at play. Land allocations are part of a general drive to attract foreign investment from India, which increased to $4.7 billion in the space of four years. According to the Ethiopian Prime Minister, ‘We want to see more Indian companies in every field, from textiles and food processing to IT [information technology] and agriculture’ (Meles, quoted in Rowden 2011: 14). There are more than 35 Indian companies active in land deals in Ethiopia and some government officials estimate one-half of all land being allocated to foreign investors will be allocated to them. The amounts of land being allocated are substantial – estimated at 38% of the land area currently being used by smallholders in that country (Rahmato 2011). According to the Ethiopian Agriculture Minister: ‘How much land will actually go to Indian investors depends entirely on the interest of investors. If they come and take all the land, then we will be very happy’ (quoted in Rowden 2011: 14, emphasis added). The Ethiopian Prime Minister was 125

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somewhat more measured, explaining, ‘there is no land grab … We have three million hectares of unutilised land. This is land is not used by anybody’ (quoted in Rowden 2011: 14). However, this may not be the case as land which appears ‘unused’ from the ‘god’s eye’ view provided by satellite imagery may simply be in long-fallow cultivation cycles as a result of the fragility of the soils (von Braun and Meinzen-Dick 2009 in Rowden 2011). Satellite imagery now serves the function of old explorers’ maps and the colonial idea of uninhabited land terra nullius which could be claimed by overseas ‘investors’ is being implicitly rehabilitated. This colonial mindset is certainly in evidence among Indian state elites as globalisation is reconfiguring the nature of sovereignty so that it becomes more liminal and porous (Harrison 2005). When the first shipment of oil from Sudan from India’s state-owned oil company arrived by supertanker in Mangalore in 2003, the Indian Deputy Prime Minister declared, ‘This is not imported oil, this is India’s oil’ (quoted in Oil and Gas Journal 2003 in Patey 2011: 88). Could this logic be extended so that land being purchased by Indian companies in Africa is now considered by Indian political elites as ‘Indian land’? The scale of the relocation programme in Ethiopia is vast, with 42% of Gambella region’s land earmarked by the government for investment and plans to relocate 1.5 million people across four of the country’s regions (Oakland Institute cited in Kemenade 2012). This is despite, or perhaps because of, the previous disastrous experience with ‘villagisation’ in Ethiopia (Scott 1998). Villagisation programmes across Africa have been notoriously difficult as concentration of population often leads to intensified soil erosion in what are often easily degraded fragile environments. However, they do have sound political and economic logics. Parts of Ethiopia are chronically food insecure and famines are profoundly political events that have sometimes been induced for political ends, as was the case in Ethiopia in the 1980s (Meredith 2005). Food and access to the means of subsistence (land) are fundamental biopolitical questions which govern both the quality and indeed the existence of life itself (Nally 2011b) in largely agrarian societies. Consequently, control over access to food and land could be regarded as the ultimate form of political power. The resettlements are taking place in regions outside of Tigray Province, from which the ruling elite in Ethiopia come. While the World Bank has recommended privatisation of land in Ethiopia, the government has resisted this, as it would compromise a major source of political power. Thus foreign investors have been granted land rights in Ethiopia which are denied to citizens (Demmissie 2011). By displacing these people into a villagisation programme they can be more easily politically controlled, ensuring the Tigrayan People’s Liberation Front/Ethiopian People’s Revolutionary Democratic Front (EPRDF) a continued grip on power (Rahmato 2011). This mirrors other strategies pursued by the EPRDF to stay in power (see Carmody 2007) and the geo-logic of spatial and biopolitical control interacts with private-sector economic logics. There is an irony that it is former ‘socialist’ states such as China and Ethiopia which are able to provide conditions most conducive to inward investment, because of their greater control over the other factors of production, particularly land and labour. In the Ethiopian case, state ownership of land makes population displacement relatively easy, with an estimated 70,000 people displaced in Gambella province alone in 2011 (Human Rights Watch cited in Kemenade 2012). According to this report, security forces ‘repeatedly threatened, assaulted, and arrested villagers’ who resisted relocation. The process was also associated with rape, burning down of homes and killing of cattle. The new villages to which people were relocated reportedly lacked farmland, food or health infrastructure. The Minister for Agriculture in Ethiopia was very forthright about the Ethiopian poor’s lack of usufruct land rights. According to him, ‘pastoralists displaced by land grabbing “can just go somewhere else”’ (quoted in Palmer 2010: 5, in Matondi et al. 2011: 5). This also has echoes of colonialism. 126

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The English political economist George Scrope considered that British government policy had made the Irish peasantry ‘human encumbrances’, which others in policy circles felt the Great Famine in Ireland would sweep away, allowing for agricultural modernisation (Nally 2011c). In the lease agreement with Karuturi the Ethiopian Government is required to hand over leased land ‘free of impediments’. ‘Arguably local people who are unwilling to leave their land could be construed as “impediments” and the lessor is now contractually obligated to ensure they are not a problem for the company’ (Rowden 2011: 30). The government also undertakes to provide ‘security’ for these investments, and the government of Gambella told locals that resistance to such investments would be considered ‘anti-development’ (in Rowden 2011: 26), perfectly illustrating James Ferguson’s (1990) thesis on how the discourse of development can be used to obscure oppressive power relations. According to a farmer displaced by the Karuturi investment in Ethiopia, when they first came they told us an investor was coming and we would develop the land alongside one another. They didn’t say the land would be taken away from us entirely. I don’t understand why the government took the land. (Gemechu cited in Rugman 2012) His spouse noted, ‘since the land was taken away from us we are impoverished. Nothing has gone right for us since these investors came’. However, the dispossession has a profound disciplinary effect in Ethiopia as large-scale land acquisitions serve as ‘a constant reminder of the danger hanging over small farmers and pastoralists and their way of life’ (Rahmato 2011: 5), thus creating a new land (in)security regime. Peasant resistance in Ethiopia has included ‘encroachments on land given out to investment projects, driving livestock to graze on them, disputing boundary limits, taking one’s grievances to court, or appealing to higher authorities for redress of grievances’ (Rahmato 2011: 17), with some success based on an intervention by the Ethiopian President in one case. However, global forces through their structural power often prevail. India’s Exim bank is expected to facilitate the Karuturi investment in Ethiopia, for example, and shareholders in the company include the Boston-based Sandstone Capital (Rowden 2011). From the 600,000 hectares currently leased to foreign investors in Ethiopia about 20,000 jobs are meant to be created; however, many more people may have been displaced in the process. Furthermore, some of the land used to produce teff, the staple food in Ethiopia, now produces maize for export, perhaps contributing to recent price increases for teff. At the Karuturi investment many of the labourers are reportedly children or adults who are paid 70 cents a day, which is less than what people earn in Ethiopia’s minimalist Productive Safety Net Programme. Gambella is thought to host the second largest wildlife migration in the world (Rahmato 2011), consisting of a variety of large mammals such as antelope, and this may be disrupted by the land acquisitions. In Rahmato’s study people also recounted how they survived drought by collecting roots and other edible plants in the forest, but when the forest was cleared this was no longer possible. The Karuturi investment also resulted in the clearance of an Anuak burial ground. Mono-agricultures are environmentally unsustainable, and according to Vandana Shiva (2008: 2) ‘the food crisis reflects a deeper crisis – the creation of “redundant” or disposable people and, alongside them, the potential for violence and social and political instability’. However, there is another reading, which is that large-agro investments generate their own, and create a reserve ‘army’ of, labour. Even if the arguments about them generating employment creation are accepted, according to calculations in a World Bank report a smallholder farmer in Zambia could make six times more producing sugar cane than earning wages working on the 127

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same crop (Murray Li 2011). Rather, ‘investors cannot be responsible for poverty reduction: an impoverished population surrounding a plantation is the ideal situation for maximum profit. The last thing a plantation company needs is for the surrounding population to prosper’ (Murray Li 2011: 291). Indeed, there is an internal logic as population displacement, often from very ‘cheap’ land, also creates a ‘cheap’ labour force. Under Ethiopian government policy, income from land deals is meant to be utilised for the benefit of the regions involved unless the land is transferred into the federal land bank, and there has been pressure from the central regime to do this. Regional leaders tend to comply with central government wishes as they often find themselves in jail if they do not (Samatar 2004). The central Ethiopian Government gets access to land fees, taxes and export revenue and the economy has grown by more than 10% a year since 2004, giving a doubling time of less than seven years. However, some of the peasantry pay the price, even as Ethiopia’s aggregate position in the Global Hunger Index improves (International Food Policy Research Institute, Deutsche Welthungerhilfe and Concern Worldwide 2011). Some might argue there are certain relative advantages to Indian agro-investments in Africa. For example, Chinese companies have often been criticised for bringing substantial portions of their labour force from China. One of the conditions of a multi-billion dollar loan to the government of Angola was that 70% of the works associated with new contracts should go to Chinese companies, for example. In contrast, stated Indian policy is different. When the Indian Vice-President toured Africa he noted: The direction in which the Indian economy is going, the major role will be played by the private-sector, especially in industrial development. Local employment will be generated. It doesn’t make economic sense to take workforce from India because it comes with liabilities. When we go for an investment venture, we don’t go with the idea of imposing our workforce or employment of Indians per se. We seek to limit ourselves to management and financial control of enterprises having an Indian element. (Quoted in Naidu 2011: 64) However, the generation of employment by these agro-investments is small and comes with a high ‘opportunity cost’ and substantial human suffering, and there are reports that Karuturi may now outsource 20,000 hectares of land in Ethiopia to Indian farmers on a revenue-sharing basis (Badrinath 2011).

Conclusion: (re)globalising the underdevelopment of capitalism in Africa Colonialism in Africa can be considered a ‘round of globalisation’, oriented towards providing raw materials and markets for metropolitan European powers. However, at the time of decolonisation in the 60s, Africa was not just self-sufficient in food but was actually a net food exporter, averaging [a modest] 1.3 million tons in food exports a year between 1966 and 1970. Today, the continent imports 25% of its food, with almost every country being a net food importer. (Bello 2009: 68) The global land grab is a feature of the current round of globalisation related to the deepening commoditisation of land (Zoomers 2010); however, the double movement, where society reacts against commoditisation, fails to operate in the context of globalisation as might 128

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be expected. Rather, we are witnessing the involution of globalisation – or a new double movement – where market actors seek to circumvent markets owing to their instability, establishing dedicated supply chains for inputs. New global agro-investments which commodify land often ‘aim not to serve the international markets, but rather to circumvent them, by tightening the control of investors from the place of production to the end consumer’ (De Schutter 2011: 253). This is a response to the system of organised entropy (Carmody 2011c) constituted by global capitalism and represents a partial decommodification of food in response to its special properties – its implicit biopower – for those who control it. It also suggests we need to differentiate between fixed and mobile flows of globalisation, as the global economy is founded on natural resources found in specific places which are not subject to ‘liquification’ (Ritzer 2010). Rather, the power relations surrounding them seem to be subject to securitisation or solidification, as the Ethiopian case demonstrates. In relation to land grabbing, according to German et al. (2011: 1) ‘governments are playing an active role – often bolstered by an unwavering faith in the role of foreign investment in national economic development’. This ideology fits with government interests in the process as they get tax revenues, exports and foreign currency, ancillary benefits and disciplinary power, all of which serve to strengthen regime survival. Part of these revenues may be invested in developmental expenditures to generate consent, as in Ethiopia. In addition, as many of the land deals are nontransparent, kickbacks may also play a part in the process. What is the potential for reform? Recently there has been discussion of compulsory or voluntary codes of conduct (CoC) around global land grabbing. However, these have failed to gain traction at the Food and Agriculture Organization (FAO) of the UN for political reasons. Furthermore, proposals for a CoC for land deals necessarily operate within and seek to sustain or extend the existing global industrial agro-food and energy complex. Positing the CoC as an overarching framework in response to globalised land grabbing therefore does not address serious problems associated with the extractive mining of land (and water) in the Global South to meet the food and energy demands of industrialised countries and to sustain corporate profits. (Borras and Franco n.d.: 515) The colonial legacy in Africa also ends up reproducing colonial-style relations in the current land grab. For example, in Zambia all land is vested in the President – making land allocation to foreign investors easy. In an important article, Professor John Sender (1999) defined himself as a ‘tragic optimist’ in relation to the progressive potential of capitalist developmental states in Africa. However, the embracing of a supposedly post-neoliberal ‘Chinese’ model of development on the continent implies the creation of oligopolistic political economies in which political elites hold substantial personal stakes (Taylor 2010 in Cornelissen et al. 2011). This is certainly the case in Ethiopia, where privatisation has been to the benefit of EPRDF elites, which helps generate funds to cement political control. Large-scale land acquisitions also serve to discipline the rural population. However, neither privatisation nor the new enclosure movement promote industrialisation as profits flow offshore in the latter case, rather than being reinvested domestically, as in Britain after the first enclosure movement, where they helped promote the industrial revolution. In his seminal work De Janvry (1981) identified two primary paths to agrarian development – the ‘farmer road’ and the Junker route, named for the large-scale landed gentry class in Prussia in the 19th century. These different paths and approaches are still evident in Africa today. For example, major progress has been made in Malawi in achieving food security and generating food 129

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exports through a programme of subsidy provision of fertiliser and other input ‘starter packs’ to small-scale farmers (Denning et al. 2009). In contrast, some have argued that Ethiopia is witnessing a ‘South Africanisation’ of its agrarian structure, as large-scale land enclosure takes place, implying greater inequality. Which of these paths is pursued is fundamentally a political question. The impact of large-scale agro-investments is also not predetermined but depends on local conditions, such as pre-existing land uses and government policies and the ways in which they are implemented. For example, Festus Boamah (2011) shows how a biodiesel project in northern Ghana diversified local livelihoods and thereby increased local food security in the short term. The inter-cropping of food with biofuel also provided some support for the idea of ‘vent for surplus’: that cash crops need not necessarily displace food crops if there are unused resources. However, the project which he describes ultimately failed as a result of the global financial crisis, showing how these projects increase risk for locals by helping create translocalities (Appadurai 1995) which are deeply exposed to global processes. Ultimately biofuels, whatever their benefits, globalise risk. They build on existing inequalities, they extend existing contradictions, they draw on existing expertise and they perpetuate existing patterns of consumption. The global biofuel assemblage stabilises these processes as rational and desirable and encourages significant changes in land use for some (generally in the South) while perpetuating the conditions that generate inequality, expertise and political economy in the first place. (Smith 2010: 13) Large-scale agro-projects create both local and globalised risks for local people, contributing to the further development of the ‘risk society’ (Beck 1992) and increasing vulnerability, and often poverty. They represent forms of ‘accumulation by dispossession’ (Harvey 2003), which increase inequality and store up further sources of conflict for the future – an ‘economy of disaffection’. The Deputy Director of the FAO argued that we could ‘imagine empty trucks being driven into, say, Ethiopia, at the time of food shortages caused by war or drought, and being driven out again, full of grain to feed people overseas … Can you imagine the consequences of that’ (quoted in Rowden 2011: 8).

Notes 1 The writing was supported by a Senior Research Fellowship from the Irish Research Council for the Humanities and Social Sciences. The opinions expressed here do not reflect those of the Council. Many thanks to an anonymous referee and Dr David Nally for their comments. Any errors are of course mine. 2 Climate change could also result in other countries seeking to purchase land in India. For example, as his country is inundated by rising seawater the President of the Maldives is looking to purchase land for the population of that country in either India or Sri Lanka (Zoomers 2011).

References Allan, J. A. (1998) ‘Virtual water: a strategic resource global solutions to regional deficits’, Ground Water 36 (4): 545–6. Appadurai, A. (1995) ‘The production of locality’, in R. Fardon (ed.) Counterworks: Managing the Diversity of Knowledge, New York: Routledge, pp. 204–25. Arnold, Guy (2009) The New Scramble for Africa, London: North South Books. AsiaPulse News (2008) ‘India seeks African diamonds: Ramesh to visit Angola, Namibia’, AsiaPulse News, 24 March. 130

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Badrindath, R. (2011) ‘Karuti to outsource Ethiopian land to Indian farmers’, Business Standard, 12 October. Available at: www.business-standard.com. Barka, B. and Mlambo, K. (2011) ‘India’s economic engagement with Africa’, Africa Economic Brief 2(6), African Development Bank. Basu, P. (2007) ‘Political economy of land grab’, Economic and Political Weekly 42(14): 1281–7. Beck, U. (1992) Risk Society: Towards a New Modernity, London: Sage. Bello, W. (2009) The Food Wars, London: Verso. Boamah, P. B. (2011) ‘Competition between biofuel and food? Evidence from a jatropha biodiesel project in northern Ghana’, in P. Matondi, K. Havenevik, and A. Beyene (eds) Biofuels, Land Grabbing and Food Security in Africa, London: Zed Books, pp. 159–75. Borras, S. and Franco, J. (n.d.) ‘From threat to opportunity? Problems with the idea of a “code of conduct” for land-grabbing’, Yale Human Rights and Development Law Journal 13: 507–23. Carmody, P. (2007) Neoliberalism, Civil Society and Security in Africa, Basingstoke: Palgrave Macmillan. ——(2010) Globalisation in Africa: Recolonisation or Renaissance, Boulder, CO: Lynne Rienner. ——(2011a) The New Scramble for Africa, Cambridge: Polity. ——(2011b) ‘India and the “Asian drivers” in Africa’, in E. Mawdsley and G. McCann (eds) India in Africa: Changing Geographies of Power, Cape Town: Pambazuka Press. ——(2011c) ‘The scramble for timber and biofuels in Africa’, Whitehead Journal of Diplomacy and International Relations XII(1): 125–36. Cornelissen, S., Cheru, F. and Shaw, T. M. (2011) ‘Introduction: Africa and international relations in the 21st century’, in S. Cornelissen, F. Cheru and T. M. Shaw (eds) Africa and International Relations in the 21st Century, Basingstoke: Palgrave Macmillan, pp. 1–20. De Janvry, A. (1981) The Agrarian Question and Reformism in Latin America, Berkeley: University of California Press. Demmissie, S. T. (2011) ‘Meles Zenawi’s land lease and famine in Ethiopia’, Ethiopian American Information Centre. Available at: http://farmlandgrab.org/post/print/19037. Denning, G., Kabambe, P., Sanchez, P., Malik, A., Flor, R., Harawa, R., Nkhoma, P., Zamba, C., Banda, C., Magombo, C., Keating, M., Wangila, J. and Sachs, J. (2009) ‘Input subsidies to improve smallholder maize productivity in Malawi: toward an African green revolution’, Plos Biology 7(1): 2–10. De Schutter, O. (2011) ‘How not to think of land-grabbing: three critiques of large-scale investments in farmland’, Journal of Peasant Studies 38(2): 249–79. Evans, P. B. (1995) Embedded Autonomy: States and Industrial Transformation, Princeton, NJ: Princeton University Press. Fengler, W. and Kharas, H. J. (2010) Delivering Aid Differently: Lessons from the Field, Washington, DC: Brookings Institution Press. Ferguson, J. (1990) The Anti-politics Machine: ‘Development’, Depoliticisation, and Bureaucratic Power in Lesotho, Minneapolis: University of Minnesota Press. Gadgil, M. and Guha, R. (1995) Ecology and Equity: The Use and Abuse of Nature in Contemporary India, London: Routledge. Gebremedhin, K. (2011) ‘African land grab: what Indian companies do in Ethiopia is what they are not allowed to do in India’. Available at: www.countercurrents.org/goi201211.htm. German, L., Schoneveld, G.and Mwangi, E. (2011) ‘Processes of large-scale land acquisitions by investors: case studies from sub-Saharan Africa’, paper presented at International Conference on Land Grabbing, University of Sussex. Ghosh, J. (2011) ‘“Landgrab” overseas’, International Development Economics Associates. Available at: www.networkideas.org/news/sep2011/news07_Global_Farmland.htm. GoI (Government of India Monitor) (2011) ‘Land grab in Africa, brought to you by India’. Available at: www.goimonitor.com/story/land-grab-africa-brought-you-india. Harrison, G. (2005) The World Bank and Africa: The Construction of Governance States, London: Routledge. Harvey, D. (2003) The New Imperialism, Oxford and New York: Oxford University Press. Havenevik, Kjell, Bryceson, Deborah, Birgegård, Lars-Erik and Beyene, Atakilte (2008) ‘African agriculture and the World Bank: development or impoverishment?’ Policy Dialogue No. 1, Nordic Africa Institute. International Food Policy Research Institute, Deutsche Welthungerhilfe and Concern Worldwide (2011) Global Hunger Index: The Challenge of Hunger: Taming Price Spikes and Excessive Food Price Volatility, Washington, DC: Welthungerhilfe, International Food Policy Research Institute, Concern Worldwide.

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Kemenade, L. van (2012) ‘Rights group: Ethiopia forcibly resettled 70,000’, ABC News. Available at: http://abcnews.go.com/International/rights-group-ethiopia-forcibly-resettled-70000/comments?type=s tory&id=15376113. McMichael, P. (1997) ‘Rethinking globalisation: the agrarian question revisited’, Review of International Political Economy 4(4): 630–62. Mann, M. (1986) The Sources of Social Power, Volumes 1–2, Cambridge: Cambridge University Press. Matondi, P. (2011) ‘Agro-investments in Zimbabwe at a time of redistributive land reforms’, in P. Matondi, K. Havenevik and A. Beyene (eds) Biofuels, Land Grabbing and Food Security in Africa, London: Zed Books, pp. 134–58. Matondi, P., Havenevik, K. and Beyene, A. (2011) ‘Introduction: biofuels, land grabbing and food security in Africa’, in P. Matondi, K. Havenevik, and A. Beyene (eds) Biofuels, Land Grabbing and Food Security in Africa, London: Zed Books, pp. 68–89. Meinzen-Dick, R. (2010) ‘Overview of “land groups”: global trends, categories, outcomes’, presented at the Regional Workshop on the Commercialisation of Land and ‘Land Grabbing’ in Southern Africa. Clara Anna Fontein Game Reserve and Country Lodge, Cape Town. Meles, Zenaewi (2012) ‘State and markets: neoliberal limitations and the case for a developmental state’, in A. Noman, K. Botchwey, H. Stein and J. Stiglitz (eds) Good Growth and Governance in Africa: Rethinking Development Strategies, Oxford: Oxford University Press. Meredith, M. (2005) The Fate of Africa: From the Hopes of Freedom to the Heart of Despair: A History of Fifty Years of Independence, first edition, New York: Public Affairs Press. Murray Li, T. (2011) ‘Centering labor in the land grab debate’, Journal of Peasant Studies 38(2): 281–98. Naidu, S. (2009) ‘India’s engagements in Africa: self-interest or mutual partnership?’ in R. Southall and H. Melber (eds) A New Scramble for Africa? Imperialism, Investment and Development, Durban: University of Kwa-Zulu Natal Press. ——(2010) ‘India’s African relations: in the shadow of China?’ in Fantu Cheru and Cyril Obi (eds) The Rise of China and India in Africa, London: Zed Books and Nordiska Afrikainstitutet. ——(2011) ‘Upping the ante in Africa: India’s increasing footprint across the continent’, in E. Mawdsley and G. McCann (eds) India in Africa: Changing Geographies of Power, Cape Town: Pambazuka Press, pp. 48–67. Nally, D. (2011a) ‘Against food security’, paper presented at ‘Geopolitics, Ireland and the New World Order’, National University of Ireland, Maynooth, Co. Kildare. ——(2011b) ‘The biopolitics of food provisioning’, Transactions of the Institute of British Geographers 36(1): 37–53. ——(2011c) Human Encumbrances: Political Violence and the Great Irish Famine, Notre Dame, IN: University of Notre Dame Press. Ness, B. et al. (2009) ‘The African land-grab: creating equitable governance strategies through codes-ofconduct and certification schemes’. Available at: www.earthsystemgovernance.org/ac2009/papers/ AC2009–0294.pdf Noury, V. (2012) ‘Africa–India: a partnership made in heaven’, African Business 382: 35–7. O’Connor, M. (1994) Is Capitalism Sustainable? Political Economy and the Politics of Ecology, New York: Guilford Press. Oil and Gas Journal (2003) ‘Talisman marks end of era with completion of Sudan sale’, Oil and Gas Journal 101(14): 36. Palmer, R. (2010) ‘Would Cecil Rhodes have signed a code of conduct? Reflections on global land grabbing and land rights in Africa’, paper presented at African Studies Association of the UK Biennial Conference, Oxford. Parenti, C. (2011) Tropic of Chaos: Climate Change and the New Geography of Violence, New York: Nation Books. Patey, L. A. (2011) ‘India in Sudan: troubles in an African “oil paradise”’, in D. Large and L. A. Patey (eds) Sudan Looks East : China, India and the Politics of Asian Alternatives, New York: James Currey, pp. 87– 101. Polanyi, K. (1944) The Great Transformation, New York: Farrar & Rinehart. Radelet, S. C. (2010) Emerging Africa: How 17 Countries are Leading the Way, Washington, DC: Center for Global Development and Brookings Institution Press. Rahmato, D. (2011) ‘Land to investors: large-scale land transfers in Ethiopia’, Forum for Social Studies, Addis Ababa. Ritzer, G. (2010) Globalisation: A Basic Text, Malden, MA: Wiley-Blackwell. 132

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Rowden, R. (2011) ‘India’s role in the new global farmland grab: an examination of the role of the Indian government and Indian companies engaged in overseas agricultural land acquisitions in developing countries’, produced in collaboration with GRAIN and the Economics Research Foundation. Rugman, J. (2012) ‘Africa succumbs to colonial-style land grab’, Channel 4 News, 7 January. Available at: www.channel4.com/news/africa-succumbs-to-colonial-style-land-grab. Samatar, A. I. (2004) ‘Ethiopian federalism: autonomy versus control in the Somali region’, Third World Quarterly 25(6): 1131–54. Scott, J. C. (1998) Seeing like a State: How Certain Schemes to Improve the Human Condition have Failed, New Haven: Yale University Press. Sender, J. (1999) ‘Africa’s economic performance: limitations of the current consensus’, Journal of Economic Perspectives 13(3): 89–114. Shiva, V. (2007) ‘From corporate land grab to land sovereignty (bhu swaraj)’. Available at: http://zcommu nications/org. ——(2008) Soil Not Oil: Environmental Justice in a Time of Climate Crisis, Cambridge, MA: South End Press. Smith, J. (2010) Biofuels and the Globalisation of Risk: The Biggest Change in North–South Relationships since Colonialism? London: Zed. Taylor, I. (2010) The International Relations of Sub-Saharan Africa, New York: Continuum. Tilley, H. (2011) Africa as a Living Laboratory: Empire, Development, and the Problem of Scientific Knowledge, 1870–1950, Chicago: University of Chicago Press. Toulmin, C. (2009) Climate Change in Africa, London: Zed Books in association with International African Institute, Royal African Society. von Braun, J. and Meinzen-Dick, R. (2009) ‘“Land grabbing” by foreign investors in developing countries: risks and opportunities’, International Food Policy Research Institute Policy Brief, IFPRI. Weiss, T. (2010) ‘The accelerating biophysical contradictions of industrial capitalist agriculture’, Journal of Agrarian Change 10(3): 315–41. Williams, E. (1994) Capitalism and Slavery, Chapel Hill: University of North Carolina Press. Zenawi, M. (2011) ‘States and markets: neoliberal limitations and the case for a developmental state’, in A. Noman, K. Botchwey, H. Stein and J. E. Stiglitz (eds) Good Growth and Governance in Africa, Oxford: Oxford University Press, pp. 140–74. Zoomers, A. (2010) ‘Globalisation and the foreignisation of space: seven processes driving the current global land grab, Journal of Peasant Studies 37(2): 429–47. ——(2011) ‘Introduction: rushing for land: equitable and sustainable development in Africa, Asia and Latin America’, Development 54(1): 12–20.

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2.4 Private investment in agriculture1 Mark Campanale

1 Introduction This chapter aims to provide an understanding of the nature and practice of private funds investing in African agriculture. It finds that there are increasing numbers of private investors looking to Africa to fund and develop agricultural initiatives. A growing number of these investments are being made through private equity funds. However, many of these firms are relatively new and at the earliest phases of deploying capital. Fewer than a dozen agriculturefocused private equity funds are currently at the stage of deploying capital into direct investments in African agriculture, though a growing number of investment managers have been marketing their fund propositions. The relatively small number of private equity funds currently operating in the African agriculture market presents a unique opportunity for development agencies to engage with emerging funds and influence the evolution of their business practices. This chapter will be structured as follows. The first section will explore the context in which agriculture has emerged as an alternative investment asset. The second section provides an overview of the structural features of the investment funds discussed and the various investment strategies employed by private investors. Next, the third section will investigate efforts to understand the impact of private investment in African agriculture. The chapter concludes with a number of recommendations for opportunities for development actors to further engage with private-sector investors and facilitate socially and environmentally responsible development as well as encourage sustainable markets for investment.

2 Context This section provides the necessary background context to the emergence of agriculture as an attractive alternative investment asset. It first summarises the factors behind the global rise of the phenomenon, before examining the appeal of African agriculture in particular.

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2.1 The resource squeeze and investment in agriculture When done right, larger scale farming systems can also have a place as one of the many tools to promote sustainable agricultural and rural development. (World Bank 2011)

Across all agricultural production regions there is a clear increase in the number of new investment funds that have been launched to attract additional capital to the sector. Investment has been driven in part by international policy-makers’ and DFIs’ willingness to address food security issues. Another driver of investment is the growing appeal of agricultural investment projects as profitable assets for the private-sector. The ascendency of agriculture as an asset class has attracted institutional investors, hedge funds and real estate investment trusts as well as private public companies pursuing farm ownership (where they have a chance to benefit financially from rising land values) and farm management strategies (where they can receive cash yields from crop sales). The appeal of agricultural assets is predicated on long-term projections of a global supply and demand imbalance for food. World population is expected to grow approximately 35% by 2050. However, by 2050 demand for food is expected to have grown by 70% (FAO/ IFAD/WFP 2011). Improving living standards and subsequent associated dietary changes across much of the developing world will drive this imbalance between supply and demand for agricultural products. The total amount of available arable land for farming is relatively fixed. Food production will, however, need to increase by 50% by 2050 in order to close the projected supply gap (UNEP 2009). Continued land degradation, climate change and water scarcity risks further complicate the challenge to meet global food demand. Basic macro-economic theory dictates that when demand exceeds supply, prices will rise. The global food imbalance underpins the trend of rising prices both for agricultural produce and for land (InvestAg Savills 2011). It is this promise of price increases and the attractiveness of ‘real assets’ such as agriculture, balanced with continued apprehension over traditional capital markets, that is attracting the private investment industry. By the end of 2010 over 190 private equity firms were investing in agriculture around the globe (Preqin 2011). While still a small number compared to the total number of private equity funds available, it is none the less significant. For instance, some 63 of these firms, many only recently launched, are currently in the process of raising an aggregate target capital of $13.3 billion for private investments into agriculture (Vencatachellum 2011). Since the end of 2007 more than $13 billion of investor funding has found its way into agricultural land or linked investments. The $5 trillion value of the global agricultural land is equivalent to only 7%–10% of the total value of global equity markets (ibid.). Yet the world will be pressed into feeding a further 3 billion people by 2050. It is reasonable to suppose that agricultural assets, both fixed and intangible, are only at an early stage of rebalancing within the global economy. Driven by rising food prices, increasing investment in agricultural productivity and demand from investment funds, it is estimated that by 2020 agricultural land values could be approximately 15%–25% of the value of global stock market. By 2050 it is possible that food-producing land might have a superior value to all other asset classes (Hardman and Co. 2010: 3).

2.2 The case for investment in African agriculture It is widely recognised by policy research institutes that Africa represents one of the greatest potential sources of available resource for increasing food yields. North and sub-Saharan Africa contains 14.6% of total global arable land. However, Africa is a net importer of agricultural produce. Over the past 20 years, African food and beverage exports have grown at an 135

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annualised rate of just 3.5% compared with total growth in African exports of 7% and global export growth of 9%. This is largely a result of insufficient investment across the sector. For instance, fertiliser use in Africa is only 13% of the global average while the tractor per hectare ratio is one tractor per 868 ha, compared with a global average of one per 56 ha. Total fertiliser use and the presence of farm equipment such as tractors are well below global averages. Africa has realised only 14% of its irrigation potential, and is currently cultivating just 43% of arable rainfed land. The cumulative effect is that African agricultural yields are 66% below the global average in terms of kilogrammes of cereal output per hectare (Credit Suisse 2008). The advantage is that African agriculture has huge unrealised potential. Investment is essential to fund the necessary increases in agricultural yields. The Food and Agriculture Organization (FAO) estimates that sub-Saharan Africa (SSA) requires approximately $11 billion per year (FAO 2009). One of the reasons financial institutions are interested in being involved in agricultural investment is because the solutions to increasing agricultural production are relatively clear. Investment institutions such as Credit Suisse, Deutsche Bank and Hardman and Co. have all noted that production can generally be raised by increasing yields and by increasing the amount of cultivated land. These institutions realise that proper deployment of capital, technology, management and education across much of the world’s subsistence farmer population could achieve considerable global agricultural productivity increases. Closing the global food supply and demand gap through boosting yields and cultivation of more land will require tremendous investment in irrigation, fertiliser, agricultural equipment, farm commercialisation and supply chain management (Deutsche Bank 2009). Of the above investment requirements, farm commercialisation holds the most relevance to the discussion about the role of private capital and smallholder farming. Farm commercialisation involves a shift towards the use of more sophisticated farming methods and inputs. This tends to result in greater and more consistent output. Commercialisation has the greatest potential to raise agricultural productivity across the globe (Deutsche Bank 2009). The relationship between fertiliser application and irrigation is closely linked to crop output. Commercialisation to maximise output drives other input growth rates. Deutsche Bank suggests that: It is the commercialisation of the factors of production that will raise productivity. Since the commercial farm is typically much larger, it often integrates food/fuel/waste elements, and enjoys significant yield and cost advantages. The result of such commercialization is a global increase in current and expected farm income levels … commercialization does not necessarily mean exponential growth in size of operation. We simply mean that farmers, regardless of scale, must professionalize their management, both in terms of raising productivity, protecting vital environmental resources and capturing the opportunity of the emerging offset markets. (Deutsche Bank 2009: 63) Clearly, maximising output needs to be moderated by the need to protect environmental resources. For example, the increase of the meat and soya bean export market from Brazil to other countries since 2000 has been associated with deforestation. However, it is important to note that many developing economies, including China and Russia, are seeking agricultural policies that favour farm commercialisation for the sake of food self-sufficiency. This is an active area for policy-makers and therefore represents a strong investment opportunity for private capital as well. Deutsche Bank (2009) provides SLC Agricola as an example of how farm commercialisation works through publicly listed vehicles. SLC Agricola is the largest listed Brazilian farm-operator. It is one of the largest Brazilian producers of soya bean, cotton and 136

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corn and has one of the highest yields among producers in Latin America. Deutsche Bank (2009: 63) suggests that SLC Agricola’s practice of maximising their land production through state of-the-art production techniques, such as double cropping, along with continuous investment into research and development, results in higher yields. This is a classic example of how investors co-operate to use a listed vehicle structure to help scale up, rationalise and built out a significant agricultural company. In Africa, there are one or two comparable examples, such as Illovo Sugar. Commercialisation provides an opportunity for private capital to flourish in agricultural investments as a result of short- and long-term commodity price increases. The micro-economic implications of price increases provide the key to identifying the opportunity for investment in solutions to mitigate the longer-term supply–demand imbalance. Increases in agricultural commodity prices impact agribusiness economics. As prices rise, the economics for agricultural producers improve, increasing profitability as well as return on investment. The increased profitability allows producers to invest further in products across the agricultural supply chain – fertilisers, irrigation, seeds and machinery – that will enable them to increase crop yields. This increased investment by producers allows increased profitability to flow through to the agricultural suppliers, thus increasing their investment returns as well. In this manner commercialisation works with commodity prices as key drivers of agribusiness economics.

3 Private investment strategies and structures This section provides an overview of the structural features of these investment funds and the various investment strategies employed by private investors. Though agricultural assets are increasingly being seen as relatively stable long-term investments, there are a number of different strategies available to invest in the sector. This section will first examine the global context for investment strategies and then the context for investment strategies for Africa.

3.1 Investment institutions diversifying by asset class The challenge that investors face is to understand the different choices of available strategies for investing in agriculture. There are opportunities to buy or lease land, or own equity; to invest in soft commodities; in liquid instruments or long-term holdings; to focus on ‘sustainable’ strategies, or on genetically modified organisms; and of course there are a raft of geographical considerations to make. To understand which strategy an investor uses, one has to begin with an understanding of the type of investor. Individual investors are relatively unsophisticated and tend to buy popular theme funds, for instance ‘agriculture’ today, compared to ‘technology’ in 2000. Most professional investors, however, particularly pension funds and endowments, have committees or trustees who have a legal obligation, a ‘fiduciary duty’, to ensure that any and all investment decisions are made only after appropriate advice – often independent professional advice – to ensure that a fund maximises its investment returns commensurate with an acceptable level of financial risk. Investments are often diversified, split between fixed income (government bonds, or debt issued by companies known as corporate bonds), equities (listed companies), geographies, early stage investments (venture capital), privately held companies (private equity), infrastructure (ports, roads, power stations) projects, and now increasingly commodities (trading in physical commodities such as oil or wheat, or in futures markets). The question is how agriculture fits into this picture. Land for agricultural production or forestry is attractive partly for the very reason that it falls between private equity, infrastructure projects and commodity assets. It is not unusual for allocations to physical land ownership to be made from within an existing property portfolio. Where a fund allocates to private equity, it 137

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would not be unusual for a specialist agricultural fund to be proposed as one of a number of strategies. Where a fund allocates to listed equity managers, some of the companies held within their equities portfolio would in all likelihood be agriculturally related. When agriculture is perceived as a ‘super theme’ that could ‘add alpha’,2 funds often make specific allocations to agriculturally related equities. A raft of such funds has been established since 2007–08 that has specific interest in agricultural investment. Equities-only funds have started so-called ‘farm to fork’ strategies that look for medium- to long-term capital growth via participation across all parts of the agricultural commodity value chain from cultivation to consumption. Shorter-term funds that focus on agricultural commodities have also emerged, along with ‘mixed strategy’ funds that invest in land, commodities and equities. Aside from such specialist funds, investors have been able to gain access to the sector by way of such traditional stocks in private agricultural companies. Over the last five years investment in agricultural equities has been a more profitable but volatile way to access the agriculture ‘super theme’ than investment in soft commodities, while an investment in soft commodities has offered diversification from an asset allocation perspective. Agricultural commodity prices began rising in 2006, with agricultural equities accelerating at an even faster pace. Corn prices in particular rose significantly in late 2006 as oil prices rose and demand for biofuels strained the food supply. Agricultural equities were driven up by these prices as well as a rising equity market that was oblivious to risk. When the financial crisis hit, equities sold off precipitously and oil and grain prices fell in the face of the global recession. While stocks in agricultural equities recovered appreciably from the market bottom of 2009, soft commodities remained relatively suppressed (Kleinwort Benson Investors 2010).

3.2 Agriculture investment vehicle structures Globally there is no one optimal platform that leads management teams or investors towards one clearly preferred investment vehicle. Instead, investors tend to decide between the different structures based on preferences for legal structures of ownership, control and management in given circumstances, depending on which gives the greatest ability to enter and exit an investment. The most common legal structures used to investment in agricultural business vehicles are:  Open ended investment companies (OEIC): fund structures designed for both retail and institutional investors that are typically used to buy liquid transferable securities (i.e. shares). This means investors can trade in and out of funds with relative speed and ease. OEICs are rarely listed in their own right; rather, they are bought off from funds platforms or sold directly by fund managers. OEICs often have an initial charge of 3% of an investment and an annual management charge to retail investors of 1.5%;  Private companies: private companies that invest in farmland tend to be vehicles held by pension funds, hedge funds, private equity funds, or individuals;  Publicly listed companies: generally bought and sold by OEICs and private client stockbrokers on behalf of investors, or by individual investors directly, or by pension funds through their appointed asset managers. These companies are often involved in farmland acquisition and ownership activities such as agricultural production;  Closed-end listed fund: these fund structures are listed on an exchange which invests in other listed equities. This investment vehicle is often favoured by the retail investment clients of advisory wealth managers, where it is essentially a listed, liquid corporation owning a range of other listed securities (and private companies) around a theme such as agriculture.  Separate accounts: the preferred vehicle for pension funds that want to own ‘direct assets’, either to exert greater control over the assets or to avoid the costs associated with co-mingled 138

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private equity funds/limited partnerships or the market volatility of listed assets. Separate accounts tend to work under the jurisdiction of specialist advisory firms who acquire and manage land on behalf of investors; and,  Private equity funds (limited partnerships): a private equity firm will raise pools of capital into a fund or limited partnership from foundations, family offices or pension funds, or private equity funds that supply the equity contributions for these transactions. These have recently been the vehicle of choice for institutional investors who select external managers and want to invest alongside other investors in order to diversify risk. Private equity firms, with their investors, will acquire a controlling or substantial minority position in an agricultural project through the fund, then look to maximise the value of that investment. While globally no one legal or corporate structure appears to prevail among the different agricultural asset investment vehicles, private equity funds wholly focused on investing in agriculture currently make up most new investor interest in the African region.

3.3 The rise of African-centric investment This chapter demonstrates that across all the major agricultural production regions, there is a clear increase in the number of new agricultural investment funds launched to attract capital to the sector. While there are increasing numbers of private investors looking to African to fund and develop agricultural initiatives, their number is still at a manageable size. Fewer than a dozen or so private equity funds are currently making direct investments into African agriculture. This accounts for most of the new private equity fund-led capital coming into the region. Many of these funds have, though, tended to be run by ex-‘bulge bracket’3 investment bankers from Morgan Stanley, Deutsche Bank or Goldman Sachs. These bankers may bring with them a mindset that might not be agreeable either to NGO-sponsored development specialists or to financial experts from the development finance banks. This mindset can have a tendency to view African agriculture as another frontier ‘gold rush’ opportunity and believe that implementing large-scale agricultural capital for investment is simply ‘a matter of will’. Today’s bankers have literally ‘gone farming’ and Africa is among their top destinations. The behaviour of capital markets is dominated by a sense of creating new frontiers and new markets. Currently agriculture has a similar feel. Development finance institutions and academics interested in the African agricultural sector have, however, recognised that in the current financial environment private investment represents one of the few major sources of capital available. Public investment cannot meet all the needs, but it can play a role in stimulating private investment for leverage in the sector. Some of the private equity funds set out with the aim of combating hunger and creating jobs while providing returns. The chance to demonstrate a measurable social impact is an appealing one for many fund managers joining private-sector investment funds. Some of these managers are attracted by the opportunity to ‘do something good’. Some have roots in the region – South African-based managers or ex-investment bankers feature strongly – while others take seriously their mandates to manage capital on behalf of a new generation of ‘impact investors’. If conducted appropriately, private investment into agriculture can indeed have a ‘positive impact’. For instance, the OECD and FAO (2008) assessment of private investment in agriculture identified a series of benefits to local communities, confirmation of which might be worth exploring in future research. In their surveys, respondents referred to the following benefits that their investment activity had on the local economy where they operated: 139

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 Introduction of more efficient agronomics and farming/business practices which are eventually adopted by the local population;  Generation of higher productivity in land use and improved crop yields;  Expansion of market access for neighbouring farmers as increased scale of production leads to increased public and private investment in infrastructure and logistics; and,  Increased access to products and services in the agricultural sector and parallel sectors in the local economy.

4 Impact of private equity investment in African agriculture This section considers the various efforts being made to understand the impact of private investment in African agriculture. First, it considers the need for greater critique of private equity investments into African agriculture. It then identifies the various efforts that have been made to measure the impact of such investments. Both development finance institutions (DFIs) and the private investment sector itself are attempting to develop performance guidelines that can act as industry standards. This section suggests that such efforts represent a significant area of opportunity for development organisations to engage with investment institutions and influence the evolution of investment practice.

4.1 The need to critique the African agricultural private equity funds An interesting feature of the African-focused funds is the number that promote their adherence to development-sensitive initiatives that aim to deliver benefits such as those listed above. Particularly common was reference to initiatives such as the UN Principles for Responsible Investment (UNPRI) (2011), or to various socially responsible investment guidelines (see Ismar, Chapter 3.5 in this volume). These may partly be a result of the fact that many of these new investment funds have been set up only relatively recently to manage agricultural funds. For example, the East African Agricultural Fund, the Emergent African Agricultural Land Fund, the Phatisa African Agricultural Fund and Duxton Agriculture have all been created in the last couple of years. At first blush, these investment managers could be seen to be enlightened and interested in ‘pro-poor’ development. Most, if not all, investors in these areas want to be seen as ‘doing the right thing’. This reflects the widespread uncritical assumption that all private capital arriving to develop commercial farming at scale is beneficial. A critique of private agricultural fund approaches can be developed by reviewing the ‘sustainability practices’ that these funds cite. In this manner these funds can be compared against the principles to which they ascribe in order to determine which issues are being prioritised and how they are being addressed. This is important information to garner as if the commercialisation and industrialisation of agriculture is taking place all across the region, it is unlikely that it will all be being conducted at ‘best practice’ standards. An added sense of urgency is provided upon consideration that most capital deployment by private equity into African agriculture has little in the way of track record to review. The critical framework employed is built upon the four parameters for sustainable collaborative agricultural investments developed for IIED by Vermeulen and Cotula (2010):  Ownership: a sense of ownership in the business (equity shares), and of key project assets such as land and processing facilities;  Voice: the ability to influence key business decisions, including weight in decision-making, arrangements for review and grievance, and mechanisms for dealing with asymmetries in information access; 140

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 Risk: including commercial (i.e. production, supply and market) risk, as well as wider political and reputational risks; and,  Reward: the sharing of economic costs and benefits, including price-setting and finance arrangements. It is abundantly clear that in terms of the actual land assets bought, leased and developed for agricultural production, very few of the agricultural private equity funds reviewed allow for either a sense of ‘ownership’ or ‘voice’. With the exception of out-grower models that aim to support smallholder agriculture, few of the funds discuss shared equity participation of projects alongside the external investors. Aside from the commonly listed objective of employment generation, few of the funds expressly discuss alternative models of ownership and development of land assets in which rewards could be shared with local communities. There is also little discussion of how communities facing the prospect of new ownership of local lands might be given an appropriate ‘voice’. There is, though, abundant discussion of how the funds bring benefits of increased educational opportunities. The most common expressions of ‘pro-poor development’ exemplified in the literature from these funds are simply an extension of their proposed corporate social responsibility (CSR) programmes. This betrays the implicit assumptions these funds make that (a) the bulk of the financial rewards generated by land and agricultural production go back to the investors and, by extension, to the investment managers; and (b) local people tend not to be able to participate in ownership or rewards from projects outside of those opportunities provided to them by statutory requirements. Other funds focus not on the immediate benefits of employment, but rather on the broader macroeconomic importance of local and regional food security. The key criterion here is to supply crops to local markets. Other funds cite the introduction of aggregation of smallholder plots to create secure economies of scale, or the social benefits brought about by the introduction of mechanised agriculture and ‘modern farming techniques’. The following passage is illustrative: We define sustainable investment as community-based, technologically advanced and environmentally friendly. It is our view that large-scale agricultural investment must be made in conjunction with efforts to improve returns for small farmers. Education and skill transfer can have economic as well as social benefits within the local community, while smaller farmers can take advantage of improved local and regional infrastructure, including access to storage and transportation. This community-based approach to developing agricultural potential can improve long-term investment prospects by expanding the local market and increasing the community’s ability to attract investment. (Chayton Capital 2012)

4.2 Measuring environmental and social performance There are now a significant number of principles and standards to guide investment projects in developing countries. The principal ones include the IFC Performance Standards on Social and Environmental Sustainability, the World Bank Group’s Environmental, Health and Safety Guidelines, and the African Development Bank ESG standards. There is also a wide range of existing multilateral principles, of which the UNPRI is the most influential (879 signatories so far, of whom a small number signed their supported specific sector ‘Farmland Principles’).4 141

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There is also a set of principles specifically for investing in agriculture. The World Bank, the FAO and IFAD have developed Seven Principles for Responsible Agricultural Investment (UNPRI 2011). The Seven Principles are:       

Respect land and resource rights; Strengthen food security; Transparency, good governance and a proper enabling environment; Consultation and participation; Responsible agro-enterprise investing; Social sustainability; and, Environmental sustainability.

The question then is the degree to which these indicators are affecting existing agricultural investment. Partly to this end, in 2010 the FAO conducted questionnaire-based desk study evaluation of global investment funds interested in agriculture (Miller et al. 2010). The evaluation found that a number of their agricultural fund respondents particularly emphasised ensuring good relationships with the local community as a key element of their business models. It noted an increasing concern among new investors entering the market and interest in establishing voluntary guidelines for sustainable investment. Many already follow existing schemes and certification practices such as GAP, FAO practices, IPC environmental and social standards, EUREGAP certification, ISO certification for internal guidelines and procedures (ibid.). Providing financing for schools, hospitals and local cultural events was a common method used by the fund managers to facilitate good relationships and achieve the objectives listed above. There are often strings attached, however. Such financing efforts were also used to help broker long-term farmland lease concessions with governments. The FAO (Miller et al. 2010) has noted that a major benefit of such deals is that large farm operations are also often the biggest and most compliant tax contributors in their host nations. This expands the tax base for local community use. This FAO evaluation also highlighted a number of funds which were in the process of developing their own internal procedures to track the impacts their investments may be having within local operating areas (ibid.). The OECD also found similar interest among investors in guidelines. They note that though the many new investors and groups continuing to enter the market may take interest in such issues, no single set of guidelines has yet been adopted as an industry standard. While there is no single ‘gold’ standard used by all funds, their survey respondents indicated that they used the following schemes and certification practices: GAP; FAO practices; IFC (Environmental and Social Standards); ‘best practices’; EUREGAP certification; UNPI standards; and ISO Certification for internal guidelines and procedures (OECD 2010). Over the last three years, a number of investment groups along with the Global Impact Investing Network (GIIN) have established the working group Terragua Group.5 The Terragua Group has a goal of developing new standards to steer ‘billions of dollars’ of investment capital in order to create a new model for sustainable investments in African agriculture. The aim of the model is to generate financial returns while also ensuring positive social and environmental impacts (Riddell 2009). Recognising the need to develop commonly acceptable standards for agricultural investment, Terragua engaged bankers to advise them on the development of appropriate standards for investors. From these efforts, the group noted that the current environment is one of increasing complexity for investors with the various overlapping standards. The Terragua Group concluded that a key premium should be placed on the need for principles covering transparency in agricultural investments for sellers, commodity price, property ownership and other key metrics. 142

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In parallel to the Terragua Group, GIIN has also developed a set of principles for responsible investment. Their principles are named the Impact Reporting and Investment Standards (IRIS) (GIIN 2011). The IRIS standards have become influential in social and environmental performance reporting for organisations. IRIS indicators comprise an array of performance objectives and include specialised metrics for a range of sectors including financial services, agriculture, and energy. GIIN has now created a group looking specifically at agriculture (ibid.). This group in turn created a set of IRIS metrics specific to the agricultural sector. The efforts of the Terragua Group and GIIN are working towards the development of a widely agreed-upon set of performance indicators for the agricultural investment sector with which to assess the social, economic and environmental impact of their activities. While neither group may have broad representation among private-sector pension funds or sovereign wealth funds, they do represent an important and growing voice in private capital. Such efforts have the opportunity to lead and set down efficacious aspirational guidelines for improving the type of private investments made into agriculture. These efforts to develop performance principles that could act as industry standard guidelines represent the greatest opportunity for development agencies to engage with private equity funds to influence the ongoing evolution of private investment practice in African agriculture.

5 Conclusions It is being called the new land grab; the rush for agricultural gold. It is a familiar story, a mini tsunami of hot money chasing a suddenly fashionable asset class, and by one reading the dash into agriculture by hedge funds and private equity managers is just the latest discovery of a commodity related play where there is still value to be found. However we think that this trend has significantly more momentum behind it; it is not just an investment story, the re-discovery of the importance of agricultural assets reveals the very real issues facing mankind in relation to food security at a time of rapid population growth, rising affluence, urbanization, and climate change … Agricultural land is proving a strong investment class on its own, but increasingly, we believe, investor attention will focus on the essential expertise in terms of science, equipment, and management skills that can make the land asset produce what humanity cannot live without – food. (Hardman and Co. 2010: 8)

The above quotation neatly summarises the underlying drivers for private equity investors’ desire to become involved in the agricultural sector. The aim of this chapter was to examine the emerging trends in private investment into the agricultural sector across Africa in order to highlight potential avenues for development agencies to engage with private-sector investors in efforts to tackle the global resource squeeze and ensure sustainable markets for investment. It has identified the key drivers behind the increasing interest of private investors in agricultural initiatives throughout the developing world. This chapter also provided an overview of the structural and causal features of the various investment fund vehicles now operating within the African agricultural sector. Finally the various principles and standards guiding the emergence of African agricultural private assets were identified in order to consider the manner in which they may differ or align with the social and environmental objectives of development agencies. There are increasing numbers of private investors looking to Africa to fund and develop agricultural initiatives. Most of these investments are being made via private equity funds. These are funds offered by professional fund managers that are generally not based on the African continent but rather partnered with local investment advisers. The legal structures of the majority of these funds are attracting interest from large pension funds, foundations and sovereign wealth funds. The increase in new agricultural investment funds launched to attract capital 143

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to the African agricultural sector reflects in part the efforts of international policy-makers, DFIs and private-sector interest in addressing food security issues. However, it is also reflective of the growing appeal of agricultural investment projects as profitable business ventures in their own right. The main rationale behind this is promise of higher prices for agricultural produce and land over the long term. Private investors are drawn, on one hand, by the chance to profit from current high demands for food and land prices, and by a balancing of continued apprehension over traditional capital markets on the other. However, while the number of such African agricultural investment funds is increasing, they still exist at a level where it is relatively manageable to study and analyse their policies and practices. Fewer than a dozen or so specialist agricultural private equity funds are currently making direct investments into African agriculture. This does, though, account for most of the new money coming into the region through private equity fund structures. The relatively small number of these funds currently operating presents unique opportunities for development agencies to engage with these funds and thereby influence the ongoing evolution of private investment practice in African agriculture. Concern is growing over the potential impacts this emergence of agricultural land as an alternative asset class may have upon local communities. The question for development agencies and private investors alike is whether or not capital flows can be promoted in ways that will meet growing regional demands for food while simultaneously promoting equitable and sustainable development. Numerous principles and standards for private-sector agricultural investment have been developed by international agencies such as the FAO, the OECD, the World Bank and the IFC. At present, though, none have clearly established themselves as the industry standard. In light of this, new investment alliances are being built between private investment institutions and DFIs to develop original guidelines for ‘positive impact investment’ for agricultural initiatives. These powerful new alliances will be able to deploy capital at scale, and it is this most recent trend that represents the most promising immediate opportunity for development agencies to influence private-sector investment practice across the African region. The formation of such alliances is evidence of an open door to engaging with investors in dialogue concerning appropriate approaches to rural development in Africa.

Notes 1 This chapter is the product of a research project commissioned by the International Institute for Environment and Development (IIED) in 2010. The editors would like to thank Lorenzo Cotula for providing permission to publish an edited version of the IIED research project in this handbook. 2 ‘Alpha’ is the term used for a strategy that generates an excess return over the market as a whole – where the market performance is known as the ‘beta’. Alpha is created from manager skill, namely calling a particular market, e.g. agricultural equities, ahead of other investors. 3 ‘Bulge bracket’ refers to the ‘big banks’, the world’s largest and most profitable multi-national investment banks. Many of them were victims of the 2007–10 financial crisis and received government bailouts because they were deemed as too big to fail. The term ‘bulge bracket’ refers to the first group of investment banks listed on the ‘tombstone’ (financial industry advertisement) notifying the public of a financial transaction or deal. The font size of the name of this bank, or banks if there are co-bookrunning managers, is larger and it may ‘bulge’ out. 4 www.unpri.org/commodities/Farmland%20Principles_Sept2011_final.pdf. 5 The objectives were published and circulated to Terragua members on 23 June 2008.

References Chayton Capital (2012) Agricultural Investments. Online. Available at: www.chaytoncapital.com/html/agricu lture.html (accessed 2 April 2012).

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Credit Suisse (2008) Africa: The Commodity Warrant. Online. Available at: http://wlstorage.net/file/creditsuisse-africa-commodity-warrant-2008.pdf (accessed 2 April 2012). Deutsche Bank (2009) Investing in Agriculture: Far-Reaching Challenge, Significant Opportunity An Asset Management Perspective. Online. Available at: www.db.com/us/docs/Ag_whitepaper_062409.pdf (accessed 2 April 2012). FAO (2009) ‘Investment’, in FAO, How to Feed the World by 2050: High-Level Expert Forum. Rome 12–13 October 2009. Available at: www.fao.org/fileadmin/templates/wsfs/docs/Issues_papers/HLEF2050_Inve stment.pdf (accessed 2 April 2012). FAO/IFAD/WFP (2011) The State of Food Insecurity Report 2011, Rome: FAO, IFAD and WFP. GIIN (Global Investment Impact Network) (2011) Impact Reporting and Investment Standards. Online. Available at: http://iris.thegiin.org/ (accessed 2 April 2012). Hardman and Co. (2010) The World Agro Industry: A Study of Falling Supply and Rising Demand. Available at: www.hardmanandco.com/Research/Agriculture%20Funds.pdf (accessed 2 April 2012). Kleinwort Benson Investors (2010) Agri Equities: The Hard Edge Over Soft Commodities, Dublin: Kleinwort Benson Investors. InvestAg Savills (2011) International Farmland Market Bulletin. Available at: www.investag.co.uk/Bulletin201 1.pdf (accessed 2 April 2012). McIntyre, B., Herren, H. R., Wakhungu, J. and Watson, R. T. (eds) (2009) Agriculture at a Crossroads: Volume 5 Sub-Sahara Africa, IAASTD. Available at: www.agassessment.org/reports/subglobal/Agricultur e_at_a_Crossroads_Volume%20V_Sub-Saharan%20Africa_Subglobal_Report.pdf (accessed 2 April 2012). Miller, C., Richter, S., McNellis, P. and Mhlanga, N. (2010) Agricultural Investment Funds for Developing Countries, Rome: FAO. Available at: www.fao.org/fileadmin/user_upload/ags/publications/investment_funds.pdf (accessed 2 April 2012). OECD (2010) Responsible Investment in Agriculture. Available at: www.oecd.org/dataoecd/4/50/45424283. pdf (accessed 2 April 2012). OECD and FAO (2008) OECD-FAO Agricultural Outlook 2008–17. Available at: www.fao.org/es/esc/ common/ecg/550/en/AgOut2017E.pdf (accessed 2 April 2012). Preqin (2011) Global Private Equity Report, London: Preqin. Riddell, P. (2009) Impact Investing in Commercial African Agriculture. Available at: www.thegiin.org/binarydata/RESOURCE/download_file/000/000/113–1.pdf (accessed 2 April 2012). UNEP (2009) Green Economy Report, Geneva: UNEP. UNPRI (2011) Principle for Responsible Investments. Available at: www.unpri.org/principles/index.php (accessed 2 April 2012). Vencatachellum, D. (2011) Africa Emerging and Frontier Markets. Available at: www.iimemberships.com/ EIdownloads/AFRICA%20Sovereign/Presentations/Desire%20Vencatachellum.ppt#20 (accessed 2 April 2012). Vermeulen, S. and Cotula, L. (2010) Making the Most of Agricultural Investment, IIED. Available at: www. ifad.org/pub/land/agri_investment.pdf (accessed 2 April 2012). World Bank (2011) ‘Rising global interest in farmland: can it yield sustainable and equitable benefits?’ Research at the World Bank. Online. Available at: econ.worldbank.org (accessed 30 April 2012).

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2.5 Domestic land acquisitions in West Africa The rush for farmland by urban ‘businessmen’ Thea Hilhorst and Joost Nelen

Introduction Most analysis of the recent wave of large-scale land acquisitions in Africa has focused on the role of international players and central government. Simultaneously a subtle but potentially more invasive rush for rural land by city-based domestic businessmen is taking place. These acquisitions are expanding fast and risk blocking the growth of smallholder farming systems and the local economy. Inward investment in land and natural resources comes and goes in West Africa, sometimes leaving its scars on the landscape. The recent wave of inward investment, however, seems different as this time it may lead to irreversible changes in control over land and resources, with knock-on effects on production systems and livelihoods in rural areas of the West African savannah. The chapter describes how, at the governmental level, changing policy discourse around agricultural modernisation raises the level of interest in rural land by ‘outsiders’ through advocating a decreasing role for family farming and replacement by corporate farming, in combination with changes in land administration systems. Acquisitions are facilitated by infrastructure development and emerging, but not very transparent, land markets, which make it easier to transfer rural land from customary land tenure systems to ‘new actors’ using formal systems. The focus of this chapter is on developments around irrigated land and land suitable for rainfed farming in Mali and Burkina Faso, with references to Benin.

The context Since the turn of the century, the agricultural sector has strongly reappeared on the agenda of African policy-makers and (international) investors. The increased attention of policy-makers is driven by concerns over food security and the potential to use agriculture growth as leverage for

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economic development. The food crisis in the Sahel of 2004 and the wider global food crisis of 2007–08 provided an additional push. From the investors’ perspective, the prospect of rising land values (Chauveau et al. 2006; Djiré 2007; Durand-Lasserve and Le Roy 2012) and the increase in agricultural commodity prices are important motivators. The new possibilities for rights registration also increase the interest in acquiring land. In addition, international investors face less risk and experience greater potential profits as a result of international investment agreements and deregulation (HLPE 2011). The struggle over land, water and other resources is not a new phenomenon in the West African savannah, but in more recent cases the motivation differs from that of traditional struggles. Conflict over land is now also sparked by ‘inward investments’. A new type of actor, the ‘businessman’, is gaining prominence. The new actor is urban-based and not an agricultural professional. Over the last decade rural land acquisitions by this type of actor have expanded in the ‘hinterland’ (GRAF 2011; Hilhorst et al. 2011). Initially investors were mainly individual ‘businessmen’, but as the trend has developed, companies have increasingly become involved as well. The large majority of these investors are nationals. In the West African savannah, most foreign investments are concentrated in the Office du Niger in Mali, but these investors are spreading geographically, with investment programmes around so-called ‘growth poles’ comprised of large-scale commercial farming, and outgrowers being set up elsewhere in the region (Ouédraogo and Gadiere 2011; World Bank 2011).

Competition over resources and changing tenure systems The powers of customary authorities were gradually eroded with the arrival of colonial powers, who claimed all land (domanialité). ‘Unused’ land became public land. Parts of the forests were gazetted. Expropriation took place in the 1930s in the inner delta of the Niger, an area of about 1 million hectares with good irrigation potential, creating the Office du Niger. Following independence, land officially remained under state control. The influence of formal, statutory land laws impacted mainly on urban areas, and on areas where significant government investment (aménagements) took place, including irrigation schemes, settlement schemes, ranches and pastoral development areas, and on land expropriated for state farms during the 1960–70s. Colonial powers established a new type of authority (‘Chefs de Canton’), composed of children from the local elite who had been schooled by, and integrated into, the colonial administration. After independence, it was this category of administrators who comprised most of the formal power-holders. They often stayed in touch with their communities of origin and engaged in local affairs (for good or bad). The first group of ‘inward investors’ emerged from the ‘administrators’, and started plantations of mango, citrus or timber in their home area in order to provide a retirement income, as well as asserting a customary way of controlling land through planting trees. Later on, these ‘investors’ also started ‘weekend’ farms near the city, on land acquired from communities, a trend which had been spreading since the end of the 1990s. In rural areas, customary land tenure regimes continued to prevail, but became increasingly characterised by legal pluralism: that is, a juxtaposition of formal and informal governance systems regulating control over land and land use. Tension was felt particularly in the management of ‘common lands’, such as forest and range lands. Conflicts between customary authorities and central government representatives first predominantly erupted around control over forests and grazing lands, and became a major source of frustration.1 It became difficult for local communities to uphold management systems for common resources (forests, range lands) without 147

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having legal recognition from the forestry service. In this period, ‘businessmen’ were mostly engaged in ‘resource grabbing’ without seeking to control the land. Businessmen took firewood and other timber to sell in the cities without seeking permission from local communities or paying compensation. A permit from the forestry service was all that was required to operate. The same situation exists for hunting concessions and even for grazing livestock (Lavigne Delville et al. 2002; Hilhorst 2008). Meanwhile, customary authorities continue to manage farmland, natural resources and water points. Generally, land is rented out for cultivation when requested, but cannot be transferred or sold to ‘outsiders’. Third parties living in the community, such as migrants, could obtain user rights provided they respect their hosts’ customs. These user rights are temporary and there is a restriction on investments where they can be interpreted as a ‘claim to land’, for example the planting of trees. The rent is not always paid in money. Competition over land and natural resources between different user groups has become more severe since the droughts of the 1970s and 1980s. Clashes between these groups can be violent, such as has occurred between herders and farmers. Up until at least the 1980s, most rural communities did not feel congested, and used to welcome new inhabitants for the increased strength a growth in numbers would bring to the community. Migrants were also used to enforce claims on land vis-à-vis neighbours; they were allocated plots at the edge of the village land or in contested areas. This perception is changing fast. Nowadays many communities are increasingly reluctant to allocate land, while informal land markets are becoming more widespread.2 The ‘fear of the void’ which led communities to welcome migrants has been replaced by the ‘fear of overcrowding’ (Tallet et al. 2000). Areas where land can still be more easily allocated to migrants is now mostly limited to former ‘river-blindness’ zones in the southern part of the savannah zone where population density is relatively low and rainfall is over 1,000mm. Nowadays this frontier area is the last green belt. Woodlands in these areas are often ‘targeted’ by new inward investors, particularly in those areas with improved access following the construction of roads.3 However, even in these areas land conflict is growing.4, Over the last decade, conflict over land and resources has become more frequent near the borders with Côte d’Ivoire, Togo, Benin and Ghana.5 Local farmers have even chased herders from these zones. Flashpoints for recent land conflicts in southern Mali have included the arrival of farmers from the more densely populated northern zones, where soil fertility is declining. Similar ‘environmental’ migration is even stronger from the Mossi plateau to western and southern Burkina Faso. In certain districts migrants now form the majority of the population. The political impact of this change in population becomes clear during elections at the local government level. Customary authorities fear that they will lose control over land to local governments that are dominated by the migrants. Moreover, the younger generation of indigenous inhabitants is challenging the migrants over existing land use arrangements that were made with their parents (Zongo and Mathieu 2000).

New policies: decentralisation and land policy The insecurity over land rights generated by the drivers discussed above may also result in increased natural resource degradation and local conflict. These themes have been the subject of much research and policy attention in Sahelian countries since the droughts of the 1980s. The findings have contributed to new legislation and policies towards more devolution and subsidiarity to enable more space for local management systems of governing land and natural resources, and to prevent conflict. In theory, communities can regain some control over natural resource use. Since the 1990s, a (new) wave of institutional reform towards devolution has 148

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emerged, following the weakening of the central state in many countries in the region, and the start of democratisation processes. Smallholders started to set up farmers’ associations and national networks (federations, unions).6 Farmers’ organisations are increasingly invited to comment on public policies, including policies around land and agribusiness. Following the completion of constitutional change and policy development, local government elections were held for the first time in 1999 in Mali, 2003 in Benin and 2006 in Burkina Faso. This has led to the establishment of hundreds of elected local governments in rural areas. In Mali new local institutional configurations were enabled, based on local notions of ‘belonging’ (Hilhorst 2008). In Burkina Faso and Benin the administrative layer of arrondissements or departments became the basis for elected local governments. The size of these bodies differs, with the approximately 700 local governments in Mali being relatively small in size, with a population of about 15,000 people. They are of a comparable size to the 250 local governments in Burkina Faso. In Benin, the 70 local governments are much larger (Hilhorst 2008). Local governments are the lowest level of formal government, but are also positioned in between customary authorities and central government. Accountability relations differ and change. In Benin and Burkina Faso mayors tend to be more upwardly accountable to their political parties, when compared with the general situation in Mali. Parallel to this institutional change, land tenure policies are being reviewed (Burkina Faso 2009, Benin 2007, Mali ongoing). These reforms are another outcome of the trend towards devolution and increased recognition of the value of local land and natural resource management systems, which started around the 1980s. These new policies in part involve acknowledging customary land tenure systems and protecting local rights in a better way, while providing openings for the decentralised administration of land and natural resources. However, these policies also seek to promote investments and attract investors, which is a more controversial part of legislation. The prospect of easing the procedure for obtaining certificates or even titles for a plot of land is encouraging ‘new actors’ into land investment. In new land policies, local governments are becoming part of the implementation structure and expected to play an increased role in land use and land administration. For the councillors and staff of local land and natural resource agencies, it is also a source of revenue – for both governments and individuals. This is particularly the case for schemes that assign land for residential purposes (lottissements), which also act to increase land values (Hilhorst 2010).

Large-scale farming The West African savannah is a region without large-scale farming. Colonial powers forcefully introduced commercial farming (groundnuts, cotton) but via small-scale family farmers or ‘smallholders’. The savannah became a labour reservoir for the coastal countries for producing cacao and coffee. Inspired by socialist countries, government-led initiatives emerged in the 1970s, often supported by donors, to set up ranches for livestock and state farms. These were large-scale mechanised farms for which land was expropriated from communities. They mostly failed and in some cases resulted in serious natural resource degradation that is still visible in the landscape. The 1970–80s was also the period of livestock ranches, combined with the idea of promoting sedentary lifestyles (Nelen et al. 2004). The results were meagre and most ranches were abandoned after the droughts of 1973 and 1984. This cessation coincided with a growing understanding and appreciation of the rationale and viability of the prevailing mobile livestock-keeping systems in the unpredictable Sahel conditions. The 1990s brought a more balanced view on the virtues of pastoralism. Mobility has been considered essential for making optimal use of grazing areas and water resources, of which the 149

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availability and quality varies between and within years. It is mobility that allows herders to make optimal use of variation in fodder and water resources availability, within and between the years (Hesse and Thébaud 2006). However, a number of policy-makers continue to regard this lifestyle as archaic, and push for ‘sedentarisation’ and ‘modernisation’ of the livestock sector, which involves keeping livestock in stables and ranches. The ‘traditional’ livestock sector is a pillar of the economy that is growing in importance in response to the growing demand from the cities along the coast. Livestock is the main activity in the drier zones where rainfall is less than 300mm but sufficient drinking water can be found for the herds. Here, access to and control over ‘pastoral resources’ takes places mainly via wells and water points. Since the droughts of the 1980s, when herds moved south, livestock has also become important in the river-blindness zones, along the frontiers with Côte d’Ivoire, Togo, Benin and Ghana (Kamuanga et al. 2008). In the aftermath of the droughts, the mixed experiences with large-scale farming also led to a renewed interest in promoting smallholder farming for food security and economic development. One result of this, also demonstrating the capacity of smallholder farming, is the emergence of a successful cotton sub-sector, which was the combined result of an integrated supply chain approach and mixed farming systems whereby cotton was rotated with food crops and livestock-keeping. Cotton production became an important pillar of the economy. The cotton sector was set up in colonial times. Initially the crop was grown under irrigation in the Office du Niger, but nowadays it is all rainfed and cultivated in the southern parts of the zone. The size of fields varies from a few hectares to up to 50 hectares. Cotton producers are linked to a ginnery that belongs to parastatal or private companies. The cotton sector developed such that it connected all parts of the chain: from cotton seed supply to the export from the harbour of Abidjan or Dakar. Infrastructure development, credit supply, extension and even basic service provision used to be linked to cotton production, which structured developments in the agricultural sector and the wider local economy in southern Mali and Burkina Faso, and northern Benin. Yield increases were achieved by intensification and extension of the fields. Moreover, village-level farmers’ associations, which were subsequently organised at district level, have facilitated innovation in production, input distribution and marketing, and have become the entry point to credit (Babin 2009). After a spectacular growth in the 1980–90s, production stagnated in the 2000s partly due to governance problems in the cotton sub-sector. Moreover, economic liberalisation encouraged privatisation and out-sourcing of support services, resulting in a changed institutional set-up of the sub-sector, leading to a decline in service delivery to farmers. The impact was further compounded by a decline in cotton prices. As the anticipated returns were low, farmers reduced the area under cotton production. Since 2009 prices have been increasing and smallholders are likely to resume investment in cotton.

‘New inward investors’: businessmen entering farming The recent food crisis has led to a return of more interventionist public policies. Concepts of modernisation and professionalisation are becoming synonymous with ‘commercial farming’ or ‘agribusiness’. Smallholders tend to be viewed in the discourse as ‘archaic’ and engaged only in ‘subsistence’ farming. Governments are now actively promoting large-scale farming as the best approach to professionalise and modernise agriculture. The successes of cotton, maize and rice production by smallholders are barely acknowledged in official policy discourses, even though large input subsidy programmes are still being set up for rice and maize production undertaken by smallholders (Roy 2010). 150

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In order to modernise and professionalise farming, since 1999 Burkina Faso has adopted policies to encourage domestic, city-based actors to invest in farming. Through the media, officials are calling upon smallholders to make space available for these ‘agribusiness men’. Some policy-makers have even suggested that smallholders stop farming and start working as farm labourers (see Ouédraogo 2003; GRAF 2011). Benin’s plans for ‘real’ modernisation are focused on international investors and joint ventures. Mali has invited international investors to the Office du Niger. The discourse is therefore imbued with ideas that development and a better life will come from outside the local community. These ideas have the potential to undermine self-confidence of communities and even reduce the interest of the next generation in farming. The image of development offered by these ‘new actors’ is seductive; some investors have been actively approached by ‘host’ communities and customary landholders (GRAF 2011). The renewed interest by governments in ‘agricultural modernisation’ and in attracting private investments for large-scale farms is adding a new dimension to land governance. Central governments are seeking to regain control over land and natural resources to make space for investors and other potential opportunities, such as carbon credits.

Inward investors on irrigated land and inland valleys Inward investors targeting farming tend to prefer irrigated land, where production potential is higher and risks due to the unpredictable rainfall pattern are lower. These areas are also sought after by smallholders.

Large irrigation schemes in the Office du Niger The Office du Niger, located in Mali, is the largest irrigation scheme in West Africa. Based on gravity feed, the scheme depends on the waters supplied by the Niger River. The river has formed a large inland delta in Mali, part of which is a Ramsar Convention site. Water levels fluctuate through the year, in part responding to the rainy season, with the input of rainfall runoff being influenced by upstream watershed management in Guinea and south Mali. The Niger River crosses several countries and is increasingly used for energy production. These hydropower installations are increasingly impacting on water availability and flow velocity (Wetlands International 2012). Irrigated land (land with the infrastructure in place and working), is scarce and nowadays sought after by smallholders (either those already in the irrigation scheme or in the rainfed area), and by inward investors from urban areas. Although the Office du Niger was for many decades neither productive nor popular, this situation changed at the end of the 1980s, when the scheme was upgraded, with the rice market liberalised, and crops other than rice were permitted to be grown. The resulting productivity increase in the Office du Niger is another example of the force of smallholder farming. The zone generated rice, vegetables, employment and wealth. These gains have been partly eroded over the last decades due to problems with water management, timely input of water supply, and diseases. This is partly a result of governance problems in the management of the scheme (Belières et al. 2011). In the future, smallholders may face constraints with respect to water availability for irrigation in the dry season. This is owing to two sugarcane schemes, both under foreign management, being planned for location along the primary channel, upstream of the existing smallholder schemes (Baumgart 2011). Several studies predict water scarcity for the smallholders. This risk is partly denied by the government, which instead refers to groundwater sources and possibilities for water use efficiency to mitigate impact on smallholder schemes. Meanwhile, the cost of water fees has already increased significantly since 2009 in the dry season.7 151

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Another change is the increasing competition of smallholders with inward investors for land. In the existing smallholder section, access to land is via government agencies and smallholders have a one-year lease that is cancelled when water levies are not paid. Every year a number of farmers lose their lease. Increasingly, inward investors use their connections to acquire these fields in the irrigation scheme and then contract local smallholders for sharecropping and contract labour. The government of Mali is actively promoting inward investment in irrigated farming. Rather than the government funding infrastructural works, as occurred in the 1980s and 1990s, the government is now seeking to acquire private investments for primary and secondary infrastructure. New forms of land tenure and types of farm are being promoted. The focus is on attracting ‘corporate farms’, which may be offered long-term leases or even full title to the land. Two new primary channels have been created over the last decade, one paid for by the Millennium Challenge Account and one by a Libyan investment fund (Djiré and Wambo 2011; Baumgart 2011). Domestic and international investors are primarily interested in zones where the government, often with support of donors, has already developed irrigation systems (the Office du Niger in Mali, and similar but smaller schemes in Burkina Faso, such as the Sourou, Kou, Bagré and Kompienga valley schemes). In the Office du Niger, of the 225 leases given out in 2010, 217 were given to domestic investors. The majority requested up to about 50 hectares (most requested 5 hectares). Half of the investors are from outside the zone and are not professional farmers. Investors residing locally, however, are mostly professional farmers (Papazian 2010). Most of the international investors who have received a lease titulaires de bail – office du Niger have already been active for some time in Mali (Chinese, Ivoirians and Lebanese nationals). The majority of international investors who requested land have only been granted a temporary agreement (accord de principe; convention) with the central government. This group of international investors originates from Burkina Faso, Canada, the People’s Republic of China, France, Lebanon, Senegal, South Africa and the USA. Although considerably less numerous than domestic investors, these international investors generally request considerably larger plots of land as they have more financial resources at their disposal. The government of Mali is becoming more rigorous by not renewing initially two-year agreements when no progress is made (Djiré and Wambo 2011). In Burkina Faso, the policy focus is shifting to developing ‘growth poles’ focused around irrigation schemes (for example, in Bagré). This will become a newly developed area of about 50,000 hectares with 10–15 large-scale farms of a few thousand hectares each, surrounded by about 3,000 smaller farms (outgrowers). Agribusiness companies, national or international, will be invited to invest. The programme is located in the former river-blindness zones which are considered agricultural frontiers. The government is leading the programme and has requested loans from agencies including the World Bank (Ouédraogo and Gadiere 2011).

Small-scale village-level irrigation Downstream of the Office du Niger are hundreds of small-scale irrigation schemes of about 20 hectares, which pump water from the river. These schemes were in most cases built with donor resources. Prior to irrigation, the land used to be part of the grazing areas and fisheries. These small-scale irrigated schemes are used only for agriculture and can achieve much higher productivity in terms of agricultural production than rainfed farming, but risks are high. It is not unusual for an entire harvest to be lost if a pump breaks down for more than a few days. Errors in the set-up of the schemes or installation will also affect water efficiency and productivity. There is no evidence available at present for involvement of inward investors in these village-led 152

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irrigation schemes. However, where inward investors do engage in this type of small-scale irrigation, they invest in motor pumps and start their own (micro) irrigation project along the river near the cities on land that they acquired from communities.

Inland valley management Wetlands, situated in areas where rainfall is lower than 300mm, play a strategic role in pastoral livestock systems. These areas are important for feeding and drinking at the peak of the dry season and during periods of droughts. Increasingly, these areas are confiscated for farming, partly by local actors using their own resources, or in the context of donor projects. It has been argued that this has been part of a ‘colonisation strategy’, particularly in Burkina Faso (Cotula 2006). In the southern parts of the region, higher and lower elevation areas alternate. The lower parts of the landscape, the valley bottoms, are more fertile and often waterlogged and occupy 2%–3% of the area. In southern Mali these areas amount to about 3,000 sq km and most of these valleys used to be controlled by women for rice farming. Cattle also rely on these areas for drinking and grazing in the dry season. Decisions to manage water tables in these valleys by building dams are taken by local governments and village leaders in discussion with the project management funding the construction. The location and the height of the dam influence how the valley can be used after construction, and whether rice farming is still possible in smaller valleys. The interests of female rice farmers are often not well represented. External project interventions have therefore deployed for internal power struggles, and often occurred at the expense of women’s rights (Lavigne Delville and Camphuis 1998). In the larger inland valleys, governments are leading the investments, again often using donor-provided resources. The level of investment is relatively high and mainly directed at producing new fields for farming. Some of these schemes may involve pumping systems that require adequate management to ensure production, but such management is not always implemented (GRAF 2008). Generally, governments will take over after the allocation of plots. Transparent allocation of these irrigated plots is a challenge when occurring against a backdrop of increasing interest from inward investors in irrigated land. Inward investors have acquired a large share of the plots and may even control entire schemes, employing caretakers or sharecroppers. Also intra-community grabbing of new irrigated fields has taken place (GRAF 2008). Inward investors who acquired plots in irrigation schemes have to work the land in order not to lose their access. Many have more financial capacity to invest in equipment and inputs than smallholders producing on the scheme, but management is of lesser quality as the investors are often absent, and therefore not overseeing the operation of the land in which they are investing. Clear criteria for eligibility and a strict oversight of the allocation process can improve productivity and equity in irrigation schemes.

Inward investors and rainfed farming Rainfed farming in West Africa In the West African savannah, when evaluated in terms of area and people, income and also food security, most of the farming activities and livestock keeping is ‘rainfed’.8 Rainfall patterns are unpredictable with respect to annual amounts, start of the season, and distribution and intensity of the rain events within the season. Farmers and herders are accustomed to dealing with this unpredictability, usually in the form of droughts, but occasionally also with flooding. The degree of infiltration and run-off depends on the way that soils and vegetation are 153

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managed, thus determining the amount of ‘green water’ captured in the soils (Hilhorst and Toulmin 2000 – see Box 2.5.1).

Box 2.5.1 Controlling water runoff and erosion Water management, by reducing run-off and increasing water-holding capacity of soils, is a key factor in successful cotton and grain production. This management has resulted in major soil erosion control and land use programmes during the 1990s, and investments in integrated soil fertility management, particularly to increase soil organic matter. Soil erosion programmes have been used also to secure land rights, with those land users with temporary rights unable to participate. These programmes also facilitated encroachment into common lands, partly at the expense of grazing lands. Officially, most of these programmes have ceased (Batterbury 1998; Bodnar 2005).

Currently, these rainfed zones produce export crops, in particularly cotton, grains and animal products for regional and global markets, as discussed above. Domestic markets for food production are expanding. The region’s agro-ecological potential is high enough to satisfy these rising demands. Actual production depends on the sustainability of ecosystems, climate conditions, institutions and changing dynamics in the production systems, in which land tenure security is an important factor (Blein et al. 2008). Secure access to land and water lies at the core of rural production strategies and livelihoods for both farming and livestock. A particular feature of production systems in the Sahel is that a considerable part of farmed land is not used on an annual basis. Herders use a specific grazing land for a relatively short time during the year, but will return every year. Farmers make use of fallowing, which is important for soil fertility regeneration, given the limited application of organic and chemical fertilisers (Hilhorst and Toulmin 2000). Long-term fallow lands are the agricultural ‘reserves’ for communities, rich in biodiversity and the areas also for cutting firewood and timber, for hunting and for grazing livestock. Fallow land is important also to ensure regeneration of the shea-nut trees, another important economic activity particularly for women. The size of these ‘forested savannah reserves’ is dwindling, under pressure from expansion of fields by a growing population. Fallow periods are becoming increasingly shorter. Scarcity of land is producing a vicious cycle of soil degradation: when fallow periods become shorter, soil fertility is not fully restored and productivity is lower, due to the shortfall in natural soil fertility not being compensated adequately by soil fertility maintenance practices (Hilhorst and Toulmin 2000).

Inward investment in rainfed farming: agribusiness in Burkina Faso As indicated above, the concept of ‘agribusiness’ was introduced in Burkina Faso by the government in 1999 as an alternative approach to supporting smallholder farming.9 Agribusiness was seen as a strategy for promoting modern, competitive and professional agriculture linked to the market and contributing to food self-sufficiency. In 2002, the Minister of Agriculture stated that the country’s agricultural sector suffered from a terrible ‘lack of professionalism with poor peasants being tied to subsistence farming’. A need for a new agricultural entrepreneurship was identified, based on concentration of capital and land, and following the example of the USA. 154

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It was argued that agriculture could emerge only when professionals engage from categories other than current smallholders. Such professionals would have larger areas of land, and employ farm labourers (GRAF 2011). The glow surrounding the launch of this ‘new’ concept, as well as its appeal to state officials, politicians and businessmen to engage in agribusiness-based inward investment, marked a turning point in investment trends. Access to rural land by these new actors from the city was to be facilitated by more flexible interpretation of the Land and Agrarian Reform Law (RAF), followed by new legislation. It resulted in a rush for land. From 2002, this pressure was exacerbated again by the influx of Burkinabé refugees from the Côte d’Ivoire who started farms, run with family labour, in the same zone, and who were eventually more successful than the urbanbased investors (GRAF 2011). In Burkina Faso, the discourse of ‘new actors’ and ‘agribusiness’ encouraged these ‘businessmen’ to acquire land under customary tenure. The inward investors use their own initiative and networks to acquire land and negotiate directly, or via brokers, with customary landholders. Investors prefer zones that are easily accessible, where soils are fertile and where customary authorities or local government authorities are not ‘difficult’. The offers made by inward investors can be attractive for relatively poor communities. Transactions take place informally, and may be interpreted differently by the various parties involved. The way that inward investors are acquiring land undermines customary authority systems even further and increases local tenure insecurity, particularly for those with secondary rights (women, livestock keepers, migrants) and for young people. Some customary leaders accept transactions without appreciating the long-term consequences. The actions of a few can undermine the livelihoods of many. Diaspora populations used to serve as intermediaries for land acquisition. Lately, however, some diaspora organisations are encouraging their families to be more vigilant with respect to selling land to inward investors (Hilhorst et al. 2011). This wave of ‘agribusiness’ did not receive much direct assistance from government or donor projects. Their settlement was also not part of a strategic land use plan. Investors did use their political position to impress on local communities and ‘force’ the transfer of land; they have also used personal contacts with government agents to acquire land and other assistance, or to stop fines by the forestry services (see Box 2.5.2).

Box 2.5.2 Production by inward investors The information on investments in infrastructure, equipment crops and livestock is self-reported and is based on interviews in 2010 with 99 inward investors, of which 30 cases are located in Burkina Faso. The inward investors interviewed in our survey are mostly civil servants, politicians, traders and other business people, generally with no professional background in agriculture. They do not live on the land; rather, they live either in the capital or in nearby towns. Most act as private individuals, but some have set up companies and in some cases NGOs were even established. A few of these investors are foreigners living in the country, or nationals living abroad. On average, agro-investors invested about 5 million FCFA (€7,620). About 2 million FCFA was invested in the land itself (clearing, anti-erosion measures) and infrastructure, 1 million FCFA in buying livestock, and about 2 million FCFA for equipment. Most of these investments are modest or oriented at small real estate. Investors often acquired second-hand equipment. They invested 155

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about 33,000 FCFA per hectare on average, in crops. The majority used their own financial resources and only 5% had applied for credit. Based on the survey data, the investors have not contributed significantly to food security. The reported yields are similar or lower to that of neighbouring family farmers. Moreover, 28% of the agro-investors reported that they only produced for their own consumption, 25% also for the market combined with subsistence, and 27% only for the market. Half of the investors have created permanent employment for one or two male labourers, generally from outside the community. Only 6% employed somebody from the community. Overall, 45% of the investors were positive with respect to the overall financial results and 55% negative. Those with positive financial results normally live near their farms (Hilhorst et al. 2011). These figures correspond with another study (GRAF 2011), which compared new agro-investors with family farms: the latter make more profit than most new actors.10

There is not much evidence of inward investors having given an impulse towards ‘professionalisation’, ‘modernisation’ or ‘commercialisation’ of agriculture. They may use more motorised equipment and pesticides, but their farming system is less sustainable as there is loss of topsoil and more erosion. The use of bulldozers to clear the land is destroying the resource base. Studies have showed that the performance of inward investors in terms of production or employment generation is at best comparable to neighbouring smallholder farms (GRAF 2011). The occupation of the land – and the fences around the areas – may impact negatively on the local economy because existing activities are disrupted, particularly the livestock sector and shea-nut collection. These studies show that, as farmers, inward investors are not very successful. Most investors are not agricultural professionals and at least one-half of the investors are not satisfied with the results. Some investors experience declining returns. They may even stop their activities, although it is unlikely that they will leave the land for the community to use. Others have acquired land without even attempting to use it, seeking to obtain title and then generate a profit through a future sale (GRAF 2011; Hilhorst et al. 2011). There are, however, examples of innovation. The most successful inward investors are in peri-urban livestock and in specialised supply chains. They engage in seed production, animal husbandry and horticulture, and are either trained in agriculture or can call upon technical knowledge, and have the capacity to invest. The farms are located close to urban markets or have succeeded in entering lucrative niche markets. Returns are also noted to increase for inward investors who reside close to their farms.

‘Zone grenier’ in southern Mali In the cotton belt of southern Mali, the government in collaboration with Alliance for a Green Revolution in Africa (AGRA) and McKinsey is developing a pilot investment proposal to introduce larger-scale farming. This is to be achieved without changing property rights and without calling upon inward investors, but rather by building on local businessmen and the largest farms. The aim is to invest in consolidation around larger farms which are seen as more productive and efficient. The intention is to develop economies of scale via ‘aggregation’ by assisting the 300 largest farms in the area to provide services (mechanisation, warehousing, credit, etc.) to their neighbours. The programme also wants to invest in farmer co-operatives. Investment is also planned in existing companies that are engaged in processing, warehousing and trading. The memorandum states that although establishing large farms (over 1,000 hectares) is 156

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more efficient from a production perspective, it is not feasible with respect to land acquisition, unless government expropriates and guarantees new ownership titles. In 2012 tendering has started (Equipe de Transformation du Mali et al. 2010). It should be noted that the two examples of larger farms named in the report were started by businessmen, active in semi-governmental organisations or NGOs, who have been acquiring (family) land over the last decade in their communities of origin. It is possible that some of their investments were facilitated with donor funding.

Conclusions In West Africa a growing number of Malian and Burkinabé businessmen are acquiring farmland. They use their own contacts, networks and resources. Few received direct government support, but they may be inspired or feel encouraged by government discourse on the importance of modernisation and professionalisation and the role of ‘businessmen’ in recent investments. However, although the term ‘investment’ is used, the amount of resources actually invested is relatively low and profitability is meagre if speculation on rising land value is excluded. Domestic inward investment in farming is not a new phenomenon in West Africa. Examples are the ‘retirement plantations’ by government officials, the acquisition of user contracts for irrigated plots in government-run schemes, or the spread of peri-urban ‘weekend’ farms. This new wave, however, is different. The few studies that exist on this development show that since 2000 more ‘businessmen’ are becoming involved and the size of the plots they obtain is increasing. Although most seek to obtain formal registration, title or other types of documentation, this land information is scattered among several government agencies, is incomplete and not mapped. Many acquisitions are also not visible on the ground and may even be unknown to most villagers. Customary landholders also appear not to keep records. A complete overview is therefore not available and more research is needed. In the rainfed areas, a considerable number of ‘businessmen’ have never invested at all, probably waiting for land values to increase before selling their land. Only a few have attempted to cultivate the land. The most successful are those inward investors who reside more closely to the land and have agricultural skills at their disposal. Overall, these inward investors do not contribute much to food security, employment creation or innovation, while they do compete with smallholders over resources. A considerable proportion of smallholders have proven that they are enterprising, knowledgeable and experienced, as demonstrated by the cotton, rice and livestock sub-sectors. If land acquisitions by inward investors continue at their current rate, conflict is bound to rise within communities over dwindling resources, and also with investors. Rural communities stand at a crossroads. They have to become more selective and allocate land on stricter conditions. More regulation is required with respect to which land is transferred, how much, to whom, at what price and under what contract conditions. This requires collaboration between customary and formal authorities, who often have to approve transactions and monitor contract conditions. Moreover, it may be more profitable for both farmers and inward investors, if the latter were to invest in ‘real’ agribusinesses, comprising commercial activities that would add value and create new markets.

Notes 1 Forestry agents were actively chased away, following the collapse of the military dictatorship in Mali in 1991. 2 See for Burkina Faso: Chauveau et al. (2006); Traoré and Badiel (2008).

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3 These are areas that are the focus of ‘awakening Africa’s sleeping giant’; see Morris et al. (2009). 4 Personal communication, Moussa Djiré 2011; Mohammed Badiel 2011; Bala Sanou 2011; Danseni Koné 2012; Amadi Coulibaly 2012. 5 Another growing problem following the increase in the price of gold is caused by artisanal gold miners who may dig deep holes in farmers’ fields, damaging the land. 6 FUPRO (Fédération des Unions des Producteurs, Benin), UDOPER (Union Départementale des Organisations Professionnelles des Eleveurs de Ruminants, Benin – later completed by national ANOPER), AOPP (Association des Organisations Paysannes Professionnelles, Mali, later completed by national CNOP), Plateforme Paysanne Niger, AREN (Association de Redynamisation de l’Elevage du Niger) and FENOP (Fédération Nationale des Organisations Paysannes, Burkina) completed by federations FEPA-B and CPF. 7 www.aleaulafrique.org/IMG/pdf/Thematique_3. 8 Urbanisation is rising and estimated to be 36% in Mali and 26% in Burkina Faso. Urbanisation will change the rural/urban population ratio, but rural population will continue to increase in absolute terms. See www.unicef.org/infobycountry/burkinafaso_statistics.html. 9 The concept was popularised during a national meeting entitled ‘Forum for New Actors in Agriculture’ in 1999. 10 Conforming to GRAF (2011), we distinguish three types of farming strategies: (a) speculators (including ‘weekend farmers’); (b) farming of (part of) the land, either mechanised, extensive or following common practice; (c) innovators, serving lucrative niche markets.

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——(2011) Agrobusiness au Burkina Faso: quels effets sur le foncier et la modernisation agricole? Amsterdam: GRAF and KIT. Hilhorst, T. (2008) Local Governance Institutions for Sustainable Natural Resource Management in Mali, Burkina Faso and Niger, Amsterdam: KIT. ——(2010) ‘Decentralisation, land tenure reforms and local institutions reforms, building partnerships for equitable and sustainable land governance in Africa’, Land Tenure Journal 10(1): 35–59. Hilhorst, T. and Toulmin, C. (2000) ‘Integrated soil fertility management’, Policy and Best Practice Document 7, Ministry of Foreign Affairs, The Hague. Hilhorst, T., Nelen, J. and Traoré, N. (2011) ‘Agrarian change below the radar screen: rising farmland acquisitions by domestic investors in West Africa: results from a survey in Benin, Burkina Faso and Niger’, paper presented at the International Conference on Global Land Grabbing, University of Sussex, April. HLPE (2011) Land Tenure and International Investments in Agriculture. A Report by the High Level Panel of Experts on Food Security and Nutrition of the Committee on World Food Security, Rome: HLPE. Hesse, C. and Thébaud, B. (2006) ‘Will pastoralist legislation disempower pastoralists in the Sahel? Indigenous Affairs 1: 14–23. Kamuanga, M. J. B., Somda, J., Sanon, Y. and Kagoné, H. (2008) Elevage et marché régional au Sahel et en Afrique de l’Ouest: potentialités et défis, Paris: CSAO-OCDE/CEDEAO. Lavigne Delville, P. and Camphuis, N. (1998) ‘Aménager les bas-fonds dans les pays du Sahel’, GRET, Ministère de la Coopération, CTA, Paris, Wageningen. Lavigne Delville, P., Ouédraogo, H., Toulmin, C. and Le Meur, P. Y. (2002) Pour une Sécurisation Foncière des Producteurs Ruraux, actes du séminaire international entre chercheurs et décideurs, Ouagadougou: GRET, IIED, GRAF. Nelen, J., Traoré, N. and Ouattara, M. (2004) ‘From colonisation to consultation, Regulating the use of a pastoral zone in Samorogouan, Burkina Faso’, Drylands Issue Paper 129, London, SNV and IIED. Ouédraogo, M. (2003) ‘Les nouveaux acteurs et la promotion des activités agro-sylvo-pastorales dans le sud du Burkina Faso: faux départ ou inexpérience?’ Drylands Issue Paper 118, London, IIED. Ouédraogo, M. and Gadiere, A. (2011) ‘Cadre de politique de réinstallation des populations. Projet Pole de Croissance de Bagré (PPCB)’, Ministère d’Economie et des Finances DGCOOP, Ouagadougou. Papazian, H. (2010) Les Investissements Fonciers au Mali, Etat des Lieux et Perspectives des Acquisitions Foncières à Grande Echelle en Zone Office du Niger, Institut National Polytechnique, Toulouse: ENSA. Roy, A. (2010) ‘L’Initiative riz au Mali: une réponse politique à l’insécurité alimentaire?’ Politique Africaine 119: 87–105. Samaké, A., Bélières, J.-F., Corniaux, C., Dembele, N., Kelly, V., Marzin, J., Sanogo, O. and Staatz, J. (2008) Dimensions structurelles de la libéralisation pour l’agriculture et le développement rural Phase II – MaliTome 1: Rapport Principal, Washington, DC: World Bank, AFD, FIDA. Tallet, B., Sanou, S. and Balac, F. (2000) Etude de Faisabilité pour une Opération Pilote de Sécurisation Foncière dans l’Ouest du Burkina Faso, Paris: IRAM. Traoré, N. and Badiel, M. (2008) ‘Enjeux et défis d’une Sécurisation Foncière au Milieu Rural: Bilan d’un processus de mise en œuvre de règles locales de gestion des ressources naturelles dans le Département de Samorogouan 2003–7’, Bobo-Dioulasso: SNV. Wetlands International (2012) ‘Les barrages et le changement climatique menacent les zones humides du Fleuve Niger ’, Wageningen: Wetlands International. World Bank (2011) Republic of Ghana: Tackling Poverty in Northern Ghana, PREM 4/AFTAR Africa Region, Report No. 53991-GH, Washington, DC: World Bank. Zongo, M. and Mathieu, P. (2000) ‘Transactions foncières marchandes dans l’ouest du Burkina Faso: vulnérabilité, conflits, sécurisation, insécurisation’, Bulletin de l’APAD no. 19.

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2.6 ‘Land grabs’ and alternative modalities for agricultural investments in emerging markets Phil Riddell

Introduction This chapter sets out to explore three hypotheses: 1 that the strengthening of Africa’s small farmers is not the only defensible way to attempt increased agricultural production in the sub-Saharan region; 2 that ‘land grabs’ of the kind excoriated in the press are not the only way to invest in commercial African agriculture; and, 3 that sub-Saharan Africa represents vast, untapped agricultural production potential that can be mobilised equitable and sustainably. Our exploration will have three parts. In the first we examine why these hypotheses matter and argue that although at the regional level sub-Saharan Africa’s agricultural production potential is more than enough to meet the region’s own needs (regardless of whether they concern food, beverage or industry/energy crops), commercial production modalities will be necessary to mobilise much, if not most, of that potential. However, experience with commercial modalities to date has been mixed at best. Hence for commercial agricultural investments to work in a sustainable and equitable manner requires:  rigorous stakeholder mapping to ensure not only that the right people are involved when key decisions are made, but also that they share any benefits accruing to those decisions, as well as an appropriate share of the risks; and  a more convincing investment typology in terms of transaction models, regulations and objectives. The second part of our exploration offers such a typology while the third presents case studies of three commercial investments being implemented at the time of writing, all three of which are well known to the author. They each represent a very different kind of transaction model and objective in terms of both scale/cost and stakeholders, but all are consistent with the typology proposed in Part 2.

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The essay ends with a brief final part making a case for a more favourable perception of agricultural FDI into emerging markets.

Part 1: Why the hypotheses are important, and Africa’s agricultural potential Hypothesis 1: Strengthening of Africa’s small farmers is not the only defensible way to attempt increased agricultural production in the sub-Saharan region Farming in typical developing country regions is characterised by smallholdings, especially in Sub-Saharan Africa. An important current debate therefore concerns smallholder production models as compared to commercial models, in the context of the international development community’s persistence1 in concentrating on the former as the cornerstone of their food security strategies.2 The global population continues to rise and everyone needs to eat. Yet in the absence of new production and distribution paradigms, it will become increasingly difficult to meet demand for food owing to deteriorating or scarce natural resources; climate change; profound demographic changes in terms of human resources; and uneven playing fields as far as trade is concerned. Despite these challenges, improving socio-economic conditions and the higher incomes that result mean that demand for food is expected to increase some 15% faster than population growth. At the same time, economic diversification – especially in traditional food-producing areas – will mean that the number of people eating food will continue to rise while the number of producers will continue to fall. In addition, many of the ‘non-producers’ will be the urban poor and the rural landless, for whom their governments will be eager to secure and sustain affordable food supplies. It should be clear therefore that this simple review of the demand side reveals an emerging food security problem at the global level, a problem which suddenly becomes very much bigger when we turn around and look at the supply side. At the very least, food security requires a sustainable combination of  natural resources (land and water) from which to harvest or gather food, and  human resources to do the harvesting and gathering.3 We have already seen that the latter are reducing as a result of economic diversity and urbanisation (at least as far as traditional food production models are concerned), but natural resource sustainability and quality are also becoming increasingly compromised while at the same time climate change is expected to make food production more difficult or risk-laden with the resources that remain. Add to this increasing competition on those resources for industrial crops (which include energy crops) or non-agricultural uses,4 and the true scale of the food security challenge begins to emerge. However, before moving on to a consideration of options for closing the gap between supply and demand, it is helpful to take a closer look at some of the ways by which the production base is being compromised. In situations characterised by unreliable input supply, unclear land tenure and perceived risk of climate shock (flood as well as drought) or biohazard shock such as disease or pests, farmers are reluctant to invest capital and effort beyond their very limited risk horizons. When poor markets and inadequate market information are also involved, the general picture becomes one of low-input, low-output subsistence farming – with household self-sufficiency, not broader food security, being the objective. This has two important ramifications. The first is environmental, in that subsistence farming of this sort is extensive in nature in order that the risk of low yields can be offset by larger harvested areas. The problem with this is 161

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not only the great toll that low-input, extensive farming systems place on the natural environment in terms of excessive tillage, soil nutrient mining, overgrazing, deforestation, etc., but also that by definition it takes place over unnecessarily large areas.5 Second is that the number of small-scale rural food producers continues to fall in relation to the non-producing sector of the global population and would continue to fall even in the absence of population growth, owing to changing aspirations and socio-economic conditions. It therefore becomes more and more unlikely that development strategies aimed at the small farmer will satisfy demand for food among the population at large. Even so, it is stressed that none of this means to say that the struggling smallholder should be abandoned! On the contrary, the pressing need to build their capacity, to provide them with effective, accountable services and to improve their socio-economic connectivity will continue for many years to come. Such strategies remain crucial, moreover, as they offer an alternative to rural–urban drift while reducing the need for extensive production models, thereby improving natural resource utilisation and ecosystem services for all. Accordingly, innovators and practitioners working to these ends are to be commended and empowered: so long as it is at least understood that the available funds may have greater food security, poverty alleviation, environmental and economic growth impact if allocated differently. However, this, being a matter of political economy, is beyond the scope of this essay. To make matters worse, the global population is not stable. It continues to expand and to do so (1) while typical major food producing regions are approaching the maximum that they can produce for the regional and world markets,6 and (2) while sea-level rise is expected to compromise the subsistence of around 1 billion people who currently depend on fisheries (BBC 2009). Furthermore, no massive new productivity gains are expected soon, at least not along traditional R&D trajectories, while the existing challenges are further nuanced by the fact that a very significant number of the new ‘non-producers’ continue to join the urban poor whose cash-strapped governments already struggle to secure affordable food supplies. Finally, to make things even worse, climate change-related challenges such as glacial melt, rising sea levels and unsuitable or unreliable weather are expected to reduce the amount of food that traditional producing areas can grow – while bio-fuel and other industrial crops will compete with food crops for the remaining natural resources. Articulated more simply, demand for food and other agricultural commodities will continue to increase while the ability of traditional producers and traditional regions to meet that demand will decrease. It should be self-evident therefore that (1) the ever-increasing gap will never be filled by smallholder farming, and hence (2) there is a pressing need for new production models and new producing areas.7 Simple assessment of the choices available suggests that such new production models will include commercial enterprises.

Hypothesis 2: ‘Land grabs’ of the kind excoriated in the press are not the only way to invest in commercial African agriculture So far, so good. Our first hypothesis seems proven: the world needs an equitable and sustainable alternative to smallholder agriculture if it is to be both fed and supplied with adequate quantities of agricultural raw materials for industrial purposes. This is well understood by the governments of rich but food-insecure countries that are trying to solve their problems elsewhere and the international investment community which is characterised in part by an increasing number of agribusinesses, funds and high net worth family offices or individuals that are actively looking to invest in commercial emerging market agriculture. Some of these (in cahoots with opaque vested interests in target countries, especially in Africa), are responsible for the ‘land grabs’ with which the media seems obsessed, but others are motivated not only by commercial success, but 162

Alternative modalities for agricultural investments

also by a desire for increased social equity and environmental responsibility: many of these are aligned with the impact investment paradigm.8 Before moving on to a consideration of investment modalities that provide a meaningful alternative to the so-called ‘land grab’ model, it is necessary to define exactly what a ‘land-grab’ is assumed to be for our purposes here. Thus here, ‘land grab’ describes an agricultural land development that:  is granted to an investor (of any kind, including a sovereign nation seeking an external solution to its internal food security problems) with minimal to nil consideration of the natural resource implications, especially as they concern implied water rights that ignore the opportunity costs of water (social, environmental and economic) and the need for an integrated approach to water allocation;  returns little to nil in the way of benefits to either the local or national population in terms of food security and may actually result in significant dis-benefits;  does not involve all the stakeholders, especially customary land users (including pastoralists) and downstream water users/water economies in the decision-making and investment9 process;  does not share the benefits equitably, if at all, with the same stakeholders. It is not unreasonable to suspect that elements of corruption lie behind typical such deals. But there are alternatives. They are neither revolutionary nor in most cases are they new. Even so, they do not receive the media attention that they deserve.10 None the less they could and they should – for reasons suggested in the closing comments at the end of this essay. They include the following:

Contract farming This is usually relevant to the investor who is interested in processing or similar added-value opportunities. Under this arrangement, the investor enters into contracts with independent local growers to supply the raw material (such as sugar, cocoa, pyrethrum, whatever …) from their own land. The growers themselves could range from large private estates to small outgrowers, and where the latter lack capacity or sophistication, an impact investor would usually fill the gap with a seasonal and timely package of technical assistance, finance and inputs. However, in investment terms there is a limitation in that, even if revenues are highly satisfactory, the prospects for capital growth are limited because the investor does not benefit from any capital growth accruing to the land involved. In addition, there is a very real danger in that the minimum needed for the process chain to break even and amortise any debt involved in its establishment may not be realised, because of either low production or side-selling. The next model has the potential to solve this problem.

Nucleus estate and outgrowers Under this arrangement, the investor (who may or may not have added-value interests) operates a central estate, but has a contractual arrangement with outgrowers to increase the amount of the commodity to be traded or processed. Again, the outgrowers could range from large private estates to small outgrowers and, as above, where such farmers lack capacity or sophistication the impact investor would fill the gap with a seasonal and timely package of technical assistance, finance and inputs. It is also possible that the investor might install an irrigation system that serves not only the nucleus estate but also the outgrower, depending on their levels of contiguity with the nucleus estate. 163

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According to Riddell (2009), this model has the potential to represent best in class for the impact investor, because of the massive potential impact on the productivity and livelihoods of small outgrowers who are ordinarily denied access to the factors of higher productivity, such as credit, inputs, technical expertise and better markets (see also Abernethy’s ideal social outcomes from commercial investment: production and productivity, profitability, equity; sustainability and enhanced quality of life; Abernethy 1989). The combination of improved access to better inputs and markets has been shown in some cases, for instance, to increase smallholder yields by as much as 400% and their incomes even more. The concept is perhaps most developed, or at least most comprehensively described, with respect to the forestry sector, but the principles none the less are transferable to other agricultural sub-sectors. The concept is evaluated and the principles are explored in detail in Mack (2002) section 14 of which comprises an effective specification for a nucleus estate/outgrower programme based on the actual example of a community forestry programme in South Africa. By way of a simple summary, the key components of a successful outgrower model are said to be:  clearly understood institutional arrangements (in terms especially of how the outgrowers are organised and/or represented in the agreement, i.e. as individuals, corporate entities or farmer groups for instance);  durable, clearly understood and adequately enforced contractual arrangements that define the roles and expectations of both parties, i.e. the commercial entity (nucleus estate and/or processor) and the outgrower(s);  capacity-building and service delivery (for instance, assistance in obtaining water permits, husbandry advice, credit and market access/consolidation) by the commercial entity for the outgrowers;  where appropriate, actual management of the outgrower farms by the commercial entity, to one degree or another. Another reported benefit of this model is that the private-sector can be a better conduit for development support (Riddell 2009), but perhaps of more interest to the investor, in this context, is that under the nucleus estate/outgrower arrangement there is a capital asset with growth potential in the form of the nucleus estate. This of course depends on the nature of the land holding involved. But where some sort of title is involved, it is reasonable to postulate that the rate of asset growth is likely to be dependent, in part, on the success of its outgrower programme, especially if the outgrowers themselves farm land included in the investor’s title.

Landlord/labourers Under this arrangement, smallholder farmers rent their land to the investor (who may also have a nucleus estate). This allows the smallholders to benefit from an economy of scale in terms of mechanised operations and tighter control over the husbandry of the crop. Additional benefits also revert to the ‘landlords’ in the form of labouring wages, training opportunities and, potentially, a share of the results (see Abernethy’s equity outcome above). An example would be the block farms proposed in Lesotho (Ministry of Agriculture and Food Security 2005) whereby fragmented, overworked family plots would be consolidated, pro rata, into 20 ha blocks and farmed as single units intended for maize, with possibilities for a second crop where irrigation is feasible. Farmers are rewarded with labouring wages and 20% of the harvest. This works well because baseline maize yields are abysmal, at around 500 kg/ha, against a reasonable potential of say 4,000 kg/ha–5,000 kg/ha under a more productive farming system. Some 20% 164

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of the potential yield represents an increase in production of around 200% in the farmer’s eyes. Thus, as well as cash income accruing to rents and wages, the farmer’s household food security is doubled in a way that leaves the investor with a healthy surplus to mill, bag and take to the market. Of course, if this arrangement facilitates the production of a second cash crop the benefits increase in everyone’s favour – even if the second crop can only be achieved on a portion of the area. Lesotho’s block farms remain, however, at the concept stage. To see how it actually works on the ground, we could look at Africa Invest’s approach in Malawi, where a landlord/labourer model using consolidated blocks is already working well commercially, even with merely modest yield increases (Phiri 2007).

A pause for thought The three models described above all involve the participation of the community in some form or other. Before proceeding to consider the other two models which do not, or at least not in the same way, there are a couple of cross-cutting issues relating to community-oriented deals that can be usefully captured at this point. One concerns risk and the other, opportunities for environmental impact. A widely reported risk in such cases concerns side-selling, as already mentioned. In other words, where the investor has advanced goods to the outgrowers (i.e. finance, farm chemicals, irrigation service) there is a risk that, come harvest time, the outgrower sells to a third party offering more cash, or more immediate returns. Three approaches mitigate this risk.  Rigorous enforcement of contract law – but this rarely happens.  Robust, prior social facilitation, either by qualified experts, or by the purchasing agents (in the case of contract growers). A good example of this would be the Pyrethrum Company of Tanzania Ltd, which claims that a rigorous programme of community contact by its purchasing agents has completely obviated any temptation to side-sell on the part of its contracted producers.  Arrangements that link the investor, not with individuals, but with groups such as farmer co-operatives. If one member of the group then side-sells, the entire group loses its benefits for the next season. This form of social collateral has been found to work well almost everywhere that it is applied. As far as the environment is concerned, all three of these models present excellent opportunities for an engagement at the environmental level. In Lesotho, for instance, the fragmented land holdings that have potential for consolidation into block farms are situated in highly degraded catchments. The investor therefore has a clear opportunity to operate the block farms in a way that restores environmental integrity. Similarly, the International Conservation Union (IUCN) is eager to see inhabitants of the buffer zones around Mozambique’s national parks engaged in productive, but sustainable agricultural activities11 – this is clearly an ideal opportunity for the impact investor interested in nucleus estate/outgrower or labourer/landlord models. Similar opportunities are likely to be encountered in many other parts of sub-Saharan Africa.

Partnerships As anticipated here, a partnership deal would be one whereby a local asset-holding entity makes it available on an equity basis to an investor that could render it productive, or more so, by a combination of technical expertise, investment capital and working capital. The asset might be 165

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land, an added-value chain or a combination of both; and the entity might be a community, a corporate entity (a co-operative or company, for instance), an institution (perhaps the government or a parastatal) or an individual. Any such partnership would then be established and operated under the appropriate national legislation and usually avoids the land holding difficulties that are wisely seen as ‘problematic’ by the savvy investor. Social benefits under such partnerships would accrue to improved quality of life for farm workers (again recall Abernethy); increased employment opportunities in both farming and value-added activities; national or regional food security; and, under the right circumstances, accelerated economic growth and livelihood differentiation through increased trade and marketing. Where needed, environmental enhancement would accrue to restorative land-use practices and the wise use and allocation of natural resources, as well the willingness of the impact investor to conform with any applicable regulatory framework where such frameworks exist, and according to the appropriate advice of experts where they do not.

Commercial estate or venture Finally we get to the simple but adequately regulated commercial estate, which describes a situation where the investor holds 100% of the operation, be it a farm, a value-added chain or both. Where land is involved, tenure could be freehold, leasehold or a simple rent. Social and environment impacts would be the same as for a partnership deal. Equitable and sustainable investment modalities such as those described above certainly represent socially advantageous alternatives to the ‘land grab’, but for any typical investors, ‘impact’ or otherwise, social equity and environmental responsibility are only two objectives. Another is profitability, regardless of how, or between whom, those profits are shared. This introduces two important questions: 1 Does profitability depend on the exportation of commodities from a producing to a consuming country? 2 What are the determinants of commercial success in emerging market agriculture? With respect to the first question, shifting food production and consumption dynamics coupled with higher commodity prices means that a profit-minded investor no longer needs to look for the ‘next kiwi fruit’. This is because basic food production for local markets now offers equally or even more attractive investment opportunities in many emerging markets, especially if value addition is included. Local markets in countries with good enabling investment environments are often robust enough to justify inward investment, while high food prices are likely to persist for a long time into the future, if not indefinitely.12 However, more than that is the fact that where repatriation of profits is permissible (as is increasingly the case) it is not necessary even to export the agricultural commodities in order to realise hard currency returns on investment. NEPAD/Technoserve (2004, cited in Warner et al. 2008: 24) confirm, moreover, not only that domestic demand will remain strong, but also that it is expected to grow significantly even into the long term: ‘the anticipated rise in farm gate income from growth in retail urban African food markets in 2030 [will be] eight times (800%) that to be generated from export sales’. This is especially beneficial for an investor given that domestic sales avoid the potential logistical difficulties often associated with exportation – this is an important due-diligence issue for the would-be investor.

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Moving on now to the second question: according to Poulton et al. (2008), actual realisation of potential profits is dependent on an adequacy of land, water and affordable labour.13 To these can be added comparative advantage,14 because while there may be a degree of political economy behind crops that are promoted by state extension agencies, the commercial impact investor will be generally interested in profitability, social equity and environmental sustainability not policy per se, except so far as policy influences the enabling environment for investment. None the less, given the commercial viability of basic food crop production (as demonstrated above) there is likely to be a close nexus between crops that could be chosen for commercial reasons and those chosen according to political economy. However, this should not be taken too far. A very dry but flat area currently growing, say, maize may have comparative advantage for rice if the soils are suitable and irrigation is possible, whereas a steeply sloping, but adequately watered area would not have this, regardless of whatever policy may or may not say about increased local rice production. Comparative advantage also introduces the potential benefits of regional trade and the need for tradable surpluses. Regional trade increases an investor’s market, while correctly managed tradable surpluses would drive broader socio-economic development. In addition, regional trade not only introduces the possibility of providing regional solutions to local problems, but it is also a determinant of sound water management. This is because:  a political economy that abandons politically cheap dreams of self-sufficiency in favour of mobilising comparative advantage by facilitating regional trade is more likely to make the most productive and sustainable use of natural resources;  expanding market activity as a result of regional trade will diversify livelihood opportunities and create jobs, thereby reducing direct dependence on fragile and/or scarce natural resources while increasing livelihood benefits/unit of water, and indeed of land. However, tradable surpluses are even less likely to accrue to smallholder production than is national food security: so if regional trade is indeed considered desirable, as it should be, then someone else has to produce the goods – which is why Poulton’s determinants are so important. The question of land and water are covered in the next section, so we close this one with a very cursory consideration of labour availability. According to the CIA World Handbook, in 2008,15 unemployment rates in selected subSaharan countries were as in Table 2.6.1: Table 2.6.1 Unemployment rates in selected sub-Saharan countries in 2008 Namibia Nigeria Central African Republic Ghana Sudan Mauritania Gabon Mozambique Botswana South Africa Cameroon

5.3% 5.8% 8.0% 11.0% 18.7% 20.0% 21.0% 21.0% 23.8% 24.2% 30.0%

Mali Kenya Swaziland Lesotho Senegal Zambia Djibouti Burkina Faso Zimbabwe Liberia

30.0% 40.0% 40.0% 45.0% 48.0% 50.0% 29.0% 77.0% 80.0% 85.0%

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Although historic, these admittedly indicative figures are unlikely to decrease. Rather, they can be expected to have increased owing to unremitting population growth and global financial crises.

Hypothesis 3: Africa represents vast, untapped agricultural production potential that can be mobilised equitably and sustainably With its vast underutilised natural resource base, large underemployed populations and emerging regional trade blocks, there is little reason to doubt that sub-Saharan Africa could and should be one of the new producing areas. In fact, with the right mix of enabling policy and appropriate investment models, there is no reason why it should not become the most important food-producing region in the world. However, and especially given everyone’s seeming fixation on Africa’s own undisputed problems, on first consideration it would seem that along with economic diversification and land-use change in traditional food-exporting countries, food production threats elsewhere are not Africa’s problem. In fact, by some reckoning they are not, at least not directly. But expanded agricultural production in Africa would not only increase local food security, it could also contribute to global food security while the countries involved would benefit from export-based forex generation as well as greater economic integration regionally and globally. So how much undeveloped agricultural potential does sub-Saharan Africa have and, more importantly, how much will it have in the future? The FAO groups the sub-Saharan African countries into seven sub-regions as indicated by Table 2.6.2. According to database resources maintained and updated by the FAO,16 unrealised agricultural potential17 in these sub-regions, rainfed and irrigated in 2006 (the current baseline) and in 2080,18 under a business-as-usual development scenario, was/will be as shown in Table 2.6.3. Table 2.6.2 Composition of sub-regions in sub-Saharan Africa Central

Gulf of Guinea

Indian Ocean Islands

Angola Burundi Cameroon Ethiopia Central African Republic Kenya Congo Rwanda DR Congo Tanzania Gabon Uganda

Benin Côte d’Ivoire Ghana Guinea Liberia Nigeria Sierra Leone Togo

Mauritius Madagascar Seychelles

South Africa

Southern

Sudano-Sahelian

South Africa

Botswana Lesotho Malawi Mozambique Namibia Swaziland Zambia Zimbabwe

Burkina Faso Chad Eritrea Gambia Mali Mauritania Niger Senegal Somalia Sudan

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Eastern

2006 2080 2006 2080 2006 2080 2006 2080 2006 2080 2006 2080 2006 2080

Central

31,358 43,592 43,007 63,197 76,845 94,135 2,470 3,600 20,218 24,230 61,986 68,730 235,884 297,484

used 403,366 391,132 140,259 120,069 151,220 133,930 33,701 32,571 158,860 154,848 208,479 201,735 1,095,885 1,034,285

available

Rainfed area ('000 ha)

Source: FAO current, but Nambia, Republic of South Africa and Seychelles not included owing to lack of data.

SSA Totals

Sudano-Sahelian

Southern

Indian Ocean Islands

Gulf of Guinea

Eastern

Year

Region

Table 2.6.3 Unrealised agricultural potential in 2006 and 2080

8% 11% 31% 53% 51% 70% 7% 11% 13% 16% 30% 34% 22% 29%

72 143 563 1,173 460 930 1,102 2,652 468 826 1,399 2,446 4,064 8,170

% used used 13,670 13,599 6,302 5,692 7,134 6,664 1,550 — 4,240 3,882 5,259 4,212 38,155 34,049

available

1% 1% 9% 21% 6% 14% 71% 100% 11% 21% 27% 58% 11% 24%

% used

Irrigated area ('000 ha)

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The large surpluses at the macro level clearly confirm that any competition for land will be highly localised (and hence a regulatory challenge, as dealt with elsewhere in this book). The irrigation potential is based, moreover, on sustainable water resource allocation at the macro level, although, as with land, in most cases competition for water will increase closer to the point of use, or will require storage (but once again this is a regulatory challenge). In addition, it is important to understand that in some specific countries19 agricultural land use, especially rainfed land, is expected not to increase. In fact, in some cases it is even expected to decrease (oil-rich countries or countries with robust economic diversification expectations, for instance). Accordingly and notwithstanding the need for regulation, the region clearly has and will continue to have a huge unallocated land potential at the national, regional and global levels.20 It should be self-evident that with rational and transparent regulatory frameworks, much if not all of this potential could be allocated to commercial interests without compromising access to land by indigenes. Revisiting the foregoing material allows us to conclude that:  There are already more people eating food than growing it, a trend which not only will continue but is expected to intensify with the collapse of marine fisheries upon which an estimated 1 billion people depend.  A combination of economic diversification, land-use change,21 climate change and natural resource limitations means that traditional food-producing areas are approaching their maximum productive potential, and in some cases (expected to increase) are already retreating from it.22  Future demand will have to be met in large part from new supply bases, and since there would seem to be no way around this, regions with large undeveloped food production potential will have to be brought under production.  The total factor productivity of agriculture will be improved if crop selection, instead of responding to political economy, reflects comparative advantage and acknowledges the potential benefits of regional trade and regional solutions to local problems.  New socio-economic production modalities, with well-regulated commercial characteristics, will be necessary to convert productive potential/comparative advantage into satisfied demand.

Part 2: Investment typology and its stakeholders The new paradigm hinted at above assumes an increasing role for commercial production of basic food crops in developing country regions, but built wherever possible on a mutual recognition between the smallholder and commercial constituencies as well as on a search for common ground in the form of contract farming, nucleus estate/outgrower or community partnerships wherever practical and feasible. However, where such possibilities do not exist – perhaps in areas of low population densities, or where they are not feasible for whatever reason (perhaps because of competing demands on labour) – opportunities for acceptable commercial production do not necessarily disappear. In fact, they might even become more apparent, but if pursued, any commercial venture should at the very least be consistent with the equitable, sustainable and wise use of natural resources. All this having been said, it is now necessary to compare production modality with production potential – hence the objectives matrix in Table 2.6.4. It is indicative only and is included simply to give the reader a sense of how different deal types relate to different cropping sectors 170

Typical high value food

 soybean  sesame  high value horticulture (HVH) Examples of added- Examples of addedvalue opportunities value opportunities  milling and bagging  animal feeds  bran oils  oils  parboiling and/or  grading, cleaning shelf-ready and shelf-ready  packaging packaging of HVH

 rice  maize

Typical basic food commodities

Production objective

 sugar  cocoa  oil palm

Typical industrial crops

Catchment restoration

Special environmental objectives

Contract farmers will be, by definition, established operators and are unlikely to be located on degraded land. None the less, that Examples of added- does not mean that their operations will necessarily be environmentally value opportunities  processing of sugar wise, in which case it may be possible to incentivise improved and its by-products  processing of cocoa practices by means of premium prices or some sort of certification.  oil palm milling and industrial use of the oil Location-specific Location-specific Location-specific added value or added value or added value or peripheral benefits peripheral benefits peripheral benefits  derelict oil palm and  there is a huge  big demand for cocoa estates in West regional demand for soybean-based Africa that could be rice in West Africa poultry feed in East brought back into which could be grown Africa productivity in Mali, Senegal and Sierra Leone Nucleus estate As for contract farmers There is considerable scope for and outgrowers building catchment-restoration objectives into this type of deal, and this would usually result in increased profitability and therefore a win–win scenario.

Contract farmers

Type of deal

Table 2.6.4 Objectives matrix

This type of deal is ideal for buffer zone management anywhere there are large conservation areas, especially where local communities feel threatened by them.

This is relevant to smallholder subsistence farmers and not, by definition, contract farmers, who if situated in a buffer zone can be expected not to rely on encroachment into the protected area. It is none the less possible that their operations will be environmentally unsound, in which case see previous column.

Buffer zone management

Partnerships

Landlord/ labourers

Type of deal

 soybean  sesame  high value horticulture (HVH) Added-value opportunities  soybean processing  grading, cleaning and shelf-ready packaging of HVH

As for contract farmers

As for contract farmers

As for contract farmers

Typical high value food

Production objective

 rice  maize  wheat  barley Added-value opportunities  milling and bagging

Typical basic food commodities

Table 2.6.4 (continued)

 sugar  cocoa  oil palm  cotton Added-value opportunities  processing of sugar and its by-products  processing of cocoa  oil palm milling and industrial use of the oil  cotton ginning, cotton seed oil, cotton seed cake As for contract farmers, plus:  There are considerable prospects for partnerships in West Africa, and to a lesser extent in East Africa

Typical industrial crops

Buffer zone management

Location-specific added value or peripheral benefits It is not impossible that a potential not relevant partner might want to throw in some seriously degraded land, in which case there would be considerable scope for catchment restoration under this type of deal.

As for nucleus estate and outgrowers Not relevant

Catchment restoration

Special environmental objectives

Typical basic food commodities

Source: Adapted from Riddell (2009).

Commercial estate

Type of deal

Table 2.6.4 (continued)

As for partnerships

Typical high value food

Production objective

 There is massive reported regional demand for locally finished cotton textiles

Typical industrial crops

Buffer zone management

It is possible to envisage a situation Not relevant where a commercial estate is developed on degraded land, in which case there would be considerable scope for catchment restoration under this type of deal.

Catchment restoration

Special environmental objectives

Phil Riddell

and certain environmental objectives. It will be clear that the differences between the deal types are subtle and generally concern the environmental objectives and location-specific added value or peripheral benefits.

Part 3: Case studies In order to provide examples of ‘land grab’ alternatives, this section presents case studies of three deals of different orders of magnitude currently under implementation in Tanzania and Sierra Leone, and with which the author is directly involved.

Case study 1: A Tanzanian partnership  The transaction model comprises an investment of technical assistance, equity and debt financing into a partnership between a foreign investor, a European social bank and a successful rice-producing co-operative of 5,630 ha in the south of the country. This is in response to three driving forces. First, the co-operative is eager to avail itself of the benefits of such a partnership. Second, the co-operative’s articles of association specifically anticipate such a partnership. Third, the approach is entirely consistent with national policy as extant with respect to both the Ministry of Agriculture, Food Security and Co-operatives and the Tanzania Investment Centre.  The objective is to increase productivity and production of rice, to increase processing capacity and to incorporate several added-value steps into the market chain.  The market is internal for the rice itself and international for rice bran oil.  The value of investment has yet to be determined but is expected to be around US$10 million and to comprise a combination of debt and equity.  The current status: letters of intent are in place from the social bank as potential debt financier, and a detailed feasibility study/business plan is currently in progress (April 2012) for the consideration of the social bank and of three equity investors that have expressed specific interest in the deal.

Case study 2: Landlord/labourers in Sierra Leone  Transaction model 1 concerns the leasing of some 14,600 ha of fertile land that has not been farmed for some 30 years owing to the effects of war and a lack of finances. Landlords are the local chiefdoms, the populations of which will benefit from seasonal rents, labour and training opportunities, and a modest share of the profits disbursed in the form of social goods.  Transaction model 2 will be an outgrower programme on around 1,000 ha for high-value horticulture, especially spices.  The objective is to increase domestic staple food supplies and to take advantage of the rapidly changing international demand for spices.  The market is internal for the cereals and international for selected high-value horticulture, perhaps processed in some way.  The value of investment is approximately $80 million, to be financed by a combination of debt and equity sourced from private equity funds and development finance institutions.  The current status: the venture is currently raising capital for scheme development, interim studies and the establishment of an in-country management unit. Caveated letters of intent are in place from both private equity funds and development finance institutions. 174

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Case study 3: A commercial bio-energy estate in Tanzania  The transaction model comprises a 20,000 ha irrigated sugar cane plantation intended to produce cane for sugar, ethanol and energy production. The developer is a large European ethanol trader, but the Tanzanian Government has provided the land (an abandoned state ranch) in return for 25% equity in the venture. The deal itself has been prepared to the highest ethical standards with respect to social and environmental issues, with all identified risks adequately mitigated and long-term continual social and environmental audits commissioned from a well-known international institution.  The objective is to produce sugar and energy (ethanol and electricity) and to provide livelihood opportunities for skilled, semi-skilled and unskilled labour in the region.  The market will be entirely domestic for the foreseeable future, but if the domestic market is ever fully satisfied then it will expand into the broader East African Community or the SADC region (in the context of a very convincing bio-energy strategy; see Takaravasha et al. 2005).  The value of investment is approximately $480 million, combining debt and equity, with additional sites in both Tanzania and Mozambique already pipelined.  The current status: financing is almost entirely in place and consists of a combination of private equity, and debt from both banks and development finance institutions, with an indemnity facility in place re cost overruns and revenue shortfalls from a bilateral aid agency. A 200 ha pilot scheme has been operating successfully for five years and implementation of the main estate and factory was scheduled for mid-2012.

Part 4: Closing comments Given Africa’s vast potential, its need for economic growth and diversification, the major role it could contribute towards global food security and the increasing commercial resources lining up to help finance all of that, at the investors’ own risk, it is absurd:  that the case of the small farmer is prioritised so rabidly over the bigger picture and all it represents in terms of food security, employment and economic growth: and this despite small farmers’ increasing irrelevance to national, regional and global food security;  that under/unemployed non-farmers are denied access to cheaper food and new jobs in the fields and in the supply/market/value chains that well-regulated FDI into agriculture could provide; and  that the noisiest and most publicised attention seems to be given to what has gone wrong, rather than the many ways in which it could go right. Not only is this irrational, but it also presents genuinely motivated investors with significant, but unnecessary difficulties. With this in mind, it has to be said that much of the negative press is inspired by lobby groups that motivate themselves by the assumption that any and every intervention at the grass roots has a hidden, evil agenda and that maintain their reputations by looking for trouble, not solutions. Such self-aggrandising rabble-rousing on the part of certain lobby groups in India has condemned rural populations to generations in limbo while ‘public enquiries’ creep along at a snail-like pace. During the resulting hiati, those responsible, supposedly acting on behalf of the disadvantaged communities, maintain or extend their big reputations doing battle in high places.23 Even though commercial African agriculture is nothing new, it has been going on for the best part of two centuries – so it clearly works for the investor. This is Africa’s big moment and 175

Phil Riddell

commercial investment there has a timely opportunity to put on a new face and better align itself with social and environmental objectives. It is none the less fair to say that no model is as yet well proven, at least for the potential impact investor, but the potential benefits, in terms of increased and cheaper food supplies, domestic and regional trade, economic growth and employment, are none the less real. Surely therefore it is far better to praise the responsible investors who are prepared to risk their own wealth in order (in part) to achieve these social benefits in an environmentally responsible fashion, than to tar them with the same brush as the iniquitous ‘land grabber’ whose risks are more or less obviated by poor regulation, opacity and possibly corruption?

Notes 1 Or ‘western romanticism’, as Paul Collier, Professor of Economics at UK’s Oxford University and author of The Bottom Billion (2007), puts it! 2 Compare, for instance, this www.fao.org/fileadmin/templates/wsfs/docs/expert_paper/16-WigginsAfrica-Smallholders.pdf with this:www.fao.org/fileadmin/templates/wsfs/docs/expert_paper/17-Collie r_Dercon_Africa-Smallholders-in-changing-world.pdf. 3 It also requires more equitable and better-regulated markets at the regional and international level, but that is beyond the scope of this essay. 4 I.e. urbanisation, energy, industry, tourism and navigation. 5 Of course, extensive production practices are not the only threat to the natural resource base, there is actually a whole smorgasbord of other factors contributing to its deterioration (these include physically and economically inefficient water use and allocation; pollution; deforestation; overgrazing; soil mining, etc.). These are beyond the scope of this essay but there are also resource allocation problems: these do have implications here and are covered where appropriate in this publication. 6 Thus, India, for example, is looking to increase its national rice harvest by 10 million tonnes by the end of 2012 (‘Indian National Food Security Mission’: statement of the National Development Council, 29 May 2007), but all of this is for the domestic market, while in both India and the People’s Republic of China (for example) prime agricultural land is being allocated to urbanisation, industry and other commercial uses! 7 For the food security strategist, it is not a case of either commercial food production or perseverance with smallholder modalities, but rather a case for both. 8 See www.thegiin.org/cgi-bin/iowa/home/index.html. 9 In this context, land should be considered an investment. 10 Presumably because success stories do not sell media as much as horror stories. 11 Conversation between the author and the Climate Change Project Coordinator at the IUCN country office in Mozambique, February 2009. 12 According to many estimates, including those of OECD and FAO. 13 There are others, but only these are relevant in this context. 14 Taken here to mean a suitable combination of physical conditions, production/transport costs and physical market access. 15 www.indexmundi.com/map.aspx?v=Unemployment+rate%28%25%29&co=af&lesson=y. 16 Specifically the database used to produce the ‘Agriculture Towards 2030/2050’ analysis: knowledge.cta. int/en/Dossiers/CTA-and-S-T/Selected-publications/Global-agriculture-towards-2050. Unfortunately this database in not in the public domain and as such, without individual country permission, its use for public presentation is limited to historic baseline data or projections at regional levels only. 17 Based on (a) the assumption that the supply–utilisation accounts close based on existing trends, (b) expert views in crop sectors and (c) the main drivers of demand, population growth and income. 18 The latest year projected by the database. 19 Which regrettably cannot be named because of the reasons explained in note 16. 20 It should be noted none the less that most climate change models indicate an increasing possibility for food production in higher northern latitudes than is now possible, but in the absence of draconian structural changes in national, regional and global trading and subsidy systems, this is likely to be an expensive route to global food security and one which is likely to maintain and exacerbate poverty in other parts of the world. 176

Alternative modalities for agricultural investments

21 Including from food production to industrial cropping, especially for bio-energy crops. 22 This statement is predicated on the reasonable assumption that no major breakthroughs in plant yields will be achieved for the foreseeable future, at least not enough to solve the problem with no other intervention. It is none the less acknowledged that the yields of certain crops will rise in response to improved husbandry and increasing carbon availability, but in any case, improved crops still require factors of production, and these include land and water. If the agricultural land has no water, is under water or has been converted to urban or industrial use, then all agronomic effort is of academic interest only! 23 This is by no means intended to pour opprobrium on the entire Indian non-government organization sector, which the author considers generally to be highly innovative, service-oriented and professional.

References Abernethy, C. (1989) ‘Performance criteria for irrigation systems’, in J. R. Rydzewski and C. F. Ward (eds) Proceedings of the International Conference on Irrigation Theory and Practice, London: Pentech Press. BBC (2009) ‘What is the 2030 perfect storm idea?’ Online. Available at: http://newsvote.bbc.co.uk/ mpapps/pagetools/print/news.bbc.co.uk/2/hi/science/nature/8213884.stm?ad=1. Collier, P. (2007) The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It, Oxford: Oxford University Press. Mack, R. (2002) Towards Equitable Partnerships Between Corporate and Smallholder Partners: Relating Partnerships to Social, Economic and Environmental Indicators, Rome: FAO/CIFOR Ministry of Agriculture and Food Security (2005) Food Security Policy and Strategic Guidelines, Maseru: Government of Lesotho. Phiri (2007) Comparative Analysis of Potential Economic Impact of Alternative Agricultural and Rural Development Models: The Case of Africa Invest and Civil Society Organizations in Malawi, Lilongwe: private publication by Africa Invest. Poulton, C., Tyler, G., Hazell, P., Dorward, A., Kydd, J. and Stockbridge, M. (2008) All Africa Review of Experiences With Commercial Agriculture: Lessons from Success and Failure, Washington, DC: World Bank. Riddell, P. (2009) Impact Investing in Commercial African Agriculture, New York: Global Impact Investment Network. Springfield Agro (2005) www.springfieldagro.com/afcott_outgrower.html. Takaravasha, T., Uppal, J. and Hongo, H. (2005) Feasibility Study for the Production and Use of Biofuel in the SADC Region, Gaborone: Southern Africa Development Community Warner, M., Kahan, D. and Lehel, S. (2008) ‘Market oriented agricultural infrastructure: appraisal of public–private partnerships’, FAO Occasional Paper 23, FAO.

177

2.7 Change in trend and new types of large-scale investments in Ethiopia Philipp Baumgartner

Introduction International investors have acquired farm land abroad with increasing speed over recent years, the trend being furthered by the food price crisis in 2007–08. Other factors contributing to an increased interest in extension of agricultural production include the tightening of market constraints in Asia, and increased demand for food due to population growth and rising income leading to a change in diet as well as improved business climate in many countries of the South. Several research teams have attempted to trace the current new wave of large-scale acquisitions of farmland abroad (von Braun and Meinzen-Dick 2009; Cotula et al. 2009; Deininger et al. 2010; Anseeuw et al. 2012). Owing to lack of transparency within the process of land deals or available information from recipient governments, access to reliable and comprehensive data remains a major issue of concern. Consequently, the analyses of country-level trends and patterns of large-scale investments are scarce. Sub-Saharan Africa as a continent has the large number of foreign land investment projects.1 East Africa as a region has proved to be very attractive for investors. Ethiopia, among other countries, has to date leased out significant areas to foreign investors, providing an excellent case study of the process. Despite much media attention on a few large international cases, reliable discussion on the extent and nature of the deals, their institutional arrangements and regional distributional pattern is missing. This chapter will help to close this gap, in using available data on the history of investments licences and information on size and distribution of planned projects across the country. First, using information about the investments in the agricultural sector for the past two decades, the chapter will help answer the question: Is the current trend in large scale investments structurally different from past investments? In addition to this time-bound question about trends, the chapter examines patterns among the existing and planned investments, looking at their country of origin, location within Ethiopia and size characteristics. The chapter will therefore answer the additional question: What type of investments can be observed in Ethiopia? Findings of both research questions will be discussed regarding their robustness and how they fit into the broader discussion on large-scale agriculture production and land deals in Ethiopia.

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Large-scale investments in Ethiopia

The discussion in this chapter is based on the analysis and triangulation of three different data sets. Each of these sets is capable of illustrating different aspects of the past and ongoing investments in agricultural land in Ethiopia. The first data set (which I call EIA 2011b) lists investment licences for all of Ethiopia for the period 1992 to January 2011. It includes all licences issued by the federal-level Ethiopian Investment Agency (EIA) and its regional branch offices which involve 100 hectares or more of land. The second set of data was purposely collected for the research on large-scale land transactions by senior government officials through the Prime Minister’s Offices, Ministry of Agriculture and Rural Development and Regional Administrations. It compiles information on the status of projects across regions, identifying which zones and districts are especially active and attractive to investment, and some incorporates information about the process of land compensation, etc. The last set of data comes from a regional investment office and states how much land was requested and actually allocated to each investor, for the case of Gambella region.

History of large-scale production and land governance in Ethiopia Large-scale production: risks and opportunities Foreign investment in agriculture involving a substantial amount of land is not necessarily a new phenomenon. Colonial attempts to establish plantations in colonies represent a first wave, which in many cases outlasted colonial rule itself. Large acquisition of use rights over land is often accompanied with large-scale production on that land in the form of plantation or extensive mechanised use, depending on the crop cultivated. Other forms, such as out- or in-grower schemes, are also possible. The organisational form has strong influence on asset accumulation and human capital formation leading to growth and socio-economic development, but it is also important to discuss, from a simple efficiency perspective, what size is optimal for production (Lipton 2009). Efficiency of large-scale agricultural production outweighed family farms at initial stage of land-opening in labour-scarce economies.2 However, technological scale economies arising from the use of indivisible inputs such as managerial ability or machines are outweighed by scale diseconomies from the use of hired labour as the economy moves from land-abundant to land-scarce stage after the completion of the opening process. (Hayami 2010: 3308) The second reason for the form of larger-scale production is shown to be a need for close coordination of farm-level production with large-scale processing and marketing of the product. Banana production for export or processing of non-fermented black tea would be an example for such crops. Yet even here, in many cases such as sugar cane production, it can be argued that losses from delayed processing are outweighed by lower monitoring costs of family labour (Hayami 2010). A third reason for the persistence of plantation or large-scale production is the granting of long-term concessions to (powerful) elites that, through relatively free access to large tracks of land, can exploit natural resources. While the first two reasons explain the existence and persistence of large-scale production with economic efficiency, the last argument points to the danger of political power corrupting efficiency arguments. This argument is extended if one looks at comparative studies from Latin America: Deininger (2005) discusses the historical evolution of the coffee sector comparing Colombia and Costa Rica with El Salvador and Guatemala. While in the former two countries 179

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smallholder structures dominated the coffee production, large estates were prevalent in the latter two countries. A boom in the coffee price triggered very positive socio-economic developments in the first two, especially investments in human capital and increases in literary rates. In the other two no such positive developments could be observed and democratic structure took about 40 years longer to emerge (Deininger 2005). This indicates how organisational structures not only influence economic efficiency, but also shape political power and distributional aspects. Despite these threats and criticisms of large-scale investments, there exist a number of potential benefits from such trends: One potentially significant positive impact of large-scale investments is their impact on the local labour market. Proponents underline the importance off-farm employment plays for poverty reduction (Otsuka and Yamano 2006). Additionally, large investments can trigger agricultural commercialisation, i.e. increased share of marketed inputs and outputs of the agriculture production system. Commercialisation’s potential benefits include stimulating rural growth, from which poor people can gain directly; diversifying employment opportunities (depending on the labour intensity of crop types); increasing agricultural labour productivity; direct income benefits for employees and employers; increased food supply and potentially improved nutritional status (von Braun and Kennedy 1994). Finally, agriculture has not received much investment – private or public – in many countries of the global South during the past two decades. However, to meet increased global demand for agricultural produce due to population increase, increasing welfare and changing diet, investments in agriculture are necessary (HLPE 2011).

Access to and ownership of land in an agrarian society In a traditional agrarian society such as Ethiopia, land is the most important natural resource. Access to land (and water) is key for agriculture and pastoral activities and consequently crucial for most people’s livelihood strategies. Therefore, political and economic power relations as well as social change and transition are embedded and reflected in the control over land and land allocation mechanisms. The transaction of use rights for land, be it through the form of permanent selling or lease limited to a number of years, as a contractual arrangement poses several challenges to a developing country. Access and use rights are often overlapping and might be held by individuals, communities or groups (Meinzen-Dick and Mwangi 2009). As established in the federal and regional constitutions, as well as by land laws, all land, whether urban or rural, is property of the state. Private ownership of land is not allowed. Land users can only acquire use rights over ‘their’ land. It is forbidden to sell, mortgage or exchange land in any way.3 The use right of land holders is dependent on a number of conditions: residence in a kebelle (locality or sub-district), personal engagement in agriculture, proper management of the land and other restrictive conditions (Dessalegn 2011). Holders who violate any of these conditions are subject to penalties and can even lose the right to their land. Such loss might also happen if they are absent from their farms or the land is left idle for three or more consecutive years. In practice, throughout the country three types of land tenure for private holding prevail: (1) The administrative system described above. (2) In the past three years a market-based tenure system has emerged, partly triggered by change in regulation, allowing for renting out shares of one’s land, while still permitting informal practices such as share-cropping. This changes has been driven by population pressure. Land is usually used intensively and rarely left fallow, in part leading to problems of degradation. (3) In the lowland areas a customary-based non-market arrangements structure land tenure exists. Families often receive land based on ancestral lands and heritage. In addition, there exist communal land titles, e.g. for forest land or pasture which are not bound to an individual but rather to a group of people. 180

Large-scale investments in Ethiopia

Government’s investment policy and relevant regulations In the 1990s the government’s rural development strategy was based on smallholders. Policies were biased towards small-scale production and the land tenure system put in place was considered to be peasant-friendly. From the 2000s a shift is observed in the logic, embracing that idea that once ‘the objective of accelerated agricultural development is achieved … [t]he key actor[s] in the sector’s development will be relatively large-scale private investors and not the semi subsistence small farmers’ (Dessalegn 2011: 9). Such change in government focus became apparent as a number of investment-stimulating legal changes and proclamations were issued, especially to attract foreign investors to the agricultural sector.4 The main legal basis for investments in Ethiopia is Proclamation 280/2002 (and amendments 375/2003). They state the incentive to attract foreign investments in order to promote export industries and technology transfer and thereby increase foreign exchange earnings. The investment regulation (84/2003) lists numerous incentives for investors and outlines sectors which are limited to domestic investors only, and those which are also open to foreign investors.5 In 2009 a new proclamation (Proclamation 29/2001) changed the process of land allocation. The federal government was empowered to carry out all aspects of foreign land transfers involving 5,000 hectares or more. Following this proclamation the Agriculture Investment Support Directorate (AISD) was created within the Ministry of Agriculture and Rural Development (MoARD). Its mandate is to assist investors in land acquisitions and facilitate the process of land transfer, identification and review of business plans and other documents. The MoARD furthermore established a Land Bank which lists potential land for agriculture expansion. Regions were advised to identify suitable areas and earmark them for agriculture investment activities. Investors have to obtain a business licence at the EIA, either in Addis Ababa or through one of its regional branches, making the EIA the entry point. Before the new proclamation and establishment of AISD, investors had to contact regional investment offices or governments to identify suitable land. Large-scale investments are not necessarily a new phenomenon. Historically, large-scale production based on hired labour has been necessary for internalising gains from investments in infrastructure and the opening of vast tracts of land. When indigenous communities became able to cultivate the same crop, they often proved to be more efficient on a per-hectare basis than foreign investors, mainly owing to lower supervision costs of family labour (among other factors) (Hayami 2010; Lipton 2009). Persistence of large estates is based on (free) access to natural resources rather than economic efficiency. At that point it might become harmful for socio-economic and political development. Changes in the Ethiopian Government’s land policy started to favour large-scale investments in the early 2000s and the policy sees them as a main pillar of agriculture production.

The trend of investments in Ethiopia over the past two decades Amount of land requested by investors In Ethiopia, demand for agricultural land by foreign and domestic investors has soared in the last decade. The histogram in Figure 2.7.1 shows the total land requested by agricultural investments each year for the period 1992–2010. Requests for greater areas of land by investors started to increase from 2004 onwards. This coincides with the government changing the investment policy in the early 2000s. The decline for the year 2006 might be partly explained by national elections and reduced investment activities in that and the subsequent year. Since 181

Philipp Baumgartner

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Year of Investment Figure 2.7.1 Total land requested by investors per year Source: Data set EIA 2011 b.

2007, however, a very large interest in farmland is shown. This confirms the globally observed trend o f increasing interest in acquisition o f farm land following the global food price spike in 2007 and remaining high food prices since then. In 2005 for the first time a total o f more than 1 million hectares was requested, and 2008 shows a peak value o f more than 4.3 million hectares requested by domestic and international investors.

Increasing share of foreign investment activities A nother frequently discussed trend is the internationalisation o f land transactions. As m entioned in the introduction, despite rare media reporting, it is clear that domestic investors play a major role. Nevertheless, internationalisation o f land deals can also be observed in Ethiopia. If investment licences are grouped according to their Ethiopian share we obtain three groups: (1) fully Ethiopian, (2) Ethiopian share (joint-investment w ith foreign), and (3) fully foreign. Figure 2.7.2 shows the historic trend for the total sum o f hectares requested by each group per year. T he dark line indicates the fully Ethiopian (domestic) investments. Prior to 2003 this group o f investors accounted for almost all land requested. Domestic investors also increasingly dem anded land from 2005 onwards, w ith a peak volume close to 1 million hectares in 2008.

182

Large-scale investments in Ethiopia

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Figure 2.7.2 Total annual land requested in hectares (by domestic, joint and foreign invest­

ments). Source: Own calculation based on data set EIA 2011 b.

Thereafter, the dem and fell again to ca. 100,000 hectares in 2010. The dotted grey line indicates investment w ith Ethiopian partnership. These jo in t investments started to increase significance in 2005 w ith a total o f above 120,000 hectares. D em and was very high in 2008 w ith about 1.4 million hectares, but dropped to about 200,000 hectares for the tw o consecutive years. The last group o f 100% foreign investment is characterised by the light grey/w hite line. W hile for the period 1992 to 2003 this group never dem anded more than 50,000 hectares per annum, in 2004 a sharp increase to m ore than 500,000 hectares can be observed. Again, this sharp increase cor­ relates w ith the changing investment policy, expressed by the proclamations issued in 2002 and 2003 (see the section on the history o f large-scale production and land governance in Ethiopia). Following a short drop in the year after the national elections in 2005, the trend rises again w ith total request close to 2 million hectares in 2008 and around 1 million hectares o f land in both 2009 and 2010. This indicates a clear internationalisation o f agricultural investments in Ethiopia. As discussed above, this trend has the potential to trigger commercialisation o f the agricultural production system, i.e. to increase the share o f marketed inputs and outputs. Technological learning and other spill-overs are other potential positive by-products. H ow ever, they do not necessarily occur automatically but are crop-dependent and related to other factors, including the functioning o f related markets, public investment and policy incentives and regulations.

Characteristics of investments by country of origin Foreign investments tend to be bigger in median size than domestic investments and originate mainly from the Middle East, W estern Europe, N orth America and South Asia. Using information on country o f origin o f each investment licence, it is possible to group investments into regions (Table 2.7.1). From the total count o f num ber o f investments, a striking trend is observed whereby

183

437 18 75 1 1 35 25 2

42 636

1,790 28 84 4 2 62 22 4 5 4

58 2,063

12 114

20 18 2 2

19 10 29 2

112 2,813

117 65 8 7 4

2,246 56 188 7 3

Medium Large Mega Total count (100–1,000 ha) (1,001–10,000 ha) (> 10,000 ha)

Investments grouped by size (medium, large, mega)

1,000 500

1,000 4,000 1,500 500 400

500 1,500 2,000 800 350

Median

120 102

110 110 500 200 300

102 150 120 400 200

Minimum

300,000 500,000

500,000 500,000 100,000 100,020 1,000

153,713 150,000 400,000 22,100 3,000

Maximum

956,586 11,411,358

2,558,495 1,510,051 160,700 133,820 2,100

2,918,909 659,608 2,455,239 52,300 3,550

Sum

Land in hectares (requested for investment)

* For joint investments the grouping is based on the main financier. As there are several joint investments between foreigners and Ethiopians, the Ethiopian role should not be underestimated. Note: Only investments requesting 100 hectares or more are listed. Source: data set EIA 2011b; only investments involving more than 100 hectares are considered.

Ethiopia (domestic) North Africa Middle East Sub-Saharan Africa East Europe and Central Asia West Europe South Asia China Southeast Asia and Pacific Latin America and Caribbean North America Total

Origin of investment by region*

Table 2.7.1 Characteristics of investments by origin

Large-scale investments in Ethiopia

domestic investments make up 2,246 of the total of 2,813 projects, equivalent to almost 80% of the number of projects. However, the vast majority of all projects are smaller in size, and the domestic share of investments exhibits an inverse trend with project size. By frequency, investors from the Middle East make up the largest group of foreign investments, followed by Western European countries and North America. There is also significant activity from countries from North Africa and South Asia, especially India. There are few investments from sub-Saharan African countries, of which most are from South Africa, and a small number from South-East Asia and Latin America. Since 2003 international investors have dominated the acquisition of land. The right-hand half of Table 2.7.1 presents information relating to project size and the total land requested by each region of countries is listed. It shows that domestic investments, though being dominant in the number of cases, are only accounting for about 3 million of the 11 million hectares requested by investors (25.6% of the total land requested). Four regions stand out with especially large shares of total land requested: the Middle East and West Europe with demand for about 2.5 million hectares (21.5% and 22.4% respectively), as well as South Asia and North America with around 1.5 million hectares (13.2%) and around 1 million hectares (8.4%) respectively. Moreover, the maximum sizes of projects of these four regions are the biggest, ranging from 300,000 to 500,000 hectares. While there remains huge variation regarding planned project size for all regions (compare differences between minimum and maximum) the median shows that some regions tend to plan bigger projects than others. South Asia and especially India are especially notable with a median value of 4,000 hectares,6 which is eight times larger than Ethiopian investments’ median, and still twice the median size of Middle Eastern investment activities. Other regions make up smaller shares, for example the People’s Republic of China, which has eight investment licences with a rather small share of the total land demanded, and similarly for sub-Saharan Africa, East Asia and the Pacific. Latin America and the Caribbean, Eastern Europe and Central Asia only play a very minor role. These trends indicate that it is especially the developed countries from Western Europe and North America and the emerging economies in South Asia and the Middle East that have an interest in agricultural investments in Ethiopia. Investments from North African neighbours exist (especially Egypt and Sudan) but only in a few cases involving a relatively small volume of land. Furthermore, while purely domestic investments account for a large number of investments, they are smaller in size and only account for about one-quarter of the total land requested. However, there are a number of joint investments where Ethiopians are partners to foreign investors.

Location of investments within Ethiopia Using the amount of land (in hectares) requested for investment allows further analysis of trends in the way allocation of land across regions has developed over the two decades under consideration. Table 2.7.2 lists the respective regional totals of land requested and stated in agricultural licences for the two periods. If we first look at the total period (1992–January 2011) we see that Oromia is noted as hosting almost one-third of the land allocated for the total period, followed by Amhara (15.4%). Together with the multi-regional7 licences, these two regions account for over 75% of the land requested. SNNPR, Benishangul Gumuz (B. Gumuz) and Gambella are the three other regions hosting a significant share. Most of the multi-regional licences also state one or more of these three smaller regions as part of their destination. Only very limited amounts of land have been requested by investments in Addis Ababa, Dire Dawa, Harari and Somali (all below 10,000 ha). Tigray and Afar list about 300,000 hectares of land 185

81,523 325,146 1,754,555 590,446 79,300 529,180 7,400 3,400,625 3,426,540 1,003,750 9,379 203,512 11,411,358

Land in hectares (0.7%) (2.8%) (15.4%) (5.2%) (0.7%) (4.6%) (0.1%) (29.8%) (30.0%) (8.8%) (0.1%) (1.8%) 100.0%

(% share total)

Total period (1992–Jan. 2011)

25,200 112,991 1,247,124 428,150 35,500 506,880 * 3,126,362 1,857,902 945,439 3,379 68,600 8,357,527

Land in hectares (0.3%) (1.4%) (14.9%) (5.1%) (0.4%) (6.1%) * (37.4%) (22.2%) (11.3%) (0.0%) (0.8%) 100.0%

(% share new)

Post-food crisis (2007–Jan. 2011)

Comparing two periods

0.42 0.47 0.97 0.99 0.61 1.31 * 1.26 0.74 1.29 0.49 0.46 1.00 Increase Decrease Increase Decrease Decrease –

Decrease Decrease Remaining Remaining Decrease Increase

‘Rate of change’ (new/total share)

Source: Data set EIA 2011b; only investments involving more than 100 hectares are considered. * No investments of this size recorded for Harari region after 2007. Note: Requested land might not be fully developed or even allocated, so this could overstate what actually happens on the ground.

Addis Ababa Afar Amhara B. Gumuz Dire Dawa Gambella Harari Multiregional Oromia SNNPR Somali Tigray Total

Region

Table 2.7.2 Regional distribution of land as stated in licences (two periods)

0.31 0.35 0.71 0.73 0.45 0.96 0.00 0.92 0.54 0.94 0.36 0.34 0.73

% % % % % % % % % % % % %

Share after 2007

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requested. This indicates that the biggest chunk of activities is concentrated in the two bigger highland areas, Oromia and Amhara, followed by some significant shares located in the south (SNNPR) and west (B. Gumuz and Gambella). The second column lists the subset of investments for the years after 2007 only. For this second period, Oromia and Amhara remain the regions with most investment activities in terms of the amount of land allocated. SNNPR, B. Gumuz and Gambella remain the next three most significant investment regions. The more urbanised regions, however, receive decreasing attention. The last column allows for some comparison, allowing us to identify whether, despite the pattern of most investments (by size) remaining the same, there is a change in the distributional trend. Dividing the share of recently requested land by the share of total land requested for the whole period, the ‘rate of change’ was calculated. A value of 1 would indicate that there was no change, while a value < 1/> 1 implies a relative decrease/increase, respectively, in a region’s share of total land requested. The biggest relative increases can be observed in Gambella (1.31) and SNNPR (1.29), as well as for multiregional licences (1.26). The last column indicates (as has already been seen from the histogram in Figure 2.7.1), that about 73% of the land was requested after 2007. There are regional variations, however. Most surprising is the small interest in Afar and Somali8 regions, which originally were considered favourable for production of castor seed and jatropha, two of the much promoted biofuel crops. In general, the change in relative shares of investments received by each region indicates that investors have recently been going west.

How potential for future expansion is distributed across regions Using a second data set we can look at where the Ethiopian Government sees the biggest future potential for land-intensive agricultural investments. This data set from March 2011 listed a total of 5.7 million hectares of potential land for large-scale commercial agriculture across Ethiopia. This total combines land listed in the federal Land Bank and regional administrations. Out of this area around 900,000 hectares or 16% had already been leased out in March 2011. This indicates that the government is still holding huge areas of land for future investments. Figure 2.7.3 shows how much of the land has already been leased out and how much is still remaining for future investment activities. Oromia, with a total of land earmarked for investments of above 1.4 million hectares, is again the leading region when it comes to agriculture investment activities. However, Gambella and B. Gumuz, the two lowland provinces in the western part of Ethiopia, also have significant areas earmarked. Somali and Afar regions are also planned to host 800,000 and around 600,000 hectares respectively. However, both of these eastern regions have to date leased out only a very small share of their potential area (Somali: 591 hectares; Afar: ca. 22,000 hectares). SNNPR, Amhara and especially Tigray seem to have almost reached their potential, with only SNNPR having some significant 140,000 hectares left for future investments.9 At this point it is important to understand that these data from the Prime Minister’s Office, Ministry of Agriculture and Rural Development and Regional Administrations, are only partly comparable with the data from the Ethiopian Investment Agency (data set EIA 2011b).

Land transferred at the regional level As discussed in the section on the history of large-scale production and land governance, land can be allocated by the federal level or by regional offices. During an extended research period in Gambella region, it was possible to gain access to data from the regional investment office, 187

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Gambella Somalli Benshangul Gumuz SNNPR Oromia Amhara Afar Tigray 0

500,000

1,000,000

1,500,000

■ Total area leased out ■ Remaining Figure 2.7.3 Agricultural land earmarked for investments by region. Source: Prime Minister's Office, Ministry of Agriculture and Rural Development and Regional Administrations, 2011.

including information on how much land was demanded by an investor and how much had actually been allocated. The data set goes back to the year 1991, but with the exception o f a handful o f cases in the late 1990s and early 2000s investment activities in that western region only start after 2004/05. The period 2004-m id -2010 therefore accounts for the vast majority o f cases displayed in Table 2.7.3. The table lists the five woredas o f Gambella region with invest­ ment activities involving land acquisition by domestic and foreign investors. It is clear that most investment activities (more than half) are taking place around the region’s capital, Gambella Tow n. This is explained by good access to infrastructure and labour in that part o f the region, while other woredas have smaller populations, thus creating a shortage o f labour.10 As can be ascertained for the case o f the 93 investment projects in Gambella woreda, only 22.4% (38,659 hectares o f the high number o f hectares demanded: 172,350) were actually approved for investment. A similar pattern can be observed for Itang, and even in Dimma and Abobo woreda; a good share o f the land requested was not allocated. Only the three projects in Godere received the full amount o f land requested. This indicates an important finding which is absent in much o f the discussion around largescale land transactions: The local government, at least for the period documented here, did test Table 2.7 .3 Investments by district level fo r Gambella Region (1992-August 2010) District

Abobo Gambella (semi-urban) Godere Dimma Itang Total

No. of investments

63 93 3 5 12

176

Source: data from Gambella Region EIA (2010).

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Hectares requested (demand)

146,350 172,740 11,588 8,000 41,900 380,577,59

Hectares allocated (supply)

61,270 38,650 11,588 6,100 12,100 129,707,59

% of demand met

41.9% 22.4% 100.0%

76.3% 28.9% 34.1%

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the capabilities of investors and assess their business plans. Following such assessment they gave out land, often below what was initially requested by the investor. For the Gambella region overall, for the period 1992 to mid-2010, only about one third of the requested land was actually given to investors, indicating a rather conservative practice of allocating land. Notably, during 2010 the governance of land within the region changed, following increased political attention at the federal level since 2007/8 to the trend of land investments. The regional president’s office established a secretariat handling large-scale land leases. Such transfer of competencies to the president’s office indicates the increasing political relevance of the issue, which is also the case at the regional level. Around the same time, the MoARD established the Agriculture Investment Support Directorate, which since then has been the main contact point for large-scale investors. This indicates a change in the governance structure over land.

Discussion of results and conclusion Discussion of results  Extent of deals in number and amount of land requested: the first and most obvious result shown was an increase in agricultural investment activities, both in number and in total land area requested. This increase started in 2004, following the change in government policy. Another sharp upward trend was shown in 2007, peaking in 2008 with more than 4.3 million hectares requested.  Internationalisation of land acquisitions and origin of investors: domestic investors account for the biggest number of investment licences requested – both for the recent and the pre-2007 periods. However, foreign investments are larger than domestic ones, comparing both median size as well as number of mega-size projects (above 10,000 hectares). There is a tendency towards a good share of joint investments with Ethiopian partners, but starting in 2003 foreign investors’ demand for land exceeded domestic demand. The overall demand from domestic projects only amounts for 3 million hectares out of the 11.4 million hectares requested in total. Most demand for agricultural land comes from developed countries in Western Europe and North America, as well as from emerging economies in the Middle East and South Asia. China plays a minor role.  Location within Ethiopia: while most investments are still located in the highland regions of Amhara and Oromia, investors have shown a recent trend to go west and request land in the western lowland areas of B. Gumuz and Gambella. In these western parts, demand for land also meets supply, as indicated by land earmarked for future expansion. In the eastern parts of Afar and Somali, demand has not met supply thus far.  Allocation of land to investors: data from Gambella region has shown that the demand for land is only partially met by the land supplied by the local government. For the projects which were processed through the regional authorities, on average only about one-third of the acreage requested was actually allocated. However, this does not include land allocated through the federal level.

Limitation and further research: what we cannot say As described at the beginning of the chapter, the data set EIA 2011b used for analysis only lists the amount of land requested. Therefore, the data can represent the investors’ view and their demand for land quite well. However, they do not allow estimation or prediction of the level of activity on the ground. As noted above, the data for Gambella region do not include investments negotiated through the federal-level agencies, but rather only present those handled by the local-level agencies. More research on the process of land transfer and monitoring of the investment process would be necessary to better understand this aspect of the trends. 189

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The discussion about spatial distribution of investments is limited to the regional level. Especially for the two large regions, Amhara and Oromia, it would be interesting to look at the district level in order to identify intra-regional changes. Such analysis is beyond the scope of this chapter, but indicators do exist: within Oromia, for example, much of the area earmarked for extension is seen to exist within a lower-level area in the south east (Bale – ca. 1 million hectares). Furthermore, the discussion above has mainly concentrated on the size characteristics of investments in land. This makes sense with regard to the question of how much land is requested, by whom, and where it is allocated. However, other production factors, such as employment creation, capital invested, technology transfer and organisational form chosen, are not necessarily related to size. Nevertheless, they are highly relevant for agricultural growth and socio-economic development. As indicated, the establishment of large-scale production units has an impact on the power distribution within related markets for labour, land and water. Little research attention has been given to these impacts at the micro and meso levels. Bues (2011) has carried out some analysis, however, and indicates that larger producers tend to gain more bargaining power and can therefore secure their access to scarce resources, which at least indirectly deprives local users.

Conclusion We have seen that investments in agriculture involving substantial areas of land are very frequent in Ethiopia. Such investments increased in number and size after the government changed the incentives for investors, and even more since the boom of food and commodity markets in 2007/08. While the reaction to prices shows the ‘market’ part of the explanation, the start of increased investment activities before the price peak indicates that governance and policy also explain a good proportion of the increased trend. Thus, this underlines that developing countries are not only ‘victims’ of global market development, but can also actively stimulate or regulate the trend through their investment policies. The fact that both size and foreign share of investments are increasing might shift agricultural production in Ethiopia from relying largely on smallholders to an increasing share of larger, commercial farms. Such commercialisation could bring about several benefits through changes to the markets for inputs and outputs. In addition, it could have positive nutritional impacts. However, these benefits might not occur automatically, but may require accompanying public investments in social infrastructure and education as well as monitoring of investors to avoid harmful side-effects. The establishment of a federal-level office handling land acquisitions beyond 5,000 hectares can be seen as a good step towards increasing governance capacities to oversee these rising investment activities throughout the country. Whether the central agency will become as critical for large requests as the regions have been (at least as has been shown in the case of Gambella) cannot yet be determined. However, there remains a danger of ‘super-sizing’ projects, pushing them far beyond economic viability. While a certain size might be required to internalise costs derived from opening land at the agricultural frontier, projects requesting hundreds of thousands of hectares are not likely to produce efficiently across an entire area within a short period of time. Continuous scaling up, after successful establishment of core farms, might be a more viable solution. As has been the case with the different development of the coffee sector in the four Central American countries, large-scale production tends to offer fewer socio-economic and enabling stimuli than other organisational forms. In addition, path dependencies might occur, as big investors tend to accumulate not only economic but also political power. While such developments are not necessarily negative, other integrated rural development strategies should be explored for 190

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their potential. However, given the rising global demand for food, fodder and agricultural products, increased agricultural investments should be viewed as a positive trend. Furthermore, employment creation, especially off-farm, is likely to alleviate poverty among the local population. It has been shown that much more land is being made available for large-scale agricultural production. Land identification should take careful account of existing user rights, which might be only seasonal or for less intensive use. Such users remain very prone to being left out when it comes to compensation measures. The complex decision of transferring land and thereby cutting a web of existing user rights should not to be taken lightly.

Notes 1 Outside Africa, Pakistan, Kazakhstan, South-East Asia (Cambodia, Laos, Philippines, Indonesia) and parts of Eastern Europe (e.g. Ukraine) are among the major recipient countries of FDI in land (Anseeuw et al. 2012). 2 Apart from plantation crops, the expansion and management of agricultural production has historically been characterised by owner-operated farms. Increases in farm sizes were mainly driven by rising nonagricultural wages (Deininger et al. 2010; Lipton 2009). 3 For a detailed discussion on the legal framework of agricultural land see Dessalegn (2009). 4 Before foreign investments were mainly incentivised to invest in manufacturing and industrial production. 5 This legislation has recently changed, removing most of these limitations. For the data presented here it was, however, still relevant. 6 It should be noted that this is much lower than most cases reported in the media. 7 The scope of this chapter does not allow us to look beyond regional-level distributions or to dismantle the multi-regional investment licences, which would be necessary to understand intra-regional changes in distribution. This is certainly a case for the bigger regions. 8 Security problems might explain especially why Somali and, to a lesser extent, Afar are not targets of much investment activity. 9 It should be noted that the identification process for agricultural investments was not fully completed at the time of data collection. 10 It is important to highlight that parts of Ethiopia, as in many other African countries, are very sparsely populated, thus making labour the scarcer factor (when compared to land). This is especially pronounced during harvest time.

References Anseeuw, W., Alden Wily, L., Cotula, L. and Taylor, M. (2012) Land Rights and the Rush for Land: Findings of the Global Commercial Pressures on Land Research Project, Rome: ILC. Bues, A. (2011) ‘Agricultural foreign direct investment and water rights: an institutional analysis from global land grabbing’, paper presented at International Conference on Global Land Grabbing, 6–8 April, University of Sussex. Cotula, L., Vermeulen, S., Leonard, R. and Keeley, J. (2009) Land Grab or Development Opportunity? Agricultural Investment and International Land Deals in Africa, London: IIED. Deininger, K. (2005) ‘Land policy reforms’, in World Bank (ed.) Poverty and Social Impact Analysis: Sector Guidance, Washington, DC: World Bank, pp. 213–60. Deininger, K. and Byerlee, D. (2010) Rising Global Interest in Farmland – Can It Yield Sustainable and Equitable Benefits?, Washington, DC: World Bank. Dessalegn, R. (2009) The Peasant and the State: Studies in Agrarian Change in Ethiopia 1950s–2000s, Addis Ababa: Addis Ababa University Press. ——(2011) ‘Land to investors: large-scale land transfers in Ethiopia’, Forum of Social Studies, Addis Ababa. Hayami, Y. (2010) ‘Plantations agriculture’, in R. Evenson (ed.) Handbook of Agricultural Economics, New York: Elsevier, Chapter 64, pp. 3306–21. HLPE (2011) Land Tenure and International Investments in Agriculture. A Report by the High Level Panel of Experts on Food Security and Nutrition of the Committee on World Food Security, Rome: HLPE.

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Lipton, M. (2009) Land Reform in Developing Countries: Property Rights and Property Wrongs, London: Routledge. Meinzen-Dick, R. and Mwangi, E. (2009) ‘Cutting the web of interests: pitfalls of formalizing property rights’, Land Use Policy 26(1): 36–43. Otsuka, K. and Yamano, T. (2006) ‘The role of rural labor markets in poverty reduction: evidence from Asia and East Africa’, background paper for WDR 2008, Washington, DC. von Braun, J. and Kennedy, E. (eds) (1994) Agricultural Commercialization, Development, and Nutrition, Baltimore, MD: Johns Hopkins University Press. von Braun, J. and Meinzen-Dick, R. (2009) ‘“Land grabbing” by foreign investors in developing countries: risks and opportunities’, IFPRI Policy Brief 13 (April).

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2.8 Tapping into Al-Andaluz resources Opportunities and challenges for investment in Morocco Nora Van Cauwenbergh and Samira Idllalene

Introduction Morocco has recently become an important emerging economy, making it an attractive destination for European and global investors looking to create new opportunities for growth. Market liberalisation initiated by King Mohamed VI has changed the investment conditions dramatically over the last decade or so, with yet greater reforms anticipated. Agriculture is one of the sectors that has seen a marked transformation by the new development stimulus. A watershed moment in creating a more export-oriented agricultural sector was the launch in 2008 of the Green Morocco Plan (GMP), which seeks to increase land productivity and overall farm output by modernising what was deemed an inefficient traditional agriculture. In order to fund such a modernisation project that will exploit what opportunities are available in this arid land for export revenue, it was necessary to attract foreign direct investment (FDI) to allow for a transformation in both the technology and the operations of farm business. Public and private landholders across the country are leasing land to a growing number of foreign enterprises, which is gradually transforming the country’s economy. While the presence of European enterprise and capital dates back to the colonial era, European interest had only a minor recovery during the 1990s after the process of decolonisation. The more recent developments are different, both in terms of the origin of funds and in the scale of investment. European enterprise and also the Saudi Arabian and United Arab Emirates (UAE) governments and large global investment funds are leasing vast agricultural areas for the production of export crops. This has led to the accumulation of export produce in the hands of increasingly powerful elites and large agribusiness players, and though there are some benefits to the population of this economic development there are also great costs associated with increased pressure on its soil and water resources. This chapter will illustrate the scale of FDI in export-orientated agriculture and its impact on the land and water resources of Morocco by analysing its development in two areas: the southwestern Souss–Massa–Drâa region and the Gharb plateau near Casablanca. In both areas it is mainly Spanish and French producers who are introducing highly intensive farming systems under greenhouses despite the concerns that both the quality and quantity of water resources are likely becoming seriously jeopardised. The impact of FDI-funded agricultural development will 193

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be analysed by comparing the recent expansion of areas under greenhouses in Morocco with the similar production model that occurred decades previously in neighbouring Almeria (growing tomatoes) and Huelva (strawberries). The anticipated growth of groundwater abstraction and export production are analysed in terms of their environmental and economic sustainability; possible alternatives will also be considered. This will be elaborated in the context of what institutional arrangements exist, such as the current legal framework, trade agreements and the specific role of the EU in its partnership with the Moroccan government.

Morocco – ‘a land of opportunities’ Economy, resources and investment conditions Starting in the early 1990s reinforced during the acceptance speech of King Mohamed VI, in 1992 the Moroccan government has realised a series of changes in its regulations aimed at increasing foreign investment in the country.1 The economy has been transformed from one with heavy state intervention to one that is more liberal and market-oriented. This was achieved, in part, through a series of privatisations of economic sectors that were previously owned by the state. Nowadays, Morocco has the fifth-fastest growing economy in Africa, with an average GDP growth of 4%–5% in the last decade (Santiago-Alcalde 2011). With one of the best banking systems in the African continent, second only to South Africa’s, it has a favourable interest rate (CESCE 2011), and its investment risk is now rated medium–low. While FDI has been opened to almost all sectors there are some restrictions on the country’s leading sectors: fisheries, energy, water supply, transport, agriculture (land tenure) and phosphates (AMDI 2012). Foreign investors can sign an agreement with the government that gives them a set of privileges, among which are omission of import rights and taxes, tax exemption and simplification of administrative procedures (ADA 2012). These benefits are received upon fulfilling a minimum set of conditions related to investment and job creation. In 2010 total FDI was around €3 billion (Cerezo-Monje et al. 2011), with France and Spain accounting for 50% and 15% respectively (these proportions are for the period 2006–10). Although still modest, there has recently been investment by several Arab countries owing to the recent creation of a series of commercial agreements in the area. Between 2006 and 2010 investment has been directed to the sectors of real estate (23%), tourism (22%), industry (13%), banking (12%) and telecommunications (12%). FDI in agriculture is small by comparison, accounting for an average of €2.5 million annually (less than 1% of total FDI). None the less, alongside tourism and more recently the renewable energy industry, it has important impacts for employment and the country’s resource base.

Reform of the agricultural sector as an incentive for FDI FDI in agriculture is significant because of its impact on natural resources and owing to the high dependence of the Moroccan population on produce and employment from this sector. Agriculture employs 40% of Morocco’s workforce, making it the country’s largest employer (Lahlimi-Alami 2007) and a key wealth generator. In rural areas 80% of the population (around 14.4 million people) are dependent on it for their livelihood. Agricultural production accounted for 15.8% of GDP between 2000 and 2006, with annual fluctuations of 3%–4% that are linked to adverse climate conditions (Eurostat 2009). The agro-industry generates annually about 5% of GDP, about 100,000 jobs and 2% of export revenue.

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Despite its high importance in terms of both the balance of trade and for rural development, productivity of the agricultural sector has remained low with yields as low as 30% of yield potential. Since the 1973 crisis that drastically worsened exchange terms, the agricultural sector has been characterised by a negative trade balance, moving from a clearly positive coverage rate (with export doubling import in 1968) towards a situation of continuous deficit where export has covered about half of import, with a minimum of 40% registered in 1984 (Doukkali 2006, cited in Lahlimi-Alami 2007). Among the factors highlighted to explain the free fall of coverage rate is the ‘Moroccanising’ or decolonisation of the country and the subsequent perturbations of the export sector. During the decolonisation of the 1970s, French and Spanish land owners had an estimated 300,000 hectares (ha) expropriated (200,000 ha and 70,000 ha respectively). Parts of these lands were conceded to Moroccan landholders, while the state, through the public entity SODEA, was in charge of managing the remaining lands. During the 1980s a process of structural adjustment was initiated at the request of the IMF in order to raise low export rates (105,000 tons at that time). However, this coincided with the onset of numerous droughts which impacted export production. In 1993, the National Irrigation Plan (NIP) was launched with the objective of expanding the area under irrigation (IVEX 2009). In the 1990s and mainly through increased use of greenhouses, export numbers recovered to over 400,000 tons, which is above pre-1973 levels. However, in general agricultural productivity in Morocco remains low as a consequence of excessive fragmentation of agricultural land (70% of farms are less than 2 ha) and a massive shortfall in private investment and risk-taking, which is evident in relatively low rates of fertiliser use and mechanisation (Badraoui and Dahan 2010). Furthermore, the rural population is insufficiently trained, markets are outmoded and there continues to be state intervention in food pricing with clear resistance from farmers to changes (Escribano and Jaida 2009). The Green Morocco Plan of 2008 is part of the wider Strategy 2020 which sees agriculture as an important catalyst for growth and prerequisite to wider poverty alleviation goals. Developed by the international consulting firm McKinsey, the Green Morocco Plan aims to attract investments estimated at 10 billion dirham (DH) per annum (pa) (€909 million pa). Its goal is to double GDP related to agricultural production within 10 years, producing an additional wealth of 100 billion DH pa (€9 billion pa) by 2020. The plan also aims to create one million small agricultural companies. The Moroccan state provided a budget of 50 billion DH (€4.5 billion), in addition to the Hassan II Fund and private investments. The final objective is to fully modernise agriculture within two decades, extending irrigation, research and use of technology and new products that are more competitive in the global marketplace (Badraoui and Dahan 2010). In practice the plan is concretised according to a ‘mature reform strategy’ that creates two pillars within a series of reforms in the legal and institutional framework of the sector. The agricultural sector is seen as the social and economic engine and has to promote high added value/high productivity while simultaneously allowing for the progressive adaptation of small-scale agriculture to new business opportunities. It is then hoped that investment in social initiatives will contribute to combating rural poverty.

Export sector and free trade agreements In recent years Morocco has signed several commercial agreements that liberalise trade conditions (Barrena-Casamayor 2010). Alongside free trade agreements with the UAE (2001), Turkey (2004) and the USA (2004), the treaties between Morocco and Europe are more significant in terms of FDI related to agriculture, not least because Europe will form the main export market for perishable agricultural produce. 195

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The agreement reduces duties on industrial products and to lesser extent on agro-alimentary products. With respect to agricultural products, there was severe opposition from European farming associations because it will allow the European market to be flooded with cheap imports (Horto 2011). Despite resistance and the highly critical Bové report (Bové 2012) negotiations were finally concluded and the agreement signed in February 2012. In combination with a lower cost of principal production factors, such as labour, energy and water (see the Box 2.8.1 on the transfer of the ‘Almerian miracle’ to Morocco), these stimulations have turned Morocco into a number one destination for European agricultural FDI: however, not without consequences.

Foreign investment depending on Morocco’s land and water – structure and characteristics A limitation of this type of analysis is the lack of official data on the number, location and activities of these transnational companies (TNCs). The results presented are obtained through a combination of literature research and stakeholder interviews. Reports of the economic offices at embassies, official reports of the Moroccan ministries of agriculture, environment and foreign exchange as well as of a set of scientific and press publications have been reviewed. However, there has been no inventory on the number and the extent of activities of foreign companies to date. Gerlach and Liu (2010) estimated that an order of magnitude figure of around 150 foreignowned TNCs operate in the agro-food sector, accounting for one-third of production and some 30% of employment. The main investors are Spain, France and Arab countries. Some 90% of the foreign investment is FDI, while 9% is from contract farming.

Agricultural sectors FDI primarily targets high added-value fruits and vegetables, mainly strawberries, tomatoes and asparagus. In particular, foreign companies have invested heavily in the early tomato industry, where they account for 15% of the cultivated area and 40% of exports, which are mainly directed to Europe (Gerlach and Liu 2010). The other sectors that attract substantial foreign investment and are growth areas are staple crops (e.g. rice, grains), oilseeds (sunflower) and flori-culture. Agricultural FDI means that foreign companies are taking an increasing stake in the entirety of the food production system from produce to export. This is particularly evident in tomato production, with about 10 major fresh fruit and vegetable exporting groups involved in the tomato export supply chain. Producers/exporters have two main strategies to control the production process and supply chain. The first is the integration of the marketing channel by creating subsidiary companies that import in France (Agri-Souss, Idyl, Azura) or Spain (Delassus); this enables them to control the whole of the export/import supply chain. The second strategy involves large exporters forcing small producers to pass their produce through specialised exporters who are trading with the European importers. In both cases, it is the importing companies that have ultimate control over the whole supply chain (Codron et al. 2007).

Box 2.8.1 Transfer of the ‘Almerian miracle’ to Morocco Greenhouse agriculture represents a small yet increasingly important and fast-growing sector of Moroccan agriculture, with extensions that have grown from 2,000 ha in 1990 to over 11,000 ha 196

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by 2011 (Santiago-Alcalde 2011), although Horto (2011) suggests it is even higher at 17,000 ha. Located mainly in the southern Souss valley around Agadir and in Larache and on the Gharb plain, greenhouse agriculture (early crops) produces 1.7 million tons of produce, 45% of it for export, bringing in 3,500 million DH and creating 20 million working days annually (ADA 2012). Greenhouses were introduced into Morocco by Spanish farmers in the 1990s. Mainly Andalusian farmers decided to test the land across the Straits of Gibraltar when the production model in Almeria (tomatoes) and Huelva (strawberries) started to reach limits in productivity. This was possible with an improved political and investment climate in Morocco. Starting very gradually, the expansion soon took off, such that by 2012 about 56,000 ha was Spanish-owned and several large greenhouse corporations had moved to southern areas, where production costs are much less elevated, while remaining close to their country of origin. One of the production centres in the Souss valley, Biougra, was discovered by Spanish farmers around 2000. These farmers found a goldmine in the sunny fields of Agadir (El Correo 2009; J. A. Sanchez, personal communication): dry earth with tons of sun in a warm but moderate climate, without frost in winter and no grilling summers. It was a copy of the Almerian Poniente, which had been so fructiferous for those who invested at due time in the plastic gold of agriculture: greenhouses. Farmers aimed to copy the Almerian miracle, or el milagro Almeriense, which brought prosperity to the ever-poor and desert region of Almeria in the south of Spain in the 1960s. This economic boom was based on intensive agriculture. Thanks to the production of horticulture under plastic greenhouses, the region evolved from one of the poorest in Spain to the one with the highest GDP in 2001, where nowadays we find the largest concentrated surface area of greenhouses in the world (up to 27,000 ha). It is said that Biougra in the Souss valley 10 years ago was what the Almerian El Ejido was 40 years ago. However, and as opposed to the buoyant Almerian municipality of El Ejido, in Biougra there were no problems of space. Hectares and hectares of flat fields seemed to wait for those who would cultivate them. There was plenty of cheap labour and government aid to investors, as well as unheard-of prices for renting land. These advantages made a lot of farmers relocate from the Spanish overexploited zones to these new lands. Apart from the logistical development of the country, the proximity of Morocco to Europe and Spain supposes an important reduction in transport costs and reduces terms of delivery. Savings in transport costs can rise to up to 60% in comparison to the People’s Republic of China and 40% in comparison to Egypt. In terms of delivery time, a shipped container or truck can arrive in Spain within an hour, whereas coming from China it takes 30 days (Santiago-Alcalde 2011). Another important advantage for Spanish farmers transferring their production to Morocco is the differences in personnel costs: yearly costs per ha in Morocco are around €9,000, whereas in Almeria they mount up to €20,194. This difference is related to the differences in minimum daily wage (€35.83 in Spain as against only 55.12 DH or €5 in Morocco) and social security costs amounting to 34% of total labour costs in Spain, whereas in Morocco this is only 18% (Aznar Sanchez 2006, cited in Santiago-Alcalde 2011). However, two decades after the discovery of the Souss valley, the greenhouse production there faces very similar problems to those that jeopardised the economic sustainability of greenhouse production in the south of Spain (Van Cauwenbergh et al. 2008). Siting it in a semi-arid area with limited surface water availability makes the production highly dependant on the extraction of groundwater, which was difficult to control and soon reached unsustainable rates. This unsustainable growth model led to a series of quantitative and qualitative problems with the primary production factor that put important pressure on the economic sustainability of the production as a whole.

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Foreign enterprises have major opportunities in the country’s poorly developed agro-alimentary sector, which is experiencing increasing demand as a result of changing food patterns of the population. The gradual modernisation of the agricultural sector also creates important demand for agricultural machines and sector-related products such as packaging, seeds, etc. (IVEX 2011). The agro-alimentary sector already attracts a large portion of FDI, especially in vegetable conserves, grain transformation, the dairy industry, fast food and bulk distribution. This investment involves the transformation of distribution with the emergence of super- and hypermarkets. In 2009, the 127 foreign enterprises present in the country accounted for 29% of the sector’s production, 42% of its investments, 40% of export and 28% of employment (Escribano and Jaida 2009). Among the major implantations of recent years we find the acquisition of the Brasseries du Maroc by the French group Castel, the Régie des Tabacs by the Spanish Altadis and that of the local Coca-Cola filial by the Spanish Cobega.

Location and relative importance Among the agricultural regions that produce for export, the Sous–Massa–Drâa basin in the south-west is the primary area for early crops and the first producing and exporting region for citrus fruits and tomatoes (over 60%) with 864,000 tons and 34,000 ha and 2.14 million and 25,500 ha respectively. This area is followed by the Gharb–Chrarda–Beni Hassen, the Oriental and Tadla-Azizal, which all have similar production quotas of citrus fruit and/or horticulture (between 5% and 10%; IVEX 2010). It is in the following areas that most FDI is concentrated: Spanish FDI in agriculture (land/ water) is concentrated in the cities of Agadir (tomatoes and others) and Larache (strawberries) with a presence in Casablanca/Kenitra as well. Spanish companies own about 80% of the Moroccan strawberry export and a substantial share of tomato export, as well as export of green beans and to a lesser extent peppers and zucchini, all of which is produced in greenhouse farming (IVEX 2010). French FDI in agriculture is located mainly in citrus production in the centre and north of the country. Among major players in the Moroccan export sector of agricultural products we find the French Azura Group, Agrisouss and Spanish Delassus. The latter is one of the seven exporters in the Maroc Fruit Board (MFB) that today represent 70% of the national potential, with a total export of around 350,000 tons in citrus and early crops. Further south, in the Guelmin region, the Tiris Euro Arab investment fund of the UAE should have acquired 700,000 ha of land principally for olive production and oil export in November 2009 (GRAIN 2009; Bové 2012); however, to date no official reports confirm the actual exploitation of these lands.

FDI near Agadir in the southern Souss valley One area that has been significantly impacted by FDI in agriculture is the Souss valley near Agadir in the Souss–Massa–Drâa district in southwestern Morocco. The area has been marked by exponential growth in greenhouse construction (for high productivity produce for export) since the late 1990s, mainly by Spanish farmers looking for new lands in which to expand the production model that had proven so prosperous on the other side of the Strait of Gibraltar (see the Box 2.8.1). Analysis of actors and productivity in horticulture, citrus fruits and olives (ADA 2011) reveals the development of a two-speed agricultural sector. On the one hand are highly specialised and productive large and medium-scale greenhouses driven by FDI, which produce high valueadded products that are 100% exported, and on the other hand are local farmers with small plots 198

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of land growing food for the local markets, at less than one third of the productivity of greenhouse agriculture. Furthermore, the dichotomy is seen in terms of the safety standards applied to the crops produced. Export-oriented produce already adheres to EU quality and safety standards, whereas local supermarkets buy from the traditional fresh produce industry suppliers, which feature a large number of intermediaries and small-scale growers who sell through wholesale markets and tend to ignore basic quality and safety standards (Codron et al. 2007). Problems arise when both types of farmers depend on the same overexploited groundwater bodies. The volume of water used in the Souss Massa basin is around 1,100 Hm³, 68% of which is supplied from groundwater bodies. Irrigated agriculture uses up to 95% of water withdrawn in the region. The Souss aquifer is currently characterised by a deficit of over 360 Hm³ per year (Département de l’Eau 2012) and groundwater table levels have declined heavily over the last 15 years. The situation is critical, and the government is looking to reduce pressure on groundwater resources through a combination of improved artificial recharge and a reduction in groundwater demand through water-saving techniques such as drip irrigation and rainwater harvesting. Drip irrigation is present in the private irrigated areas scattered around Biougra, El Guerdane en Ouled Berhil, whereas flood irrigation is used in traditional irrigated areas and upstream areas (Tagma et al. 2009). Flood irrigation is blamed for infiltration of significant amounts of nitrates into groundwater bodies, and is targeted in the modernisation programmes. In order to reduce the impacts of farming practices, investment in new technology and techniques is required. However, the scattered small landholders that produce for the local market lack the economic means to do so. This harms their reputation in the market, as they are now also held responsible for the declining quality of water resources in the region.

Institutional setting and government aid Being restricted from land acquisition by Moroccan law, foreign investors resort to renting lands to be able to farm in the country. Rents can be negotiated either directly with private Moroccan farmers or through land tenders issued by the state administrative bodies SODEA and SOGETA. Two rounds of land tenders were launched in October 2004 and April 2007 by SODEA and SOGETA, as part of the first actions in the framework of the new 2020 Strategy. A part of the agencies’ lands, until then administered by public societies, was leased to private investors, both national and foreign. In the first tender, 42,000 ha were awarded through lease contracts to investors at a price of €135–€360 per hectare per year, with variable durations (17–40 years) and type of crops produced (irrigated or fruit trees) (Boix 2011). The award procedure was based on the presentation of solid and well-funded projects, as well as the potential employment and economic stimulus provided by the project. In the second land tender, another 45,000 ha were awarded. The first round awarded land mainly to national investors, who were claimed to belong to important families of Morocco and who were within the influence of the King (Houdret 2008a). However, at the end of the second round in 2008, 38,731 hectares of state farmland were leased by France, Egypt, Spain and the UAE (Gerlach and Liu 2010). While no detailed information exists on the amounts of land per firm, it is known that currently 16 projects have been awarded to Spanish firms (Escribano and Jaida 2009). Foreign investors don’t depend solely on these official leasing projects to develop agricultural projects. Several foreign enterprises have leasing contracts with private Moroccan land owners across the country. Although official numbers on this practice are lacking, some figures say that, in the case of Spanish FDI for instance, about 56,000 ha of farmland are owned by Spanish enterprises (see Box 2.8.1). 199

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Impacts: social and environmental impacts of foreign investment/ changing climate in Morocco Resources sustainability – available resources and pressures The water availability in Morocco is 730m³/inhabitant/year (Zyad 2009), which is below the 1,000m³/person/year threshold of water scarcity established by the United Nations. Except in the north-west areas and the Atlas Mountains, the rainfall in Morocco remains low in comparison to the north Mediterranean countries. The mean annual rainfall varies between 500 and 2,000 mm in the north-west to less than 100 mm in the south-east region, and the country’s climate is characterised by drought. Average total rainfall is estimated at about 150,000 Hm³ yearly, of which 80% is lost by evapotranspiration. The surface water flow is closely estimated to be 20,000 Hm³/year. About 65% of these available surface water resources are located in the north and the centre of the Atlantic basin. Around 56% of the basin’s available water is mobilised (Département de l’Eau 2012). Potential groundwater resources are estimated to be 4,000 Hm³ per year, with more than 50 per cent located in the centre and the north of Morocco. Groundwater resources constitute an important part of the national hydraulic heritage, and represent the only source of freshwater in desert areas. All these resources experience extreme cyclic variations. Sharp cycles of drought have important consequences on the national economy, particularly in agriculture. Water resources are also affected by continuous increase of water demand due to rapid population growth, improved standards of living, urban and industrial development, and extension of modern agriculture practices. The consequences of these pressures are an increased deterioration of the quantity and quality of Moroccan water resources, and could expose Morocco to the risk of penury2 by 2030. The water challenges faced by Morocco are interlinked with the economy’s dependence on irrigated agricultural export (UNEP FI 2009). Agriculture as a whole accounts for 84% of water use and constitutes by far the largest share of water use of the country, whereas 13% of water goes to consumption of drinking water and 3% to industry. Although irrigated agriculture only occupies 16% of the cultivated area, it contributes about 81% of the total volume of agricultural production and 45% of added value of the agricultural sector, and provides 75% of total agricultural export. Of the total agricultural area equipped with irrigation systems, approximately 30% is irrigated from groundwater. The share of groundwater is increasing as the capacity of dams is decreasing. Dam authorities have also been accused of a lack of technical maintenance of equipment and unreliable supply. Many farmers prefer to individually or jointly acquire motor pumps, which tap their resources either from rivers and canals or from fossil water reserves (Houdret 2008a), often at unsustainable rates. For example, in the Souss region in southern Morocco the main aquifer is largely depleted and water is being withdrawn at 179% of the renewable supply (Département de l’Eau 2012). Since 1969, the water table has decreased at an average of 1.5 m per year. Some private tube wells now pump water from depths of over 200 m. In the El Guerdane area, which is a small part of the Souss valley, declining groundwater tables led to the abandoning of almost 12,000 ha of agricultural land by 2003 (Houdret 2008b). Nevertheless, the Souss valley produces 60% of the country’s citrus fruits, contributing to one-half of Morocco’s exports of these products. The water-dependent activities that are promoted through FDI also threaten the qualitative integrity of the nation’s waters. Although FDI production is generally substantially more efficient in terms of water and input use, owing to high technological input, it is unavoidable that the increased intensity of agricultural production jeopardises the quality of water resources in a 200

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country where use of fertiliser and phytosanitary products is less restricted. Nitrate pollution has already become a serious problem in groundwater bodies near irrigation schemes. About 10% of groundwater bodies have nitrate concentrations above 50 MG/l and 20% are between 25 and 50. In fewer than 15 years, about 50% of the Tadla groundwater bodies have been contaminated (Tagma et al. 2009). Morocco could suffer from the commercial liberalisation of its economy, due to overexploitation of water resources, increased environmental pollution, loss of soil fertility and loss of biodiversity (IDPM 2007). In 2003, it was estimated that the degradation of natural resources in Morocco reduces GDP by 8% (EU 2003, cited in Houdret 2008a), of which the deterioration of water resources alone accounts for 3.7% (Lahlimi-Alami 2007). Therefore, in the 2020 Strategy, water is included as one of the most important transversal reforms for the country’s success (Escribano and Jaida 2009). In that sense the Moroccan government has launched a series of plans that aim to reduce the negative impacts of unsustainable water use by improving the irrigation schemes through three different initiatives: the National Water Saving Programme in Irrigation (PNEEI), a programme aiming to reduce the gap between hydro-agricultural installations and the constructed reservoirs, and the institutional reform of large-scale irrigation. Furthermore, and in response to disastrous cases such as the collapse of the El Guerdane aquifer, King Mohamed VI declared groundwater protection a national priority in 2008. This resulted in a national Groundwater Action Plan consisting of 30 actions (including demand management and supply-side actions, stakeholder participation and institutional strengthening; van Steenbergen et al. 2011). The pressure on resources, combined with successive droughts, has forced the Moroccan Government to look for new water resources as well..Non-conventional resources such as reuse of treated wastewater or desalinated water are seen as viable opportunities to balance water demand and supply in the country. Desalination, for example, is planned to increase from the actual 12 Hm³ to 400 Hm³ by the 2030 horizon (Zyad 2009). In that sense several TNCs active in the water sector have highlighted their business opportunities in the country, and the Spanish government has signed a memorandum of understanding (MOU) with Morocco in which both countries will collaborate on projects that are framed in a Mechanism of Clean Development (IVEX 2010).

Socio-economic impact and the role of the free trade agreements The attraction of FDI in agriculture is expected to accelerate economic development of the country, and the agricultural politics contained in the Green Morocco Plan are seen as a key tool to decrease the poverty that is strongly linked to rural life dependent on agriculture in the country. However, whether local farmers and rural populations will benefit from these reforms is debatable. The highly valuable export of Moroccan produce is facilitated by large farmers and Moroccan and foreign investors and export groups. By further liberalising the Moroccan market in the GMP and through the recent EU Mediterranean Free Trade Agreement (EMFTA), this production model will be further reinforced. Large industries have relocated and invested in southern countries to produce at lower cost, and the EMFTA pretend to encourage this production model by securing market and profits. In order to compensate small farmers for the difficulties they could suffer through the opening of the markets, the GMP has taken measures (Badraoui and Dahan 2010) and the 2008 Strategy Paper of the Ministry deals with the problem extensively. However, in her 2008 analysis, Houdret (2008a) states that few specific solutions were proposed. In terms of job creation, it is clear that the opportunities created for TNC and Moroccan large-scale companies to develop an industrial export-oriented production model will translate 201

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into job creation in the sector. However, owing to competitive pressures that local firms will experience, it might induce them to replace permanent workers with temporary staff who will enjoy fewer benefits (Martin 2004). Furthermore, the several thousand employees of the former state firms SODEA and SOGETA were mainly sent off on early retirement. Large numbers of farmers and trade unions protested heavily against these dismissals. The restrictions imposed on private investors were not respected, and the compliance was not controlled, according to news reports (Zyad 2007, cited in Houdret 2008a). As the land leases led to an important restructuring of ownership, mainly Spanish and Moroccan companies took advantage of this space to expand. In general, there is pressure of large TNCs to rent land from small farmers who have high debts (Houdret 2008a). The stimulation of the industrial agricultural model, driven by mainly foreign and highly influential Moroccan companies, threatens local producers, as these cannot produce at competitive prices. The liberalisation and privatisation initiatives stated by King Hassan II and reinforce by his son, King Mohammed VI, provoked a profound change in the heavily subsidised agricultural sector (where subsidies for grain were 44% in 2006). The subsidised agriculture paradigm suddenly shifted, subsidies disappeared and people could not make the necessary investments to stay competitive with large producers. The liberalisation and privatisation initiatives in the agricultural and other sectors were therefore met with heavy protest by both the Parliament and Moroccan society (Hamlichi 2008). Many Moroccan critics say that rich farmers and large agricultural companies are taking too much benefit from not paying their fair share of taxes, and that poor farmers are struggling with high costs and are receiving little support from the state. Furthermore, the water resources degradation, aggravated by intensifying FDI-based agricultural production, affects the poor especially. Whereas others might generate alternative sources of income, through their higher education standards, financial reserves or family abroad, the lack of these alternatives converts the poor to being most vulnerable to resource degradation and scarcity (Streichen 2003, cited in Houdret 2008a). Finally, the decreased government income due to tax reductions (Santiago-Alcalde 2011) will lower the capacity of the state to invest in infrastructure, services and social welfare. This comes at a time when there is an increased need for subsidies to support the adjustment costs associated with the private-sector restructuring, training and education to improve the quality of the labour force, and basic infrastructure to support the competitiveness of the private-sector itself (Martin 2004). The decrease in state income therefore weakens its ability to support long-term social development. Through the liberalisation and free trade agreements, the sector and the country become more vulnerable, as its economy is more and more dependent on international markets and thus international prices. Furthermore, the trade deficit is likely to further increase the disaoppearing subsides because of decreased production of local basic crops, which are no longer profitable owing to subsidies.

Discussion: incentives to improve the situation? Recovery of environmental externalities through pricing and governance In general, a strengthening of environmental regulation, particularly in relation to water resources, land use planning and controls and protection of biological diversity, is needed (IDPM 2007). Although one of the conditions for FDI in Morocco is to contribute to environmental protection (AMDI 2012), the regulations that are supposed to specify these conditions are not detailed. Beyond regulation, institutions’ capacity is far from adapted to the liberalised investment environment, although recent development of law and policy is tackling important and urgent 202

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issues. This translates into a lack of controlling and correcting mechanisms that allow the sovereign state to intervene. In order to identify and respond to actual impacts of the existing and newly attracted production processes, there is a clear need to improve the environmental baseline data and information on the produce, as well as to strengthen monitoring systems. The lack thereof seriously undermines the government’s power to interfere with the production processes of the attracted foreign companies When looking at the example of groundwater abstraction in the Souss valley, we can see that two mechanisms exist to intervene in the resources exploitation. The first mechanism is the development of River Basin Plans (RBPs) by the recently created River Basin Agencies (RBA). The RBPs regulate resources and their use on a 20-year time frame but, as prescribed by the 1995 Water Law, they can be revised or amended every five years if changing conditions warrant amendments. A second mechanism is the development of specific Groundwater Management Action Plans. However, the development, let alone the implementation, of these plans is hampered by the meagre capacity in the RBAs and their sometimes conflicting relations with the principal water users in the basins (van Steenbergen et al. 2011). Furthermore, actual water pricing in the country is very low, with estimated volumetric and flat rates of €0.03/m³ and €0.02 to 0.06/m³ respectively (Chohin-Kuper 2008). It is expected that an adjustment of the prices could improve the efficiency of water use through rationalisation at the level of the users themselves, as well as granting some extra funding for recovery of environmental externalities to be financed by the government. These adapted pricing schemes and the use of other economic strategies, when embedded in a general process of strengthening of institutional capacity, could help optimise the impacts of the EU Moroccan free trade agreement.

Reorganising the market – alternatives for liberalisation of produce More fundamentally, the sole focus on liberalisation of products exchange to facilitate growth should be revisited. According to Winters (2001) the income granted from international migrations could be three times higher than those of commercial liberalisation. In parallel to Stiglitz’s (2006) observation that remittances received by many Latin-American countries outnumber or at least equal FDI, the 2009 report of the Office de Changes shows that in Morocco the balance of private banking transfers reached almost 60,000 million dirham in 2008. In the same year net income from private foreign investment and loans was only 14,000 million dirham (Santiago-Alcalde 2011). Furthermore, an alternative market-based mechanism should be found to avoid the decrease in benefits of the small farmers who supply large production chains. Although foreign companies dominate the plant, processing and marketing businesses, there remain a large number of intermediaries. Decreasing the number of these intermediaries could increase benefits for the smallscale farmers, which could then drive positive changes in farming practices so that cultivation remains profitable.

Governance and social movements Social movements in Morocco are generally weak and fragmented. Although the syndical movement constituted a real counterbalance during policy development in the 1950s, the actual politically premeditated fragmentation of unions has killed their social mobilisation capacity (Hamlichi 2008) and left workers without a strong voice. When focusing on the irrigators, Faysse et al. (2010) mention a reduced capacity of family farmers to voice their interests. This leads to the choice of exit strategies when granted the opportunity, something that occurs, for example, when pressure on the resources complicates their livelihoods. 203

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More generally, a recent follow-up report of the European Commission on Morocco recognises that in spite of positive results obtained in the political dialogue, there is a need to intensify efforts for the effective development of freedom and rights as well as social, judiciary, economic and financial co-operation. Measures taken to redistribute the fruits of economic development, or to favour sustained actions to improve weakened human development indicators, have been insufficient. The reservations against international conventions on human rights and discrimination of women remain, while there have been no major improvements in the battle against corruption or judicial reform. Santiago-Alcalde (2011) states that the rights of assembly and association are still not fully recognised, and that a new press code has yet to be adopted, which means that journalists and bloggers continue to be censored.

Conclusion The liberalisation of Morocco’s economy made it an attractive destination for FDI, and its economy and agriculture are gradually transforming. However, adjustments must be made in order to remedy the numerous problems stemming from liberalisation. Improved institutional capacity and control of investment conditions and resource use are highly desirable to protect both the environment and the population. To date, economic development plans, and the Green Morocco Plan especially, seem to be detached from contrasted information on the available resources and actual FDI developments, and although institutional capacity-building is part of the national priority on water protection, its development is lagging behind the actual transformation on the field. Therefore FDI is granted conditions that are most probably far from covering the real cost of the resources abstraction for the country. As FDI economy is heavily export-oriented, most of its added value leaves the country within a limited time. Especially in the middle term, its beneficial impact on rural poverty reduction is doubtful as government programmes to sustain the family farming model are yet to be implemented. It also remains to be seen whether the generated economic development provides the state with the necessary projected funding to maintain its resources. As a large part of FDI-based production is exported to Europe, the EU can play a special role through a conditioning of its free trade agreement and can promote the protection of the environment and a further development of democracy, civil and social rights as fundamental parts of the common values that underlie the relation between EU and Morocco.

Notes 1 The basic law on investment is the Investment Letter of 1996 that constitutes the legal framework on investment and was enacted 8 November 1995 by the Dahir (Law-Decree) no. 1-95-213. 2 Threshold of 500m³/inhabitant/year.

References ADA (2012) ‘The Green Morocco Plan’, Agence pour le développement agricole. Online. Available at: www.ada.gov.ma/en/Plan_Maroc_Vert/plan-maroc-vert.php (accessed 2 May 2012). AMDI (2012) ‘Opportunités d’investissement’, Agence Marrocaine de développement des Investissements. Online. Available at: www.invest.gov.ma/ (accessed 2 May 2012). Badraoui, M. and Dahan, R. (2010) ‘The Green Morocco Plan in relation to food security and climate change’, presentation on the International Conference on Food Security and Climate Change in the Dry Areas, 1–4 February 2010, Amman,Jordan.

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Barrena-Casamayor, I. (2010) ‘El sector de la Agricultura en Marruecos: inversión para empresas españolas agrícolas.’, technical report, Instituto Español de Comercio Exterior. Oficina Econymica y Comercial de la Embajada de España en Rabat. Boix, V. (2011) ‘Acuerdo UE–Marruecos: Tres Mitos y un destino’, SODEPAZ. Online. Available at: gloobal.net (accessed 10 March 2012). Bové, J. (2012) ‘Recommendation on the draft Council decision on the conclusion of an Agreement in the form of an Exchange of Letters between the European Union and the Kingdom of Morocco concerning reciprocal liberalisation measures on agricultural products, processed agricultural products, fish and fishery products, the replacement of Protocols 1, 2 and 3 and their Annexes and amendments to the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part (15975/2010 – C7–0432/2010 – 2010/0248(NLE))’, technical report, European Parliament. Cembrero, I. (2004) ‘Marruecos alquila a largo plazo tierras del Estado para atraer a agricultores españoles’, El Pais, 4 October. Cerezo-Monje, B., Rosalva-Espino, R. and Silvera-Roig, C. (2011) ‘Ficha Económica Marruecos’, technical report, Sociedad Canaria de Fomento Economico. CESCE (2011) ‘Informe Riesgo Pais’, technical report, CESCE-Gestion Integral del Riesgo. Chohin-Kuper, A. (2008) ‘Tarification de l’eau et recouvrement des coûts dans le bassin du Sebou. Rapport final du projet Ec’Eau Sebou. Royaume du Maroc, ABHS, ActEon’, technical report, WWF. Codron, J. M., Bouhsina, F. and Rouvière, E. (2007) ‘Economic and institutional conditions for valuing Moroccan ecoponics tomatoes both in the export and the domestic markets’, in W. H. Schnitzler and A. Hanafi (eds) VIII International Symposium on Protected Cultivation in Mild Winter Climates: Advances in Soil and Soilless Cultivation under Protected Environment, Agadir: Acta Horticulturae. Departement de l’Eau (2012) ‘Ressources en eau par bassin: Souss-Massa’, technical report, Royaume du Maroc, Ministere de l’Energie, des Mines, de l’Eau et de l’Environnement. Departement de l’Eau. El Correo (2009) ‘Conflictos en los invernaderos’, El Correo, 2 August. Escribano, G. and Jaida, L. (2009) ‘La internazionalización de la empresa española. Estudio monográfico sobre el entorno económico y las oportunidades de inversión en: Marruecos’, technical report, Instituto Español de Comercio Exterior. Eurostat (2009) ‘Panorama of the national accounts of the Mediterranean Partner Countries 2000–2006’, Data in Focus 1/2009. Faysse, N., Errahj, M., Kuper, M. and Mahdi, M. (2010) ‘Learning to voice? Evolving roles of family farmers in the coordination of large-scale irrigation schemes in Morocco’, Water Alternatives 3: 48–67. Gerlach, A. and Liu, P. (2010) ‘Resource-seeking Foreign Direct Investment; a review of country case studies in African agriculture’, technical report, FAO. GRAIN (2009) ‘The new farm owners: corporate investors lead the rush for control over overseas farmland’, online. Available at: www.grain.org/article/entries/4389-the-new-farm-owners-corporate-investorslead-the-rush-for-control-over-overseas-farmland (accessed 2 May 2012). A background article published as a chapter in F. Magdoff and B. Tokar (eds) Agriculture and Food in Crisis, New York: Monthly Review Press. Hamlichi, B. (2008) ‘Actores colectivos en Marruecos’, Theomai 017: 88–97. Horto (2011) ‘Conociendo nuestros competidores: Marruecos’, Horto, (63):8–14 December. Houdret, A. (2008a) ‘Konflikte um Wasser in Marokko: ökologische und soziopolitsche Ursachen sowie Möglichkeiten der Konflikttransfromation’, PhD thesis, Universitat Duisburg-Essen Universitat Paris 8 im Rahmen. ——(2008b) ‘The privatisation of irrigation water services: new partnerships and water conflicts in the El Guerdane project, Morocco’, paper presented at the 13th World Water Congress, International Water Resources Association, 1–4 September 2008, Montpellier, France. IDPM (2007) ‘Sustainability impact assessment of the Euro-Mediterranean Free Trade Area, SIA-EMFTA project’, technical report, Institute for Development Policy and Management, University of Manchester. IVEX (2010) ‘Marruecos: Oportunidades de Negocio 2011’, technical report, Instituto Valenciano de la Exportacion. ——(2011) ‘Marruecos – Informe Pais’, technical report, Instituto Valenciano de la Exportacion. Lahlimi-Alami, A. (2007) ‘Agriculture 2030: Quels avenirs pour le Maroc?’, technical report, Haut Commisariat au Plan. Laouina, A. (2006) ‘Gestion durable des ressources naturelles et de la biodiversité au Maroc’, technical report, Haut Commisariat au Plan. 205

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Martin, I. (2004) ‘The social impact of Euro-Mediterranean free trade areas: a first approach with special reference to the case of Morocco’, Mediterranean Policy 9(3): 422–58. Santiago-Alcalde, J. J. (2011) ‘Efecto de los acuerdos comerciales agrícolas entre Marruecos y la UE sobre la población marroquí’, technical report, Fundacion Cajamar. Stiglitz, J. (2006) ‘Fair trade for all. How trade can promote development – Brooks World Poverty Institute inaugural lecture’. Online. Available at: www.ljps.com.cn/oldweb/Stiglitz321/Fair%20trade%20for %20all.pdf. Streichen, P. (2003) ‘Pauvrete(s) et developpement: le cas du Maroc’, in R. Charvin and M. Hammoudi (eds) Pauperisation et degradation des ressources naturelles au Maroc, Paris: Hermès, pp. 79–86. Tagma, T., Hsissou, Y., Bouchaou, L., Bouragba, L. and Boutaleb, S. (2009) ‘Groundwater nitrate pollution in Souss–Massa basin (south-west Morocco)’, African Journal of Environmental Science and Technology 3 (10): 301–9. UNEP-FI (2009) ‘Agribusiness. Chief Liquidity Series – Water-related materiality briefings for financial institutions’, technical report, UNEP Finance Initiative. Van Cauwenbergh, N., Pinte, D., Tilmant, A., Francés, I., Pulido-Bosch, A. and Vanclooster, M. (2008) ‘Multi-objective, multiple participant decision support for water management in the Andarax catchment, Almeria’, Journal of Environmental Geology 54: 479–89. van Steenbergen, F., El-Haouari, N. and Bogdanovic, S. (eds) (2011) ‘Water policy and law in the Mediterranean – an evolving nexus’, in F. van Steenbergen and N. El Haouri (eds) The Blind Spot in Water Governance: Conjunctive Groundwater Use in the MENA Countries, Wageningen: MetaMeta, pp. 42–59. Winters, A. (2001) ‘Assessing the efficiency gain from further liberalization: a comment’, in Roger B. Porter, Pierre Sauve, Arvind Subramanian and Americo Beviglia Zampetti (eds) Efficiency, Equity, Legitimacy: The Multilateral Trading System at the Millennium, Washington, DC: Center for Business and Government, Harvard University, Brookings Institution Press. Zyad, N. (2007) ‘Maroc: SODEA–SOGETA entre satisfecit et attentes des partenaires’, Libération. Online. Available at: http://fr.allafrica.com/stories/200702270754.html (accessed 2 May 2012).

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2.9 A blue revolution for Zambia? Large-scale irrigation projects and land and water ‘grabs’ Jessica M. Chu1

Introduction This chapter seeks to situate Zambia in the wider discussions of relationships between water and land ‘grabbing’ and impacts on local communities in sub-Saharan Africa. Zambia has been a site of a growing number of large-scale land acquisitions, particularly for agricultural ventures. Such land acquisitions have fashionably been termed ‘land grabs’; however, the term has been shown to be problematic in the way that it can obscure the various mechanisms of land acquisition (Hall 2011). The term also hides the role played by water in such agricultural development schemes. In Zambia, it becomes evident that the motivations for ‘land grabs’, or large-scale land acquisitions for agriculture in general, have equally to do with the ways in which agricultural development has been conceptualised, as with other events such as the 2008 world food price crisis, the rise in biofuel production, and oil price increases (Cotula et al. 2009; Anseeuw et al 2011). The World Bank and IFPRI (International Food Policy Research Institute), among many other institutions, have referred to Zambia as having great potential for yield increase through increases in irrigation-based agriculture (Liang 2008). The influence and agendas of international donors and organisations have ensured that Zambian policies to encourage investment in agriculture have focused on investment in infrastructure and irrigation. The call for sub-Saharan African countries to harness their untapped water potential was not necessarily intended to result in increasingly large-scale investment, but this has very much been the case for Zambia. Using three case studies of recent land acquisitions, this chapter seeks to demonstrate the ways in which the calls for a ‘blue revolution’ in Zambia have resulted in incidences of largescale land acquisitions for commercial farming. The calls to increase the scope of Zambia’s irrigated land have largely been taken up by private-based commercial farming schemes, rather than by smallholder farmers. Yet the three cases provide three different models of infrastructure development. Disaggregating the different ways in which agricultural investment in Zambia is implemented is an important exercise for determining any positive and negative impacts to local Zambian livelihoods. The first case study discusses the Zambian Government’s most recent efforts to promote agricultural farm blocks to attract investors. The second is of a private equity fund that has sought to acquire established farmland for the purposes of drawing returns from 207

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the promise of Zambian agriculture. Lastly, the third case is of a public–private partnership project to encourage local agricultural development through investments in infrastructure. Each of these cases has attracted a certain amount of international attention for their promises not only to contribute to economic growth, but also to help ‘feed’ Zambia and the wider area of sub-Saharan Africa. Central to each case has been the provision of irrigation networks to harness Zambia’s water resources. However, from examining each case, there is shown to be diversity in the strategies of each of the models of irrigation development for large-scale agricultural projects. These different models demonstrate not only the importance of the role that water plays in the acquisition of lands, but that simply categorising such models as ‘land grabs’ obscures the impacts that they already have and will potentially have on local communities.

Rising trend of large-scale land acquisitions in Zambia Large-scale land acquisitions are not a new phenomenon in Zambia. Its history as Northern Rhodesia, a British colony, resulted in much of the most fertile and accessible land being set aside for colonial commercial farmers, whose ownership of large commercial farms set the scene for a dual tenure system. Under this, the majority of Zambian land is classified as communal, while a small percentage (often stated to be 6%) falls under private titles (Brown 2005). With independence in 1964, the new government maintained the same colonial system, allowing for the preservation of privately held land to continue in the same hands. The divisions between statutory and customary land continue to this day through the most recent Lands Act (1995), which continues to vest all land under the president and prioritise statutory land over customary land. This has been the basis for the government’s ability to allocate land to investors. Investors seek to secure land for myriad purposes in a politically stable growing economy, largely facilitated by the Zambia Development Agency (ZDA). They have been crucial in attracting investment in mining and tourism since their inception in 2006 and, increasingly, in agriculture. With re-focus on agriculture in international development (World Bank 2007), there has been a resurgence of attention to large-scale agricultural projects; internationally, 78% of large-scale land deals have reportedly been for agriculture (Anseeuw et al. 2011). A report from the BBC (2012) stated that within Zambia the aggregate of land deals is the equivalent of 12.92% of Zambia’s total arable land; early research from the Zambia Land Alliance has come up with a similar figure of 9.4%.2 Both figures point to a growing amount of land that is falling under large-scale agricultural projects and, thus, increasing pressures on farmland. There is inherent tension in recent attempts to acquire large amounts of farmland. Concerns over governance and corruption issues, as well as negative impacts of human displacement due to large-scale land acquisitions, are balanced against a genuine need for agricultural investment and economic development. The use of rhetoric by those running commercial farming ventures to emphasise the need and potential for agricultural development and food security has been gaining increasing media attention.3 With ‘win–win’ solutions being proposed that benefit both smallholder farmers and investors, the question of whether these large-scale land acquisitions can actually provide a new model for agricultural development has been high in the minds of development agencies, investors and the public alike. For Zambia, investment in agriculture has long been promoted not only as a means to address ongoing food security issues and rural poverty, but also as a means to diversify the national economy away from dependence on the mining sector. Additionally, there is a recognition that with population growth, there will need to be a notable increase in agricultural production; Zambia has the highest projected population growth between 2000 and 2100 at a staggering rate of 941% growth over the whole period (Smith 2011). The United Nations (UN) 208

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has projected that in 2100, Zambia’s population will be at 140,348,000 people, with a population density growing from 17 people/km2 in 2010 to 186 people/km2 in 2100 (UN 2010). With much of that population focused in urban areas, there is a genuine concern for increasing Zambia’s food security status. The growing pressure for both economic growth and poverty reduction is mounting, and yet the question is whether agriculture can really provide the answers. Stagnant for decades, what hope does agriculture have in unlocking the key to the future of Zambia and sub-Saharan Africa as a whole? The key to agriculture’s potential appears to lie in water and, as part of this, there has been a growing realisation and movement to mobilise Africa’s agricultural potential (World Bank 2007). The next sections will explore the ways in which water has become a central focus in mobilising the agriculture potential in sub-Saharan Africa and Zambia and some of the ways in which this has become manifested in Zambia, through policy and then realised through large-scale land acquisitions.

Calls for a blue revolution The World Bank’s 2008 World Development Report, entitled Agriculture for Development, represents a clear call for economic development strategies to once again focus on the role of agriculture, stating that there needs to be an effort to ‘place agriculture afresh at the center of the development agenda’ (World Bank 2007: 1). The need for increased agricultural yields is made even more pressing with continuing population increases, with climate change making it harder to achieve targets year after year. Still, these yields are not to be achieved just anywhere; the World Bank’s report on Awakening Africa’s Sleeping Giant (World Bank 2009) calls on the Guinea savannah region of sub-Saharan Africa to provide much of the agricultural growth needed world-wide. Covering 600 million hectares (ha) of land, of which 400 million ha can be used for agriculture and less than 10% is currently cropped, this is the area that has been targeted. Not only is such land available, one is led to think, but it is our imperative to use it to its capacity for the food security of future populations. As indicated earlier in this chapter, the way to open up this land is through its water resources. Reports such as the Commission for Africa’s Our Common Interest report (Commission for Africa 2005) brought attention to the fact that only 4% of arable land within Africa was under irrigation, compared to 40% in South Asia alone. Thus, it called for an increase of funding to irrigation infrastructure by 50% by 2010 and for a doubling of land under irrigation by 2015. The High Level Conference on ‘Water for Agriculture and Energy in Africa: The Challenges of Climate Change’, held in the Libyan city of Sirte in 2008, continued the trend of highlighting the central issue of irrigation for agricultural development. Recognising the potential impact of climate change on the sub-Saharan region, irrigation would serve to both increase yields and protect against projected decreased rainfall. Even those wary of embedded politics and environmental impacts of water extraction have called for sub-Saharan Africa to make greater use of its water. ‘There is plenty of scope for [developing economies in subSaharan Africa] to develop hydro-power and water for irrigation, particularly if they adopt the wisdom of the World Commission on Dams,’ calls Tony Allan (2011: 308). Philip Woodhouse echoes a similar sentiment: ‘if it is possible to identify a single investment with widespread impact on agricultural productivity in Africa, it is likely to be improved water control, extending from large-scale irrigation to small-scale stream diversions, water harvesting and managing watershed vegetation cover’ (Woodhouse 2009: 273). The consensus is that water must play a key role in the expansion of agriculture.

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These points have not been lost on the government of Zambia. The uptake of these points has been relatively impressive in rhetoric, if not in practice. Most of Zambia lies within the Guinea savannah region and does indeed clearly have the potential that sub-Saharan Africa is thought to have. Zambia’s ‘yield gap’, the typology used by the World Bank to assess agricultural potential versus current agricultural use, is high. Yield gap analysis has shown that Zambia has ‘large tracts of land suitable for rain-fed cultivation, but also a large portion of smallholders who only achieve a fraction of potential productivity’ (Deininger and Byerlee 2011: 89–90). In fact, Zambia sits within the top 10 countries in the world in which ‘the amount of suitable land is more than double what is currently cultivated’ (Deininger and Byerlee 2011: 93). The emphasis is not on rain-fed cultivation alone, of course, as the addition of irrigation could provide even greater promise: 56% of its total landmass (about 46 million ha) is arable, and Zambia is said to contain about 36% of the freshwater resources of the entire Southern African Development Community (SADC) region (Republic of Zambia 2005a). Zambia’s irrigation potential has been widely cited, although somewhat inconsistently. Figures from the FAO and the Ministry of Agriculture and Cooperatives (MACO) are commonly used, stating that out of a total 2.75 million ha of irrigation potential (about 6% of Zambia’s total arable land), only 156,000 ha were realised in 2004. Other figures have recognised that of the 2.75 million ha, the economic reality for irrigation development varies between 400,000 ha (Republic of Zambia 2010) and 532,200 ha (Aquastat 2007), and 672,000 ha claimed by the World Bank (FAO 2008). It has been widely recognised for a number of years, and is a general consensus of many, that there is great potential in Zambian agriculture (IDL 2002). It only remains to find ways to harness this potential through policy. Alongside the global trends noted earlier, Zambia has been able to put these trends into rhetoric, through three key policy documents. The government of the Republic of Zambia (GRZ) put in place the Fifth National Development Plan (FNDP) for the years of 2005 to 2010. This, and the National Vision 2030 report, a longer-term plan of the same vision, both put support for irrigation development as a central means to diversify the economy away from traditional sources of economic growth, namely mining and construction, towards agricultural development (Republic of Zambia 2006). Even with the election of a new government in September 2011, Zambia has maintained its path towards agricultural development through irrigation. A telling quote comes from the manifesto of the new governmental party, the Patriotic Front, which claims that it will ‘invest in appropriate technology to ensure that the water from regions with excess water is harnessed and delivered on an ecologically sustainable basis to drier lands that have the highest potential for large and small-scale irrigation projects’ (Patriotic Front 2011). Without discounting this slightly misguided proposition, the commitment to the use of irrigation to expand agriculture in Zambia is still evident in key policy announcements, such as the new president’s inaugural parliamentary speech from October 2011. The motives and incentives for the GRZ to provide land for irrigated agricultural projects have been present beyond the 2008 milestone often used as the starting date of ‘land grabs’. With the policies in place, it was only a matter of investors taking up these offers with increasing interest.

Case studies The previous section explained some of the enablers for the climate of large-scale agricultural and irrigation infrastructural investment. If historically the acquisitions of large amounts of land in Zambia were made possible by colonial precedent, the rise of such deals in recent years perhaps demonstrates the success in the GRZ’s policies to attract investment. Three case studies 210

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are selected to highlight these trends. They are cases that have each received notable press coverage and that, unlike many rumoured land acquisitions, have each begun implementation. They also maintain several other similarities. None of the case studies can be considered new acquisitions in that their plans for inception predate the 2008 world food price crisis. As such, while motivated by the same trends as recent deals, they demonstrate that the concept of the global ‘rush for land’ (Anseeuw et al. 2011) has involved much longer-term processes. However, they are each still very much part of the recent trend of the acquisition of farmland in that they all represent cases of foreign financial interest, transfers of large areas of agriculturally viable land, and importantly, each contains a significant aspect of irrigation. The first example is that of the Nansanga Farm Block, a government-commissioned project to create commercial farmland to channel investment. The other two examples represent large-scale acquisitions of established privately leased commercial farmland. This separates them from a growing concern about the acquisition of customary land, although the repercussions of large-scale acquisition of statutory land can be of equal concern, particularly when considering that this represents the way in which commercial agriculture hopes to expand in Zambia. Each case has been examined in its preliminary stages by the Zambia Land Alliance, a civil society organisation that seeks to promote secure, pro-poor access, ownership and control over land. Through a combination of document and media analysis, formal and informal interviews, as well as preliminary fieldwork at the Nansanga site, these case studies provide an overview of some of the greater trends throughout Zambia. They have also been discussed in other reports, most notably the Nansanga case by the Oakland Institute (2011) and the World Bank (Deininger and Byerlee 2011), and in a number of articles at GRAIN’s database,4 and the second case study as the subject of scrutiny by GRAIN (2012b). The selection of the third case study contrasts against the other two in that the attention it has received has been as a positive case study of ‘patient capital’ (AgDevCo. 2010). The inclusion as a case study has been to attempt to provide a wider perspective of large-scale agricultural infrastructure projects. Each case remains in its early stages of development; the full impacts of the land acquisition and irrigation-based farm projects may not yet be evident. This has made analysis difficult but provides a strong argument that research must take place over a longer period in order to ascertain the positive and negative impacts to local communities.

Case 1: the Nansanga Farm Block There has been a lot of recent attention to the GRZ’s efforts to jump-start agricultural investment through the creation of large-scale farm blocks. The creation of farm blocks has long been a strategy in government efforts for agricultural planning, but the sheer size of the present-day plans make them stand out in Zambia’s history. The farm blocks are an average 95,000 ha each and are planned for nine different districts. They encompass a huge proportion of customary land in each district and represent huge undertakings by both the government and the eventual foreign and domestic investors. Presently, the Nansanga Farm Block is the first, and thus far the only one, of the farm blocks to be developed at the ground level, with infrastructure built and investors committed; the others remain in the early stages of planning. The Farm Block Development Plan 2005–2007, created under the Ministry of Finance and National Planning (Republic of Zambia 2005b) was the first manifestation of ideas promoted by the FNDP on farm blocks. The emphasis on the large size was to ‘justify the large expense involved in infrastructure development … so as to achieve economies of scale’ (Republic of Zambia 2005b). In order to promote the farm blocks, core infrastructure is to be provided; the building of roads, bridges, electricity grids and irrigation networks has been key to drawing in 211

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investors who cite the lack of infrastructure as a barrier for investment. A review of the FNDP (Republic of Zambia 2007) demonstrated real progress by claiming the successful implementation (but not yet completion) of several small irrigation projects throughout the country, but particularly in the development of Nansanga with the construction of several bridges, electrification, road building and, importantly, the construction of the first four dams. The first phase of a 33 kilovolt power line was completed in 2010, along with 29.5 km of power lines, in addition to the building of 155 km of roads by the China Geo Engineering Company (Lusaka Times 2010). The combination of the building of roads, electrification and most notably the building of dams and irrigation canals has been instrumental in ensuring the attraction of investment. However, they have sparked environmental concerns. The environmental impact assessment (EIA) report, conducted in 2005 (MACO 2006), detailed the many potential impacts of such infrastructure projects, although without recourse for preventative measures. For the most part, environmental impacts on local watersheds have become of secondary importance to economic development. The farm block consists of a number of small (10 ha–50 ha), medium (51 ha–100 ha) and large (101 ha–900 ha) commercial farm plots, in addition to the core venture (9,350 ha) and three other large-scale commercial plots (1,620 ha, 2,571 ha and 3,959 ha) that were delineated and demarcated in 2009 (MACO 2009; Lusaka Times 2010). The core investor is meant to act as a lead in the development of the core venture and support the development of the surrounding small, medium and larger plots through outgrower schemes, as well as the production, processing and marketing of products. The total hectarage has been reported as anywhere between 100,000 ha and 155,000 ha, though tallies of the actual total farmland remain closer to 35,000 ha.5 The building of such infrastructure has indeed succeeded in attracting investment. The Zambia Development Agency (ZDA) plays a key role in facilitating investment in the farm block, with incentives such as tax breaks on profits, imports of machinery and the facilitation of permits and registration processes. In 2011, 259 small plots (10–50 ha), 22 medium plots (51–100 ha), and 29 large plots (101–900 ha) were allocated by the Ministry of Lands (2011). The process of land allocation was based on the submission of applications, although the exact process for selection has not been made clear. The allocation of the core venture of 9,350 ha has remained the most controversial. Bids opened for the core venture in February 2011, with an initial 16 bids; of the 16, 10 were foreign companies while 6 were Zambian. As of January 2012, the core venture is rumoured to be allocated to the Hungary-based BonaFarm Group. The Oakland Institute has voiced its concerns over the lack of transparency and regulations in the allocations of Nansanga plots (BondGraham 2011), as little about the allocation process has been revealed. The political will for the project was evident during its conception; however, there is mixed reception of the project. The Farm Block Development Plan (Republic of Zambia 2005b) indicates that ‘large areas of land have been acquired from local authorities … and the local communities [are] fully aware and ready to support the programme’ (Republic of Zambia 2005b: 8). However, an article from The Times of Zambia (Chola 2011) speaks of discontent among local chiefs during its inception in 2005. Concerns lie with the government’s efforts, and perhaps unaccountability, in the selection of 100,000 ha of land. The potential for displacement is immense, although efforts are underway to adequately resettle former community members. Reports from 2011 claimed that 9,000 people would be displaced as a result of the farm block and its allocations (Chanda 2011), while research conducted by the Oakland Institute (2011) reports 2,500 people. However, considering that the estimated population of the entire farm block area is 427 households of an average six people per household (totalling 2,562) (MACO 2006), and that the entire population of the district remains closer to 132,836 (Central Statistics Office 2003), it seems unlikely that 9,000 would be displaced. 212

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Although this is just a brief overview of one farm block, it may be indicative of the impacts that the others may have as well. Progress is being made in the development of several other farm blocks, including Luena in Luapula Province, and Manshya, formerly in Northern Province and now in the newly formed Muchinga Province. Still, there remains much to be evaluated about the style of such farm block ventures, as the core venture has not yet been developed. Several impacts seem evident at the moment: the scale of the project, with a core venture of 9,350 ha, means that it will have a large impact on the environment, particularly through its water use. The displacement and resettlement of between 2,500 and 9,000 people will require adequate compensation and the rebuilding of many lives and livelihoods. The displacement of 10,000 Tonga in the 1950s for the building of the Kariba dam continues to have negative impacts on the displaced (Clark et al. 1995). However, the Nansanga farm block is set to succeed, according to its supporters, by providing an opportunity for upfront capital for building infrastructure on a scale that has not existed before.

Case 2: large-scale commercial venture The second case represents a more typical commercial venture of approximately 2,500 ha of farmland to grow wheat, maize and soy. The growth of the production of staples such as maize and soy is not uncommon in an area of established commercial farming, and the size of land acquisition is more indicative of the historical land acquisitions in Zambia. However, it is the source of funding, in this case from a private equity fund, which separates it from other historical acquisitions, which have largely included participation of government-funded bodies.6 The new involvement and interest of the global financial sector in farmland is an important new development in commercial agricultural projects, as it adds a new element of complexity and uncertainty. The investors have also voiced desires to acquire up to 20,000 ha (Nyagah 2011) and up to 100,000 ha throughout southern Africa (Hedgenews 2011), meaning that the scope envisioned by the investors does not end at 2,500 ha. The aim of this commercial venture, as with many in recent years, is an emphasis and need for increased agricultural production, to be achieved using Zambia’s abundant land and water resources. In this case study, investors acquired two established adjacent commercial plots, with record of title deeds dating back to the 1970s. The plots were acquired with a 14-year lease with the Zambian government (ESRS 2011), which includes rights to water. As with the farm block, investment was facilitated with the help of ZDA, with which the investors have signed an Investment Promotion and Protection Agreement (IPPA); this stipulates provisions for tax incentives and the allowance of exports of certain proportions of the agricultural products (Oakland Institute 2011). Financing for the investment also includes political risk cover with the World Bank’s Multilateral Investment Guarantee Agency (MIGA). As with the Nansanga project, there is an emphasis on the expansion of agricultural infrastructure, such as irrigation. Using large pivot irrigation systems, the intention of the project is to expand the irrigation network from 660 ha to 1,040 ha, through dam construction and the establishment of approximately 7 centre pivot irrigation systems. The project intends to employ 3,000 local employees and to provide 20% of its outputs for domestic consumption (Baldauf 2011). These are meant to satisfy the need to demonstrate positive impacts to the local community, perhaps a harkening to corporate social responsibility or alternatively (though less likely) a wise business choice after extensive due diligence of local market needs. The farm is meant to use zero tillage cultivation, in an attempt to minimise soil erosion and to provide an alternative method for commercial farming with provisions for sustainability. As the company has stated, they are making attempts to leave a legacy of responsible commercial agricultural practices (Hedgenews 2011). 213

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The case is perhaps different from that of the Nansanga Farm Block in that the land acquired had already fallen under private ownership, reducing the potential for displacement of local communities; the scope of the project is also arguably smaller, not in the sense of the land intended for acquisition, but in terms of the very real limitations placed on the company during the process of land acquisition. The World Bank’s involvement in providing risk coverage has meant that the project has undergone significant EIA, providing a degree of checks and balances that has not been evident in the Nansanga project. Impacts assessed with regards to biodiversity include the removal of 180 ha of Miombo woodland for the expansion of swivel irrigation, whilst 1,500 ha woodland is expected to remain. It may be too early to assess the environmental and social impacts of this method of agricultural project, particularly with regard to environmental sustainability. However, one concern is the uncertainty in which projects of such scale exist. The capital required for a project this large is difficult to accumulate at best, particularly with unproven new methods of agri-business models in Zambia. It has been difficult enough for agriculture in Zambia to provide returns, much less the guaranteed returns required by such investment schemes. Such projects provide an important discussion point in the debate on ‘land grabs’ as rarely are transactions so straightforward that they provide clear winners and losers. In an example where everything said points to corporate social responsibility and positive benefits to local community members, it can only remain to be seen what the reality will be.

Case 3: smallholders’ co-operative and public–private partnerships The third and last case study represents a different model of organisation, although with a similar land size to the previous case. This case study represents a privately developed irrigation project, meant to provide a new approach in providing capital for the development of agricultural infrastructure. Through a public–private partnership, it aims to provide the costs of expanding irrigation structures in exchange for land leases from local smallholder farmers. The project promises to help increase food production and smallholder farmers’ incomes by increasing yields using irrigation structures. The investors are a donor-funded private company that specialises in building infrastructure through shouldering the upfront capital risks and costs. The project was first conceptualised by a local councillor in 2002, who encouraged 120 smallholder farmers to pool their land in order to attract agricultural investors. It was recognised that the land had great water potential, but required capital to develop irrigation infrastructure. The project is unique in that these smallholder farmers held titles for their land, unlike the majority of smallholder farmers in Zambia, following legal battles for the land in 1989. Smallholder farmers on the land already relied on food aid assistance and had suffered from successive droughts. This last distinction is particularly important when considering the ways in which smallholders have the potential, and the realistic opportunity, to be integrated into a large-scale farming system. Investors arrived in 2006 and the development of the project began in 2008 with the creation of in-field irrigation and water assets. These have been built to service 2,500 ha of land. Of all three case studies, this project has advanced the furthest in terms of physical development. According to the agreement held between the investors and the smallholder farmers, the smallholder farmers continue to maintain 20% of their total pooled land for individual holdings in the form of a co-operative; this forms a total of approximately 140 ha. The remaining 80% of the land has been provided to the private company for the production of commercial crops; in return, the company has invested in irrigation networks and other infrastructure in the area, while producing wheat and soy on the land. With the returns, the smallholders are meant to pay off the loan of the initial investment, which is to be ensured through the assumed and assured 214

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production increases resulting from the irrigation networks. While the company has been able to acquire a sizeable plot of land for commercial agriculture, the initiation of the investment has come from much closer to the local community than in the other projects described, particularly with regard to the role of the national or district-level governments. There are still some concerns that remain. With only 20% of the land, each smallholder seems to have retained 0.5 ha of land; this is considerably less than their original plots, which averaged 4 ha, although not all of this land had been used, which prompted the investment. It remains to be seen if 0.5 ha is sufficient for maintaining and building livelihoods with mounting external economic pressures. Access to irrigation is meant to guarantee that there will be automatic increases in yield to compensate for loss of land for income and food security; however, not all land is equally productive. Dividends provided to members of the co-operative for successful yields in the commercial project can help provide much needed additional and cash income, although these remain an uncertain source of income. There has been some provision of wage labour as the result of the project, which greatly contributes to cash incomes, but wage labour on commercial farms has favoured men (World Bank 2011). These small distinctions result in subtle differences and can be the limiting factor between who serves to benefit and who does not. The primary concern in this case revolves around the impacts on long-term sustainability of smallholder livelihoods. It remains in the early stages as to whether the project can contribute to increased yields produced on smaller plots, and if other important factors, such as access to markets, can be assured. It has become clear that while all parties welcomed the improvement of the irrigation project, the challenge is to ensure that irrigation translates into real, tangible benefits. This, of course, reinforces the notion that irrigation cannot and simply does not provide the ‘silver bullet’ to agricultural productivity as it has been hoped. Still, there is great potential in such a scheme. The strength in the scheme is that time frames have been identified through financial planning; this is not always the case in many recent large-scale land acquisition schemes. The investors have access to the land for a specified 25-year margin, after which the land, and its titles, will be reverted back to the smallholders. As the smallholders previously held these titles, this is a change from situations in which customary land is transferred on a more permanent basis for the use of large-scale projects. It remains to be seen how such clauses will be enforced in the future.

Learning from Zambia’s case studies: impacts on livelihoods and land rights The government of the Republic of Zambia, during the period of the 1960s to 1970s, had developed up to 6,500 ha of smallholder irrigation networks throughout Zambia; yet these irrigation schemes rarely succeeded owing to the ‘top-down management approach’ (Gumbo et al. 2010: 14). It remains to be seen what the government and new investors have to learn from previous experiences of irrigation projects, particularly in reflecting upon the size of this new wave of projects. Previous efforts to incorporate smallholder farmers with larger-scale commercial farms and irrigation schemes, such as the case of the 17,838 ha Nakambala Sugar Estate, have failed to have a positive impact on poverty in the local area (Gumbo et al. 2010). When investors have not demonstrated that they have learned the lessons from Zambia’s history, this perhaps indicates that their projects are more motivated by financial speculation than sustainable development. While each of the presented case studies in Zambia demonstrates the centrality of water plans in large-scale land acquisitions, each also provides an array of different means in which to 215

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implement such irrigation strategies. There have been several important distinctions between these three case studies from Zambia. That there are key differences between each of the case studies demonstrates that not all large-scale farmland acquisitions can be called ‘land grabs’; the term obscures the important distinctions and nuances of each project. These differences are important in the consideration of the ways in which projects can have both positive and negative impacts for local livelihoods. In recognising these nuances, two themes have emerged. First is a question of access to irrigation technologies. This is not just a question of the physical presence of irrigation technologies; Zambian history has demonstrated previous failures of such schemes. Access has as much to do with knowledge transfer and will as it does with the physical presence of technology. Critics of the ‘agriculture for development’ concept have pointed out that, within the advocacy of certain technologies to develop agriculture, it is a question not simply of yield increases but of access and understanding of labour requirements (Woodhouse 2009). It is acknowledged widely that investment in water technology seems to provide very real alternatives and options for improvement to agriculture in Africa; however, there are still precursory conditions that need to be fulfilled to provide success, such as ‘the importance of political strategies, of reform and administration of property rights and employment conditions, and of provision of technical support’ (Woodhouse 2009: 273). The second theme is of land rights. Who holds the rights to the land is another important determinant of the long-term benefits to local communities. For many of these projects, it may be too early to determine the full impacts on aspects such as agricultural crop yields, income growth, labour relations and migrations, and employment conditions, but the impacts that these projects have had on land rights can be seen. In Zambia, by law, all land and water is vested under the president (Brown 2005; Phiri 2000). With the 1995 Lands Act, customary land was recognised under law; however, this also served to create a two-tiered land system in which statutory land is considered more secure (Machira 2011). While land can be converted from customary to statutory status, as with the case of each of the three case studies, there is no provision for the return from statutory back to customary status, meaning that the land holdings, once consolidated, are unlikely to return to the hands of smallholder farmers who do not have the means or funds to reacquire land held under large holdings. This is particularly evident in the first case of the Nansanga Farm Block, which demonstrates one incidence in which customary land has been alienated and transferred to statutory status. In this case, it is clear that not all of the land will be utilised for agriculture and irrigation, as not all the land is suitable for conversion to agriculture. Yet still, with title deeds, any land lost to statutory land is land that can no longer be accessed by smallholder farmers. Furthermore, weak and insecure customary land rights and recognition provide the greatest basis in which smallholder farmers can be displaced from their land. Even in incidences where smallholder farmers are not displaced and are incorporated through resettlement or outgrower schemes, the impacts of alienation from further customary land can still have negative impacts to future generations, as with the second and third case studies where the land acquired has been primarily statutory land. The ‘agriculture for development’ concept misconceptualises two factors in the role of agriculture for poverty reduction; it assumes that the poorest both have access to sufficient land and earn income solely from farming (Woodhouse 2009). However, land offers much more than yields within a market plot, particularly in Zambia where customary land provides informal incomes and economies. It is this land alienation that has long-lasting impacts, not only to the incomes of local community members but also to the ways in which their livelihoods are organised. Access to land provides so much more than simple agricultural production. The multitude of ways in which local communities use their land extends to informal economies, 216

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such as grazing animals, the collection of forest products, and the production of energy such as charcoal. Miombo woodland areas of Zambia (and other parts of the region) offer informal incomes to smallholder farmers which are rarely taken into account in assessing the ‘needs’ and potential benefits from agricultural development projects. That is not to say that these are central to the ways in which rural small-scale farmers derive their incomes; the provision of formal wage employment has provided very tangible benefits for small-scale farmers. However, the ways in which the alienation of land has wider impacts on local communities must also be taken into consideration when land is alienated for large-scale irrigation projects. While land rights to adequate land holdings remain one key factor to address rural poverty in Zambia, the current movement to privatise customary land in the face of future population growth will only provide short-term benefits.

Conclusion The three examples from Zambia demonstrate that there have been many ways to invest in land and water and that there is recognition from the Zambian Government that the key to its future is to make better use of its water resources. The government and donors have sufficiently proven Zambia to be a safe and stable place for agricultural investment, with a rise of largerscale investments and acquisitions of land. Yet what has not been taken into account is that while Zambia remains a viable place for agricultural investment, its projected population growth will dramatically change future scenarios. Already, with the case studies discussed here, it can be seen that land tenure insecurity is a problem and that further alienation from land can cause increasing tensions and greater pressures on other lands. However, with the recognition that Zambia must make better use of its water resources, there are several important caveats that have been overlooked. It is not just the harnessing of available water resources that must be promoted but, rather, improvement in water use and efficiency. It is this second part that will determine the success of irrigation and agricultural schemes. With the recognition that each of these cases of large-scale land acquisition has not only been born out of increasing desires for investment trends, but has been deeply ingrained in the development policies on agriculture for the past several decades, it becomes a question of balancing the core goals of economic growth and development for a country like Zambia, against the negative impacts that have resulted from such examples of growth. Zambia remains, at the moment and with great caveats, a viable prospect for the acquisition of land and water for agriculture, with a large reserve of green and blue water and low population density. In order for agricultural development projects to succeed in Zambia, there must be hard work. No solution is ever as simple as the creation of irrigation infrastructure, and no project is ever simply a success. The different models employed in Zambia under the premise of largescale irrigation investments have demonstrated this very fact. Of course, none are without consequence and indirect repercussions. What new investors need to be reminded is that efforts to provide ‘agriculture for development’ in Zambia have not necessarily succeeded. With renewed efforts, genuine and less so, to bolster Zambian productivity and reduce poverty with the provision of irrigation, this alone will not address the myriad ways that keep smallholder farmers impoverished. It is increasingly recognised that there needs to be investment in farmers, not farmland. The case of land and water grabs in Zambia has, rather than provided insight into the motivations and impacts of land and water grabs, demonstrated some of the greatest tensions inherent in the debate. On one hand, land and water grabs in Zambia are not new; land acquisitions have played a long role in its history and even motivations that have created the right 217

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investment climate for recent acquisitions predate the commonly cited 2008 start date for incidences of land grabs. On the other hand, Zambia, too, has seen a rise of land acquisitions that have swept through most of sub-Saharan Africa. The most notable conclusion in terms of the impacts of such large-scale land acquisitions for irrigation projects is that it is still too early to really understand the impacts. Knowing potential impacts by linking these cases with what is already known is half the battle; monitoring and evaluating further changes and impacts must also take place if such development schemes are to bring real positive benefits to local communities, as grandly promised.

Notes 1 The author would like to acknowledge the support of the Zambia Land Alliance for hosting her research in Zambia. This research was completed with financial support from the Canadian Centennial Scholarship Fund. The opinions and any errors in the production of this paper are entirely of the author. 2 This figure derives from unpublished work from a growing database collected by the Zambia Land Alliance. Figures derive from collected case studies by the organisation and from literature reviews. 3 See articles by Baldauf (2011) in the Christian Science Monitor (USA), Nyagah (2011) in TradeInvest Africa, and Keane (2011) in the BBC, (UK), to name a few. 4 Since 2008, GRAIN has been collecting articles on various incidences of ‘land grabs’. These articles are compiled on their website, ‘Food crisis and the global land grabs’ (farmlandgrab.org). 5 Calculations by the author based on figures provided by planning map of the Nansanga Farm Block (MACO 2010). 6 A prominent example of this is the case of the Nakambala Sugar Estate in Mazabuka District, Southern Province, Zambia, whereby funding for farm development originated with the Commonwealth Development Corporation (UK) and the Development Bank of Zambia (Gumbo et al. 2010).

References AgDevCo. (2010) ‘Agricultural growth and poverty reduction in Africa: The case for patient capital’. Available at: www.agdevco.com/images/the_case_for_patient_capital.pdf (accessed 25 February 2012). ——(2012) ‘Portfolio: Zambia.’ Available at: www.agdevco.com/portfolio.php?portfolioId=5 (accessed 25 February 2012). Allan, Tony (2011) Virtual Water: Tackling the Threat to Our Planet’s Most Precious Resource, London: I. B. Tauris. Anseeuw, Ward, Alden Wily, Liz, Cotula, Lorenzo and Taylor, Michael (2011) Land Rights and the Rush for Land: Findings of the Global Commercial Pressures on Land Research Project, Rome: ILC. Available at: www.landcoalition.org/sites/default/files/publication/1205/ILC%20GSR%20report_ENG.pdf (accessed 5 February 2012). Aquastat (2007) ‘Zambia’. Available at: www.fao.org/nr/water/aquastat/countries_regions/zambia/index. stm (accessed 5 February 2012). Baldauf, S. (2011) ‘One way to create an African breadbasket’, Christian Science Monitor, 6 February. Available at: www.csmonitor.com/World/Global-Issues/2011/0206/Hunger-and-food-security-Oneway-to-create-an-African-breadbasket (accessed 5 February 2012). BBC News (2012) ‘Analysis: land grabs or development opportunity?’ BBC News, 22 February. Available at: www.bbc.co.uk/news/world-africa-17099348 (accessed 22 February 2012). BondGraham, Darwin (2011) ‘The great land grab’, East Bay Express, 10 August. Available at: www.eastba yexpress.com/ebx/the-great-land-grab/Content?oid=2952733 (accessed 25 February 2012). Brown, Taylor (2005) ‘Contestation, confusion and corruption: market-based land reform in Zambia’, In S. Evers, M. Spierenburg and H. Wels (eds) Competing Jurisdictions: Settling Land Claims in Africa, Leiden: Brill. Central Statistics Office (2003) Zambia 2000 Census of Population and Housing – Summary Report, Lusaka: Government Printers. Chanda, Ernest (2011) ‘Nansanga bloc farmers face homelessness’, The Post, 17 August. Available at: http://postzambia.com/post-read_article.php?articleId=22627 (accessed 3 May 2012).

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Chileshe, Paxina, Trottier, Julie and Wilson, Leanne (2005) ‘Translation of water rights and water management in Zambia’, paper presented at the International Workshop on African Water Laws: Plural Legislative Frameworks for Rural Water Management in Africa, 26–28 January, Johannesburg, South Africa. Chola, Gunston (2011) ‘Zambia: Nansanga – a tale of many fathers’, The Times of Zambia, 12 May. Available at: http://allafrica.com/stories/201105130793.html (accessed 5 February 2012). Clark, Sam, Colson, Elizabeth, Lee, James and Scudder, Thayer (1995) ‘Ten thousand Tonga: a longitudinal anthropological study from southern Zambia, 1956–1991’, Population Studies 49(1): 91–109. Commission for Africa (2005) Our Common Interest: Report for the Commission for Africa, London: Department for International Development. Cotula, L., Vermeulen, S., Leonard, R. and Keeley, J. (2009) Land Grab or Development Opportunity? Agricultural Investment and International Land Deals in Africa, London: IIED. Deininger, Klaus and Byerlee, Derek (2011) Rising Global Interest in Farmland: Can it Yield Sustainable and Equitable Benefits? Washington, DC: World Bank. ESRS (Environmental and Social Review Summary) (2011) ‘Chobe Agrivision Company Ltd.’ Available at: www.miga.org/documents/ChaytonPsi_ESRS1.pdf (accessed 5 February 2012). Food and Agriculture Organization (FAO) (2008) ‘National investment brief: Zambia’, presented at High Level Conference on Water for Agriculture and Energy in Africa: The Challenges of Climate Change, 15–17 December, Sirte. GRAIN (2012a) ‘Food crisis and the global land grab’. Available at: http://farmlandgrab.org/ (accessed 5 February 2012). ——(2012b) ‘GRAIN release data set with over 400 global land grabs’, 23 February. Available at: www. grain.org/article/entries/4479-grain-releases-data-set-with-over-400-global-land-grabs (accessed 25 February 2012). Gumbo, Davison, Mudenda, Choolwe and Machina, Henry (2010) ‘Land acquisitions in Zambia: social and environmental impacts’, unpublished report, Zambia Land Alliance. Hall, R. (2011) ‘Land grabbing in southern Africa: the many faces of the investor rush’, Review of African Political Economy 38(128): 183–214. Hedgenews (2011) ‘Chayton combines good land and secure water assets to grow its Atlas Agricultural operation’, Hedgenews Africa second quarter 1(7). Available at: www.oaklandinstitute.org/sites/oaklandinstitute.org/files/Chayton%20Fund%20Profile.pdf (accessed 5 February 2011). IDL (The In Development Limited Group) (2002) ‘An assessment of the trends in the Zambian agricultural sector’. Available at: www.odi.org.uk/work/projects/03-food-security-forum/docs/zambia.pdf (accessed 5 February 2012). Keane, Fergal (2011) ‘Can industrialised farming make Africa feed the world?’ BBC Newsnight, 24 October. Available at: http://news.bbc.co.uk/2/hi/programmes/newsnight/9623031.stm (accessed 5 February 2012). Liang, Zhi You (2008) ‘Africa infrastructure country diagnostic: irrigation investment needs in sub-Saharan Africa. Summary of Background Paper 9’. Available at: www.eu-africa-infrastructure-tf.net/attachments /library/aicd-background-paper-9-irrig-invest-summary-en.pdf (accessed 5 February 2012). Lusaka Times (2010) ‘State demarcates Nansanga Farm Bloc’,13 July. Available at: www.lusakatimes.com/ 2010/07/13/state-demarcates-nansanga-farm-bloc/ (accessed 5 February 2012). Machira, S. (2011) ‘Options for strengthening customary land tenure and administration in Zambia’, paper presented to the Consultative Forum on Customary Land Administration in Zambia, 25 August 2011, Lusaka, Zambia. MACO (Ministry of Agriculture and Cooperatives) (2006) ‘Report on the environmental impact assessment carried out for the development of Nansanga Farm Block in Serenje District’, unpublished report. Available at: www.oaklandinstitute.org/sites/oaklandinstitute.org/files/Nansanga%20Draft%20EIA% 20Report_0.doc (accessed 25 February 2012). ——(2009) ‘Progress report on the demarcation of farms in Nansanga Farm Block’, unpublished report. ——(2010) Map: Nansanga Farm Block, Serenje District, Central Province, Ref. No. FBD 001, 1:50,000, Lusaka: Government Printers. Ministry of Lands (2011) Ministry of Lands: Notice to the Public, Lusaka: Government Printers. Available at: www.ministryoflands.gov.zm/index.php?option=com_docman&task=doc_download&gid=29&Itemid =53 (accessed 5 February 2012). Multilateral Investment Guarantee Agency (MIGA) (2010) ‘Unlocking Sub-Saharan Africa’s agricultural potential’, Featured News. Available at: www.miga.org/news/index.cfm?aid=2652 (accessed 5 February 2012). 219

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Mundia, M. (2011) ‘Study on large scale land acquisitions in Zambia: a case of Chiansi and Chayton investments’, unpublished report, Zambia Land Alliance. Nyagah, N. (2011) ‘Zambia: rich African farms draw international investors’, TradeInvest Africa, 2 March. Available at: www.tradeinvestafrica.com/feature_articles/303071.htm (accessed 5 February 2012). Oakland Institute (2011) Understanding Land Investment Deals in Africa. Country Report: Zambia, New York: Oakland Institute. Palmer, K., Parry, R., MacSporren, P., Derkson, H., Avery, R. and Cartwright, P. (2010) ‘Chiansi irrigation: patient capital in action’, InfraCo Briefing Paper. Available at: www.infracoafrica.com/images/ library/files/Chiansi.pdf (accessed 5 February 2012). Patriotic Front (2011) Patriotic Front Manifesto. Available at: sadcblog.files.wordpress.com/2011/08/pf2011-manifesto-zambia.pdf (accessed 1 February 2012). Phiri, Zebediah (2000) ‘Water law, water rights and water supply in Zambia – issues and perspectives’, paper presented at the First WARFSA WaterNet Symposium, Sustainable Use of Water Resources, 1–2 November, Maputo, Mozambique. Republic of Zambia (2005a) Zambia Vision 2030, Lusaka: Government Printers. ——(2005b) Farm Block Development Plan 2005–2007, Lusaka: Government Printers. Available at: www. oaklandinstitute.org/sites/oaklandinstitute.org/files/Ministry%20of%20Finance%20and%20Development %20Planning-Farm%20Block%20Development%20Plan.doc (accessed 5 February 2012). ——(2006) Fifth National Development Plan, 2006–2010, Lusaka: Government Printers. ——(2007) 2007 Annual Fifth National Development Progress Report, Lusaka: Government Printers. ——(2010) National Water Policy, Lusaka: Government Printers. Simpelwe, Ndinawe (2011) ‘Foreign investors dominate bids for Nansanga bloc’, The Post, 21 February. Available at: www.postzambia.com/post-read_article.php?articleId=18424 (accessed 5 February 2012). Smith, Georgina (2011) ‘Population growth in Zambia: a view from the slums’, The Guardian, 24 October. Available at: www.guardian.co.uk/environment/2011/oct/24/population-growth-zambia-slums (accessed 5 February 2012). United Nations (UN) (2010) ‘Country profile: Zambia’, Department of Economic and Social Affairs Population Division, Population Estimates and Projections Section. Available at: http://esa.un.org/ unpd/wpp/country-profiles/country-profiles_1.htm (accessed 5 February 2012). Woodhouse, Philip (2009) ‘Technology, environment and the productivity problem in African agriculture: comment on the World Development Report 2008’, Journal of Agrarian Change 9(2): 263–76. World Bank (2007) World Development Report 2008: Agriculture for Development, Washington, DC: World Bank. ——(2009) Awakening Africa’s Sleeping Giant: Prospects for Commercial Agriculture in the Guinea Savannah Zone and Beyond, Washington, DC: World Bank. ——(2011) World Development Report 2012: Gender Equality and Development, Washington, DC: World Bank.

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Part III

The political economy of land and water grabs

3.1 Claiming (back) the land The geopolitics of Egyptian and South African land and water grabs Jeroen Warner, Antoinette Sebastian and Vanessa Empinotti

1 Introduction While land deals are on the rise on all continents, the majority in both its number and hectarage takes place in Africa (see, for example, Anseuw et al., Chapter 5.1 in this volume). Given the (neo)colonial resonance and local enclosure effects of the sometimes brutal business deals, it is unsurprising that the debate on foreign direct investment is particularly resonant where Africa is concerned, from academia to the popular press. The debate, however, is partial and dominated by the discussion of the pros and cons of its developmental merits, of the fate of local land users driven or enticed off the land, and of the economic and the environmental costs. Snapped up for, in places, as little as 50 cents per hectare, African land is not necessarily brought into immediate food, forestry and mining production, and when it is, staples and biofuels dominate rather than export crops (The Economist 2009). Speculative hoarding exists, with a view to bringing the land into production when grain and other staples commodities markets are at their most profitable or selling the cheaply acquired land off again at enormous profit at a propitious future moment. Given the millions of hectares now acquired, these circumstances could easily lead to a future glut in the global land and commodities market. If production or speculation is not necessarily the most significant, nor the only, driver for the new scramble for African land, what is? The present contribution will see land grab, along with the virtual energy and virtual water that come with the land, as a phase in an ongoing geopolitical game for influence. Moreover, the present chapter considers the circumstances and options of two regionally hegemonic powers, Egypt and South Africa, claiming land and virtual water – or claiming it back. The explosion of land deals reverses a centuries-long trend for states to rely on the world market for a strategic element of their food security. Importing food, and as a result, importing ‘virtual water’, was an escape for water-scarce economies, preventing the depletion of their resources but also creating dependency on exporters of virtual water. Direct investment not only provides access to resources, but also to geopolitical control. After identifying the meaning of geopolitical thought and the ‘grab bag’ of geopolitical schools of thought, different strands of geopolitics pertinent to African resource grab are added as an additional layer of the geopolitics of state-building. 223

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Since the term ‘land grab’, as global food giant Nestlé admitted (quoted in The Economist 2009), is almost tantamount to virtual-water grab, we then introduce and elaborate on the geopolitical turn in Hoekstra’s conception of the ‘geopolitics of (virtual) water’. Hoekstra’s (2011) and Hoekstra and Chapagain’s (2008) observations identify security dependencies between virtual-water exporters and importers, but have so far refrained from deepening the understanding of the geopolitics to which they refer. To illustrate the role of semi-peripheral geopolitics in Africa, the two cases of Egyptian and South African land and water geopolitics will be presented, showing the importance of geopolitical security concerns legitimising claims on land – and, in both cases, on claiming it back. In each case, land and water deals have largely gone under the radar. But in both cases, as we shall see, the topic has its particular sensitivities.

2 Strands in the geopolitics debate: a grab bag of theories The discipline of geopolitics is, as Mamadouh (1998) has termed it, one flag with many meanings. Basically, geopolitics re-establishes the importance of variables often neglected in international relations (Criekmans 2008). A geopolitician does not start evaluating the security of a nation from a vacuum, but makes a geospatial analysis of the home nation’s place and competitive advantages and disadvantages, threats and opportunities in a wider international environment. Neoclassical geopolitics, driven by the logic of Realpolitik (Realism), focuses on the strategic interests of unitary states. It has historic roots in the writings of Kjellén, Haushofer and Mackinder, and their work on a Eurasian heartland and a rimland at its margins. The strategic value of specific attributes of territories plays the leading role in this approach. Next to ‘geopolitics’, the core concept of this tradition is ‘geostrategy’. It is concerned with the strategic value of geographical factors (resources, access to the sea, etc.). While Luttwak (1990) has claimed geopolitics has been overtaken by geo-economics after the Cold War ended, others have pronounced the arrival of a ‘new geopolitics’. Roberts et al. (2003) for example posited a liberal geopolitics, with the free market as panacea, integration in globalisation.1 Klare (2003), for example, claims the ‘old geopolitics’ died out as acceptable discourse after Hitler’s abuse of the Lebensraum doctrine. Yet, he argues, geopolitical drivers for control of resources remained, which explained why the USA supported apartheid. He posits the competition for the ‘new heartland’ of the Eurasian continent, ‘encompassing the Persian Gulf area, which possesses two-thirds of the world’s oil, the Caspian Sea basin, which has a large chunk of what’s left, and the surrounding countries of Central Asia’. Still others claim that Africa is at the heart of the ‘new International relations’ (African Geopolitics 38, African-geopolitics.com). Lester Brown, a neo-Malthusian eco-pessimist, presents a resource-centred view of the ‘new geopolitics’. Brown (2011) perceives food as the hidden driver for current global geopolitics, and asserts that the competition for and conflict over water is actually taking place in the world grain market. While rooted in the Realist tradition, Brown’s observation is not too distant from a ‘green’ world-systems approach. The neo-Marxian world-systems tradition, with Immanuel Wallerstein as its exponent since the 1970s, sees land grab as neo-colonial competition between imperialist powers extracting resources for their reproduction. This school roughly identifies four stages: Imperialism (15th–19th centuries, primitive accumulation), Capitalist Colonialism (19th–early 20th centuries). Developmentalism (Cold War era) and globalisation (post-Cold War), of which many see the current ‘land grab’ as Primitive Accumulation 2.0. World-systems approaches help us understand global relations as economic exploitation, whether of people or resources. 224

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World-systems analysts identify a hierarchically ordered (and multi-level) global core, semiperiphery and periphery groupings. The system’s economic core extracts resources from the periphery, often aided by a venal ‘comprador bourgeoisie’ in the periphery, selling out natural resources to foreign investors for private gain. The possible overtaking of the US as a world hegemonic state by the People’s Republic of China would not change the logic of this exploitation (although see Agnew 2010). However, since the beginning of the 21st century it is not as clear to identify as it used to be who belongs to which of the three categories. While the USA has remained hegemonic, the West has been experiencing an overall decline vis-à-vis Asia and the BRICS economies. The European Union (EU) continued to integrate, but could not get its foreign-policy act together, lacking a unified strategy. The resurgence of the periphery (Mayo and Yeros 2005) has also brought a very different power balance in the scramble for African resources. While the dependencia2 approach has largely been superseded by International Political Economy, the view that Southern elites largely follow the interest of ‘core’ ideas and interests has remained influential. This extends to green ideas on space and nature conservation,3 drawing on political ecology, the study of ‘ecological distribution conflicts’ (Guha and Martínez-Allier 1997: 31). Thus, ‘the Centre–Periphery division does not only involve the monetary exchange of goods, it also involves physical exchange in which Southern regions provide materials and energy so that the North can maintain and develop its socioeconomic metabolism’ (Martinez-Allier 2006). This ‘green world-systems’ approach sees the international agricultural trade system as abstracting water resources as raw materials from ‘peripheral’ countries to ‘core’ countries (ibid.). The virtual-water perspective discussed here presents globalisation via a water resources security link: ‘what’s important from a geopolitical point of view: Europe’s water security strongly depends on external water resources’ (Hoekstra 2011). The external resource dependence of virtual-water ‘importers’ would seem to allow virtual-water ‘exporters’ potentially to impose their political objectives on the ‘importer’. This contribution is informed by an International Political Economy approach, but with lashings of neorealism and critical geopolitics. The Marxist concept of ‘surplus’ and ‘excess’, found in world-systems theory, is not presented as a reality in this article, but as a legitimising discourse for seizing resources. In that sense we borrow from the tradition of critical geography. That ownership of land and water is usually the consequence of taking (seizing) land by force, then legitimising the claim, while squatting is taking it back (Wallerstein 2012). Grounds for grabbing land by the state as ‘eminent domain’ are war, natural disaster or terra nullius: that is, the land appears to belong to no one as a result of insubstantial claim to title. Labelling land and labour as underdeveloped, uncivilised,4 un(der)cultivated, underpopulated and unowned is common practice: for five centuries securitising moves (invoking security needs to justify intervention) have legitimised enclosure. Even Gulf States now refer to Africa’s ‘underpopulation’ as an imperative for their investment (Geisler 2012). Problematic about both geopolitics and political geography are their provenance as essentially Western, Anglo-Saxon disciplines that tend to ignore the periphery. The state-centredness of the European state model has become the norm, which makes the neoclassical approach less suitable for Africa, where the state is often weak, dysfunctional or absent. As a legacy of colonialism, boundaries are irrational, environmental stress prevails and access to wealth and power is ethnically differentiated (Griggs 1996). Africa has a surfeit of failed or failing states, including Liberia, Sierra Leone, Somalia and Sudan, which would make a Realist, state-centred approach seem inappropriate. From a critical geopolitics perspective, it may be doubted that the state is the key actor on the geopolitical scene. A better approach might involve focusing on global capitalist elites instead. They straddle the public and private-sectors. We feel a degree of state225

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centricity in the approach is defensible, however, given that the investors involved in continental land grab are often parastatals and recipients use investment to strengthen their position. Most analyses have concentrated on the big investors from the Western world or Asia, including the Gulf. We, however, are especially interested in the African geopolitics of the semi-periphery of the world system. The core cannot reach the periphery without the services rendered by the industrialising semi-periphery. The semi-periphery can be a sub-imperialist itself, but also tends to be a source of systemic innovation (Chase-Dunn and Hall 1997). Wallerstein (1997) included Egypt and South Africa, on which we focus in this chapter, among the 35 states of the semi-periphery. It is shown that a new arrangement for mutual virtual-water dependency is taking shape.

3 The domestic layer In this analytical undertaking we go beyond the state-centric perspective dominating the virtualwater literature5 and opt for a two-level analysis, as also proposed by Vieira (2011). There are empirical reasons to see land and virtual-water grab as a multi-level and multi-sided game. We need to add a second level, the domestic level, which influences and is influenced by the interstate level. While large-scale foreign land acquisitions grab the headlines, smaller but more numerous domestic land grabs by states and by companies facilitated by the state actually predominate. While geopolitical analysis tends to be concerned with interstate relations, Cowen and Smith (2009) show that geopolitics ‘was never only about the state’s external relations, but rather … involved a more encompassing “geopolitical social” that both crosses and crafts the distinction between inside and outside national state borders’. As in Africa, the dominance of the state sector over its population and sovereignty over its territorial boundaries are not assured: states continue to be involved in a domestic hegemonic strategy of state formation at the same time as they seek external stability in their foreign relations. There are therefore not only external, international actors, but also regional and domestic actors at play: land-hungry urban real-estate developers have their eye on the countryside. We should therefore not just focus on the international chessboard but also on the national arena. Their concerns are not always co-ordinated with the state (although they often are). Mosley (2012) argues private direct investment is a way for states to secure revenue from peripheral areas. It is also a stage in the ongoing process of state formation. As Mosley notes, the centralised enclosure of land, in frontier or border areas, is a way for states to reach into the backwoods, tie them to the state and develop a tax base. In the Horn of Africa, the effort to escape central rule is a key conflict dynamic. ‘Rents generated from enclaves let governments by-pass their populations, and militate against the construction of tax or social contracts; a key source of state accountability’ (Carmody and Owusu 2007: 156). This process highlights the active role of states, however weakly developed, in courting foreign direct investment. At the same time, the potential for riots, or even civil war sparked by farmers driven off the land, can have geopolitical impact. Some directly attribute the civil wars in Liberia, Sierra Leone and Sudan to foreign land acquisitions.6 Perhaps more precisely, as David Deng has it, the investment complicated an already fractious, conflict-prone context (cited in Zweynert 2012). These activities also imply a role for the investor in the state formation process. Consider, for example, the yet-incompletely formed ‘new’ South Africa. Its agricultural land investment in the Democratic Republic of Congo (DRC) is being driven by the confluence of an invitation from the DRC mainly to white South African farmers under the auspices of AgriSA (see South African case study below) and their very focused goal to seek opportunities beyond South Africa’s borders. 226

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While much literature suggests land grabbing is a form of neo-colonialism, investee states are not passive victims, but active marketeers who may eye investor sources as a way to strengthen the state’s domestic position. Much land investment responds to an open invitation from recipient countries, enabled by liberal local investment legislation, and legitimised as strengthening recipient economies (and states?), as it gives access to power networks and capital without need to address the very challenging tasks and avoid some risks. These challenges include, first, unpredictable experiments with developing a tax base and accountability, and, second, the risk of contracting the ‘Dutch disease’ – spending the windfall proceeds from natural wealth unproductively (see the discussion on rentier states in Beblawi and Luciani 1987) or the resource curse – failure to benefit from natural wealth – coupled with ‘governance curse’ (Sparks 2011). The above-mentioned power inequalities between states obviously limit investor target states’ freedom to say ‘no’ to attractive offers. One would, however, expect semi-peripheral status in the global system to enable states to resist. In this context, Brazil is especially interesting as the Brazilian government has recently (re)created7 express legislation to resist investment. Under Brazilian law 5.709/1971, foreigners cannot buy land greater than 5,000 hectares or representing more than 25% of a municipality in which the farm is located. For greater hectarages, foreigners need to be associated with Brazilian citizens, who in turn must own at least 51% of the investment. Above and beyond that, the land transaction needs to have the approval from the Brazilian Government. For the Brazilian Government, this is not merely a matter of sovereignty, as the state’s Constitution stipulates that land ownership should belong to Brazilian citizens. While semi-peripheral states have considerable agricultural sectors, they are rapidly industrialising, and the investment that these economies attract tends to be made in industry. As Vieira (2011) argues, semi-peripheral countries are attracting huge inflows of capital in search of better rates of return than may be obtained in land development. Investments made by semi-peripheral countries on the African continent may therefore be driven by a perceived need to ‘alleviate the pressure caused by excessive capital inflows’ (Vieira 2011) – flush with cash, they need to find a use for it. This may partly explain why Brazil is also an ‘exporter’ of land investment: landhungry Brazilian farmers have invested in, among others, Ghana and Mozambique. Also, Brazil is not immune to more illegal forms of land grabbing e.g. grilagem, currently found in the Cerrado and Amazonian region, but in the whole country in different periods of time.8

4 Virtual-water grab The discussions related to land deals are followed on their heels by the discussion over water access (Woodhouse and Ganho 2011). Land production will take place in areas where water is available. Adding to such an argument is the concept of virtual water, which brings our attention to how much water is necessary to produce food and, consequently, how much water a country can save through food imports (Allan 2011). The virtual-water concept allows us to understand water through virtual flows. The idea also adds to the understanding that production choices and strategies have a direct impact over water availability in different parts of the world. When we discuss a land deal, therefore, we cannot avoid relating the discussion to the allocation of water resources and the consequences of such allocative choices on the sustainable availability of water resources. Food exporter and importer countries are also trading virtual water and consequently importer countries depend on the water resource endowments of exporters. The virtual-water perspective presents globalisation in a water resources focus: ‘What’s important from a geopolitical point of view: Europe’s water security strongly depends on external water resources’ (Hoekstra 2011). The external resource dependence of water importers would seem to allow exporters to impose their political objectives on the importer. 227

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In the neoclassical outlook, as Aldaya et al. (2010) suggest, countries should follow the highest economical return to water in their sourcing choice of water-intensive products, which would reinforce even more the dependency of European countries on food commodity imports (Hoekstra and Chapagain 2008). Food commodity exporters would potentially define the rules and assume positions of control and power in the evolving geopolitical structures. Yet it is food commodity importers in the global North who still control the global trade and economy as well as the international institutions they dominate which shape global politics. Biro (2007) emphasises the dependency of dry Southern countries on virtual-water imports from the temperate North (USA and Europe). Power clearly is not related to who has the resources but instead it is related to who has the power to secure access to them. The idea that virtual water is a geopolitical resource was first publicly mooted in a wellattended session, Water and Geopolitics, during the 2003 World Water Forum in Kyoto, Japan, hosted by Arjen Hoekstra, then at UNESCO-IHE Delft.9 At the time, the call was explicitly tied to a trade-promotion agenda believed to lead to the ecological benefits of market-induced water efficiencies (‘green liberalism’). Five years later, Hoekstra and Chapagain (2008: 135) noted with apparent disappointment that ‘the idea that freshwater is a geopolitical resource of global importance … does not get across to many people’. However, these scholars had clearly become more aware of the dark side of the global political economy of global virtual-water trade (Allan 2011: 80). In their perspective, water is a geopolitical resource influencing the strategies of countries in order to guarantee access to water resources (Hoekstra and Chapagain 2008). Such a concept introduces a new type of water dependency: virtual-water import dependency in which water-scarce nations are dependent on food and embedded water supply from other countries. By that time, the global setting had changed dramatically as a consequence of global food price rises. Whole speculative investor funds discovered the food markets as a relatively secure alternative to the plummeting housing market, states and transnational companies (TNCs) decided to circumvent the foibles of the global agricultural market and invest directly in productive land and resources, predominantly in Africa. It is instructive to observe examples of a positive relation between countries practising land grabbing and those dependent on virtual-water import such as Saudi Arabia, Qatar, Libya, Jordan and Kuwait (von Braun and Meinzen-Dick 2009; Hoekstra and Chapagain 2008). The African land deals made by China and India, even though they are not virtual-water-dependent countries today, for the future can also be counted as such – given an expected increase in food consumption, and the expected (although by no means certain) persistence of high world food price levels, they can be considered part of this category. Hoekstra and Chapagain’s observations seem to reflect this changed reality. For Hoekstra, virtual-water supplying countries could assume geopolitical power positions since other countries would depend on them to guarantee their food and water security. Through land deals, though, virtual-water dependent countries are attempting to assume positions of control since they have access to land and water without the need to depend on food exporter nations via international food trade. Water, then, is an important geopolitical resource, but we cannot assume that countries holding large amounts of land and water will necessarily be in a position of power on the international geopolitical scene. Such dynamics are also taking place in the context of energy strategies and in new alternative sources such as biodiesel. Countries heavily dependent on oil such as the USA, the United Kingdom and China are also investing in land grab practices to guarantee access to those resources. In this context, water and virtual water are important aspects of the new energy strategies in which water is crucial to energy production. In this complex suite of dependencies, 228

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abundance of land and water in a country’s territory does not assure power on the global geopolitics. On the other hand, these arrangements do show how political economy plays a very significant role. The flows of virtual water will continue through global food commodity trade, and could increase once biofuels assume a larger importance as an energy source; however, what will change are the mechanisms promoting such flow. Trade will continue to be a strong component but production resulting from land grabbing agreements will also play a role. In this case, power relationships in between economies exporting and importing food commodities and biofuels will not be the only ones in place. TNCs, investor and bilateral land agreements will also play an important role. Virtual-water importing countries, besides having access to food by trade and via land grabbing, do not need to deal with the social and environmental externalities of natural resource degradation and water and labour exploitation in their own territory. From this perspective, importing countries can invest in different economic activities. For example, they can protect their local water and decrease the pressure over the natural environment. Once more, countries that focus on food production and are exporters of food and virtual water bear the negative outcomes of such production. The traditional global hegemons in the Northern hemisphere have upped the ante in response to the 2008 food price hike. The USA and EU are faced with the (expected) end of the cheap food era, aging populations, plus a scramble for energy and rare earths. In the geopolitical contest for Africa, they now compete with very water-scarce, capital-rich Gulf states, the People’s Republic of Korea (South Korea), Japan and the BRICS economies. There is a marked difference in the strategies pursued by the investors from different types of economy. On the one hand Western European countries, Japan and the USA, considered one of the main importers of water through food trade, invest in land grabbing through private-sector agreements, which focus on biofuels production. In this case, Hoekstra’s understanding of how trade could save water is in place; however, when attention turns to energy, his focus turns to profit and energy security. On the other hand, Middle Eastern countries, poor in water resources and highly dependent on food from abroad, are the main oil producers in the world. They focus their strategy on government-to-government agreements to produce food staples and decrease their dependence on trade and low international food prices. Water-scarce Gulf state governments are involved in inward investment in land and water in Africa and are elsewhere undertaken to guarantee their food supply. They tend to focus their production on the most water-intensive agricultural products: wheat, corn and livestock (von Braun and Meinzen-Dick 2009; Hoekstra and Chapagain 2008). Private businesses headquartered in the United Kingdom, Germany, Sweden, the USA and Japan are mostly investing in biofuel production to decrease dependency on oil. The only country that finds itself in both types of investment is China, investing in both food production and biofuel to secure its supplies of food and energy (von Braun and Meinzen-Dick 2009) although it should be noted that Africa is not China’s biggest target for investment. One would expect most of the grabs to take place in those African countries where water scarcity is not an issue. Sudan and Ethiopia, however, are countries with low levels of water availability while receiving large international investments for staple production (von Braun and Meinzen-Dick 2009; Hoekstra and Chapagain 2008). It would appear that countries involved in inward investment in land and water thus are mainly externalising their water scarcity problem to countries with water scarcity problems and weak food security levels. However, what of the ‘middle powers’ in Africa, the semi-periphery, those that both send and receive major investments? To explore this issue, two cases are described below.

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5 Land and (virtual-)water deals in two semi-peripheral states The following examples may serve to briefly illustrate the geopolitical position of two states with geopolitical interest in land and water: Egypt and South Africa.

5.1 The case of Toshka: pipe dream on the Nile Fear of losing access to water explains Egypt’s obsession with control of the Nile: Egypt depends on the Nile like a diver on oxygen (Schiffler 1997) and has always upheld its rights to water, granted by the British and enforced in a treaty with Ethiopia in 1906 and water deals with Sudan in 1929 and 1959. After the French and British were defeated at Suez in 1956, Egypt briefly switched to the URSS for technological and investment support. The USSR was pivotal to the funding and construction of the Aswan Dam. Egypt switched back to the Western camp after the October War of 1973 and has remained a cornerstone of US foreign policy in the Middle East. Egypt is an example of semi-periphery in land terms, a downstreamer with few alternatives in water terms and a net importer in food terms. Like South Africa, Egypt both receives and makes land deals. The undisputed leader of the Arab world in the 1950s after Nasser’s revolution and nationalisation (‘repossession’) of the Suez Canal in 1956, Egypt has lost its pre-eminent position to Saudi Arabian oil wealth, yet continues to command a dominant position on the River Nile, to be considered a cornerstone of NATO security policy and a top recipient of US aid. Its land redistribution of the 1950s procured the state a political base among smallholders (fellahin) if it did not lead to a major overhaul in tenure (Bush 2004). To make up for its dependency, Egypt has always relied on virtual-water imports, banking on US aid until the early 21st century and cheap world food prices until 2007–08. Now that the age of ‘cheap food’ seems over, Egypt’s dependency on virtual water became painfully clear when Russia shored up exports in 2010 following large-scale fires while food prices such as that of wheat doubled. The impact is felt all the more in recipients of US food donations and sales at below-market prices as they have tended, and even sought to, shift dietary preferences in recipient countries towards wheat (Gonzalez 2004). Egypt’s dependency on external water is 97% (Hoekstra and Chapagain 2008), and on virtual water 23.55% (El-Sadek 2010). While for Hoekstra and Chapagain, economic logic would dictate that the water cost into keeping Egypt self-sufficient in water is unsustainable once much more water is needed to produce food in Egypt than in other countries, Egypt has sought to maintain its food security and independence through domestic staple production and even to expand it, at the cost of struggles with upper Nile countries (Hoekstra and Chapagain 2008). Ethiopia as an upstream state has historically threatened to take Egypt’s resources, and in turn Egypt has threatened war should Ethiopia develop its resources autonomously (Kendie 1999). This has led to a game of ‘chicken’ on the River Nile, with Ethiopia creating thousands of micro dams under Egypt’s radar (Waterbury and Whittington 1997). Even today Egypt keeps upholding the right to interdict ‘arresting’ Nilotic water by upstream riparians, and thus develop water resources in ways that could subtract from Egypt’s inflow. While Egypt is already exceeding the quota agreed under the 1959 Nile agreement, it is set to claim more under a new Nile agreement as the New Valley land development project in the Western Desert gets under way. When Egypt switched allegiance from the URSS to the USA, it opened up its economy to outside investors in the 1970s (infitah, ‘open door’) under President Anwar al-Sadat. 230

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It was noted above that inward investment in land and water is legitimised by geopolitical security arguments, whether of threat or of opportunity. The activity is commonly associated with the idea that there is a need to develop underutilised space. While in the 1970s President Sadat saw the desert as open space to be exploited, enabling ‘candid land grab’, Mubarak saw it as a threat, needing to be controlled (Wahdan 2011). These two drivers10 alternate in the history of Egypt’s internal colonisation of its desert, the Toshka (or New Valley) project, the first stage of a US$70 billion scheme in the desert which is hailed as a ‘new civilisation on the Nile’. The cost of this so-called Toshka Project, a three-stage plan, could run up to $90 billion. The Toshka agricultural land development project for a ‘new civilisation on the Nile’ coincided with empty state coffers, revealing the need to attract foreign investment. The United Arab Emirates’ Sheikh Zayed furnished start-up money for the project’s main canal, which was subsequently called after him. Foreign land investors, however, were thin on the ground; big swathes of land were only snapped up by Saudi’s Kingdom Agricultural Development Company, with a view to producing vegetables for exportation to Europe (Fahmy 1997). The investor is a Saudi prince, Talal, known to be the wealthiest in the region; representing a cashflush but water-poor country, he saw an opportunity to snap up huge swathes of fertile land (100,000 acres plus a reported 128,000-acre buffer zone granted under the counter to protect the land; Salem 2010) at a bargain price. It was an open-ended deal: no need to invest, no state controls – apparently the contract stipulated that Talal can obtain seeds without the supervision of Egyptian authorities; can hire foreign labor force that would be immediately granted work permits; can cultivate whatever crops he chooses; isn’t bound to a deadline to start cultivating the land; and can export any or all produce anywhere outside of Egypt. (Pambazuka News 2010) While it was nominally pandering to the rural electorate, promising plots to students and farmers, in fact the emphasis of the Egyptian state’s attention shifted to the urban population of Cairo. Centrally imported food was sold at heavily subsidised cost or given away for food stamps, enabled by US food aid. IMF-imposed reforms took away these subsidies, causing wild price explosions, leading to food riots in the late 1970s. The gradual abandonment of the countryside and liberalisation of the land law in the 1990s deprived many farmers of their economic security, forcing elevated rents on poor families and threatening to return land to owners who had lost it in the 1950s. This displacement led to under-reported rural violence and urbanisation. Moreover, like so many other seemingly ‘up-for-grabs’ areas, the area to be developed is not empty. Nubian activists and human rights activists have disputed the deal, dismissed it as both land and water theft, and Nubians have refused to be resettled in Toshka. Non-governmental activists claim 13,000 Nubian families were expelled from Toshka to free up the land for investment (Elyan 2010). A lawsuit was filed on their behalf aimed at annulling the Saudi prince’s land deal in October 2010, but a post-revolutionary meeting between the new government and Nubian protesters in April 2011 proved the new Egyptian leadership as yet unwilling to overturn Mubarak’s government’s resettlement plans.11 While in part this is justified as enhancing food self-sufficiency and organic export, there is also a population management angle here. Egypt’s population boom and skyrocketing rate of urbanisation has been invoked as a security imperative to greening the desert, with foreign (Gulf-state) capital. The desert, as a ‘new frontier’, would import millions of Egyptians into an area currently mainly inhabited by Nubians, where Islamists have a strong political basis and 231

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which has been the scene of terrorist attacks. Moreover, the settlement establishes prior water claims on the Nile, as it requires 5 million cubic metres of Nilotic water even in dry years, almost a 10th of the total Egyptian requirement. From a geopolitical perspective, it may not be incidental that the land project is bordering on the Hala’ib (Halayeb) Triangle, an area where the Egyptian army had already made an incursion in 1994 as part of a long Egyptian–Sudan dispute over territorial claims. The project moreover provides employment and potential income for the military sector which is increasingly turning civil, as agricultural entrepreneurs and construction developers. While opposition press and members of parliament asked critical questions, nothing really happened until the revolution of 2011 when the new, post-revolutionary Egyptian government claimed the Saudi prince had irresponsibly left land idle, whereupon the investor countered that the Egyptian Government had neglected to provide irrigation water (Eddin 2011). The investor eventually accepted the truncation of his land take (selling back 50,000 of the original 100,000 acres at the buying price) and redistribution of the remainder among young farmers and college graduates. It may not be without meaning that a Saudi investor is thus snubbed. Since the age of Nasser, Egypt has presented itself as a leader of the Arab world, but since the oil boom of the 1970s it has faced Saudi Arabia moving alongside as a contender for Arab leadership. Not wanting to lose its geopolitical base in Egypt, the Saudi investor gave in. As Woertz (Chapter 2.2 in this volume) contends, Saudi investment is not so much inspired by high food prices as by the fear of export restrictions. Egypt itself has meanwhile faced a counterhegemonic change of scene in the Nile arena by upstream Alleingang (see Matthews et al., Chapter 3.7 in this volume). Egypt has long been able to maintain its claim on Nile leadership, issuing threats to those who might consider upstream water diversion, but also facilitating and part-funding Nile co-operation in various initiatives, most recently the Nile Basin Initiative, which in 2006 almost led to a new integrated Nile agreement. The negotiations smartly widened the frame from a zero-sum water game to water-for-energy swaps. Egypt’s hegemonic position on the River Nile, however, no longer goes unquestioned now that Nilotic upstreamers, emboldened by heavy foreign investment, have decided to draw up their own Nile agreement, without Egypt. In this turn of events emotions can run high: Egyptian leaders implicitly declared the upstream move a casus belli when Mohammed Allam, Minister of Water Resources and Irrigation, reportedly told the Egyptian Parliament that Egypt ‘reserves the right to take whatever course it sees suitable to safeguard its share’ (AFP 2010). The Ethiopian Millennium Dam, first mooted in the 1860s and now seriously under way, feeds Egyptian fears of upstream land grabs which may impact directly and indirectly on the quantity and quality (return flows) of Nile water flowing into Egypt. There may, however, be a great deal of political posturing to this sabre-rattling, feeding the revival of persistent water-war sensationalism in the press. As an alternative to domestic development and upstream strife, however, Egypt itself has started to buy land and water resources in Sudan and Ethiopia to produce food for Egyptians (see Keulertz, Chapter 3.2 in this volume). Despite the cereal export ban Ethiopia imposed in 2007, top political figures from both Egypt and Saudi Arabia reportedly (based on WikiLeaks documents) managed to export from those lands, while at home, owing to the increase of food prices, the import of staple foods did not guarantee cheap food for local consumption. Egypt’s two-level geopolitical chessboard may look something like this:  Internal state building: People management, Arabising the Nubian South, building new ‘civilisation’ with Saudi and Emirates investment;  External sphere of influence: carrots and sticks on the Nile, smaller investment in Sudanese and Ethiopian land. 232

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5.2 Land and water geopolitics of South Africa At the opposite end of the continent we find a country that likes to label itself as ‘the new South Africa’, to emphasise a clean break with a troubled past. South Africa’s post-apartheid status has actually given the country a distinct advantage, which it uses throughout the continent as a means to expand its economic and political influence and ensure its security. The 2010 World Cup football games, moreover, propelled South Africa to the global stage. Not since the 1994 election of the former President Nelson Mandela had an event evoked so much continental solidarity and Pan-Africanism. The event demonstrated that not only was South Africa capable of meeting the challenge of putting on an event as well as its World Cup predecessors – Germany and the USA, both ‘core’ states in the world system, with global presence – but it could do so successfully. According to Hugon (2008), South Africa has relations with as many as 43 African countries and controls the economies of countries in southern Africa. South African FDI for Lesotho and Malawi is 86% and 80%, respectively (accumulated over 1994–2003). In 2005, South Africa represented 25% of the entire African continent’s GDP and 65% of the sales of the 500 largest African companies, half of the railway network, 40% of the highway network, and 50% of energy consumption in sub-Saharan Africa. Additionally, South Africa is a military power which not only purchases weapons, but is a top arms seller. The ‘South-Africanisation’ of Africa has not gone unnoticed by other African states; especially those concerned with what some have called South African ‘financial colonialism’ (Goldstein 2003). Goldstein calls attention to the political dimension of the increased role of foreign investment by South Africa, which sparked political controversies in Zambia and Tanzania, where it has found expression in political opposition to not only South Africa but also the Southern African Development Community (SADC).12 Among these countries, Zambia has the more strategic natural resources, e.g. copper, which is the principal attraction for South Africa. Besides copper mining, South Africa has flexed its FDI muscle in both Zambia and Tanzania with hotels, telecom and supermarket chains. The conspicuous surge in African land deals with India and China, however, has allowed South Africa’s land and water expansion on the continent without the attention of NGOs and other observers focused on land and related (real and virtual) water grabs. In semi-arid South Africa, water (and energy) is central to the economy and reports indicate South Africa’s limited water resources may have a direct impact upon its future. Gauteng province, South Africa’s industrial and mining base, has the highest population density, economic power, education level – and water demand. South Africa is a ‘pivotal’ riparian in ‘pivotal basins’ (Turton and Earle 2005). The Orange, Limpopo and Incomati rivers, all critical to South Africa, are either near or facing closure.13 If it were just about the water, South Africa’s ambitious desalination programme, part of the 2004 National Water Resource Strategy (NWRS), may well go a long way to safeguarding its future water security.14 South Africa, however, has used its capacity and hegemonic position to project its power beyond its borders and has a long history of doing so. Apartheid-era South Africa applied its knowledge, funds and hegemonic position to obtaining water beyond its borders, entering into transboundary water agreements, capturing and controlling water resources beyond its political boundaries. The country continues to exercise economic, political and advisory influence on other states with a view to future access to water for irrigation and hydropower. The Cahora Bassa Dam complex in Mozambique exports electricity generated from the hydropower plants at the dam to South Africa, and the Lesotho Highlands Water Project (LHWP) exports Lesotho’s water to South Africa. However, water is also important to the energy security of a country where almost three-quarters of energy needs are supplied from coal 233

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production, and where the energy sector receives preferential allocation of water resources. South Africa’s 1998 intervention in Lesotho may not have been directly driven by a water imperative (Turton et al. 2004), but certainly helped to secure the co-operation of a stable and friendly neighbour willing to continue the water deal. Two other, not yet fully realised investments involve importing water from the Zambezi15 and Congo rivers. A recent investment in the DRC may further illustrate the water–power nexus. In November 2011, the South African and DRC governments signed an agreement to develop the Grand Inga III Dam. That agreement secures South Africa the lead in building a 39,000Mw hydropower plant on the Congo River, which would dwarf that of China’s Three Gorges Dam. Its dam wall would exceed that of Lesotho’s Katse, currently the highest dam wall on the continent (Showers 2012). With reliable electricity, the Congolese could stop cutting forests to meet their energy needs and export electrical power to South Africa and neighbouring states. A possible stumbling block to its construction, however, is the project’s USD80 billion (!) price tag. The Congo River, second only to the Amazon by flow, is unique among the world’s great rivers in having rapids and waterfalls so close to its mouth. Among its most pronounced geomorphic features is the Inga Falls – the only and best location for realising the river’s greatest hydropower potential. Overall, South Africa will benefit significantly from involvement in the Inga project. With SA-Eskom in control, the water-scarce continental economic hegemon gains access to hydropower and, importantly, land irrigation controls for agricultural production. Apart from Eskom South African companies interested in DRC include Sasol (a private international energy and chemicals company formed initially in South Africa in the 1950s) and PetroSA (South Africa’s national oil company). In expanding its footprint in the DRC, South Africa prospers geopolitically, and builds greater opportunities to enhance its political and economic influence both singularly and regionally in multiple arenas, particularly those of water and energy. South Africa has contributed peacekeeping troops, millions of rand (South Africa’s currency, ZAR) and years of diplomacy to trying to bring stability to the eastern DRC.16 This involvement was based not only on a felt moral duty to share South Africa’s peace dividend with Africa – President Jacob Zuma and others have stated that it was in South Africa’s economic interest to stabilise the Great Lakes region (Mail and Guardian 2011). Table 3.1.2 illustrates graphically the geostrategic objectives relative to water for South Africa in Lesotho and the DRC. South Africa’s regional and continental dominance contributing to its successful ability to ‘grab’ land and water is rooted in the past. The apartheid era has conditioned the current realignment of power, framed the political discourse and created the conditions and space for land (and water grabs) regionally and domestically. From the 1950s to the 1980s the South African government forcibly relocated between 3 million and 5 million black and other non-white South Africans (Du Plessis 2004). The 1994 Restitution of Land Rights Act was framed to oversee restitution of land ‘taken’ under the apartheid regime. At that time, the ANC determined that to redistribute as much as 30% of white-owned agricultural land would be subject to expropriation by the state as a means to redress a historical wrong and restore land to its previous owners. The ability of previous owners to provide evidence for land restitution can be challenging, though, especially given the weak tenure rights system and challenges associated with establishing traditional or customary use, a problem not unlike that faced by those challenging ‘land grabs’ by external investor public and private investors throughout the continent. The deadline for filing claims was 31 December 1998. Between 20% and 25% would involve rural lands (Du Plessis 2004). While it was emphasised that no land would be taken by force, violence did occur; small farmers in particular were harmed, many attacked, some killed, and all forced to leave their farms (IRIN 2003).17 Only later would farmers appeal against the land 234

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invasions and obtain some compensation. All transactions were to be concluded by 2015 (Hall et al. 2003). Driven both by sticks (concerns about government taking their land) and carrots (an acute sense of commercial opportunity), several South African farmers have taken their commercial farming farther afield. Albeit on a smaller scale than non-African investors, South African farmers have created a history of land acquisition in Zambia, Mozambique and Tanzania that has been going on for decades (Cotula et al. 2009).18 AgriSA, the South Africa agro-investment agency, has many white commercial South African farmers who face insecurity, with potential losses from land redistribution reform policies, as well as deregulation of subsidies and marketing boards, making their livelihoods within South Africa less secure. They have been involved in talks on investment with 22 countries. The most significant concluded deal negotiated by AgriSA is with the Republic of Congo (Hall 2011), which itself imports 95% of its food requirements. The agreement between the Congo government and AgriSA gives South African commercial farmers an initial 200,000 ha of former state farms and the associated farmland and places another 10 million hectares of arable land under the control of AgriSA farmer members (Hall 2011). ‘Domestic land grabbing’ in South Africa, however, takes multiple forms. Grabbing ‘white’ land is legitimised in the name of justice, remedying the past actions of the apartheid state; meanwhile it remains an explosive and sensitive issue, whether for white farmers or black radical (largely unemployed) youth being corralled by the African National Congress’s Youth League. However, ‘black’ land was also seized for the greater good of the 2010 football World Cup – a game repressed under apartheid in light of its popularity with the black population, but in the ‘new South Africa’ a soft-power spearhead of its prominent status in the global arena. In Johannesburg, for example, the ‘games’ created the political space and governmental financial support to evict poor residents and relocate others (an estimated 17,000 or more) legitimated by the imperative of ‘urban renewal’ in newly ‘zoned’ sports precincts (Bénit-Gbaffou 2009). Attempts to demolish a 99-year-old market in Durban (from which over 10,000 informal traders operated), however, were met with organised protest (Cottle 2010). A judgment rendered by the courts prevented a successful internal land grab. Table 3.1.1, 3.1.2a and 3.1.2b briefly compare Egypt’s and South Africa’s geopolitics. South Africa’s geopolitical project, then, consists of two levels.  Internal state building: Internal economic divergence, potential losses due to land redistribution reform policies failing anti-poverty programme, racial violence, nationalisation as ‘grabbing’ (but also ‘squatting’).  External sphere of influence: pan-Africanism, independence from the West, conflict resolution, access to resources, ‘soccer diplomacy’.

6 Discussion and conclusions The chapter has sought to deepen the understanding of geopolitical strategies in Africa of semiperipheral states in the world system, especially on (virtual) water. In so doing, it has progressed Arjen Hoekstra’s ideas on the geopolitics of water. Hoekstra has posited that virtual-water strategies create dependencies, but failed to elaborate. More’s the pity, in light of the post-2008 intensification of state-centred moves to increase geopolitical security. States are rarely only importers or exporters of virtual water, so that dependencies are rarely one-way. Moreover, states can be both investors and investees in land deals. At both ends of the African continent, Egypt and South Africa come to mind. 235

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Table 3.1.1 Egypt and South African domestic and foreign policy geopolitics compared

Foreign policy Hegemonic domain Regional contender Intervention over disputed territory/interest Global position Basis for water hegemony (shadow of the past) Semi-periphery as investee state Domestic State building Domestic land grab Domestic challenge Population politics

Egypt

South Africa

Middle East and North Africa; Nile Saudi Arabia 1994 Hala’ib triangle with Sudan

SADC, sub-Sahara Africa; all shared rivers Nigeria 1998 incursion in Lesotho

Non-aligned but US protégé Colonial treaties; mix of hard and soft power

Non-aligned. Apartheid-era treaties with frontline states; now soft power (’antihegemon’) Mainly Chinese financial services

Saudi and UAE investment in Toshka Repressive Toshka; new civilisation on the Nile (to integrate south) South Moving ‘overcrowded’ Cairo to new settlement

Soft power Post-1998 land reform/ nationalisation? White farmers Export of racial{-}economic tension

Table 3.1.2a Water investment and geostrategic objectives, Egypt Level of proximity

Action

Ulterior geostrategic objective

Direct water access

Until 2010: co-operation in Nile Basin Initiative 2010 Threats to upstream Nile states Water for energy swap on the Nile Investment in Ethiopian land Reducing VW dependence by exploiting own resources

Control of Nile

Indirect water access Virtual water access

Control of Nile Water security; influence

Table 3.1.2b South Africa’s water investment and geostrategic objectives in Lesotho and the DRC Level of proximity

Action

Ulterior geostrategic objective

Direct water access

Lesotho Highlands Water Project + Orange River Treaty Eskom investment in Inga mega dam SA major FDI in DRC land

Control of Lesotho government

Indirect water access Virtual water access

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Stabilising region Food and water security and influence in DRC politics and economy

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From the virtual-water geopolitics perspective, the dependency of South Africa as well as Egypt on virtual-water imports can be considered low, even though both states are facing conditions of water scarcity (Hoekstra and Chapagain 2008). While neoclassical economists would predict a heavier reliance on external trade in order to guarantee their water and food security and deal with pressing population issues, both countries are using the water security argument to maintain their power positions in their region and control access to water in multiple ways. The two states are set in predominantly dry areas, which means water is easily ‘securitised’ as a national security issue in both states. While contending investors are outside the continent, Egypt and South Africa are part of it, and have direct geo-hydraulic interests that extend well beyond their respective political boundaries. As semi-peripheral players in the world system, they have the power to resist external hunger for their resources, although they do not necessarily refuse. They are, moreover, states with their own ethnic and economic power differences, between geographically concentrated communities (Arab North vs Nubian South of Egypt, the white-dominated province of Gauteng vs the rest of South Africa), and a heavy ‘shadow of the past’19 impinging on present-day politics and investments (Sebastian 2008). Water strategies may therefore also address overpopulation and socio-economic rifts and tensions. Governments all over the developing world, but especially in the Middle East and North Africa, where the Arab riots also toppled Mubarak, seized on the 2008 food price peak to tighten the reins on trade and emphasise the primacy of food security. Indeed, food riots in over 30 countries temporarily put food on the security agenda internationally (though see Burger et al. 2010 on the non-securitisation of food). South African actors seek security and influence through deals with neighbours and investments in hydropower and land further afield, which give access to virtual water and energy. Both semi-peripheral countries are thus exercising their economic and political power to secure access to food and water security through land deals with other countries while, at the same time, inviting foreign direct investment, Egypt on its territory, South Africa in its banking sector. Post-revolutionary Egypt has felt strong enough to rebuff a Saudi investor, while postapartheid South Africa feels justified in rescinding earlier land takes. Both countries have used a mix of carrots and sticks in seeking sufficient control of upstream neighbours. Egypt’s and South Africa’s upstream neighbours, Ethiopia and Lesotho respectively, control their downstream neighbours’ access to water, but geographic advantage has not ensured upstreamers political leverage over other countries without political power. Instead, the upstreamers have accepted land and water deals (Lesotho Highlands Project, Egyptian land investment in Ethiopia) that are potentially disempowering to the (virtual-)water exporting countries. Land and water take, then – and their return – are not merely monetary transactions but need to be legitimised, and may moreover serve geopolitical hegemonic goals which likewise need to find acceptance to be durable. In that sense we have looked at both the ‘hard’ (material) and ‘soft power’ aspects of resource claims. Hegemons often present themselves as exceptional, imbued with a mission for their region (Prys 2008). As hydro-hegemonic contenders (Zeitoun and Warner 2006) Egypt and South Africa have a particular need to legitimise their actions to domestic and external audiences. They have proved successful in this endeavour – with the help of side payments and, at times, open or veiled threats – in ‘socialising’ secondary powers in their region to accept their discourse (Ikenberry and Kupchan 1990). In that sense we have looked at both the ‘hard’ (material) and ‘soft power’ aspects of resource claims. Egypt, blessed with a 5,000-year-old hydraulic civilisation and, for a time, a prominent place in the developing world after nationalising the Suez Canal in defiance of England, France and 237

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Israel, continues to claim its leadership of the Nile basin. Hard pressed for food security, postrevolutionary Egypt appears to have regenerated its plan to colonise the desert, presented as a ‘new civilisation’ on the Nile. Yet it also uses considerable muscle to keep domestic and foreign opposition at bay, while as an investee it has recently given the richest man in the region, a Saudi Arabian prince, a rap on the knuckles. The Saudi ‘land grab’ in Egypt has largely been neglected by international NGOs (if not international water experts) as it seemed ‘non-incendiary’ except for a relatively small group of Nubians – the issue is ‘undersecuritised’ (Buzan and Wæver 2003), giving the Egyptian state leeway to go ahead with the Toshka project relatively unnoticed. However, while Egypt’s reliance on virtual water and the limits to Egypt’s water wealth have become less of a taboo, the hydrological and economic folly of Toshka is far less open to debate. South Africa, meanwhile, busily invests (and mediates) under a pan-Africanist discourse. The ‘soccer diplomacy’ of the World Cup confirmed South Africa’s status in the front guard of African resurgence and as righting historic wrongs at home. South Africa’s land dealings, however, illustrate the complexity of its history relevant to strong state roles in land acquisition to meet a political agenda. The country has to grapple with its own sensitive domestic land issues. While Egypt’s Toshka project may be considered ‘undersecuritised’, in South Africa land grab is regarded as ‘oversecuritised’ (Buzan and Wæver 2003) by all commentators exactly because of the aforementioned ‘shadow of the past’: the resonance of history makes any current South African action sensitive, interpreted as it is in light of past actions. The ‘elephant in the room’ is an explosive agenda issue, whether for white farmers or black radical youth – not to mention outside analysts. The thorniness of the topic requires a careful contextual consideration of notions simplified by activist ‘land grab’ discourse. Geopolitical rationality, this chapter has contended, is part and parcel of this context.

Notes 1 Yet contrary to popular belief, it should be noted that multilaterals like the World Bank and FAO are not perfect representatives of this school, as they are reasonably interventionist. These institutions do, however, promote the liberalisation of land markets enabling land grabbing as the solution to various crises 2 Dependency or dependencia theory arose in the 1970s in contradistinction to modernisation theory, and claims that

resources flow from a ‘periphery’ of poor and underdeveloped states to a ‘core’ of wealthy states, enriching the latter at the expense of the former. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the ‘world system’. (Amin 1976 ) Key figures are Andre Gunder Frank and Osvaldo Sunkel. 3 It should be noted that not only productive land investment but also land conservation can serve to expel land users from their habitat. Hunters become poachers, squatters become bandits in a discourse seeking to preserve land for conservation. Political ecologists like Adams (Adams and Hutton 2007) have called attention to this ‘ecological land grab’. Whether due to ecological land grab (conservationism) or green spaces sequestered for food or fuel, both serve to expel locals. 4 Western discursive constructions see African states as tribalist and unstable, needing democratic elections and nation-building as a cure (Griggs 1996). 5 Regional virtual-water analyses like Aldaya et al. (2010) are still exceptions. 6 Jeffrey Hatcher, director of global programmes at the Rights and Resources Initiative (RRI). 7 The legislation dates from 1971. In 1997 it was suspended, being reinstated in 2010 after a considerable increase in international investors buying land in Brazil. 238

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8 Grilagem is a different, illegal type of land grabbing, related to new frontiers when the state distributes land for individuals to foster economic activities in these regions. 9 IHE and World Water Council, Session on Virtual Water Trade and Geopolitics. Online: waterfootprint.org/Reports/Virtual_WaterTrade_and_geopolitics.pdf. 10 Tuan (1980) sees these drivers as the fundamental psychological instincts of Eros and Thanatos, the life force of expansion and the static force of security. 11 http://farmlandgrab.org/16592; http://news.monstersandcritics.com/middleeast/news/article_1669439 .php/Egypt-s-revolt-revives-Nubians-historical-claims. 12 In Zambia Michael Sata, now president, decried the old colonial rulers, e.g. the British, as well as South Africa and the Chinese as part of his opposition party campaign (Economist 2011). 13 Basin closure is described as a river with no utilisable outflow of water, when all the available water has been allocated to some productive activity with no more water left to be allocated. See Svendsen et al. (2001: 184), but see Molle (2006). 14 South Africa’s 2004 NWRS specifically includes desalination, but gives a higher priority to importing water from the Zambezi River, augmenting rainfall through cloud seeding, shipping water from large rivers and towed icebergs. Many other countries have desalination plants and plans as part of water resources plans and security – Saudi Arabia has over 30 plants, which supply 70% of its water. 15 Although importing water from the Zambezi, like a similar effort regarding the Congo River, is likely to be expensive and may potentially result in adverse environmental and human impacts, South Africa’s 2004 NWRS includes discussion of Zambezi River imports into South Africa. 16 South Africa’s involvement with the politics of the DRC has raised suspicions in some observers. South Africa printed and delivered the ballots for the recent DRC presidential election. Additionally, at the DRC’s electoral commission, the Commission Electorale Nationale Indépendante (CENI), the SANDF assisted with logistics – delivery of ballots to voting locations throughout the country, as well as other tasks. As a result, rumors circulated that many of the ballots had been marked in advance, all of which aided Kabila’s win (Cambanis 2010; Mail and Guardian 2011). 17 Many people-driven home and land invasions would occur in KwaZulu-Natal (KZN), an area of South Africa bordering Zimbabwe, in the 1980s, well before the 1994 elections, and continue after. By 2003 over 8,000 claims would be resolved in KZN, more than in any other province. For many, in particular those in the ANC Youth League (ANCYL) under its controversial recently expelled leader Julius Malema, redistribution and settling the claims would take too long and not go far enough. Despite the fact that there is a set of policies and law that governs ‘land reform’ (or land grabs by the state), land restitution, land reform, etc., would be cast as nationalisation. Malema has been a ‘loud’ voice on matters of nationalising other South Africa government assets, especially the mining sector. He has called for the dissolution of the current Botswana government and argued that Zuma and others are closely linked with the imperialists, e.g. the USA, Britain and France – all of whom are attempting to re-colonise. 18 Some have even labelled the threat to white farmers ‘genocide’ driven by water crowding (Turton, personal communication, 2012). 19 The concept of the ‘shadow of the past’ refers to the multiple ways history matters, i.e. influences contemporary politics in post-colonial state. Introduced initially to be applied to African states, it was determined to inform and condition contemporary politics in very specific ways, including, but not limited to: determining the prospects of co-operation or conflict; realignment of power; framing the language of politics; suppression or elevation of certain types of knowledge; or structuring identity and institutions (see Sebastian 2008).

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3.2 Land and water grabs and the green economy Martin Keulertz

1 Introduction Different from the immediate wave of interest and research on what the media describe as ‘land grabbing’ or, to illustrate the simultaneous resource capture, ‘water grabbing’, this handbook aims to provide a holistic perspective on farmland acquisitions. In my understanding, we are still at the beginning of a new research field. Demographic changes across the world and other global forces such as climate change, water insecurity, energy demands and changing patterns of consumption pose significant challenges for decision-makers world-wide. Making the world food secure in the 21st century will be fundamental to ensuring global economic prosperity and peace. The African continent is one of the regions where the outcomes of these challenges will be decided. Foreign direct investment (FDI) is going to play a crucial role if these challenges are to be overcome. The question is not whether investment is good or bad but how it will be structured so that it will lead to successful outcomes. These topics are massive and cannot be covered effectively in this chapter. The aim will be to provide a brief overview of economic cycles and of the green economy in such cycles. The need to invest in agriculture is clear, but this phase is taking place at a moment when the need to understand and protect ecosystem services is increasingly necessary and contested. The concept to which I will relate investment in agriculture is the so-called ‘green economy’, a system of economic activities related to the production, distribution and consumption of goods and services that result in improved human well-being over the long term, while not exposing future generations to significant environmental risks and ecological scarcities (UNEP 2011). At present, I argue that we are in a transitional phase from the ‘brown’ to the ‘green economy’ in adapting to social and environmental change. In particular, the investing economies such as Middle Eastern states will be dependent on ‘green growth’ inputs as demographic change and subsequently increasing consumption will make changes inevitable. Current economic management across the globe, including the management of key and limiting natural resources such as water, are still lagging behind in terms of economic perceptions inspired by a misguided set of assumptions from the past. Although investment in African agriculture by foreign investors should be welcomed, the three dimensions of (a) water management and productivity, (b) efforts to build a green 243

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economy and (c) capital accumulation/speculation are toxically set against each other unless the fundamentals of economic philosophy are revisited. It is not only in the Middle East or other parts of Asia where demographic change and subsequently increasing consumption will pose severe challenges to decision-makers, but predominantly in sub-Saharan Africa itself, where 1 billion additional people need to be fed by 2050 (Thuo 2011). Current economic management across the globe, including the management of key and limiting natural resources such as water, is still lagging behind in terms of economic perceptions inspired by a misguided set of assumptions from the past. The chapter will apply Kondratieff’s ‘economic cycle’ theory (Garvy 1943) to construct the argument that the global economy is currently in a state of what Schumpeter (1942) termed ‘creative destruction’ between an outgoing and incoming economic cycle. Despite the overall idea of Kondratieff’s cycles being to explain past patterns of growth, here I shall establish the hypothesis that the green economy is the next Kondratieff cycle. Subsequently I will illustrate the role of water management in the recent phase of FDI in Africa. Finally, the chapter will highlight the importance of taking a water allocation and management perspective when structuring FDI in farmland. Farmland investors are being urged to use adaptive water management approaches (Pahl-Wostl and Sendzimir 2005; Bunclark and Lankford 2011) and place them in the wider context identified in the writings of E. F. Schumacher, a founding father of ‘green economic thinking’. The role of water management and size of the organisation engaged in farmland investment will be shown to be the core challenges for investors.

2 Five cycles to explain economic boom and bust The global economy of the outgoing 20th century has been associated with long-term growth. After the collapse of the communist block in the late 1980s/early 1990s, the global economy witnessed a surge of unprecedented apparent growth, which brought about the weakened globalised neoliberal world of today. A feature of this period of growth was that while Western economies benefited from the revolution of information technology, the economies that supplied the manufactured commodities – the ‘work benches’ in the East – experienced an era of increasing trade surpluses. Africa benefited to some extent through the increase in demand for natural resources but not to the extent of enjoying significant trade surpluses. This new globalisation enabled the People’s Republic of China and India to become the major suppliers of Western consumerism but also turned them into new economic aspirants. The Middle East functioned once again as the ventricle of this era by pumping the required amounts of oil into the global economy’s essential systems. The metabolism of the past 20 years operated with ever-increasing velocity, turning the previous periphery into an additional core of the international political economy. As suggested above, I argue that it is helpful to reflect upon ‘economic cycles’ theory to understand the impact of global production and trading activities on water resources and their sustainable use in the 21st century. The first economist to highlight cycles of economic growth was Nikolai Kondratieff. He conceived the notion that ‘long cycles’ determine the period of economic boom until it gradually fades into a bust. Technological innovations enabled the capitalist economy to experience new waves of growth (Rostov 1975). The first wave was triggered by the invention of the steam engine and the subsequent industrial revolution, the second by railway and steel, the third by chemistry and electrical engineering, the fourth by petroleum and automobiles and the fifth by information technology (IT). Kondratieff assumed these waves would last up to 50 years (Moody and Nogrady 2010). Schumpeter (1942) linked Kondratieff’s assessments on waves with innovation. What he 244

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labelled as ‘creative destruction’ stood for the outgoing era of boom, the tipping point between the old and the new cycle. Neither Kondratieff nor Schumpeter used statistical analysis to underpin their arguments; hence they received widespread criticism from the mainstream economists of their days. Simon Kuznet (Rostov 1975) applied this missing link in examining ‘long cycles’ of an economic period by analysing the relationship between prices and production intervals. He found that primary trends in production and prices reflected systematically the life cycle of a given technical innovation (or opening up of a new territory or natural resource); that is, a phase of rapid, then decelerating, increase in output; of rapid, then decelerating, decrease in price (Rostov 1975: 422). Kuznet coined the term that those industries which were most successful in such a period led the way in the new cycle. One of the most significant features of any economic cycle was the role of transaction costs, which the leading industries managed to decrease (ibid.). The concepts of Kondratieff, Kuznet and Schumpeter have been introduced because it will be argued in the next section that the global system is in a period of bust. This condition is relevant to inward investment in farmland in Africa because the agricultural sector will play a key role in the next cycle: the green economy. An important factor for successful inception of the green economy will be the role of water resources. If water resources are being depleted through, as it will be argued, out-dated management concepts, transaction costs will become a major hindrance for any attempts to turn the global economy green.

3 The creative destruction of the fifth cycle However, let us first return to the past cycle. The fifth cycle ended as early as 2001 when the IT bubble burst during the dot.com bust. However, Joseph Stiglitz (2008) links the fiscal policy of the Federal Reserve under Alan Greenspan in the early 2000s in the aftermath of the end of the IT-led fifth cycle to the creation of the financial market bubble to prolong the outgoing economic cycle as there was no alternative in sight. This financial market bubble caused the most severe economic crisis since the Great Depression. In the absence of regulation, the next bubble was created by unsolicited investments in US and UK property markets. The bankruptcy of Lehman Brothers in 2008 marked the very end of the artificially prolonged fifth cycle. Taxpayers have experienced the contraction of their welfare states in order to enable economies to survive through bailing out US and European banks. The question that remains is: what will the sixth cycle involve? The year 2008 not only witnessed the worst financial crisis in history. It also experienced the rare occurrence for Western consumers – food price spikes. For the first time since the 1970s, staple food prices rocketed on the global financial markets (Wright 2009). The reasons were manifold: the global commodity trading system – including that for food – echoed the volatility of the price of oil. Food commodity speculation ensued. The situation was aggravated by limited storage facilities and policy shifts towards biofuels subsidies. Poor harvests completed the reasons for price increases (Piesse and Thirtle 2009). The outcome was deep concern among decision-makers in the global South, where food consumers in the booming urban areas were most affected by the price increases. One often overlooked consequence of these price spikes, as Kuznet would also affirm, was the beginning of a new era in capitalist thinking on the part of investors. For the first time in decades, inward investment in farmland became a significant focus for investors. Developing countries were the major targets for investors from economies in transition, which had benefited very greatly from the previous economic cycle. It is therefore no surprise that capital flows originated from Middle Eastern, South Asian and East Asian economies. 245

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This new focus poses a number of institutional problems in relation to the current economic cycle, where institutions to regulate such capital inflows are absent. It is likely that the price of such missing ‘rules of the game’ (North 2005) will be paid by the environment with major negative impacts on livelihoods of people. Water, it will be shown in the next paragraphs, will be the Achilles heel of the global economy. The new cycle – the sixth cycle or the green economy – is currently in its inception stage: at the heart of this cycle will be the adoption of sustainable non-fossil energy supplies alongside improved resource use efficiency (Moody and Nogrady 2010). The preceding cycle was shown to have seriously over-consumed our resources. I would call the past 30 years the ‘instant age’, where consumer demand did not take natural resources sufficiently into account. The changing global order is being shaped by a discourse involving newly recognised factors such as climate change, related resource scarcities and increasing demand for global food supplies. Together these create challenges that make a leap into a new economic cycle inevitable. Cutting waste to increase resource efficiency will be the major facet of this next cycle, which is hoped to lead to even greater economic returns than the previous cycles (Moody and Nogrady 2010; UNEP 2011). Moreover, the world could need to produce up to 50% more food by the year 2050. Since the Western world and vast parts of Asia have over-allocated renewable natural resources such as water, a significant proportion of supply-side food production and productivity will have to come from Latin America and Africa, but also increased demand-side management on the domestic side in investing economies. Africa’s position is hard to call. Its water scarcity is economic rather than physical. That is, most of Africa’s economies have not put in place the agronomic, irrigation, organisational, market and regulatory institutions to combine inputs effectively and market outputs profitably. The need is to sustainably intensify farming with integrated management concepts. The powerful and very demanding notion of ‘sustainable intensification’ is a recurring theme in the analyses of the authors of this book.

4 The green economy and investment While in the Western world over-consumption of resources caused severe environmental problems, in Africa low agricultural productivity prevailed throughout the 20th century. Agriculture has been especially negatively affected by under-investment in the past 30 years. As a consequence, the United Nations Environment Programme (UNEP) Green Economy report estimated an investment need of US$ 198 billion per year into agriculture from 2011 to 2050 to achieve global food security in conjunction with higher resource efficiency (UNEP 2011). The lion’s share of this sum will have to be invested in regions with low agricultural productivity, such as sub-Saharan Africa. The Guinea savannah with its huge tracts of land has been identified by a joint FAO and World Bank study (Binswanger 2009) as one of the main growth regions for more agricultural output. Sub-Saharan Africa could not only serve its prime duty to feed 1 billion additional people by 2050 but could also become a net-exporter of food in case trade practices change (see Riddell, Chapter 2.6, and Keulertz and Sojamo, Chapter 3.8, in this volume). A number of globally active organisations and consultancies (UNEP 2011; WEF 2011; McKinsey 2011) are calling for a change of economic thinking inspired by the values of the green economy. However, as this chapter will argue, the success or failure of the green economy in Africa will be decisively influenced by farmland investment. If, as in the past, this current phase of investment proves to be unsuccessful, the whole potentially promising idea of a green economy could be in jeopardy, and with it, the future of liberal economies. 246

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UNEP has identified a pathway for a global economic transition to the sixth cycle – inspired by the concept of the green economy by reconciling economic growth with the protection of ecosystems. This mandatory transition from ‘business-as-usual’ (UNEP 2011: 36) will require a number of steps to nourish a ‘growing and more demanding world population’ by 2050. The authors of the study predict the green economy could create up to 47 million jobs in the next 40 years globally. Through international policy reforms and innovations such as removing trade barriers and decreasing waste in food supply chains, the agricultural sectors of the world could provide the corner-stone of economic growth (UNEP 2011). The historically low agricultural productivity in sub-Saharan Africa means that it has a number of the key under-used endowments that could be the source of higher yields, given better ecosystem management along with better farming techniques and policy innovation. However, the role of economic thinking is at present insufficiently engaged. While UNEP vaguely criticises ‘business-as-usual’, the underlying nature of this term must be addressed. What is ‘business-as-usual’ and to what extent does the current investment wave in African farmland represent some of the major negative features of ‘business-as-usual’? The role of water, climate change and social conditions in Africa, as I will argue in the next few paragraphs, have brought about a tipping point that calls for new economic thinking.

5 ‘Neoliberalism is fine until you run out of (water) resources’ Managing ecosystems, and especially water ecosystems, will be among the most important challenges of those installing the green economy of the sixth cycle. Water resources will face severe pressures if global food security is to be achieved by the year 2050. If the ‘business-asusual’ approach persists in the coming twenty years, the world will require 6.9 trillion cubic metres of water – 40% more that can be provided by available water resources (Chartres and Varma 2010). In Africa, in some watersheds such as the Nile basin the blue-water resources are over-allocated and are already politically contested. The relevance to the analysis in this chapter and many others in this book is that in the Nile basin investors assume there is blue water to divert. They have not recognised that this blue-water resource is closed. Empirical research in the Middle East and in London has hinted that investors are largely ignorant of the role of water resource management in their business plans for sub-Saharan agricultural projects (key informant interviews in the Middle East 2011). On the other hand, there is a great awareness of social, land rights and some non-water environmental risks associated with their investments. However, the expectation is that higher production and productivity will be achieved by mechanisms that led to the past ‘green revolutions’ in Latin America and Asia, where blue-water resources were abundant. In Asia the limits of blue-water resources have been fully tested. Scientists have repeatedly warned of not using blue-water irrigation schemes with the necessary caution. Blue water is a very complex resource to manage owing to dynamics across basins. Depletion or pollution of water resources in one part of the basin affects users a great distance away (Lankford 2007). The overuse of water in a contested basin such as the Nile basin can also increase the risk of conflict. So if the same methods as in Latin America are applied in sub-Saharan Africa by investment in blue-water irrigation schemes, vulnerabilities to the over-allocation of blue water will lead to investment failures. As Lankford (2007) objects to Tompkins and Adger (2004), blue water should not be seen as a potential solution for droughts and climate change but instead as a potential magnifier of drought and conflict. However, climate change and soil structures also require blue-water management in some areas, where rainfall is scarce and soil nutrient levels

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are low. Hence, the role of water management is of great importance and should be treated with extreme caution (see Gilmont and Antonelli, Chapter 4.5 in this volume). However, decision-makers and investors should be investigating the potential of green-water management as an alternative water management option. As Hoff et al. argue in this volume (Chapter 4.2) green water has the highest potential to increase productivity. It should therefore be preferentially applied and tested before irrigation is used. The risk-averse investment community misguidedly focuses on blue-water irrigation as a way of risk mitigation on the basis of profound ignorance of the climate change/hydrological nexus. Institutional investors in the City of London describe farmland investments as an ‘asset class’ with returns between 15% and 25% (Campanale, Chapter 2.4 in this volume). Assumptions about low labour costs, no costs for water resources and the absence of regulation make those investments an apparently extremely profitable potential endeavour. The economic concept behind this current wave of thinking stems from the neoliberal bend of economic theory that has brought the troubled global economy to the quagmire it is in at the moment. The former British Prime Minister Margaret Thatcher once remarked that ‘socialism is fine, until you run out of money’. Her economic policies were based on neoliberal thinking which prioritised deregulation to create the institutional basis for the fifth cycle. The risk of sticking to this conceptual inertia of doing ‘business-as-usual’ can be provocatively described as ‘neoliberalism is fine until the world runs out of water’. The deregulated, neoliberal economy of the late fifth cycle therefore poses grave threats for the inception phase of the sixth cycle. Moreover, the previous cycles were characterised by economically unviable resource inefficiencies, in particular in the developed economies. For example, in UK supermarkets, 30% of the products on shelves are not being sold to customers but being disposed of. In addition, UK consumers and the food supply chain also have a resource inefficiency of 30% (Food Aware 2011). Between 1997 and 2001, the United Kingdom’s water footprint totalled 73 billion cubic metres of water (Hoekstra and Chapagain 2008). One-third of it was wasted through the absence of economic efficiency in the private-sector, where food is produced, traded and eventually consumed (Allan 2011). Another phenomenon of the fifth cycle has been the pace of development in former developing economies. If the BRICS economies only catch up with similar living standards and water inefficiencies in the Western world, water will ultimately be the most severe economic growth constraint (McKinsey 2011). However, current investment trends signal that investors are pursuing similar ‘business-as-usual’ investment strategies based on the dangerous assumptions that drove fifth-cycle thinking. See Figure 3.2.1.

6 Economic philosophy as key challenge Fieldwork in the Middle East led me to conclude that there is a tendency to apply green economic thinking to the domestic economy but there is still a lack of understanding of how this approach can be implemented in FDI. Organisation and uncertainty around water resource availability are the core challenges to be overcome in the coming years when FDI schemes go operational or endeavour to remain operational. Instead of slating investors for their intentions, it is in my view more appropriate to conduct research on the uncertainties and thus point at the opportunities deriving from the green economy approach and its potential role in successfully transforming the acquired land into win–win outcomes. The economies of the Western world are in a state of crisis after the financial system was close to a meltdown in 2008. This has impacted not only Western economies but also developing countries given the importance of the developed world in the global economy 248

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Figure 3.2.1 Fifth-cycle water management Source: based on World Bank and Food and Agriculture Organization data (Molden 2011). (Vencatachellum 2011). O ne significant consequence o f the crisis and its aftermath is likely to be a further pow er shift from the public sector to the private-sector. Such a pow er shift will further increase the role o f the private-sector in global agriculture. However, in a w orld encountering serious environmental problems, we cannot sustain another round o f the primitive accumulation o f capital. In practice desperately required capital investment in Africa’s farmland will be determined by the question cui bono — to whose benefit? To quote David Harvey (2010: 145) the process o f primitive accumulation o f land has normally ‘entailed taking land, say, enclosing it, and expelling a resident population to create a landless proletariat, and then releasing the land into the privatised mainstream o f capital accum ulation’. Such practices will ham per the establishment o f the desired and m uch needed green economy. T he origins o f the green econom y can be traced back to the early thinkers o f welfare eco­ nomics. An important decade for criticisms o f the W estern model o f doing ‘business-as-usual’ was the 1970s. As a result o f population growth, global economic change and pressurised natural resources, green economic thinking emerged to increase social welfare (Krugman 2010). A rthur Pigou is often described as the founding father o f environmental economics despite the fact that he never m entioned the environm ent in his work. Pigou introduced the concept o f externalities, a transaction spill-over not reflected in prices. It incurs w hen a party incorpo­ rates the externality, w hich may be positive or negative. If positive, it may lead to benefits such as education or environmental improvements; if not, it may impose a negative, often social, cost generated from the transaction. Such costs can be the destruction o f social frameworks or the depletion o f the environm ent (Pigou 1920). In the 1970s, neo-M althusian assumptions gained currency after the end o f the ‘oil bo o m ’ and subsequent food price spikes haunted the world (see Custodis, Chapter 3.6 in this volume). The food price spikes o f the 1970s were overcome through investment in agriculture resulting

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in overly cautious storage policies in the West and thus food security. As mentioned above, blue-water irrigation schemes played a crucial role as they led to risk mitigation and greater supply increases. However, other voices in the 1970s offered different solutions. An often overlooked founding father of green economics was E. F. Schumacher, who criticised the ‘modern beliefs’ of mainstream economists (Schumacher 1993: 11). He questioned the belief in unlimited economic growth due to environmental constraints by mainstream economists. Science indeed found a way out of the food price spikes in the 1970s, but after 30 years this optimism has taken us to the next crisis. In a radically differing interpretation of Western political economy, he coined the term ‘Buddhist economics’ to describe the need for reconciliation of social life with economic activity. Instead of placing the focus on ‘long supply chains’ induced through largescale production methods, he proposed rather looking into smaller units of production ‘with a human face’ that lead to mass production. As a ‘green economist’, Schumacher pointed out that what ‘we really require from scientists and technologists’ (Schumacher 1993: 21) are methods and equipment which are:  cheap enough so that they are accessible to virtually everyone;  suitable for small-scale application; and  compatible with humankind’s need for creativity. By putting the role of rationality on its feet, he argued that the question of size and hence organisation must be addressed in order to increase human well-being. He noted that despite the tendency to appear large externally, multinationals are internally structured in smaller units to increase productivity (ibid.: 48–9). The current situation in sub-Saharan Africa resembles Schumacher’s view on the economy, with 70% of farms in sub-Saharan Africa managed by smallholder farmers (Collier and Dercon 2009). The vast majority show symptoms of slow productivity growth and low yields. Economic transformation has to take place in this economic environment through gradual technological improvements and, just as important, via better management concepts. Collier (ibid.: 2), however, questions the assessment of donors (and Schumacher) that smallholder farmers deserve an ‘exclusive focus as a key to growth and poverty reduction’. He argues that economies of scale could also function in Africa as a hub for growth. This would create larger farm sizes but not in the sense of current investment trends with intentions to establish ‘superfarms’ as a rapid way to introduce economies of scale. Collier instead favours larger farm sizes with access to finance and international logistics to introduce commercial agriculture on a competitive basis. However, current investment trends diverge very significantly from what Collier proposes.

7 Current trends The current phase of capital investment into farmland has two puzzling facets. On the one hand, Asian state funds pursue their interpretation of capitalism (state capitalism) in Africa. On the other hand, the neoliberal-prone Western private-sector pursues outdated concepts following an ideology of the 1970s and 1980s: neoliberalism (see Campanale, Chapter 2.4 in this volume). Both types of investors should be made aware of their crucial role in global environmental politics and security at a time of climate change. However, the following case studies will illustrate the current lack of green economic understanding by Middle Eastern actors in terms of water management and unit size. 250

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7.1 The Jordanian investment in Sudan The catchy media articles on ‘land grabs’ have almost exclusively focused on big investment schemes. Among the first to be featured in Western media was the Jordanian investment by Al Bashaar in Sudan. The military-owned company run by a mechanical engineer was tasked to develop and utilise agricultural land that was given to the Jordanian Government in the late 1990s for development – 10,000 hectares just north of Khartoum. However, the yields of initially targeted wheat crops have declined steadily over the years through inadequate management. The introduction of this ‘superfarm’ failed to provide wheat (a crop especially important to provide bread for the poor in Jordan) as a result of high transportation costs, unskilled labour and poor awareness of integrated water and soil management constraints. Today, the Jordanians are mainly growing alfa-alfa (alfalfa fodder is very blue-water intensive) for lamb meat production. High costs resulting from the way inputs are managed remain the most severe inhibitor of greater use of the available land for Jordanian food security. In particular, both the management of Al Bashaar and the Sudanese workforce highlight the role of farm size. The Jordanian investors tried to introduce scale economies in order to grow wheat in Sudan but gradually experienced lower yields over the years. One reason for the low output of this project is the focus on large-scale irrigation and low level of integration of Sudanese farmers. The shrinking outputs make this investment increasingly unviable from a commercial perspective, which may eventually lead to the closure of this farm project. After all, the Hashemite Kingdom of Jordan is predominantly using the imports from Sudan to provide food security to the most vulnerable people in Jordan, which requires subsidies from the government. In a nutshell, the Jordanian project is failing in particular because of the question of organisational size (key informant interviews in Jordan, 2011).

7.2 The case of Qatar Qatar has a deep awareness of its water resource scarcity. It is also a country where holistic concepts to achieve food and water security through moving on to the sixth cycle have been introduced. Qatar offers a unique case study because of its severe water poverty and dependence on food imports. It is also perhaps the most researchable case for sixth-cycle strategies at present. The peninsula in the Persian Gulf imports over 90% of its food requirements, mainly because of its very limited water resources of roughly 56 million cubic metres per year. The 1.7 million Qatari population has access to only 32 cubic metres per year (QNFSP 2011; FAO 2011). Despite this very poor water endowment, Qatar, though a water pauper, has one of the highest GDPs per capita. However, Qatari decision-makers have understood the epic challenge and introduced a National Food Security Programme. Within the next 10 years, Qatar seeks to increase domestic agricultural production by 30%–60% through desalination plants powered by solar energy. The projects will be financed through natural gas exports (Qatar holds the largest gas field in the world). The natural resource wealth is being used to transform the economy from food and virtual water import dependence towards self-sufficiency (key informant interviews in Qatar, 2011). The missing link in the equation is viewed in foreign direct investment in land and water in North America, Eastern Europe, Africa and New Zealand (key informant interviews in Qatar, 2011). In other words, Qatar intends to increase its virtual water ‘imports’ through overseas land (and water) acquisitions to make full use of its fossil energy wealth. In addition, approaches to cut waste in the supply chain are being developed with supermarket chains to decrease waste and increase resource efficiency. Qatar is thus an example of an economy on the way into the sixth economic cycle. The decision-makers view this strategy as crucial to maintain economic 251

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prosperity reconciled with economic justice. However, through its state fund, Qatar is also going to invest $1 billion in Sudan to raise fodder for meat production (key informant interviews in Qatar, 2011). On approximately 100,000 hectares, the state fund plans to irrigate alfaalfa and other crops using 1 billion cubic metres of Nile water by 2013. As in the Jordanian case, scale economies are going to be applied to lower the unit costs. Both investors have targeted land where they can use blue water to irrigate crops. Using Nile water for irrigation is an extremely dangerous strategy as it eventually risks over-allocation of already contested surface water. Similar land deals have been signed between Qatar and the Kenyan Government, although the project has not been implemented yet (key informant interviews in the Middle East, 2011). The investment pattern, however, shows that the role of water management is a second-order concern. Just why there is an absence of environmentally friendly investment practices will be discussed on the next pages. I will further connect the role of water management to the green economy and provide suggestions of better investment principles by discussing the role of water.

7.3 Egypt and South Sudan Among the most well-researched countries in the world in terms of land investments is the world’s youngest state. Thanks to the work of David Deng and Norwegian People’s Aid (NPA), a comprehensive study (Deng 2011) on farmland leases in South Sudan was introduced in summer 2011. One of the most interesting investments is located in Unity State in between the state capital Bentiu and the state’s airport at Tarjat. A company named Citadel Capital, which receives its funds from Egypt, has leased 100,000 hectares to grow all sorts of crops. At present, less than 5,000 hectares are being used due to the ongoing political struggles between the North and South. The target market is the local economy, which has hardly any access to food. Citadel uses green-water management to grow food for the local market. According to the farmers themselves, yields have been increased by 300% since the establishment of the project in 2010. However, the company suffers badly from the absence of a skilled local workforce because green water management is quite labour-intensive. Attempts to collaborate with local Christian missionaries to educate the local workforce have failed thus far (key informant interviews in South Sudan, 2010). Although the chosen water management option seeks to sustainably intensify Unity State’s agricultural supply, the question of organisation and local tensions causes severe problems. The farmers from South Africa and Australia, who call themselves agricultural consultants, have not been able to include the local workforce. Economic returns are not in sight yet, hence the outcome of the project will depend on the capital inflow from Cairo. Although a useful technology (green-water management) has been introduced to intensify agricultural production, the question of unit size and inclusion of the local population appear at present inadequately addressed by the Egyptian investors. However, as will be shown in the next section, water management and inclusionary policies must go hand in hand if successful outcomes are desired.

8 Adaptive water management strategies Almost all investors are concerned about the social implications of their investments (key informant interviews in the Middle East, 2011), which has led to several debates around codes of conduct (Ismar, Chapter 3.5 in this volume). The absence of water management options in the suggested codes of conduct is striking. In the following section I shall illustrate the 252

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opportunities that exist to reconcile the environmental priorities (water resources) with FDI as a potential way forward in the discourse around farmland investments. Binswanger (2009) refers to the Thai experience as a desired option for sub-Saharan Africa. Thailand achieved a green revolution in the 1970s through active inclusionary policies of smallholders. Emphasis on smallholder farmers for agricultural development in Africa is also a widely accepted approach among donors and international organisations. It is therefore no surprise that the ‘land tenure’ and ‘access to land’ themes have gained privileged prominence in research around the rush for land. However, given the centrality of water for the success or failure of agricultural investments, it is suggested that the important issue of access to water and land can also be addressed by drawing attention to where water is managed and who manages it (Lankford 2007). A number of academics and development organisations have pointed to the need to develop integrated water resource management (IWRM) tools to make more efficient use of available water resources (GWP 2004; Pahl-Wostl and Sendzimir 2005; Biswas 2004; Lankford and Cour 2005). IWRM is defined as: a process which promotes the co-ordinated development and management of water, land and related resources, in order to maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems (GWP 2004; Rahaman and Varis 2005). However, as Allan (2011) points out, the core challenge of this rather ‘vague’ concept for decision-makers (Biswas 2004) is to recognise that IWRM is mainly a political process as it is essentially about the allocation and re-allocation of water resources. Introducing new regulatory frameworks is intensely political and requires workable ‘rules of the game’ (North 2005) and related organisations. In addition, IWRM is largely blue-water focused and does not account for the opportunities of increased green-water productivity. Despite its avowed participatory approach to include stakeholders, it emphasises the management of water in large river basin units (Lankford and Cour 2005). Smallness does figure in the concept and the approach has thus been criticised as not ‘engendering satisfactory outcomes’ (ibid.) even in the case of adaptive versions of IWRM. This has proved to be especially so in the case of Africa, where – as this volume shows – distinctive challenges clearly lie ahead of anyone who seeks to invest. Drawing further on the ideas of Schumacher, the question of size should be taken into consideration to set out a vision for Africa’s agricultural sector. In Governing the Commons Elinor Ostrom (1990) emphasised the need for societies to interact with natural resources as closely as possible to where environmental decisions take place – the local level. For water management, Lankford (2007) suggests breaking up the responsibility for water management into smaller units that he calls ‘holons’. A ‘holon’ is defined as a component or unit which is simultaneously a whole and a part (Lankford 2007: 9). It is the opposite of IWRM as it identifies smaller management units to make more efficient use of water resources. Findings from Tanzania suggest that farms above 25,000 hectares tend to be associated with the depletion of water and intersector competition between irrigation, domestic users, wetland and hydropower, particularly during the dry season (ibid.: 5). Instead, smaller units of around 1,000 hectares, sub-nested within a wider basin context, allow users to decide upon distribution and allocation of water locally. An FAO study (Riddell 2011) on agricultural water productivity in upstream Nile riparian countries acknowledges that the agricultural productivity of water, according to some measure, decreases as farming systems shift away from subsistence to commercial farming, as smallholders generally have (water) higher input efficiency. This could enhance uses of rainwater harvesting storage systems and a wider use of green-water management. It would also contribute to a better allocation of blue water through the use of the experience of local farmers, who have managed water resources for decades, if not centuries, in their own areas. Water management by many stakeholders, therefore, has the potential to 253

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induce participation if the facilitators gain the mandate and trust of all (Warner and Verhallen 2007).1 Informed investment into water and land in Africa, on the other hand, has the potential to provide the farmers with necessary technological skills, access to finance and access to better infrastructure.

9 Conclusions Greening our economies globally has become a widely accepted slogan in both the private and public sectors. Climate change, population growth, changing consumption patterns and energy constraints make this new direction in economic policies inevitable. Across the globe, many decision-makers are involved in daily activities to induce policy changes to use resources more efficiently. The chapter has applied Kondratieff’s economic waves to argue that the global economy is in a transition stage from the fifth cycle to a sixth, where the environment will determine economic growth. However, it will not suffice to increase resource efficiency during the next cycle; it is also mandatory to sustainably expand the supply side of agricultural production, a sector crucial for green growth after most of the world’s agricultural systems have exposed the limits to the ongoing use of blue-water resources with current technologies and farming systems. This will mark the greatest challenge of the next economic cycle. Sub-Saharan Africa and its agricultural sector will be critical in providing the additional agricultural commodities required to taking a green approach to local and FDI crop production. The current phase of farmland investments should therefore be linked with this ambitious plan to move agriculture centre-stage via a greening of capitalism. Capital inflow into Africa is necessary. The way it is being introduced has not been adequately analysed in the current global discourse. The process is misleadingly called ‘land grabbing’. This chapter and the book more generally aims to shift the discourse towards water which is the key limiting input. The effectiveness of water management will determine the success or failure of the green economy. It should therefore be viewed as a major priority in relation to inward investment in land processes. The chapter has argued that neo-liberal concepts, which underpin the current phase of FDI in water and land in Africa, will face severe challenges with respect to water resources, assuming that large-scale projects blind to the blue-water constraints will lead to failure. The assumptions are irreconcilable with sustainable water resource management. Applying old thinking in Africa may not bring increases in agricultural productivity but rather increase the depletion of blue-water resources and also increase competition over water resources. At present, we see hardly any constructive discourse around the sustainable use of water, and the increased use of green water to sustainably intensify agricultural production. Neither investors nor governments have placed an emphasis on green water. However, if the discourse is to be taken forward to water management options, the question of farm size and participation of local farmers will gain greater importance. As long as water is not valued and thus priced, water productivity and the subsequent questions on the right organisational form of farms are unlikely to matter. Foreign direct investment in land and water resources could therefore be a two-edged game: investment could promote green growth but wider green economic thinking could find ways to value or price water to divert the attention of decision-makers to the role of water productivity. A serious investor may then discover that small is indeed beautiful and thus focus on smaller units of agricultural production to increase water productivity. Economic thinking of the past cycle has been poised with big ideas for big solutions. One consequence has been the depletion of global water resources. The results are such that the next cycle should be defined by breaking up mega tasks such as global water and food security into smaller units of implementation. It could finally 254

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bring economic prosperity and food security to the long-neglected African continent. The crucial resource to structure investment will be water.

Note 1 See Warner and Verhallen (2007) for a comprehensive discussion of how multi-stakeholder platforms in water management need to be addressed.

References Allan, J. A. (2011) ‘The role of those who produce food and trade it in using and “trading” embedded water: what are the impacts and who benefits?’ SOAS Occasional Water Papers, SOAS, London. Binswanger, H. (2009) Awakening Africa’s Sleeping Giant Prospects for Commercial Agriculture in the Guinea savannah Zone and Beyond, Directions in Development, Washington, DC: World Bank and FAO. Biswas, A. K. (2004) ‘Integrated water resources management: a reassessment’, Water International 29(2): 249–56. Biswas, A. K., Varis, O. and Tortajada, C. (eds) (2005) Integrated Water Resources Management in South and Southeast Asia, New Delhi: Oxford University Press. Boccaletti, G. (2009) Charting Our Water Future, London: McKinsey. Bunclark, L. and Lankford, B. (2011) ‘Rainwater harvesting: a suitable poverty reduction strategy for small-scale farmers in developing countries?’ Waterlines Journal 30(4): 312–27. Chartres, C. and Varma, S. (2010) Out of Water: From Abundance to Scarcity and How to Solve the World’s Water Problems, London: Financial Times and Prentice Hall. Collier, P. and Dercon, S. (2009) ‘African agriculture in 50 years: smallholders in a rapidly changing world? paper presented to FAO Expert Meeting on How to Feed the World in 2050, Rome. Deng, D. (2011) The New Frontier, Oslo: NPA. FAO (Food and Agriculture Organization of the United Nations) (2011) Aquastat database, Qatar. Available at: www.fao.org/nr/water/aquastat/countries_regions/qatar/index.stm (accessed 15 March 2010). Food Aware (2011) ‘Food waste statistics’. Available at: www.foodawarecic.org.uk/food-waste-statistics. htm (accessed 12 May 2012). Garvy, G. (1943) ‘Kondratieff’s theory of long cycles’, Review of Economics and Statistics 25(4): 203–20. GWP (Global Water Partnership) (2004) Catalyzing Change: Handbook for Developing IWRM and Water Efficiency Strategies, Stockholm: GWP. Harvey, D. (2010) The Enigma of Capital: and the Crises of Capitalism, Oxford: Oxford University Press. Heffernan, R. (2003) ‘New Labour and Thatcherism’, in A. Chadwick and R. Heffernan (eds) The New Labour Reader, Cambridge: Polity Press. Hoekstra, A. and Chapagain, A. (2008) Globalization of Water – Sharing the Planet’s Freshwater Resources, Oxford: Blackwell. Krugman, P. (2010) ‘Building a green economy’, New York Times, 7 April. Lankford, B. A. (2007) ‘Integrated, adaptive and domanial water resources management’, paper presented at the International Conference on Adaptive and Integrated Water Resources Management, CAIWA, 12–15 November, Basel, Switzerland. Lankford, B. A. and Cour, J. (2005) ‘From integrated to adaptive: a new framework for water resources management of river basins’, in B. A. Lankford and H. F. Mahoo (eds) Proceedings of the East Africa River Basin Management Conference 7–9 March 2005, Morogoro, Tanzania, Tanzania: Sokoine University of Agriculture. McKinsey (2011) Pathways to a Low Carbon Economy. Available at: www.mckinsey.com/Features/Resource _revolution (accessed 12 May 2012). Moody, J. B. and Nogrady, B. (2010) The Sixth Wave, Sydney: Vintage. North, D. (2005) Understanding the Process of Economic Change, Princeton: Princeton University Press. Oakland Institute (2011) ‘Press release: Understanding land investment deals in Africa’. Online. Available at: www.oaklandinstitute.org/press-release-understanding-land-investment-deals-africa (accessed 15 March 2012). Ostrom, E. (1990) Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge: Cambridge University Press.

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Pahl-Wostl, C. and Sendzimir, J. (2005) ‘The relationship between IWRM and adaptive management’, Working Paper 3, NeWater Project. Online. Available at: NW_WorkingPaper_3_CPW_June_2008-1. pdf (accessed 4 May 2012). Piesse, J. and Thirtle, C. (2009) ‘Three bubbles and a panic: an explanatory review of recent food commodity price events’, Food Policy 34: 119–29. Pigou, A. (1920) The Economics of Welfare, London: Macmillan. QNFSP (Qatar National Food Security Programme (2011). Online. Available at: www.qnsfp.org (accessed 17 June 2011). Rahaman, M. M. and Varis, O. (2005) ‘Integrated water resources management: evolution, prospects and future challenges’, Sustainability: Science, Practice, and Policy 1(1): 15–21. Riddell, P. (2011) Agricultural Water Use Projections in the Nile Basin 2030: Comparison with the Food for Thought (F4T) Scenarios, Rome: FAO. Rostov, W. W. (1975) ‘Kondratieff, Schumpeter, and Kuznet: trend periods revisited’, Journal of Economic History 35: 719–53. Schumacher, E. F. (1993) Small is Beautiful: A Study of Economics as if People Really Mattered, London: Vintage. Schumpeter, J. (1942) Capitalism, Socialism and Democracy, New York: Palgrave. Stiglitz, J. (2008) ‘Commentary: how to prevent the next Wall Street crisis’, CNN Politics. Online. Available at: http://articles.cnn.com/2008-09-17/politics/stiglitz.crisis_1_housing-bubble-current-financ ial-turmoil-economy?_s=PM:POLITICS (accessed 17 June 2011). Thuo, S. (2011) ‘IWRM; the climate challenge and managing Africa’s shared waters’, paper presented at the Water, Food and Climate Conference, 12–13 May, Ministry of Irrigation and Water Resources, Khartoum. Tompkins, E. L. and Adger, W. N. (2004) ‘Does adaptive management of natural resources enhance resilience to climate change?’ Ecology and Society 9(2): 10. UNEP (United Nations Environment Programme) (2011) Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, Geneva: UNEP. Vencatachellum, D. (2011) Africa Emerging and Frontier Markets. Online. Available at: www.iimemberships. com/EIdownloads/AFRICA%20Sovereign/Presentations/Desire%20Vencatachellum.ppt#20 (accessed 2 April 2012). Warner, J., Santbergen, L. and Verhallen, A. (2007) ‘Towards evaluating MSPs for integrated catchment management’, in J. Warner (ed.) Multi-Stakeholder Platforms for Integrated Water Management, London: Ashgate. WEF (World Economic Forum) (2011) Capturing Opportunities in Energy Efficiency, Geneva: World Economic Forum. Wright, Brian D. (2009) ‘A note on international grain reserves and other instruments to address volatility in grain markets’, a technical background paper presented at the World Grain Forum, St Petersburg/ Russian Federation, Food and Agricultural Organization of the United Nations, World Bank, European Bank for Reconstruction and Development.

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3.3 The political economy of land and water grabs David Zetland and Jennifer Möller-Gulland1

Introduction: land grabs are not so new Foreigners have invested in international land assets for many centuries, but the recent increase in ‘land grabs’ appears to be a ‘bad’ form of foreign direct investment (FDI). Unlike FDI that shares the gains from trade with locals over a longer time horizon, land grabs maximise unsustainable returns in the short run with inadequate compensation to local communities. For the purposes of this chapter, we will therefore divide deals (or investments) into two types: ‘land grabs’ that transfer land and water rights from existing users without fair compensation and FDI that does provide fair compensation.2 Consider a deal to use land worth US$100 under traditional cultivation. A foreign investor may offer $200 to cultivate that land with improved technology that increases output and profits. That deal would be FDI if traditional users got, say, $120 for the land (more than it is worth to them plus some share of the profits) but a grab if they received only $50. How could such a grab occur? When the selling country’s ruler approves the deal over the objections of ‘his’ people. He benefits by keeping the extra money ($150 out of $200, instead of $80), but he may also please investors by lowering the price to $160, for example, to make them simultaneously happier with higher profits and more inclined to ignore peasants robbed of their land. The role of the ruler is key to understanding land grabs. As we will explain, land grabs are only possible when those in power approve unfair deals that existing users would not accept. That intervention happens in cases where rulers abuse power for their personal benefit, acting as corrupt and unaccountable ‘kings’ who care about their personal wealth – their rents from the land – more than social welfare or efficiency. Buyers play their own role – supporting land grabs in corrupt circumstances – but they do not have the ruler’s market power. Grabs are no innovation. They rely on a foreigner–ruler–peasant interaction that has existed for millennia and that dominated the colonial era. During the British Raj, for example, the East India Company (succeeded by the British Government) made deals in which local princes supplied land, labour and natural resources in exchange for payments that did not often benefit local peasants. Land grabs now – as those deals then – reduced princes’ reliance on ‘their’ people at the same time as they used imported technologies to increase princes’ wealth above levels possible from taxes based on local, traditional production. 257

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The increased intensity with which land and water resources are used within grabs or FDI is also not new. Intensification can increase wealth if it is done in a sustainable way, but overexploitation and destruction of fertility (via salination, topsoil degradation, groundwater depletion, and so on) leads to short-term poverty and long-term collapse (Fagan 2011). Such events are painful when local farmers destroy their own land; they are doubly painful when foreigners engaging in unsustainable grabs destroy land and water resources – leaving the ruins to locals without alternative ways to produce food. We do not, thus, claim to have identified a new paradigm in resource exploitation or political economy. Land – and water – grabs are merely the latest way for those with power to advance their goals. What is new, perhaps, is that grabbers now come from countries that were exploited in the past. Those business and political elites are expanding their domestic power abroad via grabs. However, is this narrative true? Or is it based on a few examples extrapolated into a trend by ‘grab activists’ with more ideology than hard data? In this chapter, we want to distinguish between bad grabs and good FDI so we can understand which deals are worthy of support or condemnation, separate good deals that maximise food production and minimise social instability from bad deals that deplete land and water resources, and clarify the relative negative impacts of poor management and disruptive changes in global temperature and precipitation patterns on local agricultural output (Fischer et al. 2005). These differences are not only useful to academics. They are important to politicians, insurance companies, agribusiness companies, and – not least – the Earth’s 7 billion people Our appraisal faces the same problems of every other appraisal in this book. We do not have complete information on deals identified as ‘land grabs’. We do not know what contracts say. We do not know how contracts – if they exist – are being implemented or how production practices affect land, water, labour resources on and around land subject to ‘grabs’. Lacking these details, we try identify the modern forces behind grabs and predict where they may have the strongest impacts on local people and resources. To do this, we begin by examining the drivers of land grabs and their impact on water resources. We then use a stylised model of political-economy of development, governance, land grabs and imperialism to understand the relationship between rulers and peasants, and how a deal with outsiders may be a harmful grab instead of sustainable FDI. We then analyse deals that have already been labelled as ‘land grabs’ in sub-Saharan Africa (SSA) to explore how corruption and accountability might help us separate grabs from FDI and assess where land grabs may damage water resources. From a social welfare perspective, our goal is simple: we want to reduce the number of unsustainable, unfair land grabs without preventing productive, sustainable FDI deals that improve global food supplies, support local communities and benefit investors.

Background: demand, supply, land and water Population growth and economic development are increasing global demand on the extensive and intensive margins for food, biofuels and timber. Policies promoting biofuel production and carbon reduction further increase the demand for food crops or reduce land available for food production (Görgen et al. 2009; Anseeuw et al. 2012). Most deals also increase the demand for water. We will concentrate on food, biofuel and timber deals that account for nearly 90% of land deals in Africa and over 80% of deals world-wide (Anseeuw et al. 2012).3 Although most deals increase land- and water-use intensity, there are different ways to do so. FDI increases output using better technologies and techniques (hereafter ‘technologies’); land grabs increase short-term output by sacrificing long-term land fertility and water resources. 258

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Note that we treat buying firms as ‘countries’ in this discussion. First, because some firms actually act on behalf of national governments. Second, because firms often share formal and informal institutional characteristics with their home countries. Third, because firms are often subjected to oversight by their home countries. Finally, because we have insufficient information on buying firms to assess their motivation or governance. On the sell side, we need only talk about national governments. First, there do not appear to be any private parties selling or leasing land to foreigners in our dataset of deals labelled as grabs. Second, even if there were, those deals would not happen without government approval. Third (again), because we only have data on national government corruption and accountability. Further, while land grabs may also be made by domestic investors, this chapter only focuses on foreign investments.

The where, why and how of land grabs GRAIN’s 2008 list of ‘land grabs’ included information on the parties to the deal (target country and grabber), origin of the grabber (private-sector/government), and announced crop. GRAIN divided grabbers into private investors seeking financial returns and governments seeking secure food supplies, e.g. the People’s Republic of China, Egypt, the Gulf States, India, Japan, the Republic of Korea (South Korea), Libya and Saudi Arabia. Friis and Reenberg (2010) used cross-checked 2008–10 data from the International Land Coalition (ILC) to assess 177 deals in 27 African countries. Ethiopia, Madagascar and Sudan have more than 20 deals each, but deals are heterogeneous in area and crops. GRAIN (2012a) updates their data to include over 400 grabs affecting 35 million hectares in 66 countries, with most activity in the 43 continental SSA countries.4 Two-thirds of the buyers are agribusinesses; one-third are financial investors and sovereign wealth funds. Woertz et al. (2008) assess the potential for Gulf Cooperation Council countries to engage in land grabs in Africa and Central Asia (based on macro-economics and potential productivity), concluding that Mozambique, Sudan and South Africa are the most promising countries for investment. Deininger et al. (2011) use an econometric model based on announced land deals to investigate the factors associated with investor interest. Investors are more likely to make deals in countries with abundant non-forested areas and where rural people have weak land tenure rights. They also find that investment protection has only a weak impact on investors’ decisions; protection is important in non-land FDI deals. From a market perspective, grabs are likely to increase local and global food price volatility and perhaps increase price levels. On a local level, grabbed land produces crops for distant consumption, lowering local supplies and raising local prices. On a global level, grabbed land could increase total supplies by using better production technology – easing global scarcity – but the increase in total supply would be even greater if it was linked to profit-maximising FDI aimed at producing crops that fill supply–demand gaps instead of particular crops sold at subsidised prices to meet domestic demand.

The demand side of land grabs Land grabs are made by two types of investors: food security seekers and financial investors (GRAIN 2008). Food security seekers want to increase domestic supplies and buffer local populations against global food price shocks, putting more trust in direct control over food production than in sourcing food from markets based on their willingness to pay. The cost of food acquired in these deals may exceed global market prices, but national food security is not about price as much as quantity (household food security is about price). The demand for food security is particularly strong in countries with strained land and water resources, e.g. China, India and many countries in the Middle East (Woodhouse and Ganho 2011). Commodity traders, 259

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on the other hand, want to profit from increasing demand for food, feed, fibre and biofuels (Anseeuw et al. 2012). Investors with global reputations to protect are less likely to engage in unsustainable grabs instead of sustainable FDI; those concerned with short-term security or profits are more likely to make grab deals, a useful strategy when their rule or business model is vulnerable to price volatility. Their partners to grab deals face similar problems, such as the risk of losing power. Of the 41 continental SSA countries tracked by EIU (2010), 33 have ‘high’ or ‘very high’ political instability.

The supply side of land grabs A naive observer may look at official statistics and assume that it is possible to put ‘vacant’ land and ‘undiverted’ water to use (Woodhouse and Ganho 2011), but facts on the ground sometimes contradict statistics. A land investment in the USA or France, for example, only occurs when a willing seller passes title to a buyer. The land could only be irrigated if water was available from existing allocations. Water allocations may not be perfect, but their flaws are well understood, and everyone is subject to the same institutional limitations on water use. Developing countries, on the contrary, are more likely to have weaker land titles, underdeveloped water allocation mechanism, and institutions that are too weak to protect rights and equity (North 2005). Land grabs occur when governments give foreign investors the right to use land that is not really vacant and water resources that are already used informally – bypassing local users who may not know ‘their’ resources have been sold or who lack the right to challenge a deal made under international law (Smaller and Mann 2009). We hypothesise that deals are more likely to be grabs when rulers are less accountable to their citizens and/or abuse of power (corruption) is greater; they allow grabs when they prefer fast money (direct investment) from foreigners to slow money (taxes) from domestic ‘owners’ of land and water resources. FDI deals are more likely when accountability is greater and corruption less of a concern. While a buyer’s attitude towards corruption and home-country accountability matters, it is the sell-side government that decides if a deal is going to be a grab or FDI. Görgen et al. (2009) suggest that grabs can be identified by examining contractual wording, legal jurisdiction, rights of stakeholders, buyer and seller identity, and other structural characteristics of the deal, but the impact of a deal depends on implementation, who gets paid, whose water gets used, and so on. It is difficult to find answers to these questions (even for FDI), so we focus on the necessary conditions separating grabs from FDI. Are selling governments inclined to act in a transparent manner consistent with the best interests of their people? Are buyers accountable for their actions or motivated to avoid grabs? If not, can land and water resources in targeted countries absorb additional demand? The first ‘no’ indicates that a deal is likely to be a grab; the second ‘no’ indicates that the grab may have significant negative impacts on locals.

The water dimension to land grabs Water access is key to deals in water-scarce areas outside SSA’s humid equatorial zone. Anseeuw et al. (2012) find that land deals concentrate in areas with secure access to water, e.g. adjacent to the Nile and Niger rivers. They conclude (p. 37) that ‘access to water is one of the key drivers of transnational land acquisitions’, and increasing demand for food, biofuels and timber will increase the importance of access and pressure on water resources. Unfortunately, grabs that ‘mine’ water will have durable negative impacts. Land abandoned after a grab can often be used in some other way, but a grab that leaves no water behind may severely limit the use of the land in the long run. Access can be sustainable or unsustainable, depending on the combination of rights to use groundor surface water and local water management practices. Rights are not created (or administered) 260

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equally. Skinner and Cotula (2011) describe how locals can lose customary rights that conflict with formal rights given to investors making grabs. Bues (2011) provides an example where an investor took over water previously used by small-scale irrigators in Ethiopia. These cases of conflict over rights to surface water clarify how the water impact of a grab can extend beyond the borders of land transferred to foreign investors, turning a zero-sum deal for land rights into a negative-sum deal in which water abstractions exceed physical and temporal flows (Woodhouse and Ganho 2011). In such conditions of mismanagement or lack of management over water resources (rights or no rights) grabs are likely to have negative impacts on local, downstream and future users of surface and groundwaters. Anseeuw et al. (2012), for example, report a failure to account for the cumulative impacts of irrigation projects in the Office du Niger area that resulted in negative impacts on downstream farmers, herders and fishermen. Investors who blithely install high-capacity pumps to use ‘their’ groundwater can deplete neighbours’ wells and reduce flows supporting springs and rivers. Those who attempt to ‘secure’ water supplies by building dams are likely to magnify damage to the environment and downstream users (Skinner and Cotula 2011). Investors making sustainable land deals will not only want to respect existing formal and informal rights to surface and groundwaters, but they will want managers to protect water resources over the long run. What is the long run? Many land deals are meant to last from 50 to 99 years. Some will be cut short by political instability, seller reneging or buyer abuse, but even contracts taken to term must leave water supplies in the same or better condition if they are to be ‘sustainable’.

Theory: kings as exploiters or protectors? Previous work on land grabs focused on the parties to the deals, the types of crops and the importance of land rights. We expand on this work by considering the relevance of governance (corruption and accountability) and water resources in land deals. Before we do that, we will motivate our discussion with a stylised model of why a king may wish to exploit – or protect – ‘his’ people. This story – a simplified description of how ‘big men’ treat citizens as peasants and possessions – is familiar to students of European and colonial history, but it is not appropriate where democratic accountability puts leaders in the service of people or the king’s role as big brother puts him in service to his tribe as an extended family. This story will make it easier to understand how a ruler determines whether a deal is a grab that harms his people or FDI that helps them.

A king and his peasants Consider a political territory with king and peasants. The king has a monopoly on power; he acts as a stationary bandit who provides security from neighbouring kings (bandits) in exchange for a share of peasants’ observed output (Olson 1993). These taxes are higher when peasants cannot leave the territory or organise resistance, but they are less than 100% of their production because the king wants them to produce in the future. Put differently, the king and peasants work within a sharecropping model in which the king allows the peasants to use land in exchange for a share of their observed crop that is paid in cash instead of in kind (Eswaran and Kotwal 1985). The king allows new technologies if greater production increases his income. Peasants will use these technologies if they are not made worse off. We define an ‘impatient’ king as one who increases current production at the expense of future production, by mining natural resources faster than they are replenished or dumping waste into the environment instead of bearing the cost of processing it. A ‘dynastic’ king pursues sustainable 261

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practices to enrich his heirs. In all cases, the king’s policies reflect input constraints among water, land and labour, and he will focus management on the binding resource, i.e. water in an arid region, land where population is high, or labour when land and water resources are abundant.

Kings, imperialists, property rights and sustainability A dynastic king and dynastic peasants favour rules and practices that give weight to future production and thereby reduce current waste of resources. Both sides, for example, prefer to use labour today to improve soil fertility for greater production tomorrow. An impatient king or impatient peasants take short cuts today that reduce production tomorrow. An impatient king has no reason to strengthen others’ property rights in resources; he will exploit forests, land and water. Impatient peasants will exploit any open access resource they can. As examples of these phenomena, consider a centralised, agrarian society (e.g. the Maya), a resource-exploiting society (e.g. Saudi Arabia or the USSR). A dynastic king with impatient peasants has to cope with their attempts to mine resources. He can try to induce patience by giving them secure title to land and water. This property rights thesis – recently associated with Peruvian economist Hernando de Soto – holds that peasants with secure rights will invest and conserve today so they can benefit tomorrow, allowing the king to grow wealthier through taxes than he would have with punitive seizures of land or crops. Depending on the king’s goal, new technologies make it easier to exploit or conserve resources by altering the relative importance of land, water and labour. Pumps that replace manual water hauling make it possible to farm more land with less labour. Such a technology can turn water into the limiting resource as it reduces the relative value of land and labour. A king replaced by foreign imperialists will result – all things equal – in less sustainable practices devoted to exporting wealth to home territories. Thus, we can see how the British in India may allow famine as they seek mercantile revenues or the Spanish may destroy indigenous cultures to extract resources from the New World. Imperialists also exploit more because they can implement technologies that loosen constraints on resource consumption. British trains and timetables increased Indian land and labour productivity, but British irrigation works vastly increased water demand. Those projects turned water into the limiting factor in agricultural production and increased the rate of water consumption – often above sustainable levels. As a counterpoint to imperialism, consider an indigenous growth model in which the king protects property rights, listens to his people, provides reliable administration and uses taxes to provide public goods. Peasants under these conditions have an incentive to plan and act for the long term, with the assurance that most of their effort will increase their own wealth.

Land grabs as neo-imperialism Land grabs result from co-operation between impatient kings who give investors cheap access to land and protection in exchange for fast money and foreigners whose use of local resources and imported technologies to produce goods for export gives deals an imperialistic flavour. Land grabs displace local development by assigning land to foreign investors instead of strengthening peasants’ informal or communal property rights (North 2005). They reduce local innovation in favour of imported technologies, direct scarce resources to cash crops, and promote big planned deals over numerous decentralised small innovations (Easterly 2006). Foreign direct investors are willing to pay more in the short run to get a better long-run return. They are therefore happy to deal with benign kings but not corrupt kings who are likely 262

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to seize their investments before they can earn their ‘fair’ returns based on a long-term yield of lower but sustainable outputs. Water is necessary but not sufficient for land deals in the sense that most intensive cultivation requires adequate water supplies, but adequate water is not enough to make a deal happen. Both FDI and grabs will use water, but that use – by definition – will be more and less sustainable, respectively. FDI deals need secure water over many years, which means that consumption cannot deplete water for neighbours or the environment. Land grabs are likely to have even more exploitation in their water dimension than their land dimension. First, because deals are likely to create novel and formal rights over water that was previously allocated through informal and communal mechanisms. Second, because water use intensity is likely to rise as intensive agriculture replaces indigenous technologies suited to local conditions, leaving less water for locals and the environment. Third, because industrial agriculture is more likely to produce contaminated runoff that affects downstream neighbours. Although we consider kings or rulers to be exogenously corrupt – or not – based on their power over their people, we must also note that foreign investors are less likely to participate in grabs if they are subject to voice and accountability in their home countries, e.g. criticism for investing where human rights abuses take place. As an example, consider the different perceptions of deals made in Sudan. Western firms and governments faced criticism for co-operating with the Sudanese Government while the Darfur genocide was receiving heavy news coverage, but Chinese and Saudi investors were happy to deal with the government. From this example and our characterisation of the relationship between a king and foreign investor, we can put deals into a two-by-two matrix, with a pro- or anti-grab king on the top and a pro- or anti-grab investor on the side. Their pro- or anti-grab position is determined by their attitudes towards corruption and accountability towards citizens. From these characteristics, we can see two stable equilibria: FDI (anti–anti) or land grab (pro–pro). The off-diagonal squares represent crossed-wire scenarios in which a pro-grab (corrupt and unaccountable) king has a hard time convincing an anti-grab investor to exploit his people, or where an anti-grab king thwarts a pro-grab investor. These mismatches are not stable. The king and investors will quickly discover that they need new (grab or FDI) partners.

Analysis: corruption, land grabs and sustainability A thorough analysis is impeded by missing data An investigation of the linkages between governance, property rights, peasant exploitation and sustainable use of land and water would require detailed information on the identity of the investor (publicly traded company or private partnership) and contracting party (a local community or a bureaucrat in the capital); details on formal or informal rights to the land; current and future water consumption in the area; details on soils, technology and labour; a description of payment flows for land, water, inputs and labour; and a reconciliation of the written contract with its actual economic, social and environmental impacts. Although it may be easier to acquire these data for FDI in places like Australia, they are difficult to find under normal conditions in SSA (due to lack of capacity or bureaucratic turf wars) and extremely difficult to uncover when deals are obscured in the interests of national security, corrupt dealings or commercial confidentiality – interests that outsiders cannot often separate (World Bank 2012). Secrecy is likely to be founded on a desire to avoid ‘international scrutiny and accountability in case of political conflicts’ or make corrupt deals that extract 263

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benefits for parties to the deal while dumping costs on average citizens and the environment (Woertz et al. 2008: 21; Smaller and Mann 2009). It is, in fact, difficult to find complete, coherent and transparent information on land deals, whether they be grabs or FDI. Such a gap makes it hard to separate FDI from grabs, understand the magnitude of individual deals, or even see the ‘official version’ of deals. What is ironic is that the data we do have for ‘land grabs’ may oversample legitimate FDI deals that nobody wants to hide from public scrutiny. What is strange is that most of what we know about land deals in Africa comes from researchers or activists more interested in grabs than FDI. GRAIN – ‘an non-governmental organization (NGO) that works to support small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems’ – released its first list of land grab deals in 2008. This list was updated and cross-checked to 173 SSA grabs by Friis and Reenberg, who caution that their data – like others relying on sources such as ‘farmlandgrab. org’ – may suffer from ‘significant differences in credibility’ (Friis and Reenberg 2010: 9). The most recent data come from GRAIN (2012b), a dataset of 416 ‘land grab’ deals from around the world that includes variables for targeted country, area, projected investment, country of the investor, investor type (e.g. agribusiness), crop type and deal status. We use 203 SSA deals, of which 201 deals are either ‘done’ or ‘in process’ (the other two deals are ‘suspended’); see Table 3.3.1. This dataset, unfortunately, is not complete. It covers only uncancelled transactions for the production of food crops on large plots of land that foreign investors initiated after 2006. Even if GRAIN were successful in listing all deals with these characteristics – which is unlikely – they did not cover deals involving non-food cash crops such as jatropha or cotton (GRAIN 2012a). These uncertainties make it difficult to distinguish between ‘real’ FDI deals that create wealth and improve local economic conditions in a sustainable way and ‘grabs’ that expropriate local land and water resources for the benefit of corrupt rulers and callous investors. With enough data, we could make a political-agro-economic evaluation of each project over time, to separate grabs from FDI, but we don’t have those data. What we have is information on a few variables that we would expect – from the theory outlined above – to be correlated with land grabs and over-exploitation of resources. The next sections describe those data and how we try to use them to distinguish between grabs and FDI.5

Land grabs, corruption, voice and accountability The World Bank provides data on control of corruption and voice and accountability for 213 countries (Kaufmann et al. 2010). Control of corruption (CC) measures the extent to which Table 3.3.1 Data coverage on land deals in SSA Criteria Total number of deals inside SSA country Information on size of land deal (ha) Information on projected investment ($) Information on base country of investing entity Information on investing entity Of these, investors identified as ‘government’ Information on crop Source: GRAIN (2012b).

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Number of entries 201 201 51 201 201 23 183

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public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests. The indicator on voice and accountability (VA) measures the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media. These good governance indicators have values between -2.5 (worst, i.e. most corrupt or least accountable) and +2.5 (best, i.e. least corrupt or most accountable), with 0 as the median value. In the following analysis, we used 95 of the 201 SSA deals from GRAIN (2012b) that involved the same country pairs (buyers identified from one country and sellers) in two or more deals. This smaller dataset helps us concentrate on the 17 SSA countries that are systematically engaged in ‘grabs’. We will occasionally compare these countries to the other 26 continental SSA countries with less grab activity. Table 3.3.2 divides these 95 deals into four groups according to their CC values: low CC buyer–low CC seller, low CC buyer–high CC seller, and so on. Based on the theory of impatient kings outlined above, we expect deals in low–low pairs to be grabs in which buyers and sellers co-operate to extract rents from land and water resources. Table 3.3.2 Analysis of SSA deals: control of corruption Sellers

Low CC (-2.5 to 0)

Buyers

High CC (0 to 2.5)

Low CC (-2.5 to 0)

High CC (0 to 2.5)

Brazil-Mozambique (2) China – Benin (2) China – Senegal (2) China – Sierra Leone (2) China – Uganda (2) Egypt – Sudan (5) India – Ethiopia (13) India – Madagascar (2) India – Tanzania (3) Italy – Rep Congo (Brazzaville) (2) Italy – Mozambique (2) Libya – Mali (2) VietNam – Nigeria (2) Portugal – Angola (3) Portugal – Mozambique (4) Saudi Arabia – Mauritania (2) Saudi Arabia – Sudan (4) Singapore – Tanzania (2) South Africa – Mozambique (4) UAE – Sudan (6) UK – Mali (3) UK – Mozambique (5) UK – Sierra Leone (5) UK – Zambia (2) USA – Mali (2) USA – Sudan (2) USA – Tanzania (4)

—

Germany – Ghana (2) UK – Ghana (2) UK – Namibia (2)

Source: Deals from GRAIN (2012b) and CC from Kaufmann et al. (2010). Note: Of the 95 land grab deals, 89 occur in countries with low CC scores, i.e. more corruption. The deal count is shown in () for each buyer–seller country pair.

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In fact, 94% of the 95 deals are in low CC countries, with 41 in low–low country pairs and 48 between high CC buyers and low CC sellers. High CC buyers may be participating because they are less corrupt at home than they are abroad (the deals are grabs) or their investments are actually FDI. Given the difficulty of objectively judging whether deals can be categorised as FDI or grabs from our incomplete information, it could be that some ‘grabs’ are actually FDI. These generalisations do not prevent a number of reasonable explanations for deal-pairs. Egypt might be investing in Sudan to improve relations or move ‘use’ upstream. Some buyers may also be investing because of ‘gravity’ (proximity), religious ties and/or long-term relationships. The USA and China – lacking geographic or historical links that might associate them with certain SSA countries – might pay more attention to corruption, but they both invest in countries with an average CC of -0.76. Indeed, low and high CC buyers invest in countries with median CC values of -0.73 and -0.67, respectively. That said, separating high CC buyers into Arab and non-Arab countries reveals that the former invest in countries that are more corrupt, i.e. median CC of -1.21 vs -0.42 in countries targeted by European buyers. We can add more depth to the discussion by looking at VA, to test the idea that land grabs are more likely to occur in countries where citizens cannot hold their governments accountable – countries with negative VA values. Table 3.3.3 segregates our 95 deals by VA values. Some 82% of the deals in Table 3.3.3 occur in low-VA countries; 27 of them – the ones in low–low country pairs – are more likely to be land grabs than FDI. The 51 deals between high VA buyers and low VA sellers, like the high–low CC deals in Table 3.3.2, may be either quiet grabs or FDI misclassified as grabs. As with CC, VA grouping shows that high and low VA buyers make deals with different countries within the low VA set of sellers. Low VA buyers invest in countries with median VA values of -1.66; median VA values are -0.27 in selling countries with high VA buyers. The United Kingdom (VA: 1.32), for example, invests mostly in relatively high VA countries (Mozambique: -0.06; Sierra Leone: -0.27; and Zambia: -0.3), but India (VA: 0.49) made 72% of its deals in Ethiopia (VA: -1.30). While some high VA countries also invest in countries with lower VA values, e.g. the USA made 33% of its deals in Sudan (VA: -1.66), the majority of the investments are made in high VA countries. High VA buyers may be investing in countries with higher VA because they face scrutiny at home. Those deals are also less likely to be grabs. That said, we should also note that only 10 of 47 SSA countries have positive VAs. While three high-VA countries (Ghana, Namibia, Mali) are included in the GRAIN (2012b) database, other countries with plenty of FDI and positive VA values (Botswana, South Africa and others) are not. Although some missing deals may be sustainable FDI, others could be land grabs (false negatives). The lack of a complete dataset on all deals makes it hard to differentiate between grabs and FDI, so we must concentrate on false positives, i.e. ‘land grabs’ in GRAIN data that are actually FDI. A comparison of CC and VA values in our 17 SSA grab countries to values in the other 26 continental SSA countries does, in fact, raise serious questions on whether or not GRAIN’s deals are exploitative grabs. From our theory, we expect corrupt (impatient) rulers to engage in grabs and benevolent (dynastic) rulers to sign FDI deals, but the average CC value in the 17 ‘grab’ countries (-0.66) is quite close to the average (-0.69) in the other 26 countries. The difference in VA values (-0.46 and -0.91, respectively) is greater but in the wrong direction. CC and VA values should be lower, not higher, in countries actively engaged in deals if those deals are grabs, but not if those deals are FDI. These results (which are not contradicted below) cause us to question the ‘grab’ label on these deals.

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Table 3.3.3 Analysis of SSA deals: voice and accountability Sellers

Low VA (-2.5 to 0)

Buyers

High VA (0 to 2.5)

Low VA (-2.5 to 0)

High VA (0 to 2.5)

China – Senegal (2) China – Sierra Leone (2) China – Uganda (2) Egypt – Sudan (5) Saudi Arabia – Mauritania (2) Saudi Arabia – Sudan (4) Singapore – Tanzania (2) UAE – Sudan (6) VietNam – Nigeria (2) Brazil – Mozambique (2) India – Ethiopia (13) India – Madagascar (2) India – Tanzania (3) Italy – Rep Congo (2) Italy – Mozambique (2) Portugal – Angola (3) Portugal – Mozambique (4) South Africa – Mozambique (4) UK – Mozambique (5) UK – Sierra Leone (5) UK – Zambia (2) USA – Sudan (2) USA – Tanzania (4)

China – Benin (2) Libya – Mali (2)

Germany – Ghana (2) UK – Ghana (2) UK – Namibia (2) UK – Mali (3) USA – Mali (2)

Source: Deals from GRAIN (2012b) and CC from Kaufmann et al. (2010). Note: Of the 95 land grab deals, 80 occur in countries with low VA values. The deal count is shown in () for each buyer– seller country pair.

Some countries move between quadrants in Tables 3.3.2 and 3.3.3, so we created a single, but crude, good governance (GG) indicator for all countries in the 95 deals that is based on the average of CC and VA values. These results, shown in Table 3.3.4, make it easier to discuss ‘governance’ below. Some 94% of the deals took place with low GG sellers (more corruption and lower accountability). Twenty-three deals involve low–low country pairs, while high GG buyers made 66 deals in low GG countries. Low GG buyers invested in countries with a median GG value of -0.74; high GG buyers invested in countries with a median GG of -0.46. Note that this difference would be even greater if we excluded developing countries with barely positive GG values, i.e. Brazil (GG = 0.19), India (GG = 0.03), South Africa (GG = 0.32) and UAE (GG = 0.09), from the high GG buy side, since the remaining buyers in the ‘high–low’ category invested in countries with a median value of -0.27. Put differently, our data indicate that GG values for buyers are higher than GG values for their sellers, but GG values of buyer–seller pairs tend to rise together (correlation 0.33).

Land grabs and pressure on water resources Although all investors in agricultural land consider water availability when making deals, we assume that ‘grabbers’ are interested in maximising current output at the expense of long-term 267

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Table 3.3.4 Analysis of SSA deals: good governance Sellers

Low GG (-2.5 to 0)

Buyers

High GG (0 to 2.5)

Low GG (-2.5 to 0)

High GG (0 to 2.5)

China – Benin (2) China – Senegal (2) China – Sierra Leone (2) China – Uganda (2) Egypt – Sudan (5) Saudi Arabia – Mauritania (2) Saudi Arabia – Sudan (4) Libya – Mali (2) VietNam – Nigeria (2) Brazil – Mozambique (2) India – Ethiopia (13) India – Madagascar (2) India – Tanzania (3) Italy – Rep Congo (2) Italy –Mozambique (2) Portugal – Angola (3) Portugal – Mozambique (4) Singapore – Tanzania (2) South Africa – Mozambique (4) UAE – Sudan (6) UK – Mali (3) UK – Mozambique (5) UK – Sierra Leone (5) UK – Zambia (2) USA – Mali (2) USA – Sudan (2) USA – Tanzania (4)

—

Germany – Ghana (2) UK- Ghana (2) UK – Namibia (2)

Source: Deals from GRAIN (2012b); CC and VA from Kaufmann et al. (2010). Note: Of the 95 land grab deals, 89 occur in countries with low GG values. The deal count is shown in () for each buyer–seller country pair.

sustainability. We can thus predict that grabbers are more likely than FDI-investors to deplete soils – overusing fertiliser for short-term boosts rather than engaging in labour-intensive soil management – and more likely to overuse water resources than save water for the next season or invest in water conservation technology. Even ignoring the short-term view of grabbers, we assume that FDI is also going to increase pressure on water and land resources because they are likely to replace traditional farming technologies that may rely on rainfall, natural soil fertility and basic implements with industrialised technologies that increase output by intensifying water consumption, planting density, mechanisation, and so on. The difference between the two is that grabbers are more likely to abuse their preferential access to water than FDI investors, since they care more about short-term production. FDI investors have a greater contractual or informal incentive to manage water resources sustainably because they need to have good relations with neighbours in the short run and protect water resources and the environment in the long run. We explore these propositions by examining data for rainfall variability, total actual renewable water resources, current use of water resources and rural land tenure recognition. We use this

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last variable as a proxy for water rights, under the assumption that weak land tenure is correlated with weak water rights and/or controls on water use. We will discuss each variable before introducing a weighted index value for ‘water vulnerability’ for each selling country based on these variables, each of which has been normalised to a value of 0 to 1, with 1 corresponding to higher pressure on water resources. Our theory is that grabs will occur in water-vulnerable countries because investors are not worried about long-term water availability; FDI, in contrast, will be targeted at less vulnerable countries because water resources are necessary to long-run, sustainable deals. For rainfall variability, we use standard deviation of rainfall for the 40+ years between 1961 and 2002 given in FAO CLIMPAG data. Higher variability implies greater pressure on surface and groundwater resources. For total actual renewable water resources (TARWR, in m³/ha/ year), we use FAO Aquastat data from 2009.6 We assume that areas with lower renewable water resources per arable hectare will have – all things equal – more competition for water, a higher likelihood of pressure on water resources, and negative environmental, economic and social implications. The percentage of TARWR withdrawn, also from FAO Aquastat, indicates existing pressures on TARWR from all uses. For rural land tenure recognition, we use data from the Institutional Profiles Database (2009). These data describe a country’s population with formally recognised land rights in rural areas on a 1–4 scale (the highest value in SSA is 3, so normalised values rise in steps of 0.33). We combined each of these variables using equal weights to create a basic index of water vulnerability, as shown in Table 3.3.5. Note that this index provides only a rough guide to vulnerability, since local conditions determine water resource availability. Table 3.3.5 Index of water vulnerability

Sudan (-1.45) Senegal (-0.42) Sierra Leone (-0.60) Mali (-0.28) Nigeria (-0.92) Uganda (-0.68) Madagascar (-0.54) Tanzania (-0.27) Angola (-1.29) Benin (-0.18) Mozambique (-0.24) Zambia (-0.42) Ethiopia (-1.00) Namibia (0.26) Ghana (0.28) Mauritania (-0.74) Rep Congo (-1.14)

1961–2002 rainfall variability, from 0 (low) to 1 (high)

TARWR per arable ha, from 0 (high) to 1 (low)

Percentage of TARWR withdrawn, from 0 (low) to 1(high)

Rural land tenure recognition, from 0 (more local rights) to 1 (fewer)

Weighted average of 3 or 4 variables (1 is worst)

0.23 0.44 0.64 0.27 0.33 0.35 0.62 0.51 0.23 0.43 0.44

1.00 0.99 0.91 0.99 0.99 0.99 0.93 0.99 0.98 0.99 0.97

1.00 0.10 0.01 0.11 0.06 0.01 0.08 0.09 0.01 0.01 0.01

0.33 0.67 – 0.67 0.67 0.67 0.33 0.67 0.67 0.33 0.33

0.64 0.55 0.52 0.51 0.51 0.51 0.49 0.48 0.47 0.44 0.44

0.43 0.33 0.35 0.57 0.18 0.42

0.98 0.99 0.99 0.99 0.98 0.00

0.03 0.08 0.03 0.03 0.24 0.00

0.33 0.33 0.33 0.00 0.00 0.67

0.44 0.43 0.42 0.40 0.35 0.27

Source: Author calculations. Note: Indexed ‘water vulnerability’ values (0 good, 1 bad) for selling countries, sorted from high to low; GG values in ().

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Table 3.3.5 indicates that Sudan has the highest water vulnerability. Land grabs, therefore, are more likely to exert pressure on Sudan’s people and environment. Add Sudan’s low score on good governance – or high score for corruption – and we can see how Sudan’s rulers may be signing deals that not only short-change their people in the near term but also put their long-term survival at risk. At the opposite extreme are Namibia and Ghana, with a combination of higher GG and lower vulnerability to water over-exploitation. ‘Grabs’ in Ghana and Namibia are more likely to be FDI that benefits local people in the long run. Countries with low water vulnerability values, such as Mauritania and the Republic of Congo, may suffer from land grabs due to corruption, but those grabs will only cause long-term environmental damage if they achieve significant scale. Note that all of these statements, like all of our data, are generalisations of potential trends on a national scale; they may not reflect actual water conditions at deal locations. It is obviously possible to have sustainable FDI in parts of Sudan where rulers care about the welfare of local people, as well as unsustainable grabs in parts of Namibia where rulers are more interested in their personal wealth than the welfare of their people (see Workman 2009). Even more important is to recognise that these deals may be occurring in the least vulnerable countries within SSA. The average water vulnerability index value is 0.46 for our 17 countries with the most ‘grab’ activity but 0.50 for the other 26 SSA countries with fewer (or zero) deals, indicating that deals are occurring within a subset of countries that are slightly less vulnerable to water scarcity.

A tempest in a teapot? In this chapter, we have explored the connection between land grabs, governance and water resources. Building on a theory of ‘kings and peasants’ that clarifies the dominant role of rulers with power over their people, this chapter describes how ‘kings’ – the rulers of countries targeted for investment – determine whether deals are land grabs that exploit local people and resources for short-term gain or FDI that generates sustainable wealth. We claim that land grabs are more likely when both parties to the deal are corrupt and citizens with a weak voice cannot hold rulers accountable for their actions. To apply the theory, we calculated a good governance index combining measures of corruption, citizen voice and ruler accountability for the countries most active in ‘land grabs’ in sub-Saharan Africa. We found that 94% of the 95 deals involved selling countries with low scores on good governance. Buyers, however, fell into two groups. Buyers with poor governance (e.g. Saudi Arabia) made deals with sellers that had lower governance scores while buyers with higher governance scores (e.g. the United Kingdom) dealt with sellers that had relatively higher governance scores. Although high governance buyers may be participating in grabs, they may also be engaged in sustainable FDI. Countries with higher governance scores (such as the UK) may avoid land grabs, but they cannot prevent countries with lower governance scores acting as buyers in land grabs. What they can do, perhaps, is encourage selling countries to increase the transparency with which they make deals, to make it easier for outsiders to see whether these deals are detrimental grabs or beneficial FDI. In a second step, this chapter analyses the water vulnerability of targeted countries based on rainfall variability, total actual renewable water resources, withdrawn water resources and rural land tenure recognition. The assessment indicates that some targeted countries are indeed vulnerable to unsustainable over-exploitation of water resources. Sudan stands out as the most vulnerable country among those we examined. Although it is difficult to generalise from national statistics to the particulars of a local deal, Sudan’s combination of high corruption and low accountability, high water exploitation and weak land tenure means that its people may suffer from an increase in agricultural investment that has been both predicted and encouraged for decades. 270

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These results – derived from the most recent, most complete set of ‘grab’ data – lead us to question whether or not some of these deals are FDI instead of grabs. While it is clear that some grabs have occurred in SSA – some deals have attracted a lot of attention and analysis – it is not so clear that we know that much about all the other deals that are superficially similar but may be functionally different. Stepping back from GRAIN’s data, we have even greater concerns. If land grabs are supposed to involve unprincipled and unsustainable exploitation of local communities and natural resources, then why is it that the 17 SSA countries most active in land grabs have similar or better rankings on scales of governance and water resources when compared to 26 other SSA countries that are not so active in grabs? Such a pattern – acknowledging the fact that no deals will occur in countries too corrupt to enforce any laws – is consistent with investors making sustainable FDI deals, not grabs. In 20 years, we will know whether these deals were grabs or FDI. We will know who got rich, who got fed, who is still in business and who is considered a leader – or a traitor – to his people. However, 20 years is a long time to wait. Further research can help local and international observers understand whether these deals are really grabs or just misclassified FDI. This research should concentrate on analysing case studies, evaluating local water conditions and water vulnerability, and tracing the financial, social and ecological impacts of deals in local communities.

Notes 1 We thank two anonymous referees, Suzanne K. Larsen, Scott McKenzie, Anita Milman and Hans-Peter Weikard for their helpful comments. All content – and errors – are the responsibility of the authors. 2 The Tirana Declaration of 26 May 2011 defines ‘land grabs’ using subjective criteria. 3 These statistics refer to ‘cross-referenced large-scale land acquisitions’ – a subset of total land acquisitions that is difficult to characterize owing to missing information. Cross-referenced deals in Africa cover 34 million hectares; ‘reported’ large-scale deals in Africa total 134 million hectares – an area roughly double the size of France (Anseeuw et al. 2012). 4 Africa has 54 countries. We exclude five North African and five small island countries from our discussion. We treat Sudan and South Sudan as one country because their data are usually merged. 5 All data can be downloaded from http://kysq.org/pubs/grabs.xls. 6 Total Actual Renewable Water Resources: the sum of internal renewable water resources and external actual renewable water resources, which corresponds to the maximum amount of water theoretically available. We lack, unfortunately, data on groundwater stocks and flows. Such data would be very important for evaluating sustainability, since it is impossible to use more than the annual flow of a river but easier to consume decades or centuries of aquifer recharge in a single year.

References Anseeuw, W., Alden Wily, L., Cotula, L. and Taylor, M. (2012) Land Rights and the Rush for Land: Findings of the Global Commercial Pressures on Land Research Project, Rome: ILC. Bues, A. (2011) ‘Agricultural foreign direct investment and water rights: an institutional analysis from Ethiopia’, paper presented at the International Conference on Global Land Grabbing, April, University of Sussex. Deininger, K., Byerlee, D., Lindsay, J., Norton, A., Selod, H. and Stickler, M. (2011) Rising Global Interest in Farmland – Can It Yield Sustainable and Equitable Benefits? Washington, DC: World Bank. Easterly, W. (2006) The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good, New York: Penguin. EIU (2010) Political Instability Index for 2009//10, Economist Intelligence Unit. Online. Available at: http://viewswire.eiu.com/site_info.asp?info_name=social_unrest_table (accessed 29 March 2012). Eswaran, M. and Kotwal, A. (1985) ‘A theory of two-tier labor markets in agrarian economies’, American Economic Review 75(1): 162–77. Fagan, Brian (2011) Elixir: A History of Water and Humankind, New York: Bloomsbury.

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FAO (2012) AQUASTAT Online Database, Rome: Food and Agriculture Organization of the United Nations. Available at: www.fao.org/nr/water/aquastat/data/query/index.html?lang=en (accessed 5 February 2012). FAO CLIMPAG (2003) The National Rainfall Index (NRI) in the 1961–2002 Period. Online. Available at: www.fao.org/nr/climpag/nri/nrilist_en.asp (accessed 10 February 2012). Fischer, G., Shah, M., Tubiello, F. N. and van Velhuizen, H. (2005) ‘Socio-economic and climate change impacts on agriculture: an integrated assessment, 1990–2080’, Philosophical Transactions of the Royal Society B 360(1463): 2067–83. Friis, C. and Reenberg, A. (2010) Land Grab in Africa: Emerging Land System Drivers in a Teleconnected World, GLP Report No. 1. Copenhagen: GLP-IPO. Görgen, M., Rudloff, B., Simons, J., Üllenberg, A, Väth, S. and Wimmer, L. (2009) Foreign Direct Investment (FDI) in Land in Developing Countries, Eschborn: GTZ. GRAIN (2008) SEIZED! The 2008 Land Grab for Food and Financial Security, Barcelona: GRAIN. ——(2012a) ‘GRAIN releases data set with over 400 global land grabs’, press release, 23 February. Online. Available at: www.grain.org/article/entries/4479-grain-releases-data-set-with-over-400-global-landgrabs (accessed 5 March 2012). ——(2012b) ‘GRAIN land grab deals Jan. 2013. Database’. Online. Available at: www.grain.org/attachments/2453/download (accessed 5 March 2012). Institutional Profiles Database (2009) IPD 2009. Online. Available at: www.cepii.fr/anglaisgraph/bdd/ institutions.htm (accessed 10 February 2012). Kaufmann, D., Kraay, A. and Mastruzzi, M. (2010) Worldwide Governance Indicators: A Summary of Methodology, Data and Analytical Issues, World Bank Policy Research Working Paper No. 5430, Washington, DC: World Bank. North, D. C. (2005) Understanding the Process of Economic Change, Princeton: Princeton University Press. Olson, M. (1993) ‘Dictatorship, democracy and development’, American Political Science Review 87(3): 567–76. Skinner, J. and Cotula, L. (2011) Are Land Deals Driving ‘Water Grabs’? London: IIED. Smaller, C. and Mann, H. (2009) A Thirst for Distant Lands: Foreign Investment in Agricultural Land and Water, Winnipeg, Canada: International Institute for Sustainable Development. Woertz, E., Pradhan, S., Biberovic, N. and Jingzhong, C. (2008) Potential for GCC Agro-Investments in Africa and Central Asia, GRC Report, Dubai: Gulf Research Centre. Woodhouse, P. and Ganho, A. S. (2011) ‘Is water the hidden agenda of agricultural land acquisition in sub-Saharan Africa?’ paper presented at the International Conference on Global Land Grabbing, April, University of Sussex. Workman, James G. (2009) Heart of Dryness: How the Last Bushmen Can Help Us Endure the Coming Age of Permanent Drought, New York: Walker. World Bank (2012) Doing Business 2012: Doing Business in a More Transparent World, Washington, DC: World Bank.

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3.4 Will peak oil cause a rush for land in Africa? Fabian Kesicki and Julia Tomei

Role of biofuels in African land grabs During the summer of 2008, oil prices peaked at almost US$150 per barrel (bbl), while in 2011 on average oil prices of $111/bbl were experienced – the highest annual average in history. Oil prices are not expected to fall significantly and this situation has incentivised a search for alternatives to conventional transport fuels based on crude oil, for example in the form of biofuels. High oil prices are considered favourable for investments in biofuels, as are other political drivers such as climate change and renewed concerns about energy security in industrialised countries. However, the land use changes – both direct and indirect – associated with increased biofuel production have meant that biofuels rapidly became a contentious energy option (Saltmarsh 2011; McVeigh 2011). Those concerned with the negative consequences of increased global demand for biofuels highlight the conversion of land previously used for food production to the cultivation of fuel crops. Indeed, biofuels were cited as one of the contributory factors to the food price hikes of 2008 (Rosillo-Calle and Johnson 2010). Food security is a global issue, but for countries already dependent on food imports biofuel investments can further reduce the area available to grow food crops and thus decrease food security. In Africa, food security has generally worsened since the 1970s, the majority of the food-insecure living in rural areas (Mwaniki 2006). Biofuels have also been blamed for the loss of natural habitats, including forests in Kenya (ActionAid et al. 2011), grasslands in Brazil (RSPB 2008) and peatlands in Indonesia (Greenpeace 2007), with the consequent release of above- and below-ground carbon contributing to anthropogenic greenhouse gas (GHG) emissions. Many biofuel feedstocks, such as sugarcane and palm oil, are produced as monocultures in inputintensive, mechanised agricultural systems. This form of industrialised agriculture is associated with negative environmental impacts including the increased use of agrochemicals, soil erosion and compaction, and water pollution. The requirement for economies of scale associated with this form of agriculture also, almost by definition, excludes or limits the role of small farmers who may lose access to land they depend on (Oakland Institute 2011; Richardson 2010; Charles et al. 2009). Finally, biofuel projects are accused of providing an unsustainable income where collaboration with local people ceases or large processing facilities control the price of feedstock (German et al. 2011). 273

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Although it is estimated that about one-fifth of all land investments in Africa are related to biofuels (Vallely 2009), African biofuel production is small compared with total global production. In 2010, global biofuels production reached 106 billion litres; providing around 3% of total road transport fuel (IEA 2011b). In the same year, global ethanol production reached 86 billion litres, with the USA and Brazil being the largest producers (OECD/FAO 2011). For biodiesel, global production reached 19.8 billion litres in 2010. The major producers were the European Union (EU) with 6.2 billion litres (32% of global production), Asia with 2.3 billion litres (12%) and Argentina with 1.5 billion litres (8%) (OECD/FAO 2011). At present, Africa is not a significant producer of either ethanol or biodiesel. According to the Agricultural Outlook (OECD/FAO 2011), in 2008–10 annual biofuels production was estimated to be 974 barrels per day (bbl/d) in Mozambique and Tanzania (0.14% of global production), while the US Energy Information Administration (EIA 2011b) calculated African production to be 320 bbl/d in 2010. The International Energy Agency’s statistics (IEA 2011a) do not show any liquid biofuel production, citing the poor quality of African data, but the BP statistical review estimates African biofuel production to be 460 bbl/d, equivalent to just 0.02% of global biofuels production in 2010 (BP 2011b). To put this in context, this amount would satisfy the USA’s liquid fuel consumption for 12 minutes or the United Kingdom’s for 2.5 hours. Although Africa’s current level of biofuel production is low, questions arise about, first, how biofuel development will be affected by sustained high oil prices and, second, whether scarcer crude oil availability will contribute to a biofuels boom in Africa. This chapter discusses these questions and analyses the biofuels and oil markets on a global and African scale, as well as the drivers behind the global and local demand for biofuels. The rest of the chapter is structured as follows: section two presents the history of biofuels and current biofuel policies, highlighting the implications for Africa. Section three discusses the current situation the oil and biofuels market both globally and in Africa, focusing on the economics of biofuel production. Section four concludes the chapter.

History of biofuels and biofuels support policies Despite the increased attention for biofuels in Africa in recent years, they are not a new energy option. First produced in the late 1800s, biofuels were viewed as a viable transport fuel until the falling price of fossil fuels brought an end to their development. During the oil price crises of the 1970s, biofuels once more attracted the attention of governments around the world. However, this geopolitical and economic interest was not maintained as the crises waned and the price of oil fell once more. Only Brazil continued to support biofuels and today arguably has the most successful ethanol industry in the world. Over the past decade, interest in biofuels has once more increased, primarily driven by concerns about energy security, resource scarcity and increasing oil prices (Borras et al. 2010). As a result, many governments have established policy frameworks to promote the production and use of biofuels, primarily in the transport sector. This policy push has led to a rapid increase in the production of biofuels, from 16 billion litres in 2000 to more than 100 billion litres in 2010 (IEA 2011b). Another driver of increased demand for biofuels is climate change, since substituting fossil fuels with biofuels is an option to mitigate GHG emissions from transport. Biofuels offer one of the few near-term options for decarbonising the transport sector because they use an existing distribution infrastructure, although the extent to which biofuels can address fuel needs is unclear. Finally, biofuels have been positioned as a catalyst of socio-economic development, particularly in rural areas, through employment, research opportunities, higher grain prices and increased energy security. 274

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A common classification of biofuels is to divide them into first and second generations. Firstgeneration biofuels are typically made from agricultural crops and include ethanol, produced from sucrose-containing (e.g. sugarcane) and starchy feedstocks (e.g. maize), and biodiesel produced from vegetable oils, including palm, soya, jatropha and rapeseed. Second-generation biofuels are produced from lignocellulosic biomass, but are still in the research and development, pilot or demonstration phase and are not expected to become competitive with fossil fuel alternatives in the near term. To date, the vast majority of investments in Africa have focused on first-generation biofuels, such as jatropha in Tanzania and sugarcane in Ethiopia (Mitchell 2011; Sulle and Nelson 2009; Nhantumbo and Salomao 2010). The specific drivers of biofuels vary according to country: for the EU it is energy security and climate change mitigation, for Brazil social and agro-industrial development, and for the USA energy security and farmer support (Rosillo-Calle and Johnson 2010). To date more than 50 countries have established support measures for biofuels, including mandated biofuel blends, tax exemptions and other fiscal incentives in order to make biofuels competitive with fossil fuel alternatives (IEA 2011c); Table 3.4.1 lists the biofuel targets and incentives of some key producer and importer countries. In 2011, total global biofuel subsidies amounted to US$22 billion (IEA 2011c). Without such incentives, biofuel production costs are typically higher than those of their fossil fuel counterparts (Peters and Thielmann 2008), although changes in oil prices can alter the economics (see also Figure 3.4.1).

Brazil Brazil’s National Alcohol Programme, ProAlcool, was established in 1975 in response to the global oil price crises. The objectives of the programme were to limit energy supply constraints, to provide stable internal demand for excess sugarcane production, and to buffer fluctuations in global sugar prices. Government support, in the form of public-sector subsidies, tax incentives and finance for distribution networks, meant that by 1986, ethanol-powered vehicles represented 90% of new car sales (Wilkinson and Herrera 2008). In the 1990s, however, the Table 3.4.1 Biofuel targets and policies of key countries Country/ region

Target (year)

Tentative or implemented

Policy tool

Biofuel focus (feedstock)

Brazil

E25 (2003) B2 (2008) to B5 (2013) E10 (2008)

Implemented

Tax incentives, subsidies, mandate

Ethanol (sugarcane) Biodiesel (soy)

Tentative

Ethanol (non-food feedstocks)

B/E5.75 (2010) B/ E10 (2020) B20 (2017) E20 (2017) 36 million gallons annually by 2022

Implemented

Tax incentives, subsidies, direct upport for farmers Tax incentives, subsidies, mandate Tax incentives, subsidies, mandate Tax incentives, mandate

China

EU India US

Implemented Implemented

Ethanol (various); Biodiesel (various) Biodiesel (jatropha) Ethanol (maize); longerterm support for advanced biofuels

Source: Sorda et al. (2010); Pousa et al. (2007); Wang (2011); EU (2009a, 2009b). Note: E stands for ethanol and B for biodiesel.

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Net oil exporting countries Countries with major biofuels investments Countries biofuel mandates other

Figure 3.4.1 Biofuel condition in Africa1

Note: 1 Countries with biofuel mandates may also have experienced major biofuel investments. Source: EIA 2011 a; IEA 2010; Carrington 2011. governm ent w ithdrew subsidies and lifted price controls which, com bined w ith declining oil prices, caused consumers to switch back to cheaper petrol. By the late 1990s, sales o f ethanolpow ered vehicles had fallen to 1% (Sorda et al. 2010). However, since 2003, rapidly rising oil prices have led to a resurgence o f ethanol, facilitated by the introduction o f flex-fuel vehicles. In 2003, the governm ent set a blending mandate o f 25% ethanol mixed w ith petrol, although ethanol today accounts for about 40% o f road trans­ port fuel demand. After m ore than 30 years o f development, Brazil’s ethanol industry is the most cost-competitive in the world, w here production costs are estimated to be $0.23—$0.29 per litre, making ethanol cost-competitive w ith oil at $30 per barrel (Sorda et al. 2010). The biodiesel industry in Brazil is less well established than the ethanol industry and uses several feedstocks, principally soy but also palm oil and castor. At present, Brazil has only a small export potential and is focusing on supplying domestic demand. T he Brazilian experience shows that the most successful biofuel industry was enabled by m ore than 30 years o f experience, appropriate agricultural conditions, long-term governm ent support and technological breakthroughs. Given the different climatic conditions, the lack o f experience, transport infrastructure and sound political support, it is an open question w hether Africa can replicate this success. W ithout initial political support, it is unlikely that the African biofuels industry will be economically viable (Meyer et al. 2008).

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USA In the USA, the 2007 Energy Independence and Security Act (EISA) mandated the consumption of 36 million gallons of biofuels annually by 2022. Driven largely by energy security concerns, for example the ‘Twenty in Ten’ challenge, which aims to reduce petrol consumption by 20% within 10 years, biofuels are viewed by many in the USA as essential to reducing dependence on foreign oil (Holt-Gimenez and Shattuck 2009). The EISA requires increasing volumes of ethanol and other biofuels over time. It focuses on the use of advanced cellulosic biofuels, which by 2021 should account for ‘not less than’ 21 billion gallons (Sorda et al. 2010). The Environmental Protection Agency (EPA), through the 2010 Renewable Fuel Standard (RSF2), is responsible for developing and implementing the renewable fuel regulations. The RSF2 also aims to deliver reductions in GHG emissions by ensuring that renewable fuels emit fewer GHG than a fossil fuel equivalent. For example, producers of advanced biofuels must deliver GHG savings of at least 50% (from a 2005 baseline), while producers of first-generation biofuels have to achieve a reduction in GHG emissions of 20% (EPA 2011). In California, however, maize-based ethanol is not considered to deliver sufficient carbon savings and thus ethanol/petrol blends do not qualify as low carbon fuels (Sorda et al. 2010). To date, US policies have focused on the domestic maize-derived ethanol industry: in 2006, 20% of US maize production was used as ethanol feedstock (Sorda et al. 2010). The vast majority of road transport fuels is made up of petrol so that several additional policies support the use of ethanol as a substitute, including a blenders’ credit ($0.45 per gallon), a $1.01 per gallon tax credit for advanced biofuels, and tariffs levied against imports of foreign-produced ethanol ($0.54 per gallon) (Walls et al. 2011) that led to a fast growth in maize-based ethanol production. However, both the blenders’ credit and the import tariff expired at the end of 2011 (The Economist 2012). This means that the US biofuel market will be more accessible for foreign imports in the future, especially Brazilian ethanol, while wider consequences are uncertain.

European Union The adoption of targets for the use of renewable fuels1 in the transport sector is a key component of the EU’s efforts towards achieving its ambitious CO2 reduction goals. The first EU target for the use of biofuels in road transport was set in 2003 through the Biofuels Directive (2003/30/EC). This Directive stated that ‘biofuels or other renewable fuels’ should constitute 5.75% of the energy content of petrol and diesel sales by 2010 (EU 2003). In April 2009, the EU adopted the Renewable Energy Directive (RED, 2009/28/EC), which set an overall target of 20% renewable energy in total energy consumption by 2020 (EU 2009a) and replaced the Biofuels Directive that had failed to be met. The RED included a 10% target for renewable energy in transport fuels by 2020, which applies to all member states. Unlike the US and Brazil, the EU is unlikely to be able to meet this demand for biofuel indigenously; the target is therefore likely to be met through a combination of domestic production and imports. In this context, the EU set up an ‘energy partnership’ with Africa in 2008, among others, to supply biomass for its biofuel production (Charles et al. 2009). In order to avoid potential negative impacts, the RED established environmental sustainability criteria with which all biofuels consumed within the EU must comply. These include the delivery of GHG savings and restrictions on the types of land that may be converted to biofuel feedstock. The Commission also encourages industry, governments and NGOs to set up voluntary schemes to certify biofuels, which requires independent auditing of the whole production chain (EUROPA 2010). The revised Fuel Quality Directive (FQD, 2009/30/EC), which was adopted at the 277

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same time as the RED, includes the same sustainability criteria and has a target to reduce lifecycle GHG emissions from fuels consumed within the EU by 6% by 2020 (EU 2009b). Support measures for biofuels have typically varied according to member state; the Global Subsidies Initiative (GSI 2010) estimated that in 2008 total transfers supporting biofuels amounted to €3.01 billion. Tax reductions and exemptions accounted for the largest share of this support, amounting to €2.80 billion (GSI 2010). The EU maintains import protection on biofuels, which are higher for ethanol than they are for diesel. However, developing countries receive preferential trade treatment through several schemes, including the Generalised System of Preferences (GSP), GSP+, Everything But Arms and the Cotonou Agreement for Africa, Caribbean and Pacific countries, which includes import tariff reductions and quota-free access for biofuels (Junginger et al. 2010). For a more detailed discussion of the influence of EU biofuel policy on an African country, in this case Mozambique, see Franco et al. (2010). In summary, it is very likely that the EU’s biofuels mandates will not be achieved through domestic production only, opening up the opportunity for African exports to Europe. However, strict sustainability criteria and fuel quality requirements need to be met in order to supply this export market.

Africa In response to the global demand for biofuels, many African countries are currently introducing biofuel policies. However, many of these policies are yet to be ratified by governments and only a few countries have developed a clear policy framework for biofuels (Amigun et al. 2011). For example, Mozambique, through its national energy policy, has proposed the gradual introduction of blending targets for ethanol (E10) and biodiesel (B5) by 2015, while the South African industrial biofuel strategy proposes a 2% biofuel blend by 2013 (Amigun et al. 2011; IEA 2011b; Cuvilas et al. 2010). Initially, such policies were introduced in order to diversify the economy away from crude oil (Ambali et al. 2011). Global biofuel demand is expected to increase over the next years with important demand markets opening up in Asia (Zhou and Thomson 2009). The vast majority of the demand is expected to come from the transport sector as an alternative to fossil fuels, while smaller quantities of biodiesel can be consumed for example in electricity generators. In their 2011 energy outlook, BP forecast global biofuel production to exceed 6.5 million barrels per day (mb/d) by 2030, up from 1.8 mb/d in 2010 (BP 2011a). The IEA foresees a similar increase in biofuel production, forecasting that by 2035 biofuels could provide between 3.4 mb/d and 7.8 mb/d of total transport fuel (IEA 2011c). Regarding regions with an existing demand for biofuels and those where supply originates, it becomes apparent that trade is a key issue for biofuels. At present most of the demand for biofuels is based in the industrialised North, e.g. the EU or the US, owing to supportive policies. However, much of the potential supply is located in the global South owing to greater crop productivity, land availability and lower production costs. This situation raised hopes that increased biofuel production and trade would provide opportunities for product diversification, as well as offering a route out of poverty for rural producers in the developing world, including Africa. Political security through lower oil imports and economic independence for some countries are cited as further incentives for a biofuels production (Ambali et al. 2011). However, much of this expectation has yet to be borne out in practice; instead, reports of land grabbing, poor labour conditions and food insecurity as a result of increasing global trade in biofuels have abounded (ActionAid et al. 2011; Christian Aid 2009; Nuffield Council on Bioethics 2011). 278

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In spite of the lack of clear frameworks, the continent has already attracted private investment, and significant extensions of land have been devoted to biofuel feedstock cultivation with production mainly destined for export markets. Increased investments in biofuels by Western companies have been reported in West and South African countries (Ambali et al. 2011). This has led to many researchers investigating the political economy of biofuels in Africa and worldwide. Questions about the social and environmental terms of future pathways based on biofuels have been discussed, leading to claims of negative social and environmental impacts (Charles et al. 2009), of land grabbing by foreign investors (Vermeulen and Cotula 2010; ActionAid et al. 2011) and of conflicts with food production (Franco et al. 2010). In order to address these issues, necessary sustainability safeguards, e.g. concerning land tenure security and environmental protection, need to be put in place (Jumbe et al. 2009; Ambali et al. 2011; Kgathi et al. 2012).

Oil and biofuels market in Africa and beyond Even before the oil price crises hit the world economy in the 1970s, Africa played an important role as an oil-producing and exporting continent. African crude oil is preferred by refineries around the world for its low sulphur content as well as its relative proximity to European markets. For many years African countries have produced more oil than they have consumed, making them major oil-exporting countries. In 2010, all African countries together exported 7.7 mb/d corresponding to 9% of world-wide demand for crude oil. Two African countries are among the top 10 oil exporters: Nigeria and Angola (see also Figure 3.4.1). According to the IEA (2011c), over the next 10 years African oil production is assumed to be fairly constant, while demand is expected to increase only slightly. It could be argued that with oil-exporting facilities in place in 13 African countries2 and long-term experience with the oil industry, the incentive for these countries to develop a biofuel industry is very limited. Furthermore, as oil production generates an important share of the tax intake in these countries, biofuel production could be seen as a threat to this income stream. Consequently, the prospects for biofuel investments look brighter in countries that are dependent on oil imports, which can mean that prices for refined products are high, especially in land-locked countries (German et al. 2011). An aspect that complicates the discussion is the fact that crude oil needs to be refined to obtain value. While African refinery throughput was enough to satisfy the continent’s demand for refined products until the end of the 20th century, this is no longer the case. An increasing demand for refined products over the last 15 years was not met by a rising refinery output, which remained roughly stable. In 2010, all African countries together had to import about a one-quarter of their refined products consumption (BP 2011b). For some African countries, that can mean distortive and unduly high prices for diesel and petrol due to a lack in refining capacity and adequate import infrastructure. At the global level, conventional crude oil production peaked in 2008 at 70 mb/d and is not expected to surpass this level in the future (IEA 2011c). However, total oil production is made up of different categories: conventional crude oil, unconventional crude oil (extra-heavy oil, oil sands, gas-to-liquids and coal-to-liquids), natural gas liquids (NGL) and condensates (these latter two categories are both produced within a gas stream). Total global oil production is not expected to decline over the next few years, but rather is expected to increase from 84 mb/d in 2010 to 90 mb/d in 2020 (IEA 2011c). This means that most of the increase in supply is expected to come from unconventional oil and NGL, but no supply shortage is expected over the medium term. This, however, does not exclude potential short-term supply/demand imbalances, for example were demand for oil to increase much faster than supply. Similar to the oil price crises in 1970, when high prices drove the development of reservoirs in the North Sea, 279

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Alaska and Siberia, sustained high prices over the last years are motivating investment in offshore, unconventional and Arctic oil fields (see Kesicki 2010). In summary, society faces many energy challenges in the 21st century, but depletion of global fossil fuel energy resources is not one of them. With oil supply not expected to decline over the near future, the question then arises of whether oil production, in particular from unconventional sources, will be substantially more expensive than current production, thereby driving up the price of oil. This is not an easy question to answer: on the one hand, the cost of incremental production can be expected to increase as more easily accessible resources are depleted, requiring drilling under harsher conditions, for example using horizontal or deepwater drilling. On the other hand, innovation in exploration technologies and greater economies of scale can act in the opposite direction, driving down costs. An interesting example is the supply of unconventional gas in the US in the form of shale gas, which has significantly depressed gas prices since 2009. In general, it is expected that oil production costs will rise over the coming years; new projects will require an oil price of as high as $90/barrel in order to become profitable. Consequently, the oil price can be expected to increase slightly by 2020 (IEA 2011c). However, price assumptions cannot be considered a forecast since there are many uncertain political, economic, and technological factors that influence the price of oil. For example, geopolitics can contribute to a significant increase of the oil price over a very short time period, regulatory requirements can limit new oil production and refining capacity, disruption of trade routes can lead to supply shortages, and economic recessions can cause a drastic reduction in demand. Given a future scenario of sustained high oil prices, biofuels offer a potential alternative to fossil fuel-based transport fuels, such as petrol and diesel. Biofuels include substitutes for petrol, principally ethanol, and substitutes for conventional diesel, including fatty acid methyl ester (FAME) biodiesel. Neither ethanol nor biodiesel are perfect substitutes for petrol and diesel; ethanol, for example, can only be blended with petrol up to a share of 10% in conventional vehicles. In order to use higher shares of ethanol (of up to 85%), modified engines or flex-fuel vehicles are needed. Biodiesel is typically used in blends of B2 (2% biodiesel), B5 or B10, but nearly all diesel engines can run on 100% biodiesel. Two possible markets for biofuels can be identified within Africa: domestic, national markets; and exports to industrialised countries, particularly the EU. In order to assess whether an investment in biofuels is profitable, in particular for export, it is important to know the production costs. Figure 3.4.2 presents production cost estimates for the most important biofuels in Africa; the estimates are either numbers for African countries or world averages. Costs are given for sugarcane and molasses to produce ethanol (as a substitute for petrol), where molasses is a by-product of sugarcane production. In order to compare the production costs of biofuels to their substitute, Figure 3.4.2 displays the range of retail price of petrol and diesel before taxes in the US over the last 10 years. The retail prices before taxes do not differ significantly between the USA and European countries. Prices for biofuels are given in petrol or diesel equivalents as the heating value per unit of volume is lower for biofuels than for crude oil products. The graph reveals that the retail price of petrol and diesel varied substantially over the last 10 years from as low as $0.2/l to more than $1/l, while more recent prices have been at the upper end of this range as the average for 2011 shows. Since petrol and diesel prices are the benchmark for biofuel production costs, the large range of prices complicates any comparison. A look at the biofuel production costs shows that the costs associated with ethanol production are estimated to be lower than the most recent petrol prices, while the range for sugarcane-based ethanol is much smaller than for molasses. This might be due to the fact that few markets exist for molasses and, as a result, cost assumptions for the feedstock vary widely. Nevertheless, Amigun et al. (2011) judge biofuels from molasses to have a high unexploited potential in 280

Will peak oil cause a rush for land?

c 0 CD > CT

1.4 1.2

0

July 2008

0

CO

0

T3

O O 0

1.0

July 2008 Average 2011

Average 2011

0.8

Q .

O 0.6 CM

to O O c

0.4

o oZD 0.2

_ Spring_2002 Spring 2002

TJ

2

CL

0.0 Petrol

Ethanol (sugarcane)

Ethanol (molasses)

Diesel

Biodiesel Qatropha)

Figure 3.4.2 Biofuel production costs based on various estimates Source: IEA 2010: 280, 2011b: 32; Mitchell 2011; Endelevu Energy and Energy for Sustainable Development Africa 2008; Ecoenergy International Corporation 2008; Bruntrup et al. 2009; EIA

2011c.

Africa. H ow ever, these ethanol production cost estimates have to be treated w ith caution as they are partially based on experience from Brazil, w here conditions are likely to be very dif­ ferent from those o f African countries. For biodiesel, the graph shows that jatropha production costs are thought to be at the upper range o f diesel prices or above. In summary, based on purely economic terms, there could be a potential investment opportunity for ethanol produc­ tion, while jatropha production costs seem fairly expensive compared to current diesel prices. Finally, transporting biofuels from Africa to end markets in Japan, the USA or Europe w ould add about $0.08 per litre to the production costs (Ecoenergy International Corporation 2008). W hen interpreting cost estimates, such as those shown in Figure 3.4.2, it is important to be aware o f the many influencing factors that can lead to significant changes in production costs. For example, yields per hectare can vary hugely from one hectare to the other (Pohl 2010); this is not only linked to land quality, but also to the knowledge and skills o f the farmers them ­ selves. Significant differences can occur betw een plantations managed by agroindustry, outgrowers and small-scale farmers. W ith regard to the processing facilities, a sufficient project size needs to be attained in order to achieve economies o f scale. H ow ever, if scale can only be achieved by growing crops further from the processing plant, higher transportation costs can offset any economies o f scale. R elated to this are concerns about the largely poor condition o f transport and export infrastructure in Africa, in particular if biofuel is produced for export markets. T he wages, skills and availability o f the labour force can also vary greatly across Africa. Finally, since feedstock costs are estimated to make up one-half o f the overall production costs, they can also be a significant cost driver, w hich will again vary greatly across the continent (Mulugetta 2009). In terms o f reductions in biofuel production costs, there are potential opportunities in the commercialisation o f biofuel by-products, such as seedcake from jatropha 281

Fabian Kesicki and Julia Tomei

that could be used as animal feed. In the long term, an increased biofuels production could have adverse effects on the competitiveness of biofuels by decreasing the demand for crude oil, thus reducing the oil price and ultimately the price for petrol and diesel. Another potential export barrier concerns the various standards set out for biofuels by the USA and EU. In order for African biofuel producers to be able to export their products they must meet the strict criteria concerning not only fuel quality standards but also environmental and social sustainability criteria. The EU, for example, requires all biofuels consumed within the bloc to deliver GHG savings of at least 35% compared to fossil fuels, which will rise to 50% in 2017 and 60%, for biofuels from new plants, in 2018 (EU 2009b). Finally, within Africa, investment security for biofuel projects may depend on complex and sometimes unstable political contexts, while opaque policy-making creates uncertainty for biofuel investors.

Conclusions This chapter has investigated whether oil scarcity is a driving factor behind the current interest in African biofuels production as well as the wider factors driving this development. In order to understand the market for biofuels, we have highlighted not only developments in the global oil market, but also the political contexts and economic conditions surrounding the development of biofuels in Africa. As discussed, in recent years we have experienced sustained high oil prices. This was partly driven by increasing oil production costs due to the peak production of cheap, conventional crude oil. Nevertheless, high prices have initiated investment in unconventional oil resources that has compensated for the declining production of conventional crude oil. While oil prices are not expected to decline significantly, energy analysts do not expect the global economy to run out of oil within the short to medium term and significant supply shortages are not foreseen in the immediate future. From this evidence, we can conclude that a shortage in the supply of oil is not the main driver of biofuel production in Africa. We also analysed some of the economic aspects of biofuel production in Africa. This cost comparison between biofuel production and their fossil fuel alternatives showed that there is no clear case for investments in biofuels when taking into account cost components that are not related to production costs. In many parts of the world, with the exception of Brazil, biofuels are only competitive with conventional petrol and diesel through a diverse set of support policies. Incentives, particularly blending mandates, supported by tax exemption and credits, and production subsidies, have artificially created a demand for biofuels. For example, in the case of the EU, the politically driven demand for biofuels requires the need for biofuel imports. In most cases, though, biofuel policies are complemented by import tariffs on biofuels in order to protect local producers and avoid import dependency. However, developing countries enjoy preferential treatment, including tariff reductions, in importing ethanol through several schemes. Therefore, we conclude that the key driver behind biofuel development in Africa is not scarce oil resources but biofuel support policies, in particular European policy. As a result, investments in biofuels in Africa are dependent on global policy support, which is subject to change. Biofuel investments currently account for about a one-fifth of all land acquisitions in Africa; yet African biofuel production represents only a tiny fraction of global production. This also means that biofuels are only one driver among many, possibly more important, drivers of agricultural investments in Africa. With tax credits and import tariffs for ethanol having expired in the USA and a heated debate about the advantages and disadvantages of biofuels in the EU, the question of whether biofuels production in Africa is economically – as well as environmentally and socially – 282

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sustainable needs to be answered. In the long term, reliance on politically driven export markets may be imprudent. In order to develop sustained, domestic interest in biofuel production in Africa, not only do production costs need to fall and a suitable investment environment to be created, but clear policy frameworks must also be developed. However, an investment climate where biofuel production is profitable without subsidies will likely take many years, as the Brazilian experience has shown.

Notes 1 This refers not only to first- and second-generation biofuels, but also to electricity and hydrogen from renewable sources. 2 The 13 countries comprise Nigeria, Angola, Algeria, Libya, Sudan, Equatorial Guinea, Congo (Brazzaville), Gabon, Chad, Cameroon, Côte d’Ivoire, Mauritania and Congo (Kinshasa).

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Vallely, P. (2009) ‘Wish you weren’t here: the devastating effects of the new colonialists’, The Independent, 9 August. Vermeulen, S. and Cotula, L. (2010) ‘Over the heads of local people: consultation, consent, and recompense in large-scale land deals for biofuels projects in Africa’, Journal of Peasant Studies 37: 899–916. Walls, W., Rusco, F. and Kendix, M. (2011) ‘Biofuels policy and the US market for motor fuels: empirical analysis of ethanol splashing’, Energy Policy 39: 3999–4006. Wang, Q. (2011) ‘Time for commercialising non-food biofuel in China’, Renewable and Sustainable Energy Reviews 15: 621–9. Wilkinson, J. and Herrera, S. (2008) ‘Food, energy and social justice in Brazil’, paper presented at the Food, Energy and Social Justice in Latin America research conference, November, New York. Zhou, A. and Thomson, E. (2009) ‘The development of biofuels in Asia’, Applied Energy 86 (Supplement 1): S11–S20.

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3.5 How to govern the global rush for land and water? Julia Ismar

The global financial crisis, the 2007/08 food crisis and shifting trends in energy supplies have gathered as the perfect storm on arable land. As a consequence, investments in farmland and the acquisition of large tracts of fertile land in Africa, South America and Eastern Europe have picked up significantly, giving rise to the notion of a global ‘land grab’. The common narrative behind this catch-all phrase is that ‘national governments in “finance-rich, resource-poor” countries are looking to “finance-poor, resource-rich” countries to help secure their own food and energy needs into the future’ (Borras and Franco 2010a: 508). This trend has been decried as the latest act of neo-colonial1 intervention in Africa, which is where roughly 70% of the land grabs are taking place (Deininger and Byerlee 2011). On a more pragmatic note, (international) investment in Africa’s land is presented as one solution to the global food crisis, a way of overcoming the chronic lack of investment needed to kick-start the agricultural sector in Africa, hence creating win-win situations for investors, the host states and the sub-Saharan rural poor alike. Media reports have focused on Sovereign Wealth Funds of the Gulf states and Western investment funds as main actors, even though private and local investors are increasingly joining the race for unutilised, ‘reserve’ lands. This race, however, is not only about land. In many African countries, water and land rights are inextricably linked (Meinzen-Dick and Nkonya 2007), with the consequence that water is often implicitly or explicitly given away with the land. This ‘blue dimension’ of the land grab has only been acknowledged recently, but has now spurred the notion of a ‘water grab’, a scramble for the world’s finite water resources masked by the interest in wide swaths of land. International approaches to control the ‘unfolding drama of land grabbing’ (BMZ 2009), or at least shape the side-effects of the current trend in order to create ‘painless’ (Palmer 2011) win-win situations on the ground are being discussed but have arguably not yielded to concrete results. This chapter holds that the discourse on ‘codes’ or ‘guidelines’ depoliticises the phenomenon unfolding in Africa and around the globe and turns a blind eye to the wider causes and implications of this emergent trend – access to water resources being only one of them. The challenges that the scramble for land and competition over water create on the international, national and local level cannot be explained by inadequate governance (UNDP 2006; Anseeuw et al. 2012) but have to be put in perspective with reforms in land and water regimes and their linkage to global dynamics. 286

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Inspired by a political ecology perspective, the chapter is concerned with the socio-political dimension of resource management. Political ecology seeks to understand the ‘complex relations between nature and society through a careful analysis of what one might call the forms of access and control over resources’ (Watts 2000: 257). The power relationships underpinning the discourse on and the management of environmental issues are central to this perspective. Against this background, the chapter will first illuminate the water-related dynamics concerning the land grab, and then put them in perspective with the underlying rationalities and developments in water governance in Africa. In contrast to most articles on the issue, we will look at the influence of international organisations that have been seminal actors in shaping both the institutional framework within which this wave of investments has built up, as well as the policy responses presented in the third section of the chapter through the ‘blue’, i.e. water-related, prism. The last section will analyse these approaches and shed light on some critical issues and points for debate.

The blue dimension of the land grabs GRAIN’s report Seized! (GRAIN 2008) was crucial in raising widespread international attention, but it only represents the beginning of the NGO’s work to track the more than 200 million hectares that have been bought or leased by agri-businesses since 2001 (BMZ 2012; Pearce 2012). For a long time, the discourse on the rush for land focused on the economic, security and development implications in the host country, ‘typically ignorant of and disconnected from the discourse on the physical condition of the land, despite the fact that the latter affects the productive capacity’ (Niasse 2011). However, a land lease in semi-arid countries, which is where most of the investments are currently taking place, is worthless without adequate and secured access to water. Taylor and Bending (2009) argue that the actual value of the water (often received for free) might in fact exceed the value of the land given away. Access to water is a heavy constraint on agricultural production in many places and is a ‘key factor in the location of land acquisitions in some countries’ (Anseeuw et al. 2012: 37). Africa faces only economic water shortage (Niasse 2011), and sub-Saharan Africa merely uses ‘two per cent of its freshwater resources for irrigation. The region is therefore seen by investors as having an untapped potential for irrigated agriculture’ (Smaller and Mann 2009: 5). The fact that many of the acquired lands are not yet being used – according to Deininger and Byerlee (2011) only 21% of the leased land is (fully) cultivated – makes it utterly impossible to predict the future demand for water resources in the given areas, not to mention the impacts on the hydrological cycles of the river basins concerned. The types of crops to be grown, however, suggest that many projects will rely on irrigation. Arslan et al. (2011) as well as Niasse (2011) hint at the fact that most contracts do not include regulations on water use. Based on a comparison of 12 different contractual agreements throughout Africa, Cotula (2011) comes to the conclusion that agreements on water are rather haphazard, and that there is little standardisation between the different contracts, which range from the guarantee for the water necessary for operationalisation to concrete numbers, or varying arrangements on water fees. The scope of the treaty will vary greatly based on the interests and bargaining positions of the parties involved, which are unlikely to play out in favour of the people traditionally depending on the access to the resource. Further, compliance with the agreed quotas is costly and difficult to monitor: while the abstraction of water from an open source, such as a river or a lake, will not go unnoticed – albeit hardly measured – the abstraction of groundwater tapped from a plot of land is literally impossible to control, and will have direct impact on the water available to the other users of a given aquifer. Apart from the contested actual use of water, access to water 287

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points, e.g. for pastoralist groups, is crucial and has been reported to have been negatively impacted by changing ownership regulations concerning the surrounding land (Fisseha 2011; Alden Wily 2012). The fear is that host states might be rushed into making deals on water when they originally only wanted to negotiate the land, in many cases granting the investors a carte blanche or free access to their most precious, and, in many places, far from abundant asset. Given the customary regulations on water use and ownership that determine access to water at the local level in many African countries, the introduction of legally binding commitments towards investors will create legal obligations that are likely to trump traditional, local needs in times of water shortage or even drought: ‘government authorities would be required to prioritise large projects backed by contractual commitments over other water users’ (Cotula 2011: 37; also see Smaller and Mann 2009: 5), securing ‘enclaves of privilege’ (Zoomers 2010) in countries struggling to meet the basic water needs for large parts of their population. International law demands that both parties of a contract comply with the terms, irrespective of the domestic situation. International investment protection standards hold the power to limit the leeway for regulation at the national level if not met by adequate governance mechanisms (Heri et al. 2011: 123), emphasising the duties but only few rights of the host countries. Further, the legal frameworks on international investments provide arbitration mechanisms to protect investors (Oxfam 2011) – for the people affected by the land grab there is no such mechanism. However, until now, ‘there has been no effort to improve the consistency between the measures to be adopted to regulate foreign direct investment in agriculture to the constraints of international investment regimes’ (de Schutter 2011: 267).

Removing control over resources from the local level Given its impact on social organisation and the high amount of resources required, water management, and the control over the flow of the precious resource, have long been considered a central element of political organisation and inherent to everyday state formation and state power (in the case of irrigation, see Wittfogel’s ‘hydraulic societies’, 1957) – a tenet of national sovereignty. However, at the policy level, water issues and reform were seen in a rather technical or bureaucratic light, more concerned with hydrology and hydraulic engineering than with re-distribution and social reform (Hodgson 2004). Regardless of the apparent linkages between water and land, reforms have developed in parallel ways, but they have been inspired by different rationalities, and carried out by different actors. There are few formal mechanisms in place to co-ordinate the allocation and administration of land tenure rights and water rights (ibid.; Binswanger-Mkhize et al. 2010). The current investment trend has moved the issue of water rights (especially for production) up the agenda, in the proclaimed attempt to address the legal vacuum in which water is given away. From a legal or governance perspective, water rights are highly complicated – even without delving into the complexity of transboundary water resources. Whereas land rights are of a rather static nature, water rights need to be specified in terms of location, time, use and even quality (Molle 2004). Given the plethora of possible uses of the resource by different actors, in different quantities and at different scales, there cannot be one single consistent statutory ‘right’ to a specified amount of water. In most African countries, the ownership rights of water are officially vested in the state, while a ‘bricolage’ (Cleaver 2002) of formal and informal institutions governs access to and use of the ‘ultimate fugitive resource’ (UNDP 2006). These include national and international law, religious and cultural practices, local customary norms, as well as project regulations (Meinzen-Dick and Bakker 2001: 131). Schlager and Ostrom (1992: 251–2) 288

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speak of a ‘bundle’ of rights to operationalise property rights to water: ‘operational-level property rights’ refer to access and withdrawal of certain amounts of water, whereas management, exclusion, and alienation rights are ‘collective-choice rights’ concerning the governance and control of the resource. Multiple users may hold different rights to the same water (Nkonya 2008). The current land acquisitions directly impact access and withdrawal rights, but implicitly undermine the complex system that determines the manifold uses of and rights to water. To add another layer of complexity, these considerations only apply to blue water resources, as green water, which in sub-Saharan Africa makes up the majority of water used in agriculture (Hoff et al. 2010), is per definitionem tied to the land: green water is the water stored in the soil, absorbed by the plants, and evaporating in the air. Based on Falkenmark’s (1995) illustration of the hydrological interdependences in water catchments, the concept of green water has strongly impacted the academic debate – but has so far failed to impact the practical or policy dimension of water management. The disrespect of colonial powers, national elites, donors and investors alike concerning the complex governance and tenure mechanisms that have evolved over time to govern the vast commons helped to coin the notion of idle, ‘reserve’ land, which is a discursive construction that helps to justify the appropriation of resources without recognising their current use (Engels and Dietz 2011) – a perfect example of what Scott describes as the ‘simplification that social practices related to land undergo when these practices are made to fit the requirements of state regulation and administration’ (Scott 1998: 27). A more critical reading would conceptualise this practice as forum shopping, i.e. focusing on the legal system involved that best matches one’s interests to appropriate resources. The same holds true for water, as local, or community-level, management mechanisms have indeed provided for regulated use of the resource based on clear and established rules (see Ostrom 1992), which are insufficiently recognised by and incorporated in new approaches to water governance. The water policy discourse, and the framing of problems and solutions in the water sector has only taken on a global dimension since the 1990s (Boelens et al. 2005): the ‘global water crisis’ has become a dominant issue on the international development agenda since the United Nations (UN) Water Conference in 1977 (Mar del Plata), re-emphasised in New Delhi in 1980. Since the 1980s water resource management has gained an increasing profile in its quest to increase efficiency of use to counter the looming water crisis. Triggered by the Dublin Principles (1992), which conceptualised water as an ‘economic’ resource, the notion of permit systems has gained ground as a means to grasp the perceived scarcity and lack of efficiency in the management of the resource. Intrinsically linked to the permit system was the concept of Integrated Water Resources Management (IWRM) that emerged in the 1990s, building on long scholarly and practical experience that called for a more integrated approach that embraces all dimensions of the resource to achieve economic, social and ecological sustainability of the use. The state as custodian of the nation’s water resources (van Koppen 2007: 47), would be the most appropriate actor to oversee the shift from single-purpose to basin management happen. The establishment of water markets as a panacea to inefficient water management by public institutions and the reliance on tradable water rights (Rosegrant and Binswanger 1994) is still debated but arguably faces severe constraints in developing countries through a lack of infrastructure and regulatory government capacity (Meinzen-Dick 2007: 15202). Also in Africa, IWRM is the foundation of water sector reform, but many of the proposed reforms remain pending (African Development Bank–Water Partnership Programme 2010). Derman and Ferguson (2000) claim that ‘water management, policies and reform reflect a combination of historical ideas and practices grafted onto the new global strategy for converting water from a free public good to an economic one’. The current global demand for land and 289

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water is nothing new: it is only the latest in a chain of developments, and the compliance of the host states marks another step in the shift of control over resources from the local to the global level. This related to Johnston’s (2008) political economy of water, that comes to understand water management and reform primarily as a change of the ‘loci of power’ over a given resource and is concerned with the ‘increase in distance between those who decide, and those who experience the consequences of decisions’ (ibid.: 82). According to Alden Wily (2011: xi), we are experiencing a ‘tipping point in capitalist transformation affecting agrarian economies’ that arguably caters to the development agenda of the powerful actors in the global North.

Making a virtue out of necessity? Empirical analysis of the contracts and consequences of the deals leads to the conclusion ‘that models of investment predicated on acquiring large tracts of land are unlikely to yield significant benefits locally, and in fact may cause significant harm’ (Anseeuw et al. 2012: 31). However, even optimists concerning the current surge in investments have come to admit that there have been negative side-effects: ‘where rights are not well defined, governance is weak, or those affected lack voice, there is evidence that such investment can carry considerable risks of different types’ (FAO et al. 2010: 1), including inadequate security concerning the land and water rights of the local population and domestic food security, the exploitation and degradation of natural resources, loss of livelihoods, and corruption. The appendix of the 2010 World Bank report Rising Global Interest in Farmland (Deininger and Byerlee 2011) lists negative effects encountered in the survey: sugar-cane plantations in Mozambique that use local water without compensation, rice plantations in Liberia that displace large numbers of people without compensation and with few alternative jobs being created, to quote but a few.2 There is a growing call for mechanisms to oversee and control the investments in land and water, protect the populations concerned and set benchmarks to prevent a race to the bottom between host countries, who see private investments as readily available short-term fixes to the constant lack of funds in the agricultural sector. Four sets of principles to serve this purpose are presented at this point by way of example: the framework developed by the Food and Agricultural Organization (FAO), the International Fund for Agricultural Development (IFAD), the UN Conference on Trade and Development (UNCTAD) and the World Bank Group; the stance on a Code of Conduct (CoC) by the International Food Policy Research Institute (IFPRI); the strategy of the German Ministry for Economic Co-operation and Development (BMZ); and the human-rights based approach by the UN special rapporteur on the right to food, Olivier de Schutter. The first set of guidelines is advocated by the World Bank Group, FAO, IFAD and UNCTAD, arguably well-established actors in the field of agriculture, resource management and development with significant power to shape the professional and public discourse. They stipulate seven ‘Principles for Responsible Agricultural Investment that Respects Rights, Livelihoods and Resources’ (PRAI) (FAO et al. 2010). Triggered by debates at the G-8 summit in Japan, and based on extensive consultations3 with experts, host governments and civil society, the PRAI will inspire the development of principles, guidelines, governance frameworks and eventually lead to a comprehensive CoC. According to Deininger and Byerlee (2011: xxvi), ‘the principles have already served a useful purpose in reminding countries and investors of their responsibilities and in drawing attention to situations where they were not adhered to’. These principles are as follows: 1 Existing rights to land and associated natural resources must be recognised and respected. 2 Investments must not jeopardise food security but must rather strengthen it. 290

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3 Processes for accessing land and making associated investments must be transparent, monitored, and ensure accountability by all stakeholders, thereby improving the business, legal, and regulatory environment. 4 All those materially affected must be consulted, and agreements from consultations must be recorded and enforced. 5 Projects must be economically viable, respect the rule of law, reflect industry best practice and result in durable shared value. 6 Investments must generate desirable social and distributional impacts, and must not increase vulnerability. 7 Environmental impacts must be quantified, and measures must be taken to encourage sustainable resource use while minimising and mitigating negative impacts. The PRAIs are linked to the FAO ‘Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security’ (2011) which aim for food security based on clear and secure tenure agreements. Water and other natural resources that determine the value and the condition of the land are only touched upon in passing, but the guidelines provide an elaborated view on resource governance that can serve as an additional mechanism to protect customary land rights – if officially and institutionally backed in the future. A draft was presented at the Committee for World Food Security in 2010, but was not endorsed owing to the strong opposition of several NGOs based on the aforementioned facts and a perceived lack of consultation. In March 2012, the guidelines won the consensus of roughly 100 countries and were to be ratified in May 2012 after three years of negotiations (Financial Times, 25 March 2012), the final wording not being available to the public at the time of publication. The Washington-based IFPRI lists five elements that are to inspire a CoC ‘with teeth’ to ‘make a virtue out of necessity’ (Von Braun and Meinzen-Dick 2009). The basic scope is similar to what has been stated above: 1 Transparency is required in the negotiations, based on free, prior, and informed consent. 2 There should be respect for existing rights, including customary and common property rights. 3 Benefits are to be shared so that the local community does not lose from investments. 4 Environmental sustainability has to be ensured by impact assessments and monitoring. 5 National trade policies should be adhered to, so as not to put food security in the host state at risk. Based on the expertise at the Institute, the authors suggest that the code be modelled according to international business laws (Von Braun and Meinzen-Dick 2009: 4) in order to be enforceable. The aim is to allow for a ‘healthy trade relationship’ to grow out of the ‘investment islands’ (ibid.: 3) and to stabilise the volatile global food system. The German BMZ (2009, 2012) proposes six guidelines that are to form the backbone of their stance on their development policy on land grabbing. Overall, the stance of the Ministry provides a more comprehensive approach, but it also endorses the PRAI (BMZ 2012: 8). It endorses the Land Policy Initiative of the African Union (AU), the African Development Bank, and the Economic Commission for Africa (ECA) which issued the ‘Framework for Land Policy in Africa’ (ECA 2010). In its 2012 strategy paper, the BMZ explicitly mentions the protection of the right to food and to access water for drinking and agriculture, and calls for contractual recognition and enforceable protection of the de facto rights – also communal rights to the land 291

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and water concerned. This is important as the formal titling of land and the prescription of statutory water rights is unlikely to reflect actual use patterns or offer effective protection (Borras and Franco 2010b, 2010c; Alden Wily 2012). The guidelines call for: 1 participation, transparency and accountability of the treaties, so that the population is included in the planning and negotiation process as early and comprehensively as possible; 2 recognition of existing land and water rights, including common law, and contractual protection thereof, including monitoring and mechanisms for sanctions; 3 management of relocation and compensation of land users in compliance with human rights standards (i.e. with the UN Basic Principles and Guidelines on Development-based Evictions and Displacements); 4 unrestricted respect for the human right to food and the human right to water, which must not be put at risk by investors; 5 protection and sustainable use of natural resources so that the change in land use must not negatively affect biodiversity, fertility of the soil and water resources or other ecosystem services; and 6 benefits of the investment to be fairly shared with the host state and the local population, e.g. provision of employment opportunities, infrastructure, and services by the investor. What these three exemplary sets of principles have in common is that they aim for a twopronged approach of clarifying and consolidating the legal framework concerning land and natural resources in host countries, and constraining the leeway of international corporations and investors. On a pragmatic note, the rapid rate at which deals are struck (Meinzen-Dick and Markelova 2009: 75) and the slow pace of international negotiations and local reforms alike seem to suggest that voluntary guidelines are the most promising mechanisms to limit the negative effects of the rush for land (Schanzenbächer 2010) in the short term. Risks are presented as manageable, and ‘win–win’ scenarios are deemed possible. This reading, however, disregards the fundamental conflict between local rights and struggles for control over their resources, and the international agricultural market that sets out to gain control over the sites and resources of production. The CoC is presented as the ‘magic bullet’ (Borras and Franco 2010a) that will create consensus where there can be none. What this article seeks to highlight is that these guidelines seem to facilitate the transfer of authority over a commodity in a fair and equitable way, rather than working towards fair and equitable land and water rights. Borras and Franco (2010a: 510) reason that whatever the shape of a possible CoC, it is not ‘proceeding from a social justice-driven analysis of the causes of (rural) poverty and the need to protect and advance (rural) poor people’s land access and property interests’. Presenting investors, host states and the rural poor as multiple and equal stakeholders in a process that will lead to mutual benefits neglects the dynamics of the global pattern of food and energy production underlying what is happening on the ground and its link to rural poverty (ibid.). Given the high level of expertise and authority these institutions hold on the issue of agriculture and development, the promotion of land grabs as ‘agricultural investments’ has managed to reframe the debate to focus on opportunities for development, rather than on risks deriving from speculation. However, the fact that these principles are also being promoted by the World Bank, whose policies have shaped the neoliberal international environment in which land grabbing is currently taking place, has been highlighted and strongly criticised by several scholars (Borras and Franco 2010a; Exner 2011), and has undermined the credibility of the efforts. The PRAI have received the strongest criticism from academia and civil society alike. There are 292

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several points of debate concerning each principle (also see La Via Campesina et al. 2010), but in general these relate to the fear that a typical ‘good governance’ approach to land acquisitions will depoliticise the debate and whitewash what is happening on the ground. The signing of land leases touches upon the very heart of the debate on water rights, as it highlights the lack of security of the actual users in the face of increasing (international) competition. Nevertheless, water is not explicitly mentioned in the PRAI, but only touched upon as one of the resources related to land. The proclaimed respect for customary water rights does not change the fact that the guidelines fail to address the wider (also in a geographical sense) implications of the shifting of water rights to investors. While focusing the debate on the land dimension alone, the linkage between water and land rights and water availability and productive capacity of the land drifts easily out of sight. The withdrawal of water for an investment project in one place will affect the water resources available for other users of the same river basin or groundwater aquifer, affecting relations between individual users, sectors and countries, but it is not only the hydrological complexity that is ignored: the recognition of the existing ownership and use rights regarding land and water does not pay tribute to the delicate balance of the rights concerning water on the local level and does not amount to the explicit protection thereof and of the livelihoods that depend on them. International treaties, i.e. claims enforceable by international law, will implicitly but none the less strongly affect the institutional arrangements for water management and land use practices and alter the balance between the different scales and mechanisms that determine actual access to water in favour of statutory rights and contracts (see Bues 2011 for the case of Ethiopia). Truly responsible, pro-poor land deals would hence take the complexities of both the hydrological cycle (including green water resources) and customary practices into account and include them in the contracts. Drawing on international human rights (HR) standards, Olivier de Schutter offers an alternative approach to provide more credible and more effective regulation. He elaborates on 11 minimum principles that are to ensure that (international) agricultural investments contribute to the right to food for the populations affected (de Schutter 2009). The HR approach highlights how obligations deriving from the International Covenant on Economic, Social and Cultural Rights relate to the fate of the small-scale farmers threatened by large-scale investors. By focusing on the effects on the individual, labour rights and the modes and sites of production, and placing the apparent change in agricultural practice in the context of development and poverty reduction, de Schutter advocates a more creative and responsible approach to agricultural reform and investment on behalf of host states and investors alike. Li (2011: 292) argues that this approach comes closer to the structural dynamics spurred by the increased interest in farmland, instead of desperately trying to limit the fallout of a market-driven phenomenon. ‘What we need now is a vision that goes beyond disciplining land deals and providing policymakers with a checklist of how to destroy the global peasantry responsibly’ (de Schutter 2011: 275). This vision, however, has yet to materialise, and human rights can only serve as a compass in this regard.

Who is to govern the land and water rush? The 2010 African Union ‘Framework and guidelines on land policy in Africa’ denounces the lack of vision underlying reforms on the continent up until now, which has given birth to inconsistent and reactionary politics that have often failed the local population (African Union et al. 2010: 1). The World Bank (Deininger and Byerlee 2011: 125) also argues that a ‘lack of success of a large number of investments can partly be attributed to the fact that the institutions tasked to process these ventures were ill-equipped and ill-prepared to deal with the sudden influx of interest’. In fact, most acquisitions take place in countries characterised by weak 293

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governance mechanisms concerning land and water, weak institutions and widespread corruption (BMZ 2012). In this context, Deng (2011) mentions the insufficient regulatory framework in South Sudan to manage the investments, uncertainty whether authority concerning land deals rests with the state or at a national level, and weak implementation of existing laws. Authority over water is even more uncertain. Li (2011) rightly notes: these issues are more than ‘technical’. If the State acts as the custodian of the resources, does it have the right to pass these rights to a third actor? As Alden Wily (2010) argues, customary rights are rarely formally extinguished. Would individual, legally enshrined water rights not help to secure access for the rural communities? The reports of Kenyan elites accessing public lands (O’Brien 2011) are a case in point, demonstrating that it is not only institutional weaknesses, but also the interests of the national elites that drive the current trend. Property rights are only as strong as the institution(s) that back them up (MeinzenDick and Bakker 2001). In the case of sub-Saharan states, these might not be strong enough to counter the pressure of international investors. However, holding only host governments responsible for not protecting their population against investors would ignore the long history of European and international intervention that has helped to loosen the grip of local communities on their livelihood resources and create the liberal environment in which even land and water seem to be ‘up for grabs’ (Borras and Franco 2010b). As shown above, past and internationally inspired reforms have continuously merged the rights over natural resources with global politics and market mechanisms and have created an environment in which voluntary guidelines will have little impact. These reforms include the initial privatisation of the water and land rights and the understanding of water as primarily an economic good, despite the internationally endorsed notion of water as a human right. In a way, these policies have now come full circle, albeit fuelled by international dynamics: the former expropriation by Europeans turned into expropriation by national elites – and has now become a global game, ‘compounded by emerging global and strategic imperatives’ (African Union et al. 2010: 5). The constant allusion to the Extractive Industries Transparency Initiative (EITI) and the reliance on investors to abide by corporate social responsibility are arguably a political choice not to take a political decision. Newell’s (2001) work on the impact of voluntary guidelines for TNCs provides evidence to back intuitional scepticism on the impact of non-binding guidelines concerning investments in agricultural land (also see Utting 2008), and Borras and Franco (2010a) doubt that a truly equal TNC–farmer partnership is possible. Meinzen-Dick and Markelova (2009), on the other hand, call on civil society and the media to monitor the practices of host states and international investors as a means of public scrutiny that is to compensate for the lack of political will at the international level (also see Smaller and Mann 2009). However, a well-informed public is a necessary but never sufficient condition for more responsible investment, and arguably a very feeble and unambitious approach. The case of the failed investment of Daewoo Logistics in Madagascar (Andrianirina-Ratsialonana and Teyssier 2010) is important, but should not be overemphasised against the overall dynamic. An active civil society can put important issues on the agenda, but does not provide effective legal remedy (Gehne 2011). If host states and investors are not likely to tame the land grabs, then who is? Compared to the scope and the impact of the rush for land and the intensity of the academic and public debate, international attempts to shape this trend have been very modest, to say the least, and tend to spring from the acceptance that the North is encroaching on the commons of the South in its quest for food security. Skinner and Cotula (2011) warn against rushing into scenarios that might become established precedents from which there might be no easy way back, and that will change access to water and land for generations to come. In the face of the well-established 294

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evidence on the negative effects of the acquisitions, more decisive and bold action on the part of the international community would be indispensable in turning the tide in Africa’s vast land.

Conclusion Control over land and water has traditionally been one of the central tenets of national sovereignty. Currently, states around the world are giving up control over their resources – control that has been detached from its actual site and the people concerned over decades – and handing it over to national and international investors in perceived – or make-believe? – quickfixes to development deficits and in the name of achieving national and global food security. Borras and Franco (2010b: 36) advocate a more people-centred notion of sovereignty concerning natural resources to offer a critical counter-narrative to the dominant liberal discourse. The article follows this line of thought and argues that the debate should not be concerned with the ultimate shape and legal status of international agreements, but rather about recognising the delicate land and water management systems in place, scrutinising international interference, and acknowledging the adaptive and management capacities of the people concerned. There should be a critical reflection of the driving forces and the impact of land and water reforms today, with the aim of bringing the people back in: ‘Ultimately countries need a national (and local) dialogue on what they want for and from their land’ (Spieldoch and Murphy 2010: 48), and this dialogue should not be inspired by or a reaction to foreign demands for precious resources. Among the leading international institutions, the dominant stance is to sit back and make a few adjustments to the project of liberal environmentalism to turn the ‘challenges’ of the land and water grab into opportunities. Voluntary guidelines and Codes of Conduct without sanctioning power will not serve to – and according to my view are not meant to – significantly alter the emerging trend: the stressing of accountability, transparency, efficiency and economic development shields the deep-seated changes concerning the loci of power over water and agricultural production, and the relationships between international markets, states and the people that have been triggered by international agendas for reform. Codes might be pro-poor concerning the means, but pro-business concerning the ends of the phenomenon. By buying into this discourse, political actors have limited their own scope to reducing the negative effects of a market-driven phenomenon, and not even the most comprehensive Code of Conduct can obscure this decision.

Notes 1 ‘Neo-colonial’ refers to the economic and political policies by which a great power indirectly maintains or extends its influence over other areas or people, especially in developing countries. 2 Also see the International Land Coalition Global Research Project (www.landcoalition.org/cplstudies) and the Oakland Institute Understanding Land Investment Deals in Africa (www.oaklandinstitute.org/ publications) for country-based case studies. 3 For progress on the consultations, see www.fao.org/economic/est/investments/building-internationalconcensus-on-rai-principles/en/ (accessed January 2012).

References African Development Bank–Water Partnership Programme (2010) Water Sector Governance in Africa, Addis Ababa: ADB/WPP. African Union, African Development Bank and Economic Commission for Africa (2010) Framework and Guidelines on Land Policy in Africa, Addis Ababa: AU, ADB and ECA.

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Alden Wily, L. (2010) ‘Whose land are you giving away, Mr President?’ paper presented at the Annual Bank Conference on Land Policy and Administration, 26–27 April, Washington, DC. Available at: http://siteresources.worldbank.org/EXTARD/Resources/336681–1236436879081/5893311–1271205 116054/WilyPaper.pdf. ——(2011) The Tragedy of Public Lands: The Fate of the Commons under Global Commercial Pressure, Rome: Land Coalition. Available at:www.landcoalition.org/publications/tragedy-public-lands-fate-commonsunder-global-commercial-pressure. ——(2012) Customary Land Tenure in the Modern World. Rights to Resources in Crisis: Reviewing the Fate of Customary Tenure in Africa – Brief 1 of 5, Washington, DC: Rights and Resources. Andrianirina-Ratsialonana, R. and Teyssier, A. (2010) ‘Large-scale agricultural investments in Madagascar: lessons for more “inclusive” models’, in L. Cotula and R. Leonard (eds) Alternatives to Land Acquisitions: Agricultural Investment and Collaborative Business Models, London: International Institute for Environment and Development (IIED)/Berne: Swiss Agency for Development and Cooperation (SDC)/Rome: International Fund for Agricultural Development (IFAD)/Maputo: Centro Terra Viva (CTV). Anseeuw, W., Alden Wily, L., Cotula, L. and Taylor, M. (2012) Land Rights and the Rush for Land, Rome: International Land Coalition. Arslan, A., Khalilian, S. and Lange, M. (2011) ‘Dealing with the race for agricultural land’, Kiel Policy Brief. Available at: www.ifw-kiel.de/think-tank/policy-support/kiel-policy-brief1 (accessed 10 February 2012). Binswanger-Mkhize, H. P., Meinzen-Dick, R. and Ringler, C. (2010) Policies, Rights and Institutions for Sustainable Management of Land and Water Resources, SOLAW Thematic Reports 09. Water Resources, Rome. Available at: www.fao.org/nr/solaw/thematic-reports/en/ (accessed 15 February 2012). BMZ (2009) Development Policy Stance on the Topic of Land Grabbing – The Purchase and Leasing of Large Areas of Land in Developing Countries, Bonn/Berlin: BMZ. ——(2012) Investments in Land and the Phenomenon of Land Grabbing. Challenges for Development Policy, BMZ Strategy Paper 2/2012e, Bonn/Berlin: BMZ. Boelens, R., Zwarteveen, M. and Roth, D. (2005) ‘Legal complexity in the analysis of water rights and water resources management’, in D. Roth, R. Boelens and M. Zwarteveen (eds) Liquid Relations. Contested Water Rights and Legal Complexity, New Brunswick, NJ: Rutgers University Press, pp. 1–20. Borras, S. and Franco, J. (2010a) ‘From threat to opportunity? Problems with the idea of a “code of conduct” for land-grabbing’, Yale Human Rights and Development 13: 507–23. ——(2010b) ‘Towards a broader view of the politics of global land grab: rethinking land issues, reframing resistance’, ICAS Working Paper Series 001: 1–39. ——(2010c) ‘Contemporary discourses and contestations around pro-poor land policies and land governance’, Journal of Agrarian Change 10(1): 1–32. Bues, A. (2011) ‘Agricultural foreign direct investment and water rights: an institutional analysis from global land grabbing’, paper presented at LDPI, International Conference on Global Land Grabbing, 6– 8 April, IDS Sussex. Castro, J. E. (2007) ‘Water governance in the twentieth-first century’, Ambiente y Sociedade 10(2): 97–118. Cleaver, F. (2002) ‘Reinventing institutions: bricolage and the social embeddedness of natural resource management’, European Journal of Development Research 14(2): 11–30. Cotula, L. (2011) Land Deals in Africa: What is in the Contracts? London: IIED. Available at: http://pubs. iied.org/12568IIED.html. de Schutter, O. (2009) ‘Large-scale land acquisitions and leases: A set of core principles and measures to address the human rights challenge’, report issued by the United Nations Special Rapporteur on the Right to Food, 11 June. ——(2011) ‘How not to think of land-grabbing: three critiques of large-scale investments in farmland’, Journal of Peasant Studies 38(2): 249–79. Deininger, K. (2011) ‘Challenges posed by the new wave of farmland investment’, Journal of Peasant Studies 38(2): 217–47. Deininger, K. and Byerlee, D. (2011) Rising Global Interest in Farmland – Can It Yield Sustainable and Equitable Benefits? Washington, DC: World Bank. Deng, D. D. (2011) Understanding Land Investment Deals in Africa. Country Report: South Sudan, Oakland, CA: Oakland Institute. Derman, B. and Ferguson, A. (2000) ‘The value of water: political ecology and water reform in southern Africa’, paper prepared for the Panel on Political Ecology for the Annual Meetings of the American Anthropological Association, 15–19 November, San Francisco. 296

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ECA (United Nations Economic Commission for Africa) (2010) ‘Framework and guidelines for land policy in Africa’, Addis Ababa. Engels, B. and Dietz, K. (2011) ‘Land Grabbing analysieren: Ansatzpunkte für eine politisch-ökologische Perspektive am Beispiel Äthiopiens’, Peripherie 124(31): 399–420. Exner, A. (2011) ‘Biomasseproduktion für energetische Zwecke. Die Situation in (potenziellen) Exportländern mit Fokus auf den globalen Süden und dem Fallbeispiel Tanzania’, Klagenfurth. Falkenmark, M. (1995) ‘Land–water linkages – a synopsis in land and water integration and river basin management’, FAO Land and Water Bulletin 1: 15–16. FAO, IFAD, UNCTAD and World Bank (2010) Principles for Responsible Agricultural Investment that Respects Rights, Livelihoods and Resources. Discussion Note 25 January 2010. Online. Available at: http://siteresources.worldbank.org/INTARD/214574–1111138388661/22453321/Principles_Extended.pdf. Fisseha, M. (2011) ‘A case study of the Bechera agricultural development project, Ethiopia’, contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Gehne, K. (2011) ‘Responsible investment through international investment law: Addressing rights asymmetries through law interpretation and remedies’, in S. Heri, A. ten Kate, S. Van der Waal, B. Bonanomi and K. Gehne, International Instruments Influencing the Rights of People Facing Investments in Agricultural Land, Rome: International Land Coalition, pp. 88–131. Published online. Available at: www.landcoalition.org/gpl (accessed 15 February 2012). GRAIN (2008) SEIZED! The 2008 Land Grab for Food and Financial Security, Barcelona: GRAIN. Online. Available at: www.grain.org/go/landgrab. Heri, S., ten Kate, A., Van der Waal, S., Bonanomi, B. and Gehne, K. (2011) International Instruments Influencing the Rights of People Facing Investments in Agricultural Land, Rome: International Land Coalition. Online. Available at: www.landcoalition.org/gpl. Hodgson, S. (2004) ‘Land and water – the rights interface’, FAO Legal Paper Online 36, Rome. Available at: www.fao.org/legal/Prs-OL/lpo36.pdf. Hoff, H., Falkenmark, M., Gerten, D., Gordon, L., Karlberg, L. and Rockström, J. (2010) ‘Greening the global water system’, Journal of Hydrology 384: 177–86. Johnston, B. R. (2008) ‘Capitalism nature socialism – the political ecology of water: an introduction’, Capitalism Nature Socialism 14(3): 73–90. La Via Campesina, FoodFirst Information and Action Network, Land Research Action Network and Genetic Resources Action International (2010) Stop Land Grabbing Now! Heidelberg: FIAN International. Li, T. M. (2011) ‘Centering labor in the land grab debate’, Journal of Peasant Studies 38(2): 281–98. Meinzen-Dick, R. (2007) ‘Beyond panaceas in water institutions’, PNAS 104(39): 15200–5. Meinzen-Dick, R. and Bakker, M. (2001) ‘Water rights and multiple water uses’, Irrigation and Drainage Systems 15: 129–48. Meinzen-Dick, R. and Markelova, H. (2009) ‘Necessary nuance: toward a code of conduct in foreign land deals’, in M. Kugelman and S. L. Levenstein (eds) Land Grab? The Race for the World’s Farmland, Washington, DC: Woodrow Wilson International Center for Scholars, pp. 69–84. Meinzen-Dick, R. and Nkonya, L. (2007) ‘Understanding legal pluralism in water rights: lessons from Africa and Asia’, in B. van Koppen, M. Giordano and J. Butterworth (eds) Community-based Water Law and Water Resource Management Reform in Developing Countries, Oxford: CABI Publishing, pp. 46–64. Molle, F. (2004) ‘Defining water rights: by prescription or negotiation?’ Water Policy 6: 207–27. Newell, P. (2001) ‘Managing multinationals: the governance of investment for the environment’, Journal of International Development 13(7): 907–19. Niasse, M. (2011) ‘Access to land and water for the rural poor in a context of growing resource scarcity’, paper presented at the IFAD Conference on New Directions for Smallholder Agriculture, 24–25 January, Rome. Nkonya, L. (2008) Rural Water Management in Africa, Amherst: Cambria Press. O’Brien, E. (2011) Irregular and Illegal Land Acquisition by Kenya’s Elites: Trends, Processes, and Impacts of Kenya’s Land-grabbing Phenomenon, Rome: International Land Coalition. Available at: www.landcoalitio n.org/cpl. Ostrom, E. (1990) Governing the Commons: The Evolution of Institutions for Collective Action, New York: Cambridge University Press. ——(1992) Crafting Institutions for Self Governing Irrigation Systems, San Francisco, CA: ICS Press. Oxfam (2011) Land and Power. The Growing Scandal Surrounding the New Wave of Investments in Land, Oxfam Briefing Paper 151, London: Oxfam. Available at: www.oxfam.de/landgrabbing (accessed 15 January 2012). 297

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Palmer, B. R. (2011) ‘Would Cecil Rhodes have signed a code of conduct? Reflections on global land grabbing and land rights in Africa past and present global land grabbing’, paper presented at the LDPI, International Conference on Global Land Grabbing, 6–8 April, IDS Sussex. Pearce, F. (2012) Turning Point. What Future for Poorest Peoples and Resources in the Emerging World? Washington, DC: Rights and Resources. Available at: www.rightsandresources.org/publication_details. php?publicationID=4701 (accessed 10 February 2012). Rosegrant, M. W. and Binswanger, H. P. (1994) ‘Markets in tradable water rights: potential for efficiency gains in developing country water resource allocation’, World Development 22: 1613–25. Schanzenbächer, B. (2010) Sustainable Large Scale Agriculture – Lessons Learned from the Forestry Sector. Online. Available at: www.donorplatform.org/about/news/224-land-investment-and-development.html (accessed 16 May 2011). Schlager, E. and Ostrom, E. (1992) ‘Property-rights regimes and natural resources: a conceptual analysis’, Land Economics 68(3): 249–62. Scott, James C. (1998) Seeing like a State: How Certain Schemes to Improve the Human Condition Have Failed, New Haven, CT: Yale University Press. Skinner, J. and Cotula, L. (2011) ‘Are land deals driving “water grabs”?’ IIED Briefing, London. Available at: http://pubs.iied.org/1702IIED. Smaller, C. and Mann, H. (2009) A Thirst for Distant Lands: Foreign Investment in Agricultural Land and Water, Winnipeg: IISD. Spieldoch, A. and Murphy, S. (2010) ‘Agricultural land acquisitions: Implications for food security and poverty alleviation’, in M. Kugelman and S. L. Levenstein (ed.) Land Grab? The Race for the World’s Farmland. Woodrow Wilson International Center for Scholars. Asia Program, pp. 39–-53. Available at: www.wilsoncenter.org/topics/pubs/ASIA_090629_Land%20Grab_rpt.pdf (accessed 24 June 2010). Taylor, M. and Bending, T. (2009) ‘Increasing commercial pressure on land: building a co-ordinated response’, discussion paper, ILC Secretariat, Rome. UNDP (2006) Human Development Report 2006 – Beyond Scarcity: Power, Poverty and the Global Water Crisis. Online. Available at: http://hdr.undp.org/en/reports/global/hdr2006/ (accessed 15 June 2011). Utting, P. (2008) ‘The struggle for corporate social responsibility’, Development and Change 39(6): 959–75. van Koppen, B. (2007) ‘Dispossession at the interface of community-based water law and permit systems’, in B. van Koppen, M. Giordano and J. Butterworth (eds) Community-based Water Law and Water Resource Management Reform in Developing Countries, Oxford: CABI Publishing, pp. 46–64. Von Braun, J. and Meinzen-Dick, R. (2009) Land Grabbing by Foreign Investors in Developing Countries: Risks and Opportunities, IFPRI Policy Brief 13 (April), Washington, DC: IFPRI. Watts, M. (2000) ‘Political ecology’, in E. Sheppard and T. J. Barnes (eds) A Companion to Economic Geography, Oxford: Blackwell, pp. 257–74. Zoomers, A. (2010) ‘Globalisation and the foreignisation of space: seven processes driving the current global land grab’, Journal of Peasant Studies 37(2): 429–47.

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3.6 Keep calm and carry on What we can learn from the three food price crises of the 1940s, 1970s and 2007/2008 Johann Custodis

To prevent the recurrence of misery is alas! Beyond the power of man. (Thomas Malthus)

It is important to note that the wave of investment in African farmland peaked immediately after the food price spikes in 2007–08. But food price spikes are nothing new. The 20th century witnessed a similar increase in food prices in the 1970s and, though less well known and under different circumstances, also in the late 1940s. Commodity booms occurred frequently in the 20th century with price spikes of agricultural products a key cause in many instances. Food shortages accompanied each of the three crises. A significant body of literature in fact discusses the cyclical nature of food crises (see Timmer 2010 and World Bank 2009 for a more complete discussion). This article examines and contextualises the three food price spikes in the 1940s, 1970s and 2007–8 to evaluate the key similarities and differences and to understand what lessons could be drawn from these experiences for the future of world food prices. The price spikes in 2010–11 will also be discussed very briefly. This study places the three food price spikes in the context of the theories of Malthus. The question is posed as to whether the 2007–08 food spike and its predecessors are indeed the ‘recurrent miseries’ against which Malthus warned. Malthus in his work argued that under certain circumstances, miseries and crises such as famines or epidemics would recur because they acted as checks to contain excessive population growth outstripping resources. A vast body of literature has criticised Malthus for his view, but there are also some groups that contend that a revised version of Malthus – one could call it Malthus 2.0 – still holds today. This chapter considers whether the ghost of Malthus is about to haunt us again. The ghost appeared at various instances throughout the course of economic history, but its presence in the 20th and 21st centuries is of particular relevance for the world food problems faced today. The ghost emerged in the wake of the food crisis in the late 1940s, re-emerged very prominently in the 1970s and was present yet again in the 2007–08 crisis and maybe also in 2010–11. This chapter carves out the similarities and differences between the crises, in particular regarding the origins of and responses to the crises. It concludes that the answer to the question whether or not we have 299

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beaten Malthus and how food prices will develop in the future lies in the examination of the interplay between government intervention and private-sector responses and in the sustainable management of resources. In light of rising price volatility, growing demand from developed countries and stagnating productivity in developed countries, a focus on energy prices and government policies is vital to prevent prices from spinning out of control.

1 Malthus revisited? The ghost of Malthus was inherent in all food crises since the 1940s. Today, a report by the FAO reinforces the severity of the scarcity argument by warning of future food bottlenecks. It estimates that rural global food production has to increase by up to 70% in order to meet the food security demands of a growing world population estimated at 9.2 billion in 2050 (Committee on World Food Security 2011: 21). The key idea of Malthus is that resources are fixed while population growth is not and that this resource constraint will eventually curtail economic growth in one way or another. He famously argued that population growth can outstrip resources and postulated that food supply only grows arithmetically while population growth is geometrical. Population growth is checked either through a ‘positive’ check, such as a famine, war or an epidemic, or through a ‘preventive’ check, such as birth controls or postponing marriages (Malthus 1798). The ‘recurrent miseries’ touched on in the very beginning of this chapter can, for instance, assume the form of these positive checks. Population growth oscillates therefore around a certain maximum point defined by resource constraints. Put simply, though, the idea of a preventive check also implies that wealth oscillates along with population growth. Food scarcity entails higher food prices which in turn depresses real wages, leading individuals to reduce offspring in face of the prospect of reduced income. Under the Malthusian model, therefore, population remains stable in the long run at a point where birth rates equal death rates at an income sufficient for subsistence (Clark 2007). The ghost of Malthus reiterates the danger of world-wide food shortages that haunted the world in 2007 and, some may argue, are still haunting us now. Yet Malthus has made his appearances on the world stage many times before, in particular prior to and in the aftermath of the 1970s crisis. The publication Limits to Growth by the Club of Rome in 1972 expressed concerns about population growth and limited resources (Horton 2009). Lewis, writing in 1980, points out that ‘many people believe that we are coming up to a food shortage in 1990’ given the inability of the URSS, the People’s Republic of China, India and some African countries to feed themselves and the expected rise of the oil price (Lewis 1980: 426–7). The fear of persistently high oil prices inflating food production costs and population growth outstripping food production that resurfaced with the 2007–08 food spike had thus already appeared 30 years earlier. Fears of resource shortages, fuel price turbulences and fuel shortages also played a key role in both food price spikes in the 1940s and 1970s. It is debatable to what extent these previous crises have Malthusian characteristics, but it remains clear that the limitation of resources, population growth and the impact of energy prices on food prices are not new problems. Sachs (2008) discusses the two main criticisms of Malthus’s pessimistic predictions. He finds that they failed to incorporate the advancement of technology enabling food supply to stay ahead of population growth and that population growth may not be geometric after all. At the same time, Sachs admits that we still do not know whether we have beaten Malthus. Further depleting the ‘natural capital’ such as water via resource extraction rather than resource saving while simultaneously world population would be growing faster than the replacement rate of 2.1 children per household would result in a Malthusian scenario. Sachs recommends that we 300

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should stabilise world population and react to climate change by economising on finite resources and expanding on development of renewable energy technologies. Neo-Malthusians like Clark would reject the claims that technological advances and increasing agricultural productivity have enabled sustained population growth in the long run despite fixed resources. Technological gains, for instance, are only temporary in their view. In the long run, the birth rate exceeding the death rate will trigger a movement back to the equilibrium at the subsistence income prior to the technological change. The only difference is that the subsistence income is sustained at a higher population level after the technological change (Clark 2007). It remains to be seen which advocates of either camp are proven right, but the focus of attention of Malthusians on the limits of our resources is an issue that must not be avoided, in particular in relation to warnings of climate change and the need to increase the usage of renewable energies. However, Malthus has been beaten twice already in the 20th century, and this article will now shed light on these crises that bear a Malthusian character. The core indicators for Malthusian moments were food crises, food shortages and high food prices. I will now analyse the three crises in turn and conclude with a comparative analysis.

2 The forgotten crisis? 1946–48 The [FAO] council is convinced that the world food situation demands from all governments early and vigorous actions and feels a responsibility for bringing the stark facts to the notice of the governments.1

The above extract from an FAO report could be placed in the context of the food crisis in 2007–08 and the African food crisis in 2011. In fact, this statement was made more than 60 years earlier, in 1948. The pronounced increase in food prices in the immediate post-war period, namely from 1946 to 1948, was mostly but not exclusively driven by the extreme circumstances of the war. The lifting of price controls prevalent during the war gave rise to significant inflation world-wide and, in particular, to rapidly increasing food prices. In the USA, for instance, grain rose to four times its 1938 price at the end of 1947 following the withdrawal of wartime price controls in mid-1946. American food prices rose at a significantly faster pace than those in manufacturing and it was only in mid-1948 that this trend gradually reversed as food and manufacturing prices started to decline (UN 1949: 93). Supply factors appear to be the most prominent when examining the European case. Western Europe struggled with vast human losses, damaged capital stocks and depleted government finances in the immediate post-war period. Hyperinflation appeared to grip Italy and France, for instance. The European recovery was more rapid than after the First World War, but agriculture recovered more slowly than industry. Food production suffered from fertiliser and machinery bottlenecks, the disastrous 1947 harvest and the post-war financial chaos; farmers resorted to hoarding and barter rather than marketing their products (De Long and Eichengreen 1993). Food supply deteriorated in quality given the fertiliser shortages and livestock supply was severely depleted (Cassels 1946); fuel shortages and continued rationing constrained food availability and caused high food prices (Geiger 1999). Western Europe disposed of only 80% of its 1938 food supply by 1946–47 while population had increased by at least 10% (De Long and Eichengreen 1993: 199). Bottlenecks were particularly acute in Eastern Europe where average food production had reached only 67% of pre-war levels by 1947–48 (UN 1949: 17).

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These problems were, however, not only constrained to Europe but experienced around the globe. The URSS suffered from a severe drought in 1946 but agricultural production allegedly returned to pre-war production in 1947 (UN 1949). Ellman (2000) reveals that between 1 million and 1.5 million people died in the Soviet famine which followed the drought and which lasted from mid-1946 to 1948. However, he argues that there was no inevitable link between the 1946 drought and the famine; government policies regarding stock management and international trade exacerbated the effect of the drought. The situation in post-war Asia bears similarities to that of Western Europe. Black-marketing, hoarding, inflation, food, fuel and fertiliser shortages were frequent in Japan in the aftermath of the war (Dower 1999). The abolition of price controls and attempts at market liberalisation by the American administration in the Republic of Korea (South Korea) resulted in food shortages and rapidly rising prices. Masses of refugees and returning Koreans added demand pressures. Hoarding and black-marketing followed so that rationing had to be reintroduced (Francks et al. 1999: 121). Similar to the European case, therefore, supply bottlenecks and increased demand contributed to the price increase in Asia. The European governments played a decisive role in mitigating the crisis; Keynesian economics influenced the solution to the spikes. Government intervention in the 1940s and subsequent years through vehicles such as the Marshall Plan and, later on in the European Union (EU), the Common Agricultural Policy (CAP) ensured short-term food supplies in the crisis years 1946–47. More importantly, however, agricultural subsidies artificially kept prices low and supported farmers, especially in Western Europe (see Keulertz and Sojamo, Chapter 3.8 in this volume; Paarlberg 2010). High food production in Western and Central Europe and in particular in North America relaxed the situation, with wheat output increasing stocks by 50% in summer 1949 compared to summer 1948, while low output persisted in the Far East, Africa and Latin America, in particular in rice (FAO 1950). Post-war food shortages therefore did not dissipate quickly across all agricultural commodities after the initial food price spike had calmed down. Malthus was beaten through supply recovery and government intervention. Lewis (1980) describes the year 1949 as one of recession and the final year in which the effects of the war on prices could still be felt. Afterwards, he claims that commodity price increases induced inflation in the 1950s, notably the US stockpiling in 1950 in light of the Korean War. Prices subsequently declined in the second half of the 1950s, recovered slightly in the 1960s and remained low until 1970. The VietNam War, however, ended this period of calm prices as the USA experienced high inflation in the late 1960s and Britain devalued its currency in 1967. The food crisis in 1972 and oil shock in 1973 brought commodities back into the spotlight. This spotlight, however, was much brighter than many had wished.

3 The 1970s crisis: oil enters the stage Malthus was back on the agenda in the 1970s. Extremely high food prices and food shortages in developing countries resurfaced; the first oil shock destabilised markets world-wide. The food price spike in the 1970s begins, as in the previous case, with acute supply problems. Adverse weather in the USSR, Asia and Africa in 1972 had significantly reduced world food production by 40 million metric tons compared to an average yearly increase of 28 million metric tons over the previous decade. The USSR closed its gap on food supplies with imports from the USA as it benefited from US export subsidies and a lack of US export monitoring. This, in turn, caught the USA off-guard with reserves standing at 10% of annual consumption in 1973 (Hathaway 1975: 69). In addition, the first oil shock hit. Oil prices rose by 450% between October 1973 and May 1974 because of a commodity boom and the Organization of the Petroleum Exporting 302

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Countries (OPEC)’s response to the Yom Kippur war. The impact of the oil shock on food prices was worsened by the trebling of the price of Moroccan rock phosphate, a key fertiliser, further augmenting food production costs (Horton 2009). The combination of fertiliser shortages, very high oil prices and again extremely low food production in 1974 caused panic buying by, for example, India and Bangladesh. Developing countries, especially in Asia, were hardest hit by the crisis and also the availability of grain feed for animals was the lowest ‘in history’ in the USA in 1974–75. The FAO warned that hundreds of millions of people suffered from malnutrition or starvation in 1974 (Hathaway 1975). The food situation eased in 1975 following the World Food Conference, mainly for two reasons. First, the USSR and China cancelled orders of USA grain supplies, thus reducing demand pressures. Second, prices fell in 1975, allowing the USA to broaden its food aid programme in addition to Canadian and Western European aid supplies. However, Horton (2009), based on Hathaway’s account of the implementation of the 1974 World Food Conference goals, finds that these efforts were not very successful. The economic and political context of the immediate post-war period is difficult to compare to that of the 1972–74 crisis. The Second World War had severely disrupted markets and destroyed pre-war trade patterns. Economies struggled to readjust to peace, reconstruct, and cope with failed harvests and higher demand at the same time. The post-war era 1950–73 was characterised by a ‘Golden Age’ of economic growth in particular in Western Europe and a simultaneous spur in market liberalisation (Crafts and Toniolo 2002). It is interesting to note that in both crises short-run supply problems (low stocks, distributional problems, adverse weather) and increased demand pressures (consumption backlog from the war and population growth) played their part in triggering the crisis. This is not to say that they were the sole cause. Asia was also in both crises more severely hit than Europe; Asia needed more time to recover in the 1940s and South and South East Asia bore the brunt of the consumption decline caused by the 1972–74 food crisis (Hathaway 1975). Finally, in both cases a world-wide recession and fertiliser shortages were apparent and fuel shortages occurred, although the latter entailed a more dramatic market reaction in the 1970s. One key difference remains: the economic environment. In wake of the Second World War, government intervention in the form of Keynesian policies was regarded as a crucial factor for economic policy while in the immediate aftermath of the oil crisis, Keynesian economic thinking was challenged by calls for market liberalisation (see Keulertz and Sojamo, Chapter 3.8 in this volume; Hayek 2001).

4 The 2007–08 crisis The food price spike of 2007–08 awoke the memories of the 1972–74 crisis among many observers. Malthus appeared to have returned once again. It is impossible to touch on all the different arguments put forward in the literature, but the following discussion will shed light on the main price drivers discussed and also compare to what extent these differ from the 1972–74 crisis. Prices for internationally traded food increased by almost 60% in the first half of 2008. Wheat prices more than doubled between March 2007 and March 2008; rice prices tripled between December 2007 and April 2008. Subsequently, however, food and raw material prices experienced sharp declines by November 2008 (World Bank 2009). However, the FAO warned in July 2011 that prices had not yet returned to their pre-2007–08 levels. International food prices actually rose sharply in the first half of 2011 and the food price index exceeded 2007–8 levels. In other words, yet another food price spike occurred in 2011 (Committee on World Food Security 2011: 19). Supply-side factors triggering the 2007–08 crisis include, as in the 1970s, low food stocks. Stock to utilisation ratios were extremely low both in 1973 and 1974 and also in 2007–08. 303

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Government policies, diverting crops such as corn into ethanol production, a sharp reduction of supplies, e.g. by the EU of its ‘butter mountains’ and ‘milk lakes’, in turn reduced incentives for agricultural R&D, are highlighted as key drivers for the exceptionally low stocks. World-wide harvest failures and droughts in Australia aggravated the crisis. However, Mitchell claims that these harvest failures were not sufficient to drive the increase in grain prices (Piesse and Thirtle 2009). On the demand side, the sudden increase in commodity prices preceding the food price can be seen as a more direct culprit for the crisis. Markedly increased demand for metals and oil by China and India drove up commodity prices which increased the price of inputs, in particular fertilisers, as they depend on oil prices. Food production costs and in turn food prices rose as a consequence. In addition, low stocks attracted speculation from investors betting on food price rises. Export restrictions worsened this problem, in particular for rice given the low level of rice actually traded in international markets. The depreciation of the dollar also contributed to the food price spike, although the degree of its contribution is heavily contested. Abbot, Hurt and Tyner claim that half the price spike is attributable to the fall in the dollar whereas Mitchell suggests that the impact of the weak dollar is less significant, ‘perhaps 20%’ (Mitchell cited in Piesse and Thirtle 2009: 124). Dorward (2011) questions the way food prices are measured altogether. He argues that the usage of most price indices such as the US CPI overstates price falls and understates welfare losses for poor people and suggests expressing food prices more relative to income and expenditure. The historically low stocks therefore exposed a supply vulnerable to speculation exacerbated by harvest failures and export bans while rapid economic growth and biofuel production augmented demand. The role of speculation and that of government policies deserve further attention because the impact of the former is heavily debated and because the latter factor was especially important in Africa and Asia. Von Braun and Torero (2009) shed light on the role of speculation in the January 2008 price spike. It drove up commodity prices through rising capital inflows into the commodity markets from investors and through markedly increased speculative trading in the futures markets of agricultural products. They claim that the volume of speculative activity could partly explain price movements for wheat and rice and propose a two-pronged approach to prevent or mitigate future price hikes. First, the establishment of a small, decentralised physical emergency reserve of 5% of current food aid flows managed by the World Food Programme (WFP) should target urgent food needs. Second, they suggest setting up a ‘virtual reserve’ via an international institution which would monitor grain prices and their futures markets. It would intervene in these futures markets by, for example, reducing the price of a commodity in its futures market, thereby reducing or averting a price spike. This reserve could make ad hoc trade policy options obsolete. Such policy options include export bans, high tariffs and subsidies which had been both a cause and an effect of the 2007–08 crisis. Nevertheless, opinions on the role of speculation are heavily divided. Domanski and Heath, for instance, defend the role of speculation as they detect sharply increased trading volume in the futures market during the 2007–08 price spike. Sanders poses a counter argument that speculation was not high in historical terms and that also commodities without future markets such as rice and milk experienced price spikes during the crisis (Committee on World Food Security 2011: 26). While the role of speculation may be unclear, it is very clear that prices now are more volatile and also that the role of future markets today is larger than in the previous two crises. The aggravating role of isolationist trade policy measures during the crisis represents another important supply-side factor. Both food importing and exporting countries worsened food price instability by pursuing policies to isolate and tame domestic food markets. These in turn 304

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distorted world prices of e.g. rice given the thin nature of its market (Abbott and Boro de Battisti 2011). Slayton (2009) claims that the 2008 rice price spike in Asia was ‘man-made’ and that rising oil prices, a weaker dollar and speculation only played a supporting role. India, VietNam and Thailand, accounting for 34% of world rice exports, implemented export restrictions that triggered the rice spike. India started the rice crisis by curtailing wheat imports and banning basmati rice exports to increase domestic rice prices and to please farmers, a strong voter group in the approaching regional and national elections. VietNam’s ‘profit-driven’ choices and the Philippines’ aggressive buying worsened the crisis in mid-2008. This case study on the detrimental effects of export bans bears similarities to the problematic nature of the US export subsidies to the USSR in the early 1970s which exposed low US stocks (Hathaway 1975). Also, European and US policy reversals through reduced farm subsidies and less stock dumping indirectly reduced food supplies prior to the 2007–08 crisis (Piesse and Thirtle 2009: 122). Government policies and the transmission of prices played an important role in determining the impact of the food price spike on Africa. The degree to which international food and commodity prices translate into higher prices within a country depends on a number of factors, such as market integration, trade policy and the nature of exchange rate regimes. Developing countries are particularly vulnerable to domestic price increases as they are mostly crude oil and fertiliser importers. Abbott and Boro de Battisti (2011) find that in Africa price transmission rates are higher the more import-dependent countries are. Senegal, Mali, Burkina Faso, Niger, Malawi and Ghana show this pattern for rice, for example, while Niger and Mali have lower transmission rates for sorghum and millet, which are mostly domestically produced (Abbott and Boro de Battisti 2011: i31). Three further factors intensify the transmission mechanism. First, depreciating exchange rates of the domestic economy prolong price rises while international prices may already be falling. Second, the share of food among consumer expenditures is higher in developing than in developed countries, so domestic food price increases hit the former harder. Many African countries experienced very high food inflation rates during 2007–08 of up to 25% in Kenya and almost 20% in Botswana, for example (Abbott and Boro de Battisti 2011: i33). Third, higher commodity prices affect trade balances. Increased revenue gains from higher export commodity prices, e.g. cocoa, mostly were swallowed by higher import costs of more expensive crude oil. African governments were caught in a dilemma: isolationist policies to prevent or cushion price transmissions deplete scarce foreign exchange and shrink government budgets; allowing the price rises to be transmitted unchecked can lead to pronounced food inflation, social unrest, hunger and poverty (Abbott and Boro de Battisti 2011: i35). Many African countries resorted to the former to protect farmers and consumers and Abbott and Boro de Battisti find that the more integrated the markets of those countries were, the more affected they were by international food price rises, but still the impact varied widely. The recurring nature of food price spikes and increased price volatility is also seen as a causal factor for the food price spike. Commodity booms appear to occur periodically and often precede food crises. Geopolitical uncertainty, rapid growth and inflation more or less can be found in four commodity booms of the 20th and 21st centuries: in 1915–17, 1950–57, 1973–74 and 2007–08 (World Bank 2009). Apart from the 1915–17 period, all booms were preceded by a period of low prices (1970s and 2003–08) or low investment (1950–57). The 2003–08 boom stands out in terms of magnitude, duration and the number of commodities involved. The real dollar price increase from peak to trough never exceeded 60% in the previous three periods, whereas from 2003 to 2008 it stood at almost twice that amount, 109%. However, these price increases are measured with 1977–79 as a base year, implying that booms prior to this period are deflated while the following boom, i.e. the 2003–08 one, is inflated. In other words, the base year choice might exaggerate the magnitude of the 2003–08 boom. Also, the price rise spread 305

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in 2007–08 from oil to minerals and then agricultural products in 2003–08. The only other instance of such a broad and long increase in commodity prices was during the First World War. Reconstruction demands and shortage fears increased metal prices and harvest failures raised agricultural prices in the 1950s, but oil prices remained unaffected. Booms and busts in the metal, oil and mineral sector normally tend to be longer than those in agricultural markets because of the longer lags between investing in new capacity and the increase in supply. The current boom of 2007–08 diverges from this trend as it reflects a demand shock, so prices rise despite an overall increase in production. The final factor discussed causing the 2007–08 food crisis would particularly please Malthus. Agricultural productivity stagnates while population continues to rise, entailing growing food scarcity. Resource extraction and pollution continue at an ever increasing pace. The potential of the ‘green revolution’ to increase productivity in agriculture and increase yields is gradually diminished. The FAO believes that a second green revolution is necessary, one which focuses on technology and the sustainable use of resources (FAO 2012). Also, degraded farmland is abandoned (up to 10 million ha annually), water is over-extracted and essential inputs such as fuel and fertilisers, in particular phosphates, become increasingly scarce. Another concern is the damaging and costly effect of agriculture on the environment. Nitrogen pollution of blue water and the atmosphere and greenhouse gas emissions are extremely significant. Horton (2009) underscores the fact that climate change renders a call for action to combat food crises more and more urgent and Sachs, as mentioned above, also warns that the depletion of resources could lead to a Malthusian scenario if the way we think about using our resources is not challenged.

5 The crises compared The 1970s and 2007–08 crises have been compared by many observers, but this study also looks at in the 1940s and finds that Malthusian fears were raised in each case, but beaten each time. Short-run supply pressures and increased demand pressures and their reversal played their part in each of the three crises. The similarities and differences, especially between the 1972–74 and 2007–08 crisis, deserve further attention to deepen our understanding of the price movements and the danger of Malthus’s return. There are many similarities between the food price spikes in the 1970s and in 2007–8. The combination of low stocks, high energy prices and augmented demand played a key role in both food spikes. While low US stocks constituted the trigger in the 1970s, in 2007 the European Union had deliberately run down stocks to reduce the previously heavily criticised notorious ‘butter mountains’ and ‘wine lakes’. Adverse weather conditions exacerbated both crises. Another similarity was increased demand, in the 1970s for animal fodder for meat production in light of rising population growth and in 2007–08 in the form of rapid economic growth of India and China. Along with increased demand, strong GDP growth could be observed prior to both crises. Japan spearheaded that economic growth phase before the 1972– 74 price spike while China’s boom was the prime engine driving growth prior to 2007–08. GDP growth preceding the boom was actually greater in the 1970s compared to 2003–08 (World Bank 2009). Both the 1972–74 and the 2007–08 food crises also had a more severe impact on developing countries. Protection from the crisis via ad hoc policy measures proved extremely expensive and sometimes painful, and financial, economic and social and political instability could follow. Examples are the panic buying by India and Bangladesh in the 1970s and by Asian countries in 2007–8 and protective policy measures in African countries. Finally, food aid was lowest in both the crisis years, 1973–74 and 2007–08, compared to the 20 years preceding each crisis. 306

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The new demand in the 21st century for grain for biofuel production presents a key difference between the two crises. The competition of this production process for food grains with direct food demand may lessen in the long run as more efficient biofuels are developed – for example, sugar-cane waste – but in the short run biofuels allegedly artificially increase food prices. Fabian Kesicki and Julia Tomei discuss the role of biofuels in further details in Chapter 3.4 of this volume. The two crises also differ substantially in terms of price levels and movements. The food price spike in 2007–08 was less severe than that in the 1970s. While prices in 2007–08 were higher than in the 1970s in nominal terms, real prices, i.e. food prices relative to other goods and services, were lower. Wheat, for example, stood at 55% of the 1970s price levels in 2007–08 in real terms (Piesse and Thirtle 2009: 119). The World Bank Food Index also indicates that the 2007–08 food price increase was less severe than that in the 1970s. Measured in constant 2000 dollars (accounting for inflation), at peak in 1974 food prices were almost twice as high than at peak in 2007–08 (Committee on World Food Security 2011). While the food price movements in the 1970s preceded other commodities, in 2007–08 metal and oil prices rose first and food prices followed (Piesse and Thirtle 2009: 123). Finally, the 1972–74 spike appears to be a brief deviation from the price trend whereas the 2007–08 spike occurred after six consecutive years of rising prices and the end is still not in sight, with yet again significant price increases in 2011 (Committee on World Food Security 2011: 19). Notwithstanding the divergence of prices and the role of biofuels, the degree of market liberalisation and the role of the government perhaps constitute the key difference between the crises. The war had disrupted markets and trade globally after the end of the Second World War; economic planning and government intervention were common solutions to allocation problems in the immediate post-war chaos. By contrast, in the 1970s and 2007–08 markets were significantly liberalised. After the oil shock of 1973 a paradigm shift occurred away from the Keynesian school of thought towards Monetarism (Friedman) and the importance of free markets. The ‘Golden Age’ 1950–73 witnessed significant economic and trade growth on a global scale and the turn away from protectionism. It is difficult to generalise the development for agriculture world-wide and over this period as it remained a protected sector in many countries. The establishment of the CAP in 1962 provides an example of this move towards protected agricultural markets. Still, overall, trade liberalisation was promoted with the establishment of the GATT and WTO and the EU. Institutions are seen as a key driver for economic growth in this period in Europe (Eichengreen 2002). The period prior to the 2007–08 crisis was characterised by the move away from protectionism in agriculture in the USA and the EU and also by an increasing role in the agricultural industry of the private-sector. The example of Brazil shows that market liberalisation and the involvement of the private-sector in the form of FDI can trigger rapid changes in the food industry. The heavy interventionist role of the Brazilian Government in the 1960s was followed by market liberalisation in agriculture in the mid-1980s in light of a debt crisis. The liberalisation in combination with urbanisation and cheap access to raw materials attracted FDI from multinational agribusinesses which on the one hand fostered rapid growth but on the other neglected small farmers (Chaddad and Jank 2006). The role of the private-sector today is particularly crucial with co-operative projects between the public and the private-sector and substantial investments from, for instance, the Far and Middle East. The FAO stresses that a successful approach includes a progressive food security policy, long-term investments involving the farmers and also smallholders, and a focus on environmentally friendly, sustainable production (FAO 2012). Finally, one could also argue that while high prices disturb international markets, they benefit farmers in developing countries. This, however, depends on whether they are net producers or 307

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consumers of food. In Africa, for example, the majority of farmers are net consumers while in India many are net producers (FAO 2012). The concept that market liberalisation stimulates growth and welfare dates back as far as Ricardo. Countries specialise in goods and services in which they enjoy a comparative advantage because of abundant supply, for example, or particular quality. The debate whether or not free trade stimulates economic growth is beyond this paper. Yet Ricardo’s concept, just as the ideas of Malthus, lives on today. With regard to agriculture, the key question is whether trade liberalisation will benefit the sustainable use of resources. Empirical evidence suggests that the opposite may be the case as property rights over resources are not well defined and incentives to avoid resource depletion are lacking, in particular in developing countries (Neumayer 2001). The fear of resource depletion today is very real, in particular with regards to water, the key element of this volume as a whole. As a consequence of this fear, prices for inputs for farmers such as fertilisers and oil are attached with increasing uncertainty. Piesse and Thirtle suggest that ‘the long decline in agricultural prices is over’ because oil prices would have to remain below US$55 per barrel in the long run in order to prevent a food price increase, a scenario they consider unlikely. Governments should therefore act prior to an oil price increase to prevent another food price spike. These actions should target the reduction in food supplies, improvement of infrastructure and improvements of incentives for agricultural R&D and institutional changes (Piesse and Thirtle 2009: 127–8). Findings from Abbott and Boro de Battisti and the FAO move in a similar direction.

6 Conclusion Malthus was beaten three times in the 20th and 21st centuries, but the problems which surfaced during each crisis and in particular during the last one are far from solved. He was beaten in the 1940s with the help of world-wide co-operation, better harvests and government intervention. High energy prices entered the stage in the 1970s as an additional factor, but food purchases on the private market, food aid and reduced demand provided relief. Malthus appeared a third time in 2007–08, and one could argue that both the markets and governments did strike back this time. While government intervention via subsidies, export bans and tariffs is declining overall, it has never really disappeared, especially in the food sector. Despite very different economic and historical context, the three food crises in the 1940s, 1970s and 2007–08 have many causes, factors and symptoms in common. Fuel and fertiliser shortages reduced supply in quantity and quality in the 1940s and also the 1970s. The oil price hike and its knock-on effect on fertiliser prices and the price increases of, for example, Moroccan phosphate were important ingredients to the build-up of the food price spike in the 1970s. The role of fertilisers in the price spike in 2007–08 was equally important. Higher oil prices inflated production costs and made prices more vulnerable to panic behaviour and speculation. Harvest failures – and, in extreme cases, famines – occurred in all three cases and exacerbated the crises, but they may not have been the prime drivers for the crises. Supply bottlenecks and increased demand pressures rather played this role. Low stocks were at the core of each crisis; run down because of the war in the 1940s, caught by surprise in the 1970s and reduced by trade liberalisation policies in 2007–08. Demand was high after the war with millions of refugees, returning soldiers and prisoners of war and, in the 1970s and 2007–08, because of high economic growth from Japan, China and India. The development of trade liberalisation, the private-sector and the role of biofuels represent the key differences between the crises. As the discussion of the three food crises has shown, energy prices and in particular fuel prices play a key role as an input factor for food production. Also, extreme demand pressures 308

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(developing countries, biofuels) and supply bottlenecks (harvest failures, low stocks, export bans) made the 2007–08 food spike appear more intense than the previous ones, even though in terms of price levels it was less severe than the 1970s crisis. Demand pressures and supply bottlenecks also appeared on the scene in the 1940s and 1970s, but forms and mechanisms differed starkly. The late 1940s were characterised by increased reconstruction demand, displaced persons and world-wide readjustment to peacetime economies. Supply shocks such as harvest failures and low agricultural output were particularly severe as foreign exchange for food imports was lacking. In the 1970s, developing countries exerted demand pressures and harvest failures reduced supply, but in addition an energy prices spike further hampered production and low stocks and excessive export policies eroded surpluses. The future of food prices will be dominated by an increasingly uncertain and volatile world food market. The FAO believes that as food supply has now shifted from Western to Eastern Europe and Russia, higher price volatility is inevitable owing to less stable harvests (FAO 2012). These new challenges of competing with biofuel production, taming the volatility of future agricultural commodity markets, incorporating environmental concerns and the food requirements of the developing world suggest that in many ways food prices are very difficult to predict. The spectre of Malthus has not yet disappeared. The long shadows of previous crises highlighted in this paper stay with us and are important in understanding the current food price crisis. Prices have become not only more volatile but more difficult to predict as multiple factors have to be taken into account, such as oil and fertiliser prices, the global economic environment and exchange rates. In addition, the availability of resources such as water, vital for agriculture, is increasingly discussed. This time, as discussed in this volume, Africa seems to become the new target for investment and development in agriculture. It will be decided in Africa whether Malthus can be beaten again.

Note 1 Report of the Council of FAO, 2nd session, 5–17 April 1948, Washington, DC, May 1948, p. 2.

References Abbott, P. and Boro de Battisti, A. (2011) ‘Recent global food price shocks: causes, consequences and lessons for African governments and donors’, Journal of African Economics 20 (AERC Supplement 1): i12– i62. Cassels, J. (1946) ‘The European food problem’, Proceedings of the Academy of Political Science 21(4, European Recovery): 16–27. Chaddad, F. R. and Jank, M. S. (2006) ‘The evolution of agricultural policies and agribusiness development in Brazil’, Choices, American Agricultural Economics Association 21(2): 85–90. Clark, G. A. (2007) Farewell to Alms: A Brief Economic History of the World, Princeton, NJ: Princeton University Press. Committee on World Food Security (2011) ‘Price volatility and food security’, High Level Panel of Experts on Food Security and Nutrition, Rome. Crafts, N. and Toniolo, G. (2002) ‘Post-war growth: an overview’, in N. Crafts and G. Toniolo (eds) Economic Growth in Europe since 1945, Cambridge: Cambridge University Press. De Long, J. B. and Eichengreen, B. (1993) ‘The Marshall Plan: history’s most successful structural adjustment program’, in R. Dornbusch, W. Noelling and R. Layard (eds) Postwar Economic Reconstruction and Lessons for the East Today, Cambridge, MA: MIT Press, pp. 189–230. Dorward, Andrew (2011) ‘Getting real about food prices’, Development Policy Review 29 (6): 647–64. Dower, J. W. (1999) Embracing Defeat: Japan in the Aftermath of World War II, London: Allen Lane. Eichengreen, B. (2002) ‘Institutions and economic growth: Europe after World War Two’, in N. Crafts and G. Toniolo (eds) Economic Growth in Europe since 1945, Cambridge: Cambridge University Press.

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Ellman, M. (2000) ‘The 1947 Soviet famine and the entitlement approach to famines’, Cambridge Journal of Economics 24: 603–30. FAO (Food and Agriculture Organization) (1948) Report of the Council of FAO, 2nd Session, 5–17 April 1948, Washington, DC: FAO. ——(1950) Report of the Council of FAO, 6th Session, 13–24 June 1949, Paris: FAO. ——(2012) anonymous interview, London. Francks, P., Boestel, J. and Kim, C. H. (eds) (1999) Agriculture and Economic Development in East Asia: From Growth to Protectionism in Japan, Korea and Taiwan, London: Routledge. Geiger, Till (1999) ‘Reconstruction and the beginning of European integration’, in M. S. Schulze (ed.) Western Europe, Economic and Social Change since 1945, London: Longman, pp. 23–41 Giersch, H., Paque, Karl-Heinz and Schmieding, H. (1993) ‘Openness, wage restraint and macroeconomic stability: West Germany’s road to prosperity 1948–59’, in R. Dornbusch, W. Noelling and R. Layard (eds) Postwar Economic Reconstruction and Lessons for the East Today, Cambridge, MA: MIT Press, pp. 1–27. Hathaway, D. E. (1975) The World Food Crisis – Periodic or Perpetual?, Washington, DC: International Food Policy Research Institute. Hayek, F. (2001) The Road to Serfdom, London: Routledge. Horton, S. (2009) ‘The 1974 and 2008 food price crises – a déjà vu?’, in J. Clapp and M. J. Cohen (eds) The Global Food Crisis, Governance Challenges and Opportunities, Waterloo, ON: Centre for International Governance Innovation (CIGI) and Wilfried Laurier University Press, pp. 29–42. Lewis, A. (1980) ‘Rising prices: 1899–1913 and 1950–79’, Scandinavian Journal of Economics 82(4): 425–36. Malthus, T. R. (1798) An Essay on the Principle of Population, as it Affects the Future Population of Society, first edition, London: J. Johnson. Neumayer, E. (2001) Greening Trade and Investment, Environmental Protection without Protectionism, London and Sterling: Earthscan Publications. Paarlberg, R. (2010) Food Politics: What Everyone Needs to Know, Oxford: Oxford University Press. Piesse, J. and Thirtle, C. (2009) ‘Three bubbles and a panic: an explanatory review of recent food commodity price events’, Food Policy 34: 119–29. Sachs, J. D. (2008) ‘Are Malthus’s predicted 1798 food shortages coming true?’ Scientific American, 25 August. Slayton, Tom (2009) ‘Rice crisis forensics: how Asian governments carelessly set the world rice market on fire’, Center for Global Development Working Paper Number 163. Timmer, C. P. (2010) ‘Reflections on food crises past’, Food Policy 35: 1–11. UN (1949) Economic Commission for Europe, Department of Economic Affairs, Economic Survey of Europe in 1948, Geneva: United Nations. Von Braun, J. and Torero, M. (2009) ‘Implementing physical and virtual food reserves to protect the poor and prevent market failure’, IFPRI Policy Brief 10. World Bank (2009) ‘Commodities at the Crossroads’, Global Economic Prospects, Washington, DC: World Bank.

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3.7 Constructing a new water future? An analysis of Ethiopia’s current hydropower development Nathanial Matthews, Alan Nicol and Wondwosen Michago Seide

1 Introduction Ethiopia’s economy and population are growing rapidly.1 From 1990 to 2010 Ethiopia’s population more than doubled from 48 million to 83 million (UNDESA 2010) and during this period surpassed Egypt’s to become, after Nigeria, Africa’s second most populous country. This rapid increase – notwithstanding the economic growth that is being achieved – is adding pressure to an already rainfall-dependent, largely agricultural economy, and to the unique biodiversity of Ethiopia that supports 280 types of mammal, 861 birds, 201 reptiles, and more than 6,000 plants (Jacobs and Schloeder 2001). The agro-ecology of Ethiopia from highland farming to lowland livestock production, on which much of the economy and population depend, will be challenged in future by current population and economic growth projections. Can these natural resources reservoirs sustain such levels of growth, particularly in light of future climate change impacts? These challenges form part of the justification for the government’s refashioning of the economy. Complex energy–food–water relationships exist in Ethiopia. Approximately 95% of energy use in the country consists of biomass and only 20% of the population has access to electricity. The pressure on natural environments to sustain this level of biomass loss is considerable. Ethiopia remains one of the least urbanised economies in Africa, and in 2005 85% of the population still lived in rural areas (Dorosh and Thurlow 2011). Two consequences of this situation are continued pressure on the landscape and watersheds into which large dams are being situated, and the critical need to assist the development of urban services and economic opportunities through provision of more (and cheaper) electricity. Until 2009, even large parts of Addis Ababa continued to suffer regular power outages. Ethiopia’s hydropower potential has long been recognised. Currently, the government claims that the potential is in the region of 45,000 MW, of which only 2,000 MW is installed (FDRE/ MoFED 2010). The government is encouraging massive expansion in this sector as an essential ingredient in developing the economy and benefiting from wider energy demand in the rapidly growing African continent as a whole. Even with Ethiopia’s current electricity demand projected to rise almost 25% annually, such is the potential hydropower production that ample 311

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capacity w ould remain for export. Currently Ethiopia is negotiating w ith its neighbours on selling pow er and has reached agreement w ith Sudan, D jibouti and Kenya. Transmission lines are currently under construction (see Figure 3.7.1). Such regional interconnections may one day be capable o f taking energy exports beyond Africa and to the Middle East and G ulf countries.

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Land use under FDI in biofuel and food production

framework is a simplified generalization since every situation is unique. Both ecosystems and livelihood dynamics for the current land use and land use under largescale biofuel and food production are context-specific. It should be noted that changes in land use will not necessarily result in a decrease in runoff and infiltration. This depends on a range of factors, including the existing land use and land cover.

Figure 4.1.1 Schematic showing possible changes in water fluxes, ecosystems and livelihoods in a landscape arising as a consequence of LSLA from FDI in agriculture. The

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well-being and livelihoods of local farmers. Conversely, some will have adverse impacts to both the environment and/or local people. Furthermore, changes will have both immediate impacts and effects that only become apparent a long time (decades) in the future. Hence, FDI-induced LSLA is being introduced into very complex, dynamic milieu and must be considered in comparison to the impacts that might occur in its absence. For this reason the framework considers trajectories of change both with and without FDI and, in addition to changes in water availability, highlights the need to consider changes in ecosystem services and livelihoods (Figure 4.1.1). Although not shown in Figure 4.1.1, the conceptual framework can also be used to consider the trajectory of investor’s benefits under various scenarios. The conceptual framework is underpinned by the following assumptions:  Water impacts depend on the types of crops grown, where the crops are grown and the specific land and water management practices that are undertaken (Comprehensive Assessment of Water Management in Agriculture, 2007). In this regard, there is nothing inherently different between schemes based on foreign investment and other large-scale agricultural development initiatives.  Changes in water availability will arise as a consequence of land-use change (i.e. changes in rainfall partitioning as a consequence of different evapotranspiration) and, where irrigation is installed, as a consequence of water withdrawals from rivers or groundwater. The implications for the environment, ecosystem services and both local and downstream users need to be considered (MEA 2005).  In evaluating the implications for water availability, the scale of assessment is important. At the basin or sub-basin scale, changes in land use within a single scheme will, for the most part, be relatively small compared to the area of the basin (e.g. even a 10,000 ha scheme is small in a 40,000 km2 basin). Hence, at this scale the impacts of a single scheme on mean annual runoff are not likely to be great. However, the cumulative impacts of many investment schemes, particularly at specific times of year (i.e. during the dry season), will be much greater. Of course, at the local scale the impacts of a single scheme (whether irrigated or not) are likely to be much more significant. Consequently, the implications of impacts on livelihoods and the environment need to be considered across a range of scales.  Some crops that are planned for LSLA schemes require large quantities of water (e.g. rice, cotton, sugar cane and biofuels). Pursuing production of these crops in water-scarce areas will put pressure on an already stressed resource, especially if the crops grown require irrigation (Skinner and Cotula 2011). However, even in the absence of irrigation, changes in infiltration and runoff may reduce water availability, particularly in the dry season, and may lead to competition with existing users/farmers.  With any change related to natural resources, there will always be trade-offs between different components of the system and ecosystem services (Tallis 2011). Consequently, changes in ecosystems and livelihoods resulting from changes in hydrology as a result of either current development or LSLA can be either positive or negative. In both cases, in a worst case scenario environmental degradation stemming from changes to hydrology will result in a downward spiral of increasing environmental degradation, loss of ecosystem services, worsening poverty and inferior and less resilient livelihoods. However, in both instances, if change is correctly managed, with due consideration given to the local environment and local people, the reverse is also possible. The impacts depend on exactly how changes are managed.  Water availability is not the only issue of importance. Access to water and how this changes under LSLA arrangements is equally important. In the absence of alternatives, if farmers are denied access to traditional water sources for either cultivation or livestock this is likely to have very severe implications for their livelihoods and well-being. 340

Green and blue water dimensions of FDI

 Water quality implications of LSLA, though not considered in this study, must also be given attention. If large quantities of fertilisers and pesticides are applied (as is conceivable for large-scale production) and these effluents are transported to streams via runoff or percolate to the groundwater reserves, the water resources may be physically available but may not be potable without treatment (MEA 2005). Access to these polluted water resources could have detrimental consequences to human health and on the ecological diversity of aquatic habitat.

3 Methods 3.1 Case study selection and study site characteristics Ghana and Mali were selected as case studies because of numerous recent agreements signed with foreign investors to grow biofuel and food crops and the attention this has received in popular media and public policy debate in the two countries (Cotula et al. 2009; Diallo and Mushinzimana 2009; Ahwoi 2010; Oakland Institute 2011). Tables 4.1.1 and 4.1.2 provide a summary of the FDI-induced LSLAs for biofuel and food production that were studied in Ghana (Yendi and Kobre) and Mali (Malibya and SoSuMar, Figure 4.1.2). Jatropha in Ghana and sugarcane in Mali were selected as the main biofuel crops to be studied because they are the most prevalent biofuel crops grown in the two countries (Von Maltitz et al. 2009; Oakland Institute 2011). In Ghana, mean annual rainfall at Yendi and Kobre is 1,226 mm and 1,336 mm respectively (Table 4.1.3 and Figure 4.1.3a). At Yendi, the rainfall pattern is unimodal with the rainy season extending from late May to mid-October, followed by a prolonged dry season from November through to early May. In contrast the rainfall pattern at Kobre is bimodal with the first peak occurring in June, while the second peak occurs in October. The soils at Yendi are predominantly laterites and at Kobre are heavily weathered savannah ochrosols. Agriculture is the major land use in both places. Most of the inhabitants are poor farmers engaged in subsistence rain-fed crop cultivation and livestock rearing. As such they are heavily dependent on the natural resource base and a wide range of ecosystem services for sustenance and the provision of other basic needs (Republic of Ghana Ministry of Food and Agriculture 2007, 2011). In the context of the conceptual framework, the farmer livelihood trajectory in these landscapes could be considered to be at the transition between the baseline and the low unstable income due to poor technology adoption though this may vary on a case by case basis (Figure 4.1.1). As Table 4.1.1 indicates, FDI in biofuel and food production has introduced significant changes in terms of area farmed by a single economic entity and land management practices. The Mali sites are located in Segou and San (Figure 4.1.2). The climate in both sites is Sahelian semi-arid, with annual rainfall ranging between 600 mm and 750 mm (Figure 4.1.3b). Annual mean temperature is 28oC and the annual mean maximum temperature is 35oC (CLIMWAT 2011). The soils are predominantly arenosols featuring on deep aeolian alluvial sands with a sandy loam texture. There are two major growing seasons: ‘la Saison’ and ‘la Contre-Saison’. La Saison which coincides with the rainy season from June to December is when the main rice crop is grown as well as other crops such as groundnuts and sorghum. The second growing season is during the dry season or la Contre-Saison. This season is divided into a relatively cold period, ‘Saison Seche froide’, when vegetables are cultivated (January to March) and a very hot season, ‘Saison Seche chaude’, when a minor rice crop is cultivated (March to June) (Zwart and Leclert 2009). Similar to Ghana, most local people are poor subsistence farmers, heavily reliant on natural resources and vulnerable to the vagaries of the climate (Michigan State University 2011) and would have a farmer livelihood trajectory at the transition 341

Kizito et al.

Table 4.1.1 Comparative analysis of land acquisition process, land-use patterns and potential livelihood impacts of two FDI large-scale plantations studied in Ghana Variable 1 Land acquisition 1.1 Location of land acquired 1.2 Land-granting authority 1.3 Land area, types and duration of rights granted to investors

1.4 Irrigation facilities

2 Land use 2.1 Primary and secondary crops grown

Solar Harvest (SH): Yendi

Kimminic Estates Limited (KEL): Kobre

Yendi Municipality, Northern Region

Nkoranza South and Pru Districts, BrongAhafo Region The Traditional Councils

The Traditional Council Initially, SH leased 38,000 ha of land for 50 years, with possibility for renewal. Water was not explicitly included in the initial deal. Additionally, SH has acquired 3,000 ha of land under lease for 50 years downstream of the Bontanga Irrigation Scheme (BIS). It plans to acquire an extra 7,200 ha under the BIS for future expansion. SH is going into full-scale irrigation by utilizing the residual water from the Bontanga Irrigation Scheme (BIS) and also intends to expand the BIS with additional 470 ha for cultivating a wide variety of food crops in addition to pasture, cotton and sugarcane. SH plans to pump water from the White Volta River in the future for irrigation.

Together in the two districts, KEL has about 43,000 ha of land and plans to expand its land holdings to 65,000 ha. The lands are under leasehold titles of ≤ 50 years duration, with possibility for renewal. Water rights were not explicitly stated in the land deals, but KEL has started exploiting water on the leased land.

KEL is developing pockets of small dams throughout its plantation to harvest rainfall and provide irrigation to take care of short-term soil moisture deficits in order to maintain optimal yields of Jatropha at all times.

Initial primary crop was Jatropha which The primary crop for KEL is Jatropha. It is is now abandoned. SH is now going intercropped with soya bean, cowpea, into full-time commercial vegetable groundnut, maize and, sometimes, yam. and food crop production. 3 Livelihood outcomes 3.1 Were customary No, with respect to the land under Yes. land users Jatropha as it was a marginal land. displaced? Yes, for the new lands acquired for vegetable and food crop production within the BIS. 3.2 Compensation For farmers displaced in the BIS area, Displaced farmers were not compensated. methods SH has promised to relocate them elsewhere further downstream and has offered to plough the new lands given to the farmers free of charge. 3.3 Impact of land Not yet known. Most farmers claimed they now have less acquisition on land area to cultivate compared to the livelihoods of situation before land acquisition by KEL. customary land They also claimed that they have been users pushed to degraded lands and their farm incomes have significantly declined. Displaced farmers who could not find any new land within the community have

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Table 4.1.1 (continued) Variable

Solar Harvest (SH): Yendi

Kimminic Estates Limited (KEL): Kobre

migrated to other communities. Others found wage employment with the company, although they were unhappy about the low wages they were earning. 3.4 Actual or SH is about to start full-scale The company is building a processing potential commercial production of vegetables plant, and upon completion there is going impacts of land and food crops under irrigation at to be increased water demand for deals on water the BIS. This may likely have an impact processing operations. The company can and its various on water availability to other farmers in abstract water from the nearby Volta Lake functions the scheme. Though the company to meet this increased demand. Potential says it will use residual water from the negative impacts may result through BIS, their intention to eventually assume disposal of waste into local water bodies. management of the BIS may create a conflict of interest, with the company being the main water user as well as the regulator of water allocation to other farmers Source: Survey data collected by authors in 2011.

between the baseline and the low unstable income due to poor technology adoption and could vary on a case-by-case basis (Figure 4.1.1). Table 4.1.2 details some of the changes that FDI in biofuel and food production has introduced to the Malian agricultural sector.

3.2 Estimation of crop water requirements Two models – CROPWAT8.0 and WEAP – were used in this study. The CROPWAT8.0 model was used to estimate crop water requirements (CWR) and irrigation demands of biofuel and food crops, while the WEAP model was used to estimate other catchment moisture fluxes, for example runoff and ground water recharge, that occur outside conventional crop water use. The CWR of current land-use systems and those of FDI-induced large-scale biofuel and food production scenarios were estimated using the FAO CROPWAT8.0 model (Allen et al. 1998). A diagrammatic depiction of the potential hydrological flows is shown in Figure 4.1.1. The model estimates CWR by multiplying the potential evapotranspiration (ETo) by a crop coefficient (Kc) determined for each of four crop growth stages (initial, development, mid and late) (Allen et al. 1998). For the case of Kobre, which had intercropping, estimations were conducted for a combination of four crops. The actual water requirement under the prevailing climate was estimated for both the growing season and the whole year (i.e. including periods when the land is fallow). Combined and single Kc values were used to estimate the CWR of intercropped fields and that of Jatropha sole cropping, respectively (Table 4.1.4). Assuming the annual crops intercropped with the perennial Jatropha can be grown twice a year on the same plot, four combinations of options were considered:    

Intercropping during the main rainy season and the dry season Intercropping during the main rainy season and sole Jatropha during the dry season Sole Jatropha during the main rainy season and intercropping during the dry season Sole Jatropha throughout the year. 343

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Table 4.1.2 Comparative analysis of land acquisition process, land-use patterns and potential livelihood impacts of two FDI large-scale plantations studied in Mali Variable 1 Land acquisition 1.1 Location of acquired land 1.2 Land-granting authority 1.3 Land area, types and duration of rights granted to investors 1.4 Irrigation facilities

2 Land use 2.1 Primary and secondary crops grown 3 Livelihood outcomes 3.1 Were customary land users displaced?

Malibya (San LSLA)

SoSuMar* (Segou LSLA)

Office du Niger catchment area

Office du Niger catchment area in Segou region Government of the Republic of Mali

Government of the Republic of Mali

100,000 ha of fertile land acquired at A total of 39,538 ha acquired on a no cost for 50 years. Water rights explicitly lease agreement of 50 years, renewable included in land acquisition contract. The company intends to build canals for irrigation for rice production. A 40 km long irrigation canal is under construction upstream on the Niger River with an estimated irrigation capacity of 4 billion cubic metres per year.

The project will construct a hydraulic network: water intake structures on canals, pumping station and 208 pivots for irrigation

Rice and cattle

Sugarcane is the primary crop. Secondary crops are tomato and onion

Yes. About 150 households in the area Yes. Displacement of 1,644 villagers were displaced. Women farmers who (Diallo and Mushinzimana 2009) produced and sold vegetables from garden plots have lost their lands and livelihoods. 3.2 Compensation Less than half of the displaced people A detailed population resettlement methods received any compensation for their lost action plan (RAP) was prepared with homes, plots and trees. Where provision for payment of compensation was paid, it was compensation to land title-holders considered inadequate. or those with usufruct rights 3.3 Impact of land The local farmers’ union, SEXAGON, believes acquisition on that when the millet-producing region is livelihoods of transformed into a rice export growing area, customary the local people who lost their lands will no land users longer be able to feed their families. 3.4 Actual or potential Access to water for downstream A study funded by the African impacts of land communities who depend on the River Development Bank to address the deals on water and Niger may be negatively affected by the issue of availability of water during its various functions irrigation diversion. The Malibya low-water periods concluded that agreement indicates the project may current resources are enough to consume water ‘without restriction’ from cover the water needs of the June to December of each year, but states Markala sugarcane scheme. that between January and May, when the river is low, less water-intensive crops should be cultivated. Source: Oakland Institute (2011). * Local company CaneCo to be created in Mali by SoSuMar (Societé Sucrière de Markala) with Illovo Group Holdings Ltd (IGHL) as majority shareholder.

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Table 4.1.3 Agro-climatic characteristics and land-use regimes for both current and FDI cases of the study sites in Ghana and Mali Country FDI site

Geographic Altitude Predominant Available co-ordinates (m) soil textural water class capacity (mm/m)

Average annual rainfall (mm)

Current land use

Land use under FDI

Ghana Yendi

9.45; -0.01 197

100–150

1226

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Jatropha

Kobre

8.28; 1.25 305

130–180

1180

Maize, yam, legumes

Segou

13.4; -6.15 289

Sandy loam

100–150

634

San

13.33; -4.83284

Sandy loam

100–150

696

Millet, vegetables, beans, groundnuts, maize Vegetables, maize, millet, sorghum, cowpea

Jatropha, oil palm, maize, legumes, yam Sugarcane

Mali

Sandy clay loam Loam

Hybrid rice and tomatoes

3.3 Estimation of catchment moisture fluxes with WEAP Catchment moisture fluxes were estimated for the FDI sites in Ghana. No estimates were made for Mali owing to data constraints. The moisture fluxes were estimated using the catchment module in the Water Evaluation and Planning (WEAP) model (SEI 2011). The module uses the FAO Irrigation and Drainage Paper 56 that allows simulation of climate-driven rainfall– runoff relationships in conjunction with dynamic calculation of crop irrigation demands. The WEAP model uses the rainfall–runoff method where it computes runoff as the difference between precipitation and a plant’s evapotranspiration. In the catchment module, a portion of the precipitation is set to bypass the evapotranspiration process and goes straight into runoff to ensure a base flow which is set through the ‘effective precipitation’ parameter – 80% in this study. The use of an effective precipitation parameter other than 100% is one way of acknowledging the fact that part of the rainfall is not submitted to evapotranspiration during high intensity rainfall events (a common occurrence in West Africa), hence generating a minimal runoff to the river or groundwater even when the rainfall is lower than the potential evapotranspiration (SEI 2011). The catchments with FDI-LSLAs are currently principally rain-fed. Consequently, irrigation was simulated as a future scenario. This enabled comparison with rain-fed conditions. The spatial extent and components of the FDI-LSLAs in Ghana were determined and then system components such as catchments, agricultural demands and stream networks were added to the schematic in the model. Following the study characterisation, ‘current accounts’ were defined, and the time horizon of the analysis was set for the year 2000. Thus 2000 acted as a baseline representation of the system – including the existing conditions for catchment management. The current accounts served as the point of departure for developing an irrigation scenario, which described alternative future assumptions related to the use of water. The irrigation scenario provided water to crops when 345

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T he conjunctive development o f blue and green water, through sustainable intensification, in com bination w ith available and emerging irrigation and agricultural technologies, should help maximise outcomes in water development, while reducing environmental impact. The risks o f wasted capital expenditure, ‘paying tw ice’ for water, and social and economic risks o f water reallocation should be minimised, w hen compared w ith traditional trajectories o f w ater development. It is essential that water withdrawals for agricultural production are not expanded w ithout regard to local w ater budgets. Lessons from past experiences should be learnt so that investments can be directed towards new, alternative approaches to w ater resource development that can spur economic growth while preventing the impairment o f w ater systems.

5 Conclusion This chapter has argued for future w ater development projects and growth to follow an alter­ native trajectory to ‘business-as-usual’ blue water-based agricultural development. The argu­ m ent has been based on the inherent inefficiencies and limited capacity o f traditional water development pathways. Traditional pathways rely on mobilising blue water, normally to an unsustainable level, followed by a reallocation o f this water, and consequential reinvestment in alternative means o f maintaining production. The present debate and practice over land and w ater investment is still dominated by blue w ater thinking. This chapter has challenged that thinking, showing the potential for investing in the sustainable intensification o f agricultural production. At the core o f this argument is the need to recognise the value and use potential o f green (soil) water, and the corresponding higher opportunity costs associated w ith blue water use in agriculture. By investing in the development o f green water, already responsible for 84%

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of water use in global food production, significantly greater returns are available than through blue water, and with far lower opportunity costs. The need to avoid the over-exploitation of blue water resources is emphasised by suggesting the conjunctive development of green and blue water resources in order to bridge dry spells and lower the risks associated with the reliance on rainfall. The focus should be on improving the efficiency of green water resources and agricultural practices to maximise returns, with blue water playing a supplementary role. Through this pathway, based on analysing the most effective development options, it is argued that the combination of economic, social and environmental outcomes can be optimised. Further research is required into the political and institutional conditions of investors and investees that can enable successful development through sustainable intensification rather than further mobilisation of blue water resources. Where such suitable environments exist, or can be fostered, an approach of ‘analyse to optimise’ is proposed as a contributor to greater prosperity and food security in the coming decades.

Notes * This chapter was written with joint contribution from Marta Antonelli and Micheal Gilmont. 1 Further evidence-based analysis of alternative water investment and development pathways in Africa are explored by Hoff et al. (Chapter 4.2) and Kizito et al. (Chapter 4.1) in this volume. 2 According to Hoekstra and Mekonnen (2012), agricultural water footprint accounts for 92% of the global water footprint. 3 The national calorie level of 3,000 kcal/day was chosen as a benchmark for hunger alleviation by Rockström et al. (2009) conforming to earlier estimates of human water needs for food production (De Fraiture et al. 2007), and is also the average calorie level projected by the FAO (2003) to be reached in developing countries by 2030. 4 The use of both green and blue water in agriculture is, however, associated with a degradation of water quality due to the use of fertilisers and pesticides (Aldaya et al. 2010).

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Vidal, A., van Koppen, B. and Black, D. (2010) ‘The green-to-blue water continuum: an approach to improving agricultural systems’ resilience to water scarcity’, in J. Lundqvist (ed.) On the Water Front: Selections from the 2009 World Water Week in Stockholm, Stockholm: Stockholm International Water Institute (SIWI). Vohland, K. and Barry, B. (2009) ‘A review of in situ rainwater harvesting (RWH) practices modifying landscape functions in African drylands’, Agriculture, Ecosystems and Environment 131: 119–27. Woodhouse, P. and Ganho, A. S. (2011) ‘Is water the hidden agenda of agricultural land acquisition in sub-Saharan Africa?’ paper presented at the International Conference on Global Land Grabbing, 6–8 April. Available at: www.iss.nl/fileadmin/ASSETS/iss/Documents/Conference_papers/LDPI/12_P_W oodhouse_and_A_S_Ganho.pdf (accessed 29 March 2012). Yang, H., Wang, L., Abbaspour, K. C. and Zehnder, A. J. B. (2006) ‘Virtual water highway: water use efficiency in global trade’, Hydrology and Earth System Sciences Discussions 3: 1–26. Zehnder, A. J. B., Yang, H., and Schertenleib, R. (2003) ‘Water issues: the need for actions at different levels’, Aquatic Sciences 65: 1–20.

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Part V

Livelihoods

5.1 Expectations and implications of the rush for land Understanding the opportunities and risks at stake in Africa Ward Anseeuw, Lorenzo Cotula and Mike Taylor

As the global rush for land following the 2007/08 food price crisis began hitting world headlines, initial observers could not help but provide basic, often contradictory prognoses. The lack of firm evidence of impacts led observers to relate current events to historical ones, with some condemning the ‘neo-colonial land-grab’1 while others touted the opportunity for ‘win–win– win’ solutions for investors (World Bank 2010), local populations and host governments which would overcome three decades of declining investment in agriculture in the south (HLPE 2011). While each of these characterisations may provide some insight and carry some truth, commentators were inevitably limited by a lack of empirical evidence in the current context to go beyond statements that were based more on ideology, hope or fear than evidence. With the spirit of optimism driving massive flows, but potentially putting livelihoods and food security at risk and shaping the future of global agriculture, there is a great need to take stock of the real outcomes for all those involved (Wegner and Zwart 2011). This chapter presents evidence from the different case studies included in the Commercial Pressures on Land research project to examine the outcomes and impacts of large-scale land acquisitions (Anseeuw et al. 2012). Based on empirical evidence and experiences on the ground, resulting from thematic, country/regional and specific local case studies realised by a diverse panel of international and national research institutions, NGOs and local associations, it considers outcomes for investors, for host governments, for affected communities and for the environment. It is important to be aware of, and to highlight, different potential impacts and affected population groups, even if an in-depth and comprehensive analysis of all of them is beyond the scope of this chapter. In addition, although based on sound experiences, observations from the field must be treated with caution for several reasons. First, cases observed have often been only at the initial stages of investment. While adverse impacts tend to be concentrated at the initial stages of project implementation (e.g. loss of local land rights), some of the claimed benefits (e.g. public revenues, employment) would only fully materialise in the future when investment projects are operating at full scale. Second, case study evidence is strongest on local impacts, and less strong on wider economic impacts, which would require a different set of methodologies. 421

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Third, much of the research on which this chapter is based took place in contexts where foreign investment in natural resources is treated as an unalloyed good by government and other powerful actors. Therefore, many of the contributing organisations have sought to draw attention to some of the overlooked or deliberately ignored downsides of investment practices, particularly those that affect marginalised land users who otherwise have little voice within public debate and policy-making. Finally, the case studies represent an extremely diverse set of geographic and sectoral specificities in the manifestation of land-based investments, whose observations may not be applicable in different contexts. The evidence presented is indicative; much of it cannot be taken at face value, and neither can it necessarily be generalised. The next section of this chapter examines expectations of investors, host countries and local populations from large-scale, land-based investments, and the extent to which the evidence indicates that these will be matched by reality. The third and fourth sections focus on affected populations, rural women and men who use the land; the direct costs that they face, and the indirect costs associated with further entrenching the deeply rooted challenges to the sustainable livelihoods of the rural poor.

1 Expectations and reality: the opportunities of large-scale, land-based investments Increased investment interest in land can, at least in theory, create substantial opportunities. Rising commodity prices and the capital flows these help to generate have the potential to bring much-needed investment to agricultural and forestry sectors in developing countries. They have the potential to enhance livelihoods and food security through improvements in productivity and structures that allow poor land users to connect with and benefit from growing global markets. High commodity prices also have the potential to enhance income by generating substantial economic rents. This section examines the empirical evidence for opportunities potentially gained by the three possible ‘winners’: investors, host governments and local populations. It shows, however, that, at least in the initial phases, the reality of opportunities falls short of expectations.

1.1 Expectations and realities for investors Many case studies regarding large-scale land acquisitions discuss well-established industries such as mining, hydrocarbon operations and oil palm plantations. These have more likely a track record of profitability (e.g. in Indonesia and Peru). However, other acquisitions appear to have more uncertain commercial prospects. For example, agricultural projects involving the establishment of very large plantations for untested cash crops, or led by companies that do not have the necessary track record in tropical agriculture, involve much higher risks. These acquisitions are often underpinned by hopes of high returns, and it seems that the challenges linked to successfully delivering projects in difficult environments are often underestimated. These challenges often lead to unexpected delays and lower returns (Odhiambo 2011; Colchester 2011). In Africa, Madagascar provides an example of very large-scale transnational projects that were abandoned after they triggered a public outcry (Andrianirina-Ratsialonana et al. 2011), while a case study of a project in Ethiopia showed that the project was not performing as expected and was not profitable at the time of the research (Fisseha 2011). Started in early 2008 on ready-to-be-used land, the production size was less than half of what was expected and promised for the 2009–10 season (ibid.). Studies undertaken by researchers outside this research project are in line with these findings – for example, with regard to abandoned biofuel projects 422

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in Mozambique and Tanzania (Nhantumbo and Salomão 2010; Sulle and Nelson 2009). In these cases, projects were abandoned following changes in global economic circumstances, including oil prices and difficulties in accessing finance following the financial crisis. In addition, acquisitions may be a way to capture economic rents associated with imperfect markets or with control over natural resources, as well as a means to generate normal profits from productive activity. As such, rising land prices have allowed speculators to make profits through capital appreciation. In the peri-urban areas, for example, capital flows in search of a safe haven, as well as credit-driven speculation, have fuelled land price inflation (Dossou 2011). In several places, the main beneficiaries of rising land prices have been a booming real estate industry, land speculators and well-connected landowners, many of whom have become (semi-) residential landlords. Land price inflation is partially driven by the greater returns that may be generated by land-based activities, linked to the increasing global demand for agricultural commodities. Rising commodity prices relative to production costs have enabled producers or landowners to capture differential rents. Indeed, contractual rents (what is paid by tenant farmers to landowners) have increased significantly, in line with rising land prices. Landowners, rather than producers, have been able to capture rising economic rents (Tambler and Giudice 2011). More generally, actual and projected rises in world commodity prices will tend to push land values up. This can be expected to generate significant natural resource rents, particularly where land prices are currently very low. The finding that returns may be significantly determined by the capital appreciation of land and use of market power suggests that those who will gain the most in the longer term are those that are able to maintain lawful possession of the land. As a result, local land users may stand to lose out if they lose possession, even if they gain in other ways, such as through employment. The potential generation of land rents raises moral questions about who should ideally be able to capture them.

1.2 Outcomes for host countries An in-depth analysis of outcomes for host countries would require far more evidence than is provided by the existing case studies, particularly with regard to macro-economic aspects measured on a longer-term basis. This would include effects on economic growth and balance of payments, for example. This section discusses two major aspects, however – the generation of public revenues and Africa’s agricultural and rural development, including national food security. First, regarding the generation of public revenues, there is a long-standing argument that natural resource rents should be subject to taxation in order to strengthen incentives for productive over speculative activities. Fees charged to investors for the use of public lands would have the same effect. In this way, natural resource rent may be collectivised and used to fund public goods. However, there is little evidence that governments are seeking to capture rents in this way. Instead, many governments have been prepared to allocate land for little or no rent, as part of efforts to attract the investment that is seen to be needed to create jobs and develop infrastructure. In Ethiopia, for example, the government is said to have used a five-year tax holiday (Fisseha 2011). Similar facilities are implemented in the Chinese SEZs in Africa. Being established in Nigeria, Ethiopia, Egypt, Zambia, Mauritius and Algeria, the Chinese SEZs benefit from extensive special provisions (free land, tax exemptions, export facilities, etc.), leading to criticism of unfair competition as well as to questions regarding the feasibility of such policies and projects when assessing the costs related to the facilities and the returns of investments for the host countries (Cowaloosur 2012).

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Second, the renewed interest of a diversity of investors seems to represent an opportunity for host governments to attract private, national and international capital. As such, with reduced public spending and ODA, these investors are perceived as solutions to overcome the lack of public interest and investment for the discarded agricultural and rural sectors since the 1970s (Ducastel and Anseeuw 2011). These impacts can be direct and indirect, as a positive pull-effect integrating the host country’s small-scale farming sector. The investments, generally based on large-scale development models, represent initiatives made visible and well advertised by the host governments as evidence of their engagement in development-oriented initiatives, programmes and policies. As such, these initiatives are promoted as contributing to the countries’ revitalisation of their agricultural sector and to enhance their national food security situation, as well as to develop rural infrastructure. In Senegal, for example, Indian investments and support in agricultural development are promoted as an effort to achieve food self-sufficiency and develop the agricultural and livestock sector, within the country’s Major Offensive for Abundance (GOANA) programme (Anseeuw and Rahal 2008). Also, by handing over 80,000 hectares of untilled land to a few dozen South African farmers, authorities in the Republic of Congo are confident they will greatly improve domestic agricultural expertise and reduce the country’s chronic dependence on food imports (Hall 2011). In addition, many land deals emphasise investment commitments over land fees – for example, with regard to developing irrigation systems, public infrastructure like ports and roads, and social facilities for affected communities (Cotula 2011b). In the Malagasy Daewoo and Varun cases, significant investments were announced: Daewoo intended to mobilise about US$ 6 billion over 25 years and Varun announced an initial investment of $ 1,170 billion over three years. The list of infrastructure to be developed by Daewoo was impressive: 1,170 schools, 170 private hospitals, 250 markets, 120 churches, 60 power plants, 8 airports, 30 factories and silos, 8 ports, and the list continues. Varun’s commitments are no less impressive: construction of health establishments, schools, electricity and drinking-water networks are announced but not quantified. These very large-scale projects appeared as tools in support of the struggle against poverty and the country’s rural development (Andrianirina-Ratsialonana et al. 2011). These ambitious announcements of future benefits for host countries and communities are often a way to secure local support for the project. These processes tend to fuel unrealistic expectations on the part of local populations. In the long run, this can lead to frustration and hostility to the investment. In addition, a legal analysis of a sample of land contracts from Africa found that these commitments may be too unspecific to be enforceable, that monitoring and sanctioning compliance involves a cost for the host state, and that, despite these commitments, low or absent land fees can create incentives for speculative acquisitions (Cotula 2011b). The example of an Indian company investing in Ethiopia from early 2008 onwards, focusing on a variety of crops including palm oil, maize, rice, and bananas on 10,700 hectares in the Bako Plains (Western part of Oromiya Regional State), and which promised to construct roads, schools, a clinic and water points, is exemplary. Not only was the production not developed according to promises and expectations, but neither had these promises been fulfilled at the time of the study (Fisseha 2011).

1.3 Expectations and realities for local populations The downstream, long-term expectations and realities of commercial pressures on land on local populations are ultimately what should concern us most about these trends. Unfortunately, they are also the most difficult to assess, both because of the number of factors that may be involved, and because of the time it may take before the full impacts occur. The expectations and realities 424

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for the local populations are divided into three areas: compensation and revenues from land transfers, employment and income. First, the nature and level of compensation are an important factor in assessing outcomes for the local population. It is common for individuals, families or groups that are affected by the expropriation of their land to be legally entitled to some form of compensation. However, where the customary rights of local land users are not legally recognised, dispossessed land users may not be entitled to compensation. Examples include the disregard of indigenous people’s territories in the context of oil palm development (Colchester 2011), an investment scheme in Ethiopia where the land was declared by the state to be not cultivated (Fisseha 2011) or a case in Zambia, where local populations who had been occupying mission land for several decades were simply declared ‘illegal squatters’ (Milimo et al. 2011). Where compensation is paid, amounts may not be adequate to restore local livelihoods. In addition to being late or never received although promised, many compensation payments are based on an assessment of market value before the development, as is common industry practice. This approach proves inadequate to meet replacement cost: as many recipients sought to buy replacement land in the surrounding area, local land prices rose significantly. Also, compensations awarded tend to be lower on the basis that the (initial) land had a different form of tenure (although the legal right of authorities to expropriate this land was questioned). Finally, compensation can be inadequate because it does not cover non-land assets such as wells, boreholes, trees, livestock sheds and livestock. Many of the affected are forced into distressed sales of livestock and are thus unable to recover their value (Fisseha 2011). Second, it is often argued that agricultural investments may create jobs in agriculture and/or processing, both directly and through supply chain relations, and may improve livelihoods through links with local producers. This is often seen as a main benefit for local populations. As such, the South African farmers leasing government land in Congo for 30 years are expected to create thousands of jobs – announced the Minister of Land Affairs (Hall 2011). In Madagascar, besides the detailed projects announced here above, the creation of numerous jobs – 1,500 for Varun International and 70,000 for Daewoo – was also announced (Andrianirina-Ratsialonana et al. 2011). However, several case studies suggest that the hoped-for jobs do not necessarily materialise, partly because investments are often capital-intensive and because local populations are not well integrated in the investment projects. In several of the Chinese SEZs in Africa, for example, where job creation is one of the major announced benefits, estimates remain low – 9,400 people employed in total, of whom 1,500 were not local (Cowaloosur 2012). A frequently reported complaint is that employment promised by companies as an incentive for communities to hand over their land to plantations turns out to be jobs that are cut after a few years (Yaw Baah and Jauch 2009). Benefits in the form of local jobs are likely to be limited where investors can hire imported labour. This commonly applies to recruitment for management and skilled positions, so that locals only get precarious, seasonal or low-paid jobs (e.g. Fisseha 2011). Worse, some investors come with their own labour. This is, for example, the case of Chinese Lekki SEZ in Nigeria (Cowaloosur 2012). Although this include project has not materialised yet, the People’s Republic of China’s Ministry of Commerce has stated its intentions to settle more than 10,000 Chinese farmers across the African continent, from Nigeria to Kenya, from Sudan to Zambia and Zimbabwe (Yaw Baah and Jauch 2009). When local people are employed, labour relations tend to be difficult. A common feature of working conditions at Chinese companies – particularly in agriculture in Africa – was the absence of employment contracts and the arbitrary determination of wages and benefits by the owners or acquirers. There was, therefore, no record of employment, which made enforcement 425

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of local labour laws difficult – even in countries with clearly defined legislation and procedures for dispute resolution, such as South Africa (Yaw Baah and Jauch 2009). Third, it is worth giving separate consideration to the direct income effects of large-scale investments in land, aside from one-off compensation payments. The loss of access to productive resources can have negative effects on income and compel the affected to seek other livelihood sources. On the other hand, investments can be a source of income for local populations, through share-cropping, outgrower schemes or locally negotiated land leases. However, in all these instances, the income effects depend on the terms that have been negotiated, and thus on the negotiating power of the relevant parties. In other words, the sharing of income between investors and local populations depends on the level of wages, leases and other negotiated contractual terms, and on the price of agricultural supplies provided by small-scale growers. In turn, these aspects are affected by varying degrees of control over resources, on market conditions (such as monopoly or monopsony structures) and on negotiating power. In the majority of cases, only the better-off local farmers can adapt to the changing context and benefit from incoming investment, mainly through outgrower or sharecropping schemes. The others, particularly those who have lost their land, face a loss in income as an avoidable consequence. In Rwanda, related to the establishment of an agribusiness company in the marchlands around Kigali, only a relatively small number of farmers – those who were commercially oriented before the arrival – were able to retain access to land and work as outgrowers with the agribusiness; the others took up employment on the plantation or somewhere else. Both groups considered themselves to be poorer than they were before the takeover by the agribusiness: the outgrowers complained about the conditions imposed by the agribusiness; the labourers about the bad labour conditions (Veldman and Lankhorst 2011). The lack of alternative livelihood options in these countries, exacerbated by reduced access to land as a result of the investment, constrained the affected populations’ ability to disassociate themselves from the investing company. Farmers’ desire for independence may explain these frustrations.

2 Negative impacts on local populations Besides expectations not being realised, local populations may also be negatively affected by incoming investments. Although it is still too early to fully assess possible negative impacts of many of these investments, case studies do provide some evidence of early impacts. Greater commercial pressures on land may have both direct and indirect adverse consequences for the local population. Direct effects refer to changes that are directly ascribable to an investment project, and may include, for instance, changes in access to resources and overall changes in local livelihoods. Indirect, or ‘knock-on’ effects include a wide range of socioeconomic changes, including changes in inequality and marginalisation, food security, gender relations, land governance processes, future expectations and health.

2.1 Direct impacts: loss of land, water, resources and housing 2.1.1 Access to land There is a widespread perception that much land is ‘empty’ and ‘available’. This is not the case. Virtually all valuable land is used or at least claimed by local people. The land that is the focus of large-scale land acquisitions is not land under permanent cultivation but unfarmed forests, grasslands and marshlands held and used as communal assets by rural communities. These lands 426

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are usually owned collectively by tradition and customary law and also used collectively. These communally held lands, or ‘commons’, often make up the major land and resource asset of rural communities. Far from being idle or unused, such lands are in fact crucial elements in the system of customary or indigenous landholding and use (Alden Wily 2011a). They are also major contributors to livelihood. Such lands provide a huge range of forest products, areas for grazing and transhumance, and for hunting and fishing. They are also often used for shifting cultivation (bush farming or forest farming) or held to be the reserve areas for generational expansion of cultivation. That is, while they are often large areas, communities deliberately sustain these areas as collectively owned and used and not available for permanent settlement or farming. Loss of access to any such lands will have adverse impacts on local livelihoods, and these may be very severe. Pastoralists and forest-dependent people are particularly at risk given the nature of their land use and their need for large land areas to survive (Odhiambo 2011). Case studies provide numerous examples of cases where local communities have been dispossessed of land resources. For example: the 10,700 ha for the Bechera Agricultural Development Project in Ethiopia comprises the grazing lands and wetlands of local pastoralists, as does most of the 300,000 ha leased to the same Indian investor in Gambella Regional State (Fisseha 2011; Horne 2011); lands being reallocated in Madagascar include fertile lands reserved for community expansion, along with pasturelands belonging to communities by custom. Forests, which are formally public property, are also being allocated (Andrianirina-Ratsialonana et al. 2011); local marshlands in Rwanda are taken over by a Ugandan sugar mill group (Veldman and Lankhorst 2011). Despite the rhetoric of targeting marginal lands, acquirers are most interested in lands which are fertile, well-watered or with good rainfall, and easily accessed by roads or rail, and electricity transmission, market centres, habitation (helpful for employing people), and export servicing centres nearby. These are areas likely to be already used relatively intensively by local people, and not just for farming. Geographical analyses show clustering near large towns, capitals and ports; or concentration in the water-rich areas of otherwise dry countries. Despite the vast size of Madagascar’s territory, acquirers compete for fertile, non-hilly land near a port (AndrianirinaRatsialonana et al. 2011). Other studies also illustrate this trend, describing a scheme in the marshlands near the Rwandan capital Kigali (Veldman and Lankhorst 2011), and in peri-urban areas such as around Cotonou in Benin (Dossou 2011). It is important to note that dispossession does not always result in physical eviction. Local landholders may continue to live on the land until developments take place; in some cases, communities may keep their houses and permanent farmland but lose their common property, or they may lose part of their landholdings, being squeezed on to residual areas. In one project in Ethiopia, for example, the loss of livestock tracks and routes to water points has deprived herders of their access to strategic pastures. As a result, some herders engaged in distress livestock sales (Fisseha 2011).

2.1.2 Access to adequate housing A major risk linked to commercial pressures on land is the potential loss of residence and residential-based assets. Such effects may be particularly severe when acquisitions are compulsory, rather than negotiated, and include non-consensual displacement of the affected populations (Milimo et al. 2011). Increased competition for land may also make gaining access to land for housing or other purposes more difficult, particularly for the poorest. While commercial pressure-related land price inflation may benefit some existing land holders, it may make land and 427

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adequate housing out of reach for the poorest. These inhabitants are then often forced to migrate to more marginal zones, as in Benin where the increase of the population on nonserviced sites at the municipality edges has led to the development of slums (Dossou 2011). In addition, where land acquisitions result in the direct loss of residential property, the effects on households can be further exacerbated by the loss of other assets and the disruption of nonfarm livelihoods. In Zambia, for example, additional loss of non-farm revenues occurred through displacements. Traders were relocated to a disadvantageous location, having then to incur the costs of travelling a long distance from their home to the public market to carry out their business (Milimo et al. 2011).

2.1.3 Access to water Access to water is one of the key drivers of transnational land acquisitions. Water scarcity is increasingly a key constraint on agricultural production, leading to escalating competition for water resources. This is particularly true for the Gulf States, where declining fossil water reserves have prompted moves to acquire agricultural land overseas. Declining water reserves forced Saudi Arabia to abandon food self-sufficiency in 2007. Wheat production is due to be phased out entirely by 2016. At the same time, mechanisms have been established to promote the acquisition of land for food production overseas (Cotula 2011a). As such, water is a key factor in the location of land acquisitions in some countries, with acquisitions focused in irrigable river basin areas. There is, for example, evidence of concentration of large-scale acquisitions in the upper river basins of two of the most important transboundary rivers of Africa: the Nile and Niger (Cotula 2011a). In most jurisdictions, water is owned by the government, in particular following reforms in the 1990s to implement Integrated Water Resource Management. Land deals for irrigation agriculture may grant acquirers priority access to water, or even an entitlement to specified quantities of water (Cotula 2011a). Where this happens, water abstraction and enforceable water rights may adversely affect water access for other users. Competing water interests can be particularly difficult to manage in large transboundary river basins such as the Niger and Nile basins (Keulertz 2011). In Mali, for example, the cumulative increase in large-scale irrigation projects in the Office du Niger area of Mali could impinge on water availability to downstream irrigators in the Office du Niger area, and to farmers, herders and fishers in the seasonally flooded Inner Niger Delta of Mali (Baumgart 2011). It is not yet clear how local institutions and transnational river basin bodies (in this case the Autorité du Bassin du Niger) will cope with increased water demand from large-scale schemes, and increased vulnerability of water supplies as a result of climate change (Cotula 2011a).

2.1.4 Environmental impacts References to environmental consequences are numerous in the case studies and are often related to the detrimental effects of a change in agricultural production methods as well as negative environmental consequences of the clearance and cultivation of forested and other non-farm habitats. A transformation from low-input smallholder agriculture to large-scale, intensive and industrialised agriculture may imply a range of environmental consequences. These include land degradation, water pollution, excessive use of fresh water and heavy dependence on fossil fuels for machinery, fertiliser, pesticides, storage and transportation (Lambina and Meyfroidt 2011). 428

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Regarding pollution, cases include land, air and water pollution related to intensive agriculture as well as industrial developments (Rawat et al. 2011) and pollution linked to intensive mining (Durand 2011). Land acquisitions can also indirectly lead to negative environmental impacts elsewhere. This is shown by the case of the Cotonou’s neighbouring municipalities where rural emigrants who have lost their lands have settled en masse on unserviced plots, leading to extreme pollution and health problems (Dossou 2011). Meanwhile, the conversion of forested and uncultivated lands is associated with biodiversity loss, degradation, diversion of water from environmental flows and loss of ecosystem services such as the maintenance of soil and water quality, as well as carbon sequestration (Markelova and Meinzen-Dick 2009). Several reports emphasise the depletion of forests. Observations of deforestation are widespread in the context of increasing commercial pressures on land (Molnar et al. 2011; Colchester 2011). Environmental degradation can also have knock-on impacts. The transformation of wetland areas or coastal regions can adversely affect the natural environments of fauna and flora, endangering biodiversity and threatening traditional incomes (Anseeuw et al. 2012).

2.2 Indirect costs: worsening and entrenching the root causes of the land acquisition phenomena The direct costs faced by local populations arising from the rush for land covered in the previous section are relatively straightforward: that the poorest members of agrarian societies risk losing their only major assets, land, water and housing. However, in addition to this, the rush for land also has indirect consequences which threaten to worsen and entrench deeply rooted challenges to the sustainable livelihoods of the rural poor, of which the rush for land is a symptom, not a cause. As the latter encapsulate many of the conditions of agrarian economies and societies, the potential impact on the poor extends far more widely than the direct implications of dispossession from property. These are: (1) the further marginalisation of smallholder agriculture from agricultural models of the future; (2) the further erosion of economic policy and market safeguards that would protect the interests of poor land users; (3) the further disenfranchisement of the rural poor and marginalised; (4) a deepening land governance crisis of increasing land insecurity, decelerated land reform implementation. The rush for land is not only a consequence of these; it is also an aggravator. This provides cause for concern as they create a situation in host countries that entrench the conditions to a degree that their reversal becomes extremely difficult.

2.2.1 Further marginalisation of smallholder agriculture It is becoming apparent that the host economies remain marginalised from the renewed investments in agriculture. Most of these investments focus on provisioning food and primary commodities, neither for local societies nor for export on international markets but directly for the investor country through integration of the production process based on far-reaching vertical integration. This offshore production, besides the lack of local integration (import of machinery and labour) as seen here above, which is failing to circulate money in local economies, feeds into parallel markets enabling the investors to avoid world markets (becoming too unreliable) but failing to benefit local food production and security. These current mass investments in land-based production are thus not directly integrating poor agrarian economies with the global economy. Instead, poor economies, while providing resources for the investors, are remaining in a client position. 429

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Not only is this not beneficial, but many case studies draw attention on how these investments and acquisitions are further marginalising smallholder agriculture. As discussed, the long-term nature of typical large-scale acquisitions (often involving durations of up to 99 years), effectively locks communities and smallholders out of land for several generations. This may bring about the end of cultivation and livestock rearing as traditional livelihoodsupporting activities in affected areas. However, not only is local populations’ arable land being lost directly to other practices such as urban, industrial and large-scale corporate agriculture. They also will have to deal with less favourable socio-economic and institutional environments and increased, often biased, competition related to the arrival of these renewed actors and activities. Small producers confronted with large-scale land investments tend to evolve into three categories: a group that seems to be in a position to adapt, often through integration with these big investment projects but on very uneven terms (often contract farming); a non-integrated group, which continues its production and can sometimes sell on local markets, but which is obliged to diversify its revenues; and a marginalised group forced to leave agriculture and for which farming becomes – at its best and if at all practiced – a subsistence activity (Losch et al. 2011). Nevertheless, these three groups are particularly stigmatised in this process and experience difficulties in their livelihood strategies. If some of the local populations can reconvert or relocate, the development of the new activities are often to be realised in less favourable conditions, putting even more pressure on their already fragile farming activities and livelihoods (Fisseha 2011; Veldman and Lankhorst 2011). In general, commercial pressures on land lead to a concentration, intensification and mechanisation of agricultural practices. They are associated with a trend towards monoculture, with the marginalisation of family farming, and with farmers becoming landless labourers. Even where this could lead to increased productivity, there are real concerns that the more vulnerable groups will bear the costs without reaping the benefits. These concerns are exacerbated by the lack of alternative livelihood opportunities for people who lose land and do not manage to obtain employment in the newly established plantations. Many of the countries affected have not yet engaged in their secondary or tertiary sector revolutions, so that there are few alternatives to agriculture (Headley and Fan 2008; Losch et al. 2011).

2.2.2 Further erosion of market safeguards The sheer scale of this globalised land acquisition at scale is indicative of an entrenchment of globalisation. It pushes for further opening up of economies and land classes to externally derived land purchases or leases. If the implications for polarisation in the ownership of natural resources are immense, it mainly draws the attention to the cancellation of regulatory instruments to safeguard the affected countries’ economies and their populations’ rights. At international level, while the World Bank, FAO and individual country donors among other agencies promote and contribute to the formulation of voluntary guidelines for regulating and monitoring land deals, these same institutions are unleashing a wide array of resources aimed at (i) financing profit-seeking enterprises through investment funds; (ii) providing information, consultancy, and infrastructure to private investors; (iii) promoting changes in laws to create investment-friendly environments in target countries; and (iv) implementing investment protection treaties. (Da Via 2011)

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As such, the rush for land has led to a new wave of trade liberalisation resulting in reduced barriers to trade in agricultural commodities (Bürgi Bonanomi 2011). Trade liberalisation has also been pursued through a growing number of bilateral or regional free trade agreements (FTAs). At host country level, international demand for land has pushed governments to cancel or ease regulatory measures in order to facilitate (foreign) investment (Anseeuw et al. 2012). Examples are numerous and vary from abandonment of land ceilings, via cancelling of trade barriers to facilitate commodity and financial flows (as in Ethiopia), to changes in the constitution allowing foreign acquisition of land (as in Mozambique). A major concern is directly related to food security. The ability of the host country to restrict food exports in order to ensure domestic food security may be impaired by investment agreements that give investing companies or governments the legal right to export produce from their investments. Export restrictions may reduce global food availability and raise prices on world food markets – and are widely seen as one of the drivers underpinning the price hikes of 2008. None the less, for countries subject to food crises, regulating food exports can be an important way in which producer country governments can protect the food security of low-income groups in times of crisis (Headley and Fan 2008).

2.2.3 Entrenching a human rights crisis and further disenfranchisement of the rural poor The rush for land significantly exacerbates the negligence of human rights in several ways. Currently, many communities are victims of forced evictions without being consulted or compensated, seriously affecting the right to food as well as other human rights. First, large-scale investments in land are often justified in the name of food security, both at local and national level, mainly by increasing agricultural productivity. However, by limiting the access to land and other natural resources for local communities or by exporting food production to the investor’s country, investment schemes can negatively affect local food security. Glaring contradiction in the fight against hunger and the right to food thus appear. Second, commercial pressures and particularly the non-transparent character of the land deals and negotiations are entrenching the lack of democratic rights of local communities. Indeed, several cases show how local communities may not be consulted (or even informed) on the proposed lease of local lands to investors. Their free and prior informed consent is not sought, and, even when they are consulted, they may not be fully informed of the risks as well as the opportunities large-scale investment could bring. Examples of Rwanda, Zambia, Ethiopia, etc., show how the rush for land entrenches non-democratic practices, disempowers local communities and in particular reinforces the lack of action to deliver democratically elected and empowered community-level land institutions and represents obstacles for developing community-level land administrations. Third, commercial pressures are also exacerbating social and political divisions, as well as purely economic ones. The fault lines may be between castes, between indigenous and nonindigenous groups and between men and women. Marginalised groups are often the most dependent in land resources and the least equipped to take advantage of changing contexts and new opportunities. Regarding the economic ones, although commercial pressures on land create new economic opportunities, those who are already in an economically strong position are more likely to be able to exploit them. The risks, by contrast, are most likely to be carried by those who have least influence over developments. Thus key beneficiaries may be national elites, through corruption as in Kenya (O’Brien 2011), or large national and international companies and their owners, as in a large number of the case studies. Important to emphasise is 431

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that case studies reveal the extent of negative impacts that are incurred, particularly by women (Daley 2011).

2.2.4 A deepening land governance crisis: increasing land insecurity, decelerated land reform implementation The land rush exacerbates the already weak legal status of the lands being acquired by domestic and foreign investors. Indeed, greater commercial pressures on the land also translate into greater pressure on land governance systems. In many instances, land governance systems may be unable to provide and enforce the regulatory safeguards to protect the interests of smallholders and the poor. In the worst cases, this can increase opportunities for corruption and risks of dispossession. As such, land governance failure under pressure leads to an increase in tenure insecurity. This insecurity derives chiefly from the growing uncertainties affecting local populations as to the future ownership and use of their lands (Dossou 2011; Rawat et al. 2011; Tambler and Giudice 2011; etc.). Land investments reinforce the weak status of community-derived ownership over collective lands and contribute to the resulting sharp rise in the loss of agrarian property, aided by shifts in host government policies. While customary regimes rarely permitted individuals to alienate for profit lands they had been awarded or inherited over generations, the increased demand now leads to rapid commodification and loss of land for local populations. These dynamics are contradictory with the tenure reforms engaged in by several countries (paradoxically to protect the traditional occupants’ rights). This is the case in many African countries, such as Madagascar, Zambia, Mali and others, where the loss of land to domestic and international investors is contradictory to officially promoted policies aiming at securing the local populations’ rights. In South Africa, large-scale investments, called strategic partnership agreements, are even officially promoted as alternatives for tenure reform (Ducastel and Anseeuw 2011). Regarding the use, ambiguities around the motivations and real strategies of investors can create a climate of uncertainty for the future of the communities. In this way, commercial pressures on land, merely by raising questions about future access to resources, may deter investment and sustainable management by small-scale landowners and users. Increasing commercial pressure on lands is also a driver of mismanagement and the nonimplementation of policy, while in open-access contexts ever-increasing commercial pressures on land-related resources amplify informal activities such as illegal logging, continuing to degrade natural forest areas (Molnar et al. 2011). Also, rising land prices and speculation have promoted informal, and even illegal, land and housing markets. This can take the form of unregulated development, including parcelisation and private land transactions that might not be legal. An example is the privatisation and commoditisation of ‘new’ lands. In Benin, this has included the sale of swamplands declared unfit for construction (Dossou 2011). In Kenya, unregulated privatisation has been driven by the conversion of state lands into private properties by elites (O’Brien 2011). The selling of lands traditionally belonging to local communities by national and local elites is another frequent cause for concern (Alden Wily 2011b).

3 Conclusions As such, the presentation of the (potential) implication of the rush for land contributes importantly towards building an understanding of the range and magnitude of the risks and opportunities at stake in Africa and elsewhere. The evidence presented in this chapter confirms much of the wider evidence; models of investment that are predicated on acquiring large tracts of land 432

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will most likely not yield significant benefits locally, and in fact in many cases are set to cause long-standing harm. Moreover, the manner in which the global rush for land is currently taking place is deepening underlying causes, which entrenches the challenges faced by rural families to escape from poverty, hunger or marginalisation (Anseeuw et al. 2012). The effects of large-scale land acquisitions and wider commercial pressures are felt at a local level, at a national level, and at a global level through world markets and global ecosystems. They include direct outcomes such as new employment or loss of access to a resource, or more indirect impacts such as changed food security, local or elsewhere. People are affected in different ways. Income, livelihood security and economic development are important aspects; food production, availability and security are others. However, issues of dignity, self-determination and the right of people to decide their own path of development and control their own food systems if they want to do so is also a critical issue. Lastly, commercial pressures on land have different impacts on different groups of people. Such groups include international land acquirers and host country elites, the population of host countries and other countries, and the local communities directly affected. It is also vital to remember that there are divisions and power relations within these groups. It is the poor who are most likely to be negatively affected, as are pastoralists and forest-dependent people. This notwithstanding, it should be noted that commercial pressure on land is a phenomenon affecting not only pockets of rural minorities, but rural majorities, and indeed whole societies, in many parts of the world. Where formal land governance systems are unable to resolve competition for land resources in an inclusive, transparent and demonstrably fair way, or where they are prevented from doing so, an escalation of competition into conflict is a significant risk. In many cases, popular discontent has so far taken the form of peaceful advocacy and protest movements. However, where injustice is seen as unresolved, the risk that such disputes and movements lead to direct and violent confrontations is real.

Notes 1 See warnings of the then-head of the United Nations (UN) Food and Agriculture Organization (FAO), Jacques Diouf, regarding ‘neo-colonial’ land acquisitions, with poor states producing food for the rich at the expense of their own food security (see Financial Times 2008; etc.).

References Alden Wily, L. (2011a) ‘The tragedy of public lands: the fate of the commons under global commercial pressure’, Alden Wily contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. ——(2011b) ‘“The law is to blame” Taking a hard look at the vulnerable status of customary land rights in Africa’, Development and Change 42(3): 733–57. Andrianirina-Ratsialonana, R., Ramarojohn, L., Burnod, P. and Teyssier, A. (2011) ‘After Daewoo? Current status and perspectives of large scale land acquisitions in Madagascar’, OF/CIRAD contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Anseeuw, W. and Rahal, S. (2008) ‘Les politiques agricoles sénégalaises – Evolution et facteurs explicatifs’, rapport de recherche, CIRAD, Montpellier. Anseeuw, W., Alden Wily, L., Cotula, L. and Taylor, M. (2012) ‘Land rights and the rush for land’, synthesis report, ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Baumgart, J. (2011) ‘Assessing the contractual arrangements of large-scale land acquisitions in Mali with special attention to water rights’, GIZ, Berlin. Bürgi Bonanomi, E. (2011) ‘Trade law and responsible’, in S. Heri, A. ten Kate, S. van der Wal, E. Bürgi Bonanomi and K. Gehne (eds) International Instruments Influencing the Rights of People Facing Investments in

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Agricultural Land, Rome: ILC; contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Colchester, M. (2011) ‘Palm oil and indigenous peoples in South East Asia’, FPP contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Cotula, L. (2011a) ‘The outlook on farmland acquisitions’, IIED contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. ——(2011b) Land Deals in Africa: What is in the Contracts? London: IIED. Cowaloosur, H. (2012) ‘Chinese Special Economic Zones in Africa: new hubs or concessions?’ paper prepared for the workshop ‘Emerging Africa: Moment and Momentum: Critical Transitions’, 1–2 March, Centre Emile Durkheim for Comparative Political Science and Sociology, Sciences Po Bordeaux, Bordeaux. Daley, E. (2011) ‘Gendered impacts of commercial pressures on land’, Daley contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Da Via, E. (2011) ‘The politics of “win–win” narratives: land grab as development opportunity?’ paper presented at the Land Deals Politics Initiative (LDPI) International Conference on Global Land Grabbing, 6–8 April, University of Sussex, UK. Dossou, P. J. (2011) ‘Evolution and impacts of coastal land use in Benin: the case of the Sèmè-Podji Commune’, VADID contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Ducastel, A. and Anseeuw, W. (2011) ‘Le “production grabbing” et la transnationalisation de l’agriculture (sud-) africaine’, Transcontinentales 10/11. Available at: http://transcontinentales.revues.org/1080. Durand, A. (2011) ‘No man’s lands? Extractive activity, territory, and social unrest in the Peruvian Amazon: the Cenepa River’, SER/CISEPA contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Financial Times (2008) ‘UN warns of food “neo-colonialism”’, 19 August. Fisseha, M. (2011) ‘A case study of the Bechera agricultural development project, Ethiopia’, Fisseha contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Hall, R. (2011) ‘The next Great Trek? South African commercial farmers move north’, Working Paper 19, PLAAS, Cape Town. Headley, D. and Fan, S. (2008) ‘Anatomy of a crisis. The causes and consequences of surging food prices’, IFPRI, Washington, DC. HLPE (High Level Panel of Experts) (2011) ‘Land tenure and international investments in agriculture’, Committee on World Food Security – High Level Panel of Experts on Food Security and Nutrition, HLPE Report 2, Rome. Horne, F. (2011) ‘Understanding land deals in Africa. Country report: Ethiopia’, Oakland Institute, Oakland. Keulertz, M. (2011) ‘The new politics of virtual water in East Africa’, paper presented at the Land Deal Politics Initiative (LDPI) International Conference on Global Land Grabbing, 6–8 April, University of Sussex, UK. Lambina, E. F. and Meyfroidt, P. (2011) ‘Global land use change, economic globalization, and the looming land scarcity’, PNAS 108(9): 3465–72. Losch, B., Freguin-Gresh, S. and White, R. (2011) Structural Dimensions of Liberalization on Agriculture and Rural Development. A Cross-Regional Analysis on Rural Change, Synthesis Report of the Ruralstruc Programme, Washington, DC: World Bank. Markelova, H. and Meinzen-Dick, R. (2009) ‘The importance of property rights in climate change mitigation,’ 2020 Vision Briefs 16(10), IFPRI. Washington, DC. Milimo, J., Kalyalya, J., Machina, H. and Hamweene, T. (2011) ‘Social impacts of land commercialization in Zambia: a case study of Macha mission land in Choma district’, ZLA contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Molnar, A., Barney, K., De Vito, M., Karsenty, A., Elson, D., Benavides, M., Tipula, P., Soria, C., Sherman, P. and France, M. (2011) ‘Large acquisition of rights on forest lands for tropical timber concessions and commercial wood plantations’, Rights and Resources Initiative (RRI) contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Nhantumbo, I. and Salomão, A. (2010) Biofuels, Land Access and Rural Livelihoods in Mozambique, London: IIED. O’Brien, E. (in collaboration with the Kenya Land Alliance) (2011) ‘Irregular and illegal land acquisition by Kenya’s elites: trends, processes, and impacts of Kenya’s land grabbing phenomenon’, KLA contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. 434

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Odhiambo, M. O. (2011) ‘Commercial pressures on land in Africa: a regional overview of opportunities, challenges, and impacts’, RECONCILE contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Rawat, V. B., Bhushan, M. B. and Sujata, S. (2011) ‘The impact of special economic zones in India: a case study of Polepally SEZ’, SDF contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Sulle, E. and Nelson, F. (2009) Biofuels, Land Access and Rural Livelihoods in Tanzania, London: IIED. Tambler, A. and Giudice, G. (2011) ‘The competition for family dairy farmers’ land in Uruguay and their strategies for confronting it’, CCU/CISEPA contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Veldman, M. and Lankhorst, M. (2011) ‘Socio-economic impact of commercial exploitation of Rwandan Marshes: a case study of sugar cane production in rural Kigali’, RCN contribution to ILC Collaborative Research Project on Commercial Pressures on Land, Rome. Wegner, L. and Zwart, G. (2011) ‘Who will feed the world? The production challenge’, Oxfam research report, Oxfam. World Bank (2010) ‘Rising global interest in farmland. Can it yield sustainable and equitable benefits?’ research report, Washington, DC: World Bank. Yaw Baah, A. and Jauch, H. (2009) ‘Chinese investments in Africa: a labour perspective’, research report, African Labour Research Network, Johannesburg, May.

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5.2 China–Africa agricultural co-operation, African land tenure reform and sustainable farmland investments Yongjun Zhao and Xiuli Xu

Introduction The current international development landscape is being shaped by the emerging powers such as the Peolple’s Republic of China and other BRICS nations in their unprecedented engagements with Africa’s economy and society. China, as the world second-largest economy, has received both compliments and criticisms for its approach to development assistance in Africa. Its involvement in the region has repercussions for the local economy, natural resources utilisation and livelihoods of the poor (Tull 2006; Zafar 2007; Moyo 2009; Tan-Mullins et al. 2010). In addition to impacts, the interplay of the Chinese engagement and African political economy seems elusive and thus complicates different stakeholders’ interpretations of their location in the broader system of economic and political relations. Therefore, a more in-depth analysis of China–African relations cannot solely depend on a preliminary or even superficial understanding of the broad aspects of bilateral links including trade, investments and aid. Most of current research findings do not inform how the Chinese interact with African communities and the impact this engagement has on their livelihoods and natural resource base. Neither does current research provide a more nuanced, disaggregated and critical insight into the existing and potential risks that undermine the sustainability of Chinese investments (Ong’ayo 2010; Tan-Mullins et al. 2010). The above issues, combined with ongoing criticism of the impact on African peoples by foreign investors, means the analysis of China–Africa agricultural co-operation is an effective case study given the key role of China as an investment source (Cotula et al. 2009; World Bank 2010). Africa’s land reform is driven by market forces to facilitate profiteering by foreign investments and therefore is coterminous with land grabs or the global rush for African land which has attracted global attention, particularly since the food crisis of 2007. The vested interests of vulnerable groups in the face of eviction and associated consequences of livelihood deterioration, enlarged inequality and poor governance are often reported in the media,1 although it is difficult to ascertain the authenticity of these reports. It is likely, however, that any potential confrontation with the local and international powerful actors will have severe 436

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repercussions for local development outcomes. In this respect, African land smallholders would be more receptive to foreign investments if sound institutional arrangements for sustainable land investments are designed with consideration for their interests. De Soto’s approach to economic development is widely followed by developing countries in introducing land tenure reform laws and policies. It is assumed that strengthened and clarified land titles and more simplified land management systems would pave the way for market-based land transfers with the ultimate outcome of attaining the goal of agricultural economies of scale (De Soto 2000). However, such measures have not been proven effective or even pro-poor. On the contrary, it is possible to attribute such reform to land concentration and social fragmentation which puts the vulnerable groups on the margins of development. It is in this context that China’s agricultural investments in Africa are put to the test. The outcomes of such investment have not been well understood. Thus, an enhanced understanding of the linkages between African land tenure reform and Chinese investments from a pro-poor angle – sustainable land use, rural development and village governance – needs to be developed (Zhao 2011a, 2011b). This chapter emphasises the complexities of land tenure reform and its integral interactions with agricultural development and governance (Lumumba-Kasongo 2010). In so doing, this chapter attempts to go beyond the narrow theoretical and policy approaches to land tenure security as essential to agricultural development. Giving the multifaceted nature of land use and management, it puts forward the dynamics and conditions of land tenure security from sustainable development and governance perspectives. It provides a snapshot of the drivers for China’s engagement in African agriculture, especially in land acquisitions, to explore the role of land in their co-operation and conflicts. In this context, it then outlines the trajectories and problems of land tenure reform in Africa to a further understanding of implications of land tenure on sustainable Chinese investments. Finally, it discusses why and how the use of a propoor approach to land tenure can possibly benefit responsible Chinese and other foreign agribusinesses in African land in the long run.

China’s agricultural support to Africa in a broad sense China adopts a broad concept of mutual benefit-based economic co-operation rather than oneway acts of aid to ensure the sustainability of the aid projects and to promote the endogenous development in Africa (Xu 2011). According to the White Paper for China–Africa Economic and Trade Cooperation (Information Office of the State Council 2010), aid is an intrinsic part of a broad bilateral economic co-operation between China and African countries. Since 2006, China has adjusted the priorities for its aid policy in Africa from construction to agricultural development, among others, with a view to assisting Africa in solving its hunger problems (Han 2010; Sun 2011). It is often contended that this policy shift towards agricultural development resonates with growth in China’s internal food demand. With a fast-growing economy, China needs to feed its 1.3 billion people with 7% of the world’s arable land in a sustainable manner. Yet China’s arable land is depleting so rapidly that, by 2006, only approximately 122 million hectares remained (Bräutigam 2009). Food shortages and rising food prices have resulted in China becoming more dependent on grain imports. Thus, it is argued that the rich soils of Africa and other countries could be a target for grain production and organic agriculture for the Chinese market (Alden and Alves 2009). This argument is challenged by some who view the impossibility of generating a profit for investors from food supplied by Africa because of high costs of transportation, a lack of skills in 437

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the local population and a lack of technology for large-scale production, along with other factors (Cotula et al. 2009; Rubinstein 2009). On one hand, China’s formal proclamation presents this policy shift as a prompt response to the demand of the host countries, particularly resourcerich countries such as Zimbabwe and Zambia who would like to escape the resource curse by making the best use of China’s aid to solve the pressing problem of limited food availability (China–DAC Study Group 2011). On the other hand, the policy embodies the philosophy of Chinese decision-makers, i.e., ‘teach them how to fish, rather than giving them fish’ (Han 2010) in believing that agricultural development, grain production and food security, in particular, should be a top priority to trigger a broad-based pro-poor development in African countries, following the pathway deployed by China since its market-oriented reform with a mission to open China to the world economy was started in the late 1970s. China has set up a number of investment schemes targeting food production in Africa through different approaches, including aid projects providing investments by both the Chinese Government and Chinese companies in infrastructure, technology demonstration and training programmes (Sun 2011). Chinese businesses have explicitly rejected ‘Afro-pessimism’ by bringing the equipment and expertise needed to boost economic development in Africa (Alden et al. 2009). The investment in African agriculture has accounted for more than 3% of China’s outward FDI cumulative stocks by 2009 (Information Office of the State Council 2010), and is expected to increase through the revival of the focus on the importance of agricultural cooperation between China and Africa. To date, China has established 14 agro-technical demonstration centres in Africa through use of public–private models, with the aim of assisting Africa in developing sustainable agriculture (Bräutigam and Tang 2009; Xu 2011). There has been a growing number of enterprises taking the responsibility of construction and operation of the agro-technical demonstration centres. Investment in agricultural infrastructure, along with farmland investment, technology transfer and agricultural processing, remains a dominant component of China–Africa agricultural co-operation. An example of this investment is China’s pledge of US$800 million to modernise Mozambique’s agricultural infrastructure, including the building of a dam and canal for irrigation purposes. Coupled with the agricultural investment, China has encouraged China–Africa agricultural trade by abolishing tariffs on some exported products, which is expected to cover 95% of the total taxable items listed in the Regulations of the People’s Republic of China on Import and Export Duties, from the least developed countries in Africa (Information Office of the State Council 2010). Although the trade in food and agricultural raw materials as share of total trade between China and Africa remains small, around 3% in 2008 both in exports and imports (Fan et al. 2010), it witnessed unprecedented growth by 25% in 2009 even against a backdrop of the financial crisis. Additionally, China sent 104 senior agricultural technology experts to 33 African countries between 2007 and 2009, basing them in research stations working with local groups to increase crop yields and to improve the performance of the agricultural sector (Chinese Academy of International Trade and Economic Cooperation 2010). Agricultural biotechnology developed in China has also been introduced to Africa for the propagation of more droughtresistant crops such as rice to cope with increased pressure on local food supply (Rubinstein 2009). In general, Chinese agricultural investments appear to have been made through collaborative projects rather than exclusive land deals, though some questions have arisen over the influx of Chinese labourers with limited interaction with Africans, resource exploitation and the unsuitability of the technologies introduced (Rubinstein 2009; Spring 2011). It is still too early to conclude that these efforts could lead to a better solution to Africa’s hunger problems, given the scant information available on the outcomes of these agricultural projects (Sun 2011). However, 438

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the positive reception to this type of agricultural support as perceived by some African governments contradicts the ongoing criticisms of China’s aid to Africa, which is commonly labelled as contributing to the rising land grabs (China–DAC Study Group, 2011).2 Quite often, African governments view China as one of the few donor actors that is bringing about more tangible development outcomes, and it is crucial to learn from China’s own development experiences for Africa’s success (Rubinstein, 2009).

Chinese involvements in farmland investments in Africa A major criticism of China’s investments in African agriculture rests with the land sector. Among other foreign actors, recent reports illustrate China’s role in fuelling land conflicts, thereby contributing to land grabbing in Africa. African community organisations have expressed their concerns about the lack of proper consideration of the social and environmental impacts of these programmes (Horta 2009). The size of land acquisitions remains unaccounted for through a lack of studies, constrained by the difficulties in access information on land transactions (Cotula et al. 2009). A lack of transparency in land deals is often linked with business malpractices and corruption of African governments. Such malpractice disadvantages local smallholders in farmland acquisition processes. Unjust compensation for their loss of land often spurs local unrest (Rubinstein 2009). A recent example of the marginalisation of local smallholders is highlighted in a local protest over the building of a Chinese cotton-processing plant in Malawi that involved the removal of local residents. Local civil society groups contended that the local people would receive few benefits from foreign companies. Their distrust in land use and management by foreign investors resembles instances across Africa where uncultivated land is believed to be abundant for foreign investments for agricultural development, which is often not the case (Alden Wily 2011). In general, there is a growing awareness among African farmers and agribusinesses that Chinese farm operations may have caused negative impacts on the local markets and local land tenure systems.3 None the less, to date there is little evidence to suggest that the land deals involved have much connection to land speculations per se. Historical and comparative perspectives need to be developed to examine the nature of China’s land deals in Africa. Historically, Chinese farming experiences in African countries have been accumulated over five decades – from the entry of large state-owned plantations in the 1960s in delivering China’s technical assistance to the mushrooming of market-oriented enterprises since the mid-1990s. Thus, China’s engagement in African farmland is not new, but the investment trend seems have intensified in recent years. One exemplar of investment is the Zhongken Farm established by the China State Farms Agribusiness Corporation near Lusaka, Zambia, which encouraged other Chinese farmers to invest in African farms (People’s Daily 2002). Comparatively, China’s ‘Friendship Farms’ in various African countries are formally owned by Chinese parastatal organisations, which are mostly medium-scale in terms of land area, usually below 1,000 hectares (Cotula et al. 2009). According to the International Food Policy Research Institute (IFPRI), of the 34 large-scale projects recorded, ‘Chinese investors are involved in only four which are questionable’ (China–DAC Study Group 2011). Based on Chaponniere et al.(2010), 18 out of 19 Chinese farm investments totally in African countries target the local or world market rather than the Chinese market. The only exception would be investments in biofuels which target the European export market. Moreover, the macro–micro link should also be taken into account in exploring the essence of the land deals. One needs to look into issues such as the local context, terms of land lease and 439

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local reactions, job creation and access to market, to better understand the effects of land acquisition on rural development (Cotula 2011). It is estimated that 10 Chinese managers coworked with 240 local employees in one Chinese farm in Tanzania, while in other instances the ratio is 8:1,000.4 These numbers may be illustrative of the meaningful contribution of Chinese farms to the local employment. Furthermore, the local employees took new technologies learned during their work on the farms in China back home to benefit their own communities, as seen in the case of Zambia.5 Buckley’s empirical research in Senegal, however, shows that Chinese and Senegalese experts and farmers need to engage in a mutual learning process to deal with the complexities of land-based interventions and agrarian management. Without such engagement, investment plans made in Beijing may fail when implanted into the locally variegated contexts (Buckley 2011). Overall, the evidence to date does not lead to the conclusion that China’s involvement in farmland acquisitions in Africa have been overtly negative, especially when accounting for the long history of its engagement in African farming, either through aid from the 1960s or more recent increased rates of investments. However, China still needs to make greater efforts in introducing more innovative institutional mechanisms in its land deals to accommodate the needs of the affected groups in sustainable land and resource use, management and agricultural development. The need for such measures are discussed in the next section.

Why African land tenure reforms matter for Chinese investments Any foreign agribusinesses intending to invest in Africa will pay critical attention to the willingness and approach to improvements in investment environments by African governments. The access to land for these businesses constitutes a major opportunity and constraint to their penetration into Africa. Therefore, there are inextricable links between the land uses of these investments and Africa’s own land tenure reform. Linking these investments with sustainable land use and livelihoods of local communities are necessary to generate more inclusive development outcomes. This inclusive approach needs to be accorded higher policy attention to deal with the growing concerns over the adverse impacts of foreign investments on Africa’s soil. As such, Chinese agricultural projects are not immune from the complex natural, social and economic environments in Africa (Sun 2011). A barrier to such reform is the misunderstanding and ignorance by both policy-makers and business players of how the evolving African land tenure systems underpin societal–state relations. Even when it is ‘truthfully’ claimed that land used by investors was previously ‘unoccupied’, the lands often turn out to be used by local communities in customary practices; thus unjust compensations constitute a major social, legal and political issue concerning land tenure security and development (Alden Wily 2011; HLPE 2011). Adopting an approach for ensuring that the investments are compatible with local customary land management and will not cause the eviction of local smallholders becomes politically challenging owing to the divergent interests between users, businesses and local state. Current land tenure reform measures to enshrine greater entitlement rights to the smallholders have yet to show effective benefits for local smallholders (cf. Smith 2004). Land tenure reform in different historical, political and social contexts undoubtedly requires a critical examination of current institutional arrangements in order to understand the underlying rules of the games for different parties with vested interests. Africa’s ongoing land reform measures are driven by a strong push for market-oriented approaches to land tenure arrangements and agricultural development. They are characterised by the legalisation of land tenure through land titling that incorporates individual, group and communal ownership to facilitate land 440

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market transactions at least from a longer perspective. In this respect, the individualisation of land tenure has loomed large as a means to facilitate land acquisitions by domestic and foreign investors with a view to boosting economies of scale (Alden Wily 2011; HLPE 2011). However, the implementation of these policies has often involved state and local elite capture of land rights, thereby leaving poor communities with only land use rights, to a large extent (Alden Wily 2011). Thus, the majority of poor smallholders have not been able to defend their rights in the face of foreign land acquisitions. Moreover, the latter have not brought about net social benefits when new economic opportunities in agriculture and technology are introduced (cf. Barrows and Roth 1990). Among African policy-makers, there is a growing awareness of the difficulties in balancing large- and small-scale farming, especially for the vast number of smallholders’ livelihoods and customary land practices. Land tenure reform inclined to the individualisation of land rights has been proven extremely difficult, given conflicting claims over land rights by different social groups. Some reformers try to take into account the dynamics of local society in managing land and thus develop new land laws and policies in a hybrid manner – combining statuary law with local law or reconciling state and local interests in land use. These institutional ‘innovations’ can, however, be misleading in practice as the state does not always interpret property relations in the same way as local communities. Rather, the state often engages in reconstructing local realties to suit its own interest, as seen in the reinstatement of state ownership or absolute discretion power over common property rights. For Alden Wily, as long as these communities do not have real landownership, land grabs become a reality (Alden Wily 2011). In other words, the capacities of the local state to manipulate land institutions and governance process count more than rules on paper (Hoekema and Otto 2012). Moreover, although local concepts and practices in the flexible design of land tenure systems are called for, the actual design and implementation remains critical as it is interwoven with the complex environment in which decentralisation is instituted. The design and implementation in Africa is crucial for coupling land reform with good governance for genuine power transfers to the local areas (Peters 2009). Robust land tenure security can probably succeed if land administration is made an integral part of granting political rights to the smallholders (Dessalegn 2009). To a large extent, therefore, land tenure reforms in Africa have not effectively tackled the institutional constraints to economic development and social security. Rather, they have contributed to increased social inequality, poor governance and unsustainable use of land resources. There are essentially no causal links between private landownership or tenure security, a population’s economic incentives and economic development. In addition, land tenure security may not necessarily be ensured through the institution of private property rights assumed to facilitate land transactions (Dekker 2001). Simplified and uniform property regimes manipulated by the state can be more static and schematic than the actual social problems that they aim to solve (Scott 1998). Clearly, African land tenure reforms have facilitated and fostered foreign land acquisitions rather than obstructed them. At the core of the issue is that current land tenure reforms have not addressed which land tenure arrangements, under what conditions, are compatible with sustainable land resource use, governance and development in face of land acquisitions. Thus, there is a need for the development of a clear conceptual framework for further research and policy design to address the conditions and dynamics of local land tenure systems, not only in Africa but in other regions also (Zhao 2011b). The pros and cons of land tenure reform need to be further understood and brought to the fore of land and agricultural development circles. As long as the reforms pursued by the African states attach insufficient importance to the real needs of the poor and vulnerable smallholders, it will not be possible to avert unsustainable land uses through foreign land investors. These 441

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investors, to a large extent, may have been overconfident in their local recipients or the capacity of local states to effectively deal with the discontents of local communities. Their contribution to the disadvantage of the poor further signals the failure of current land tenure reform policies. Yet, given the rising land-induced conflicts, the ignorance of local land tenure complexities can delay not only their operations but also the sustainability of their investments in the long run. More research efforts are needed in exploring more appropriate land tenure systems for the benefits of both African smallholders and foreign investors. Improvements to land tenure reforms largely rest with the roles of African governments in setting more stringent conditions on foreign land acquisitions. Nevertheless, Chinese agribusinesses may benefit from better understanding the African social and political complexities underpinning land tenure and use. Thus, making their programmes more aligned with the basic conditions of sustainable land use and livelihoods is essential. Land tenure and the role of land cannot be understood in isolation from the overall challenges of development and governance. A match between a land tenure system and sustainable land resource use should be pursued as a fundamental mechanism for achieving good governance and sustainable development. Thus, agricultural investments should be oriented towards the goals of sustainable land and resource use and appropriate local land tenure systems. It is beyond the capacity of businesses to define and develop more appropriate land tenure systems. Therefore it is of vital importance that African governments facilitate the development of such reforms and the application of sustainable development and governance approaches to improve more drastically the terms and conditions for foreign land acquisitions. There is a requirement to make more sustained efforts in providing the avenues for both Chinese and African policy-makers, business actors and even farmers to work together towards a feasible framework of action.

Conclusions China’s agricultural investments in Africa are likely to grow exponentially in the coming decade. One can better understand China’s role in Africa from contextual perspectives into its means of business-making with African stakeholders (cf. Robertson and Pinstrup-Andersen 2009). More empirical studies are crucial for an enhanced understanding of the contentious issues surrounding their land deals and related practices and the fundamental challenges of Africa’s agrarian reform. These findings should contribute to the exploration of appropriate social institutions at national, regional and international levels to facilitate models of social and political change in Africa. In particular, these studies should contribute to the engagements of Chinese businesses and policy-makers with their African counterparts in coming to terms with the challenges of sustainable land use, rural livelihoods and governance. Land tenure reforms in Africa should be geared towards the needs of the land users above the needs of foreign investors for land access, although a win–win situation, especially for the most vulnerable rural groups, would be the ultimate, but challenging, goal. This chapter has attempted to contribute to an enhanced understanding of the linkages between China–Africa agricultural co-operation and African land tenure reform from a propoor perspective. It emphasises that a pro-poor land tenure system should set conditions for sustainable land use, development and governance rather than mere propositions on landownership and rights strengthening, thus going beyond the pursuit of simplistic approaches to land reform (cf. Meinzen-Dick et al. 2008). It is necessary to consider how farmer traditional cultures have changed in relation to land, how the logic of political culture has shifted, and how the state and farmers have colluded in political movements. In other words, a certain land tenure system cannot be appropriate for the poor unless it is compatible with and supported by local 442

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conditions – sustainable economic development and good governance (Zhao 2008). These interdependent parameters have profound implications for foreign land acquisitions and investments. As African farmers and even Chinese agribusinesses lack effective means to engage in land use and management, promoting inclusiveness is critical to the fostering of locally based institutional arrangements for pro-poor land management. However, the issue remains as to whether there is a need to create new institutions, or whether sufficient improvements in current institutions can be achieved in a way that allows them to effectively represent farmers’ land rights and benefits in the context of those complex social and political relations. Thus, a practical approach is needed to build the institutional basis of innovative land tenure systems that allow flexibility for the farmers to decide on a particular land use arrangement deemed appropriate for a specific village setting. This system should be developed according to the local needs for sustainable development, with governance strategies to incorporate sound participatory land use planning mechanisms.6 The design of an appropriate land tenure system builds, to a certain extent, on the heterogeneity of institutions, agro-ecological and farming conditions, which dictate the pursuit of different approaches and models with technological and institutional innovations tailored to the local context (Wegner and Zwart 2011). Depending on the varieties of land use on a specific plot and in the village as a whole, a single land tenure system may not be sufficient. Rather, a plurality of land tenure systems encompassing both individual and collective landownership and land use rights should be explored. This process requires farmer voluntary action to form land use and management groups when group tenure is appropriate, for instance. These groups should be willing to participate in decision-making to ensure that labour and benefits can be shared equally among themselves (Agarwal 2008). Again, the challenge is how to organise effective local community participation in land acquisitions, which has received scant attention among Chinese investors. The design of Chinese support for African agricultural programmes may benefit from a paradigm shift from the conventional call for economies of scales, towards more locally appropriate schemes for sustainable land tenure, land use and development and governance. These programmes should prioritise helping the poor identify and overcome the biophysical, social and political constraints to sustainable livelihoods, land use and village governance. They should contribute to improved land administration at the local level through more effective transparency and accountability mechanisms (Hilhorst 2010). China–Africa agricultural co-operation has a long way to go to arrive at a win–win situation in a broader sense. Mutual lesson-learning among the major stakeholders holds the key to any institutional innovation that is expected to lead to more equitable and sustainable development outcomes for Africa’s disadvantaged groups. If this approach can be adopted by both policy-makers and business communities in China and Africa, the positive effects of China–Africa agricultural co-operation can gain greater momentum in shaping international development practices in the new millennium.

Notes 1 GRAIN, a Spanish-based NGO, has monitored media articles that reported around 180 land deals at varying stages of negations. International Food Policy Research Institute (IFPRI) documented reports on 57 land leads. International Institute for Environment and Development (IIED), Food and Agriculture Organization (FAO) and International Fund for Agricultural Development (IFAD) compiled a large database on this issue (China–DAC Study Group 2011).

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2 China’s deals with Congo and Zambia for biofuel production involved millions of hectares of land and, according to one estimate, 1 million Chinese farmers would be sent to work on Africa’s land; see The Economist (2009). 3 For details on land grabs, see UN Office for the Coordination of Humanitarian Affairs’ release, titled ‘Food crisis: status and impacts’, available at: www.irinnews.org. 4 The data was derived from an informal talk with a senior manager of Zhongken Industry Co., Ltd, in Beijing on 13 January 2012. 5 The case originated from the field study in the Sunlight Farm in Zambia in June 2009. 6 A new area-based planning approach that involves specific plans for land reform at local level may be appropriate in South Africa, for instance. This approach helps determine the nature, location, purpose and target group for land reform; see Hall (2008).

References Agarwal, B. (2008) ‘Collective approaches to land rights’, The Broker 8: 2. Alden, C. and Alves, A. (2009) ‘China and Africa’s natural resources: the challenges and implications for development and governance’, SAIIA Occasional Paper No. 41. Alden, C., Large, D. and Soares de Oliviera, R. (eds) (2009) China Returns to Africa: A Rising Power and a Continent Embrace, London: Hurst Publishers. Barrows, R. and Roth, M. (1990) ‘Land tenure and investment in African agriculture: theory and evidence’, Journal of Modern African Studies 28(2): 265–97. Bräutigam, D. (2009) The Dragon’s Gift: The Real Story of China in Africa, Oxford: Oxford University Press. Bräutigam, D. and Tang, X. (2009) ‘China’s engagements in African agriculture: “down to the countryside”’, China Quarterly 199: 686–706. Buckley, L. (2011) ‘Eating bitter to taste sweet: an ethnographic sketch of a Chinese agricultural project in Senegal’, paper presented at the International Conference on Global Land Grabbing, 6–8 April, University of Sussex. Chaponniere, J. R., Gabas, J. J. and Qi, Z. (2010) ‘China Africa in agriculture: a background paper on trade, investment and aid in agriculture’, China–DAC Study Group on Agriculture, Food Security and Rural Development, Bamako, 27–28 April. China–DAC Study Group (2011) Economic Transformation and Poverty Reduction: How It Happened in China, Helping It Happen in Africa, Volume 2, Beijing: China Financial and Economic Publishing House. Chinese Academy of International Trade and Economic Cooperation (2010) China–Africa Trade and Economic Relationship Annual Report, Beijing: CAITEC. Cotula, L. (2011) ‘The outlook on farmland acquisitions’, Policy Brief, IIED, CIRAD, ILC. Cotula, L., Vermeulen, S., Leonard, R. and Keeley, J. (2009) Land Grab or Development Opportunity? Agricultural Investment and International Land Deals in Africa, Rome: FAO, IIED and IFAD. De Soto, H. (2000) The Mystery of Capital: Why Capitalism Triumph in the West and Fails Everywhere Else, New York: Basic Books. Dekker, H. (2001) ‘A new property regime in Kyrgyzstan: an investigation into the links between land reform, food security and economic Development’, unpublished PhD thesis, University of Amsterdam. Dessalegn, R. (2009) ‘Peasant and agrarian reforms: the unfinished quest for secure land rights in Ethiopia’, in J. Ubink, A. J. Hoekemer and W. Assies (eds) Legalizing Land Rights: Local Practices, State Responses and Tenure Security in Africa, Asia and Latin America, Leiden: Leiden University Press. The Economist (2009) ‘Outsourcing’s third wave’, 21 May. Fan, S., Nestorova, B. and Olofinbiyi, T. (2010) ‘China’s agricultural and rural development: implications for Africa’, background paper for China–DAC Study Group on Agriculture, Food Security and Rural Development, Bamako. Hall, R. (2008) ‘State, market and community: the potential and limits of participatory land reform planning in South Africa’, PLAAS Working Paper 7. Han, C. (2010) ‘Strengthening China–Africa agricultural co-operation to promote the common development’. Online. Available at: www.gov.cn/gzdt/2010–08/11/content_1677114.htm (accessed 11 August 2010). High Level Panel of Experts (HLPE) (2011) Land Tenure and International Investments in Agriculture, a report by the High Level Panel of Experts on Food Security and Nutrition, Rome: FAO. Hilhorst, T. (2010) ‘Decentralization, land tenure reforms and local institutional actors: building partnerships for equitable and sustainable land governance in Africa’, Land Tenure Journal 1: 35–59.

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Hoekema, A. J. and Otto, J. M. (eds) (2012) Fair Land Governance: How to Legalize Land Rights for Rural Development, Leiden: Leiden University Press. Horta, L. (2009) ‘Food security in Africa: China’s new rice bowl’, China Brief IX(11, 27 May): 10–12. Information Office of the State Council (IOSC) of People’s Republic of China (2010) White Paper for China–Africa Economic and Trade Cooperation, Beijing: Renmin Chubanshe. Lumumba-Kasongo, T. (2010) ‘Forward on “China in Africa”’, African and Asian Studies 9: 201–6. Meinzen-Dick, R., di Gregorio, M. and Dohrn, S. (2008) ‘Pro-poor land tenure reform and democratic governance’, Discussion Paper 3, Oslo Governance Centre, UNDP. Moyo, D. (2009) Dead Aid: Why Aid Is not Working and How There Is a Better Way for Africa, London: Allen Lane. Ong’ayo, A. O. (2010) ‘China–Africa relations: a review of the civil society–academic dialogue process 2007–10’, Perspectives on Emerging Powers in Africa 4: 2–6. People’s Daily (2002) ‘Chinese enterprises ready to invest in African farming sector’. Available at: http:// english.peopledaily.com.cn/200209/28/eng20020928_104063.shtml (accessed 28 September 2002). Peters, P. E. (2009) ‘Challenges in land tenure and land reform in Africa: anthropological contributions’, World Development 37(8): 1317–25. Robertson, B. and Pinstrup-Andersen, P. (2009) ‘Global land acquisition: neo-colonialism or development opportunity?’, Food Security 2: 271–83. Rubinstein, C. (2009) ‘China’s eye on African agriculture’, Asian Times Online. Available at: www.atimes. com/atimes/China_Business/KJ02Cb01.html (accessed 27 April 2012). Scott, J. C. (1998) Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed, New Haven and London: Yale University Press. Smith, R. E. (2004) ‘Land tenure, fixed investment, and farm productivity: evidence from Zambia’s Southern Province’, World Development 32(10): 1641–61. Spring, A. (2011) ‘Chinese development aid and agribusiness in Africa’, in E. Obuah (ed.) Proceedings of the 10th Annual Conference on the International Academy of African Business and Development, Athabasca, AB: Athabasca University, pp. 1–12. Sun, H. L. (2011) ‘Understanding China’s agricultural investments in Africa’, Occasional Paper No. 102, South African Institute of International Affairs (SAIIA). Tan-Mullins, M., Mohan, G. and Power, M. (2010) ‘Redefining “aid” in the China-Africa context’, Development and Change 41(5): 857–81. Tull, D. (2006) ‘China’s engagement in Africa: scope, significance, and consequences’, Journal of Modern Africa Studies 44(3): 459–79. Wegner, L. and Zwart, G. (2011) Who Will Feed the World? The Production Challenge, Oxfam Research Report, London: Oxfam. Wily, L. A. (2011) ‘Briefs on reviewing the fate of customary tenure in Africa’, Rights and Resources Initiative. Available at: www.rightsandresources.org/events.php?id=526 (accessed 10 December 2011). World Bank (2010) Rising Global Interest in Farmland: Can it Yield Sustainable and Equitable Benefits? Washington, DC: World Bank. Xu, X. (2011) ‘Reshaping the international development discourse’, Journal of China Agricultural University (Social Science edition) 28(4): 22–33. Zafar, A. (2007) ‘The growing relationship between China and sub-Saharan Africa: macroeconomic, trade, investment, and aid links’, The World Bank Research Observer 22(1): 103–30. Zhao, Y. (2008) ‘Land rights in China: promised land’, The Broker 7: 7–9. ——(2011a) ‘Engaging China on Africa’s agriculture: comparative perspectives on land and development’, The Newsletter, International Institute for Asian Studies (IIAS), 57: 10–11. ——(2011b) ‘China’s land tenure reform: time for a new direction?’, The China Review 11(2): 125–52.

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5.3 Competing narratives of land reform in South Sudan David K. Deng

When people were fighting for this land, there were no resources for fueling the war. The [Sudan People’s Liberation] Movement had to go to the chiefs, to the people at the grassroots level, and say, ‘Give us your children. Let them come. We will train them to fight for this land. It is their land.’ The return for their sacrifice is the services, protection, stability and peace that must be guaranteed by the government. The people are the owners of the land, not the government. If they refused to give their children to go and fight – to go and die – we would not be where we are today. (Hon. Bukulu Edward, Speaker, Western Equatoria State Legislative Assembly, May 2011)

Introduction The six-year interim period following the end of the civil war in South Sudan was a time of change for definitions of landownership in the country. Upon assuming control of the region in 2005, the government of Southern Sudan reaffirmed its commitment to establish a system whereby communities, defined mainly in terms of ethnic affiliation, would own and administer land in their home areas. This marked an apparent break with the pre-existing system under the northern government, which afforded little or no protection for the land rights of rural populations. Despite the popularity of community landownership among South Sudanese, the reform process has proven far more difficult that expected. Tensions have arisen between community assertions of sovereignty over land and natural resources and the government’s need to access land for postwar reconstruction and investment (Rolandsen 2009). Private-sector interests have also begun to interject themselves into the process. In recent years, South Sudan has experienced a dramatic surge in large-scale land investments, presenting fundamental obstacles to the formation of a land administration system based on community landownership (Deng 2011). This chapter evaluates the government’s attempts at land reform during the interim period. It identifies two competing narratives at work in the reform process: The first views the government’s attempts to establish a system based on community landownership as a form of reparation for abuses to which South Sudanese communities were subject to during the civil war. The counter-narrative 446

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focuses on government practice, rather than policy, and views the surge in land investments during the interim period as a continuation of dysfunctional wartime economies.

The social and economic harms of the wartime economy One of the goals of economic reform in South Sudan concerns the transition from the abusive and conflict-prone wartime economy of the past to a more sustainable, development-oriented economy conducive to lasting peace. During the civil war, Sudan’s economy was geared towards fuelling and sustaining systems of violence (Lewis 2004). The national government relied on revenue from foreign investment in the country’s oil sector to wage war in the south. It used facilities built and operated by oil companies to launch attacks on civilians. In protecting these facilities, government-allied militias engaged in massive human rights violations, including forced displacements and mass killings (Human Rights Watch 2003). The Sudan People’s Liberation Movement and Army (SPLM/A) also committed human rights abuses in order to fund its war efforts. The SPLM/A misappropriated community resources, including money, food, and other necessities, and diverted relief aid from local populations (Walraet 2008). SPLA officers used local monopolies of force to control crossborder trade and used profits from a range of commodities, including gold, timber, cows and alcohol, to buy weapons and supplies (Walraet 2008; Leonardi 2011). Civilians in local communities bore the brunt of the harm. The illicit timber trade during the war illustrates some aspects of these social and economic abuses. Both the Sudan Armed Forces (SAF) and the SPLM/A engaged in widespread illegal logging, causing severe damage to many forest reserves in the region. A parliamentarian in the South Sudan legislative assembly recalled the SPLM/A’s experience with teak during the war: Elsewhere, there were blood diamonds. For the North, there was blood petroleum – GoS [Government of Sudan] was drilling in the South to purchase weapons from Korea, China, Iraq and the Soviet Union. For us [in the SPLM/A], there was blood teak. (Ashamu 2010) In 2000, the SPLM/A issued a series of provisional orders in an attempt to create an institutional structure to manage timber sales in areas under its control (ibid.). These provisional orders, later formalised in the 2003 Forestry Commission Act and Timber Utilisation Act, placed responsibility for regulating timber concessions with the SPLM’s Civil Authority of the New Sudan (CANS). The new laws required that contracts with timber companies include a number of provisions to protect the interests of local populations, including: harvesting plans, environmental impact assessments, reforestation obligations, and proposals to assist in addressing social needs of the adjacent communities. However, according to researcher Elizabeth Ashamu (2010), the CANS did not have the necessary administrative capacity to enforce these regulations and companies routinely violated their contractual obligations. Ashamu claims that the lack of effective oversight also enabled SPLA officers to engage in rampant illegal logging, plundering valuable forest resources that could have been harnessed as sources of development in the postwar period. The government’s failure to adequately address lingering grievances from wartime abuses such as these, coupled with the perceptions among many South Sudanese that government officials continue to misappropriate community resources for their own interests, represents an ongoing source of social discontent in South Sudan. As seen in a recent spate of rebellions, ‘spoilers’ have begun manipulating perceptions of corruption and elite capture to mobilise 447

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armed rebellions in rural areas. In April 2011, for example, Major General Peter Gadet and several other high-ranking military officers defected from the SPLA. In the Mayom Declaration, they called for the overthrow of the government of South Sudan and characterised the governance failures of the interim period as a continuation of social and economic abuses committed during the war: [O]ur entire nation has witnessed rampant corruption on the top echelon of GOSS … Our children went without schools while the children of our leaders enjoyed the best education in foreign lands. Our people continued to die from treatable diseases while those in charge and their families visited the best hospitals abroad … These leaders of GOSS continue to siphon off the meagre resources of the South bleeding our people dry. Who is now the enemy of our people? (SSLA 2011) Gadet has since rejoined the SPLA, but other rebellions in South Sudan demonstrate a similar manipulation of historical and contemporary grievances. As argued further below, the government’s approach to large-scale land investments may feed into these narratives by privileging foreign investment at the expense of domestic landholders.

Land reform as reparation for past abuses in South Sudan After having fought for this land, now it is here. We [South Sudanese] own it, but we don’t know how to own it. We must develop the legal tools that will give us the power to own our land. (Hon. Bukulu Edward, Speaker, Western Equatoria State Legislative Assembly)

Competition over land, its ownership, control and use was a contributing factor to the civil war in South Sudan (Johnson 2009). When the Comprehensive Peace Agreement (CPA) negotiations began in 2003, the principle that ‘land belongs to the community’ became a key component of the SPLM/A’s negotiating posture. However, despite widespread belief that community landownership was enshrined in the CPA, the peace agreement only called for a process to formalise customary land tenure and did not itself vest ownership in communities (Rolandsen 2009). The government of South Sudan did not formally commit itself to community landownership until the promulgation of the Land Act in February 2009. The Land Act explicitly recognises customary land tenure, putting it on an equal footing with freehold and leasehold rights. It adopts an expansive definition of community land to include all land ‘lawfully held, managed or used by specific community as community forests, cultivation, grazing areas, shrines and any other purposes recognised by law’ (Government of South Sudan 2009). The Land Act allows communities to allocate land for investment purposes so long as the investment activity reflects an important interest for the community and contributes to its economic and social development. Section 15 lays out the procedures for allocating community land. It states: (1)Traditional Authority within a specific community may allocate customary land rights for residential, agricultural, forestry, and grazing purposes. … (5) Any allocation of a piece of land beyond 250 feddans [105 hectares] for commercial, agricultural, forestry, ranch, poultry or farming purposes shall be approved by the Concerned Ministry in the State. (ibid.) 448

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This provision gives traditional authorities primary responsibility for allocating community land. Investment agreements between communities and investors are subject only to approval by the state authorities. Subsection 7 further clarifies the process by which traditional authorities may allocate land. It states: (7) If the size of the land is over 250 feddans [105 hectares], the Concerned Ministry in the State or its duly designated representatives shall verify the following: … (c) consensus on the allocation between members of the community; (d) allocation does not exceed such a size that the Minister finds against principles of equity and fairness; and (e) the social and environmental impact that activity may cause. (ibid.) This provision suggests that state authorities can only play an oversight role to verify that the traditional authority was acting with the support of the community in its collective capacity. Under a strict reading of the law, state authorities themselves cannot allocate community lands; they are only authorised to veto proposed projects that are against principles of equity and fairness. The policy objectives underlying these provisions were clarified with the release of the draft land policy for South Sudan. The draft policy emphasises the importance of access to land as a ‘social right’, a feature of many customary land tenure systems that allows community members to access land irrespective of wealth or economic status. It also specifically identifies the risks associated with ‘land grabbing’, which it defines as ‘the acquisition of land without regard for the interests of existing land rights holders’. According to the draft policy: In some jurisdictions, community land used in common – for forest products, grazing and water supply – has been alienated by central and state level authorities for public use or for sale or lease to private investors without taking account of the ownership interests of communities in the land and its associated natural resources. This has occurred despite the fact that historically and customarily communal land has fallen under the ownership of communities, and its use has been regulated by traditional or other community-level authorities. (SSLC 2011) The draft policy adds further support for the above interpretation of Section 15 of the Land Act. It suggests that the drafters of the Land Act intended for landownership to be vested in the community in its collective capacity and for communities to be the primary signatories to investment agreements with private investors (ibid.). Despite the progressive intent behind this new law, there are numerous challenges to creating a formal system based on customary land tenure. One challenge concerns the notoriously elusive concept of the ‘community’. The Land Act (2009) defines a ‘local community’ as: a group of families or individuals, living in a circumscribed territorial area at the level of a locality, which aims at safeguarding their common interests through the protection of areas of habitation, agriculture, whether cultivated or fallow, forests, sites of cultural importance, pastures, and area of expansion. (Givernment of South Sudan 2009) This definition treats the ‘community’ as a well-defined and cohesive administrative area and obscures some of the divisions that exist within local societies in South Sudan. In reality, 449

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communities are often fractured and ambiguously defined entities. They often host displaced populations or minority groups who may have lived on community land for generations. Divisions may also exist between recent returnees and people who remained in the community during the war; host communities and neighbouring communities who enjoy rights of access for grazing, fishing or gathering forest products, or South Sudanese citizens and economic migrants from neighbouring countries. Even if one accepts that a semi-cohesive community exists, local governance systems have been undermined by the lengthy civil war. Community leaders may not have the capacity to manage land transactions and the system may be susceptible to self-interested decision-making, elite capture and simple misgovernance. There are also more fundamental problems. Many customary systems include provisions that discriminate against certain groups in society, most notably women, and are therefore in violation of international human rights norms. Community landownership can also reinforce ethnic divisions. Individuals from outside the community typically enjoy lesser rights of access to community land. The idea that that ethnicity could determine something as fundamental as where one may or may not live, without the ability to opt in or opt out of the system, is of particular concern in the South Sudanese context, where ethnic politics have played such a large role in the proliferation of conflict. Despite these challenges, the government’s vision of building a nation upon the customs and traditions of the peoples of South Sudan is politically very popular in the country. In the land sector, this translates to some kind of formalisation of customary land tenure. If policy-makers manage to articulate a way forward that efficiently harnesses customary systems in formal law, or at least allows formal and customary systems to co-exist, these land reform efforts could represent an important step forward for rural populations whose land rights have been abused by past state and military actors.

South Sudan: a new frontier for investment There was a large influx of foreign investment in South Sudan following the signing of the CPA in 2005. The first business sectors to start generating profits were telecommunications and construction. As the interim period progressed, additional investment began to materialise in the hotel and banking sectors. Conventional wisdom held that these sectors, together with the already active petroleum sector, were the major forms of foreign direct investment (FDI) during the early years of the interim period. However, as a recent study (Deng 2011c) shows, there was also a surge in large-scale landbased investment after the signing of the CPA in 2005. These investments in commercial farms, plantation forestry, biofuel projects, carbon credit schemes and ecotourism projects went largely unnoticed by representatives of the government and civil society. Companies moved in fast to secure large concessions and land leases in some of the most fertile and water-rich regions of the country. For the most part, however, they held off investing large amounts of money into developing the property, preferring to wait until the political uncertainty of the interim period had passed. As a result, although large areas of land were sought or secured by private actors – more than 8% of South Sudan’s total land area according to the study – there was relatively little evidence of investment activity on the ground. How could a country allocate more than 8% of its land area to private investment in just a few short years without the knowledge of the broader government or civil society? The first explanation lies in the ‘chilling effect’ that the 2011 referendum on self-determination had on private investment (Deng 2011b). As noted above, most investments exist only as contracts signed in Juba, or one of the state capitals, since companies have been wary of investing too 450

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much money into developing immoveable assets in South Sudan. Without visible investment activity, companies were able to secure leases to large areas of land without bringing attention to themselves through confrontations with local communities. The second explanation for the lack of oversight lies in South Sudan’s underdeveloped legal framework (Deng 2011a). The 2009 Land Act has provided some guidance, but a single statute cannot possibly regulate all the complex and cross-cutting issues that arise with respect to land in a country. Government institutions compensate for the regulatory gaps through ad hoc and discretionary decision-making at various levels of government. The fact that investments are managed mostly at the state level also contributes to an overall lack of transparency, since there is no central monitoring body responsible for keeping track of who is investing in what and where. The third explanation lies in the nascent state of government in the country. During the war, investment activity was severely restricted. A number of public investments in agro-industrial complexes were able to function during the early years of the war, but as it intensified in the mid-1980s these plantations and industrial processing facilities were abandoned. Other than activities in the oil sector, which were handled exclusively through Khartoum, the main investment activity on community land was timber extraction. While the government of South Sudan had some data on forest reserves at its disposal, there were few detailed maps of rural areas, particularly for administrative units at the sub-county level. As a result, large land areas may have been leased to private investors without government officials fully appreciating the scale of the transfer. In 2008, for example, the Central Equatoria State Ministry of Physical Infrastructure authorised a 49-year lease for 1 million hectares of land to an American company called Nile Trading and Development (Oakland Institute 2011). The paramount chief in a place called Mukaya Payam (a payam is the equivalent of an administrative district), one of the five payams in Lainya County, was the main domestic signatory to the investment agreement. There was no community consultation beyond the participation of the chief and a handful of community leaders. The agreement was ostensibly meant to transfer land in Mukaya Payam to the company in order to produce biofuels. However, the land area that was leased to the company is many times the size of the entire county, even though none of the four other payams in the county were involved in the investment negotiations (Deng 2011c). These egregious errors concerning the size of the land area in question suggest that the government officials involved may not have fully appreciated the scale of the transfer.

The socio-economic harms of large-scale land investments Despite the promise of community-led development inherent in the government’s move towards community landownership, in practice large-scale land investments during the interim period display serious shortcomings in terms of community participation. In many respects, this surge in investment activity reflects a continuation of the dysfunctional and predatory wartime economies, characterised by capital flight, corruption, non-inclusive decision-making, one-sided contracts that strongly favour the foreign investor, and net losses for local populations. The government’s approach risks marginalising rural populations by prioritising the needs of private investors over those of local communities. Different land investments reflect different socio-economic harms. Take, for example, a planned agricultural venture by the US equity firm Jarch Management Group. According to numerous media reports, Jarch has leased 400,000 hectares of land in Unity State by buying a majority share in a company owned by Gabriel Matip, son of SPLA Deputy Commander-inChief Paulino Matip (Blas and Wallis 2009; Funk 2010). The leased area covers approximately 451

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80% of Mayom County. Mayom has a population of 121,000 people, mostly pastoralists who require access to large areas of land to graze their cattle, and is among the most insecure locations in South Sudan. There was no local involvement in the negotiation of the agreement; indeed, the Mayom County Commissioner did not even know who Jarch was until local researchers visited the county in 2010 (Deng 2011b). This investment is a clear example of how private investment in a fragile post-conflict setting can serve to perpetuate wartime economies. Public statements from Jarch’s CEO, Phil Heilberg, imply that the company is relying on local monopolies of force to secure its investment. In fact, Peter Gadet, the SPLA general-turned-rebel-turned-general who authored the Mayom Declaration, is a member of Jarch’s advisory board. According to Heilberg, relationships such as these are a necessary part of doing business in South Sudan: There are no white hats here. It’s the Wild West. People get upset when I say you’ve got to go to the guns. Hell, you had to carry a gun back then. You were a cowboy? You would lose all your horses and cows, your women would be raped, and everything you had would be gone. People take their ideals and try to impose them someplace else. That’s colonisation to me. I don’t do that. This is what it is. I’m not promoting it or demoting it, I’m just part of the system. (quoted in Funk 2010) To the extent that Jarch is ‘just part of the system’, it is not the system that gave rise to the Land Act and the draft land policy, which clearly lay out a different vision for land-based economic development in South Sudan. As explained above, the legal framework recognises community landownership as co-equal to freehold and leasehold interests. Under prevailing law, no company should be able to unilaterally claim ownership over a territory as large as this. None the less, to simply dismiss the Jarch investment as a deal that was struck between two companies, neither of which is the legal owner of the land, would be to underestimate the power of wartime economics in the post-conflict setting. Governors across the country have made clear that attracting FDI is among their top priorities. Indeed, the Governor of Unity State indicated that he might authorise the Jarch deal if the company were to apply through the proper channels (Deng 2011b). Communities, too, are reluctant to turn away foreign capital. Faced with the daily challenges of hunger, poverty and insecurity, people are desperate and are often willing to accept unfavourable terms in the hope that the investment can provide them with some relief. Investments also serve to perpetuate socio-economic inequalities by emphasising development pathways that prioritise the needs of the investor over those of the local population. According to Steven Lawry, a senior research fellow at the Hauser Center for Nonprofit Organizations at the Harvard Kennedy School who assisted the Southern Sudan Land Commission in preparing the draft land policy: There appears to be undue infatuation [among policy circles in Juba] with grandiose, largeenterprise [agricultural] models – public and private – as short-cuts to rapid modernisation. These models are unlikely to deliver the growth and poverty reduction that is expected of them, and could deflect the country from more productive strategies planned and carried out by the thousands of Southern Sudanese across the country prepared to make the most of the economic and social benefits of political independence. (Lawry 2011)

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Many of the foreign multinational enterprises investing in South Sudan plan to employ highly mechanised types of farming that take advantage of economies of scale to maximise returns for the investor. As Lawry suggests, these highly mechanised modes of production do not generate the same levels of employment as more labour-intensive methods that work through smallholder farmers. When coupled with displacement, they can actually lead to increased rural poverty, since the loss of land-based livelihoods that results from dispossession of community lands is often not compensated for by the generation of local employment opportunities (Vermeulen and Cotula 2010). Compounding the threat to local food security, the investment agreements rarely include export restrictions, and there will be a strong incentive for companies to prioritise production for international markets once they reach a certain level of productivity. One of the largest planned commercial farms in South Sudan involves an investment by a company called Concord Agriculture and an Egyptian private equity firm called Citadel Capital. Concord has acquired a 25-year lease to 105,000 hectares of community land through an agreement it negotiated with the Unity State government. Concord’s CEO, Peter Schuurs, has candidly admitted that in his opinion, the agreement ‘is strongly tilted in favor of the lessee’ (Deng 2011a). Concord’s project employs highly mechanised forms of production and is unlikely to bring significant local benefits in terms of employment creation. Although there are no reports of displacement associated with the project, if the company chooses to expand its operations to cover its entire landholding it would require resettling hundreds, if not thousands, of people. Concord claims that it will prioritise local markets in the short term, but it has also publicly stated that in the long term it may choose to export its produce for sale on international markets (ibid.). The speculative aspect of many of the investments is another characteristic associated with wartime economies and other high-risk business environments. Virtually all of the investments involve some degree of speculation. In some cases, investors may not have the expertise or inclination to devote capital towards developing the property. Instead, they appear to be more interested in holding on to the property to see if land values rise, at which point they can sell their lease to a subsequent lessee at a profit. Even for companies with more of a proven track record in their sector, the uncertainty of the current context in South Sudan causes them to adopt shortened time horizons and quick exit strategies to save as much of their investment as possible if things go bad. In 2007, for example, the government entered into a 32-year concession agreement with the Equatoria Teak Company to harvest teak from 18,640 hectares of government-owned forest reserves in Western Equatoria State. The primary shareholders were two governmental development funds – the UK government’s Commonwealth Development Corporation (CDC) and the Finnish Fund for Development Co-operation. According to the CDC, the purpose of the investment was to build an FSC-certified forestry operation, supply teak to the international market, and ‘exit through sale to a strategic or financial advisor’ (ibid.). In 2011, the CDC did just that, selling its shares to an unnamed investor without notifying anyone in either the government or the affected communities. The organisation has not been forthcoming with information about the investment so it is not possible to determine whether it profited or lost as a result of the sale, but the manner in which the sale was managed raises serious questions as to how the CDC balances its competing demands to responsible investment and commercially viable investment. As these examples demonstrate, large-scale land investments during the interim period do not display the kind of decentralised, community-led development that was promised by the land reforms of 2009. Government officials do not thoroughly vet potential investors to ensure that they are actually able to live up to their promises. They do not provide for the meaningful participation of host communities in investment negotiations. They do not prioritise the 453

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development needs of their citizens over the interests of foreign investors. As history has shown, this kind of non-inclusive approach can have grave consequences for the country.

Conclusion The six-year interim period that followed the signing of the peace agreement in 2005 presented a unique opportunity for transformative change in South Sudan. Institutions were in flux, power had not yet fully consolidated, and the fresh memories of war gave rise to overwhelming public support for new and innovative approaches. The pay-offs from reforms in terms of economic growth during this period were atypically high. Looking back on the government’s performance during this window of opportunity, two competing narratives emerge. The ‘land reform as reparation’ narrative views the decisive move towards community landownership in the early years of the interim period as a precursor to decentralised and sustainable development in the years to come. The efficient operationalisation of community landownership would serve to increase positive linkages between foreign investors and local economies, maximising local benefits and channelling them towards communities’ development priorities. The counter-narrative focuses on institutional practice, rather than policy. It views land-based investments in South Sudan as a continuation of dysfunctional and predatory wartime economies. Whereas the ‘land reform as reparation’ narrative highlights the strides that the government has made in land reform and grassroots empowerment during the interim period, the ‘wartime economies’ narrative emphasises the focus on development pathways that serve to marginalise rural populations by prioritising the needs of private investors over those of local communities. Indeed, the data on large-scale land investment during the interim period displays serious shortcomings in terms of community participation and one-sided contracts whose economic equilibrium strongly favours the foreign investor. It is too early to determine what course these competing narratives will take. The government’s approach to large-scale land investments during the interim period is certainly a cause for concern. At the same time, many communities are using the government’s rhetoric about community landownership to demand that public and private actors respect their decisions about community lands. The unfolding process thus reflects both positive and negative contests for power and authority; the manner in which the system reconciles these contests will determine the form that South Sudan’s land governance system takes in the years to come.

References Ashamu, E. (2010) ‘Post-conflict forest governance in Southern Sudan’, unpublished paper. Blas, J. and Wallis, W. (2009) ‘US investor buys Sudanese warlord’s land’, Financial Times, 9 January. Deng, D. K. (2011a) ‘Understanding land investments in Africa: South Sudan country report’, Oakland Institute. Available at: www.oaklandinstitute.org/land-deals-africa/south-sudan. ——(2011b) ‘Land belongs to the community’: demystifying the “global land grab” in Southern Sudan’, Land Deal Politics Initiative (LDPI) Working Paper No. 4. Available at: www.plaas.org.za/pubs/ldpiworking-papers-africa/LDPI04Deng.pdf. ——(2011c) ‘The new frontier: a baseline survey of large-scale land-based investment in Southern Sudan’, Norwegian People’s Aid (NPA). Available at: www.npaid.org/en/News_Archive/?module=Articles; action = Article.publicShow;ID = 17086. Funk, M. (2010) ‘Capitalists of chaos’, Rolling Stone, 27 May. Available at: www.ft.com/intl/cms/s/0/ a4cbe81e-de84–11dd-9464-000077b07658.html. Government of South Sudan (2009) Land Act 2009, Juba. Human Rights Watch (2003) ‘Sudan, oil and human rights’. Available at: www.hrw.org/en/reports/2003/ 11/24/sudan-oil-and-human-rights.

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Johnson, D. (2009) ‘Decolonising the borders in Sudan: ethnic territories and national development’, in M. Duffield and V. Hewitt (eds) Empire, Development and Colonialism: The Past in the Present, Woodbridge: James Currey. Lawry, S. (2011) ‘A new start for Southern Sudan’, The Mokoro Newsletter 55. Leonardi, C. (2011) ‘Paying “buckets of blood” for the land: moral debates over economy, war and state in Southern Sudan’, Journal of Modern African Studies 49(2): 215–40. Lewis, S. (2004) ‘Rejuvenating or restraining Civil War: the role of external actors in the war economies of Sudan’, Bonn International Centre for Conversion (BICC). Available at: www.bicc.de/publications/ papers/paper-37.html. Oakland Institute (2011) ‘Nile Trading and Development, Inc. in South Sudan, Understanding land investment deals in Africa’, Land Deal Brief. Available at: www.oaklandinstitute.org/land-deal-briefnile-trading-and-development-inc-south-sudan. Rolandsen, O. (2009) ‘Land, security and peacebuilding in the southern Sudan’, International Peace Research Institute, Oslo (PRIO). Available at: www.prio.no/sptrans/-1552845763/Land,%20Security% 20and%20Peace%20Building%20in%20the%20Southern%20Sudan,%20PRIO%20Paper%202009.pdf. SSLA (South Sudan Liberation Army) (2011) ‘Mayom Declaration’. Available at: www.sudantribune.com/ The-Mayom-Declaration,38605. SSLC (Southern Sudan Land Commission) (2011) ‘Draft land policy’. Vermeulen, S. and Cotula, L. (2010) Making the Most of Agricultural Investment: A Survey of Business Models that Provide Opportunities for Smallholders, Food and Agriculture Organization of the United Nations (FAO), London: International Institute for Economic Development (IIED) and International Fund for Agricultural Development (IFAD). Walraet, A. (2008) ‘Governance, violence and the struggle for economic regulation in South Sudan: the case of Budi County (Eastern Equatoria)’, Afrika Focus 21. Available at: www.gap.ugent.be/africafocus/ pdf/08-21-22-AWalraet.pdf.

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5.4 Struggles and resistance against land dispossession in Africa An overview Elisa Greco

Introduction The current land grabbing trend in Africa demonstrates more similarity than differences when compared with colonial land expropriations (Palmer 2011). The trend simultaneously reignites long-standing land struggles and connects them with the world market crisis which assists the driving force of the food–finance nexus (ROAPE 2011). Starting from this conceptualisation, the chapter is premised on the appraisal that, for the time being, resistance against land grabs in Africa has built on pre-existing struggles over land, while producing isolated and localised protests against some of the deals (Moyo et al. 2011). These land struggles have gained visibility through an information network put in place by a network of academic researchers, think-tanks and transnational agrarian movements. Donor-led advocacy and the activism of social movements have been crucial to raising awareness and to report the reality on the ground, without being in the position of substituting for popular agency or giving radical solutions. Although risking of overemphasising their case and romanticising activists as ‘people of the land’ (Bernstein 2008), activist networks, supported by a growing web of academics and intellectuals, are playing a progressive role in offering a competing view over land deals. This network comprise a large spectrum of positions, ranging from conservative initiatives on land titling to more radical actions.1 Many of them work in connection with African national counterparts, and are typically donor-funded African land advocacy organisations. These networks are not being taken as a surrogate of popular participation and resistance to land dispossession. Their major role is that of documenting the ongoing struggles, providing diverse, non-corporate views of the reality on the ground. Against a rapidly changing setting, this chapter offers some necessary background information to interpret resistance against privatisation and land dispossession in Africa as a moment of the agrarian question.

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The emergence of the land grab debate The debate about land grabs can be seen to act as a proxy for the missing debate on agrarian reforms and the future of world agriculture. In November 2008 the international press exposed a land deal between the Malagasy government and Daewoo, following which a significant body of research has been developed about land expropriations in poor countries, as multinational corporations, investment funds and insurance companies rushed to rent and buy large farming areas on the cheap. In 2010, the main profiteers of the food price hikes of 2007/08 (SGS, Dina Farms and Syngenta Agro; McMichael 2009) promoted and funded the first conference on Large Scale Farming in Africa, hosted by Egypt in Cairo. Land grabs emerged as a politically charged issue, with strong international dynamics at play, both among governments – especially on the Asia/Europe front – and among investors. It is, however, important to stress that the debate was initially triggered by the international press and began because of social resistance against dispossession. A host of transnational agrarian movements (Borras et al. 2009) (a wide term to indicate the many formal organisations networking at international level on different issues related to agriculture, pastoralism and rural production at large) strongly influenced the terms of the debate, especially during their confrontations with multilateral institutions. Indeed, the term ‘land grabbing’ itself has been adopted and popularised by social movements and activists on the radical side (Borras and Franco 2012). In reaction to this, multilateral institutions which have long been promoting land titling, land tenure reforms and private property of land in poor and largely non-industrialised countries had to respond, and thus related the issue ‘land acquisition’, and included it in their political platforms. A remarkable moment of these confrontations was when, in April 2010, a coalition of transnational agrarian movements championed by La Via Campesina dropped out of the negotiations on the ‘Responsible Agricultural Investment’ (RAI) principles issued by the World Bank (La Via Campesina et al. 2010a) and provided a articulated critique of RAI (La Via Campesina et al. 2010b). In 2011 the militancy extended to the World Social Forum, which issued a petition asking the United Nations (UN) and other relevant multilateral organisations, especially the UN Committee on World Food Security (CFS), to reject the RAI and to renew their commitment towards agrarian reform taken in 2006 at the International Conference on Agrarian Reform and Rural Development (ICARRD) (World Social Forum 2011). The RAI’s seven principles together with FAO’s Voluntary Guidelines on the Responsible Governance of Tenure of Land issued in March 2012 acted as an international clarification that international law would not impose conditions on transnational land deals. The matter is being deferred to political venues and it is likely to be defined at inter-governmental platforms. This situation is confirmed by the many recommendations to national governments made by the High Level Commission of Experts on Food Security in its analysis of the land grabbing interactions with the food question (HLPE 2011). The confrontation with agrarian movements has helped to clarify the terms of the land grabbing debate and to clarify where it belongs in the wider controversy of the future of agriculture under capitalist conditions. In this regard, the question of agriculture has often boiled down to discussions over land reform, mainly issues of property and farm size, on large vs. small farms’ viability and the effectiveness of redistributive land reforms (Journal of Agrarian Change 2004). In the third volume of Capital, Marx had commented on these kinds of disputes and underlined how ‘in wrangling over the specific forms of this evil its ultimate cause is forgotten’ (Marx 1974: Chapter 47). Even in the 19th century, a discussion of land property disconnected with the wider political economy conditions had led to the overlooking of the fact that both 457

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forms – small and large farms – are crucially dependent on the mechanisms of the market price. Any argument about developmental intentions of capital, and indeed about its intentionality at all, is to be dismissed as theoretically flawed, since ‘what capital is interested in is not development, but its own expansion. When the conditions exist for profitable productive investment in the periphery, both foreign and domestic capital … become interested in it’ (Leys 1996: 124). Critical agrarian studies are comprise two groups of scholars. There are those who interpret the current land grabs by sticking to Marx’s definition of it in the first volume of Capital (Marx 1974) and thus see it as a new wave of primitive accumulation (Bernstein 2010). This is understood as the dispossession of producers through the definitive separation of workers from the means of production; the creation of a landless, propertyless class which is compelled (or sarcastically termed ‘free’) to sell labour for survival. Conversely, there are also those who take land grabs as evidence of the fact that primitive accumulation perpetuates itself through the allencompassing process of turning use values into exchange values (Luxemburg 1913). This interpretation poses itself as a continued, ongoing process of dispossession, commoditisation and privatisation (Harvey 2003) and introduces qualifying labels to describe the specific modalities of accumulation, for example accumulation by dispossession in the case of land grabs (Historical Materialism 2006). The former interpretation overemphasises structural analysis of capital. The latter interpretation is then left with the task of investigating the locally specific, historically contingent social expressions which result from the unevenness of farming under capitalism. This division often results in populist positions which equate small production with social justice. This is especially dangerous as it ignores the fact that most African small rural producers are caught in a simple reproduction squeeze (Bernstein 1977, 1979, 1981) that guarantees survival only through systematic self-exploitation coupled with chronic underconsumption inside the farming household. It is important to avoid wishful thinking predicated over unrealistic analyses which have a tendency to overestimate the actual potential and dimension of the working poor’s struggles. While there is the danger of interpreting everything as a sign of resistance and disconnecting it from the possibility of revolutionary change, the opposite possibility also looms large: a systematic overlooking of popular agency. This is important to note, as the massive global movement of capital towards almost-free land, water and natural resources will have an impact on the cheap labour attached to these. In this regard, analysing popular resistance entails addressing the issue of agency of the rural and urban masses in African countries. These masses comprise the millions of small farmers, small cattle-keepers, small miners, hawkers, small traders – the unemployed and self-employed who straddle between the city and the countryside to eke out a living, either from direct production or from the circulation of goods. These populations, living on the bottom step of society, can possibly represent patchy and conflicting interests, but they share a condition: they do not command significant control over any property, the capacity of working being their only asset. Directly or indirectly, the other class formations are crucially dependent on their labour and flourish on the value produced by it. It is these peoples who, whether farming or not, are the prime subjects of the unsolved agrarian question of labour (Li 2011).

A sample of current resistance against land grabs This section reviews, through an indicative sample, the scenario of resistance against current land grabs. It reflects on the relations between land advocacy organisations, land activism and the wider social reality of agrarian resistance. Here particular attention will be paid to land struggles outside formal organisation, to hidden forms of everyday resistance and to land struggles 458

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as an outcome of processes of social differentiation. While far from being representative, the examples will show some among the possible relations between pre-existing land issues and reactions to the current land grabs. Both modernist discourse championing land rights and the communitarian view based on land as essential to identity and culture (Mamdani 1996) are simplifying paradigms which interpret the political and social complexities related to the land question in Africa. Highly diverse, country-specific social conditions and political dynamics interact with the current grabs. A starting point for this analysis is a sample of three different expressions of resistance to largescale land deals by private investors. The landmark case of the huge Daewoo deal in Madagascar is an example of how the politicisation of the land question can be rapidly turned into a major electoral issue, and become a prime political argument in populist rhetoric (Perrine et al. 2011). Early mobilisation by nongovernmental organisations and transnational movements failed to obtain significant results. This lack of progress changed when Malagasy opposition parties rallied popular consensus against land dispossession, turning the land question into a powerful political rhetoric. This fuelled the revolt against the then president Ravalomanana, shifting the game in favour of his opponent Rajoelina. Rajoelina had spearheaded the opposition against the deal during his electoral campaign, and took a more possibilist stance towards land deals following his election to office. It remains to be seen whether the passing of new land laws will give more tools to Malagasy citizens, who in many cases seem not sufficiently informed to distinguish land deals from development projects (Perrine et al. 2011). In other cases, for example the case of the Ethiopian federal republic, millions of hectares are being alienated from local people to investors in contested regions with a history of troubled sovereignty (Rahmato 2011). In Ethiopia, control over land had become both a tool of identity politics and the bone of contention in the political struggle between local and central government. The affected regional constituencies and political groups, mainly in Oromia and Gambella, staged protests against the federal government, which had been making space for foreignowned plantations by dispossessing small farmers and pastoral groups of their land. The case of mobilisation against land sales in Gambella is characteristic of the politics of land inside the regional state, as distinct social groups struggle to affirm sovereignty and the consequent control over land against a background of ethnic federalism (Turton 2006). Also, the new constitution of Ethiopia emphasised the connection between perceived identity and the ownership of land; as autochthony was politicised, land acquired a new political significance and became a central issue in the politics of identity (Feyissa 2005, 2006). Land grabs have entailed forced resettlement, after the blueprint of the controversial so-called Voluntary Resettlement Programme through which the federal government has been forcibly removing people from the central and eastern highlands to the western lowlands (Hammond 2008; HRW 2012). Political parties at home – as the Oromo Liberation Front, which has vocally opposed the government’s plans to rent land in Oromia out to foreign investors – and the Ethiopian political diaspora have played a major role in bringing the issue to the attention of inter-governmental bodies. Academic research on the ground showed that these collective forms of protests co-exist with everyday forms of resistance, as dispossessed producers contest the boundaries of large farms, taking their cattle to graze on them and questioning local authorities, beside taking the disputes to the courts (Rahmato 2011). Another example of the complexities of land grabbing concerns the way in which the language of land rights and environmental protection can be displayed in the international arena to cover up the features of social conflict and political struggle which are not acceptable to modernist discourses. This has in part occurred in the mobilisation against the de-gazetting of Mabira 459

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Forest Reserve, which spurred deadly violence in 2007, as the defence of a protected area overlapped a racialised discourse against people of Asian descent (Child 2009). In this case, the contestation centred around a protected forest being turned into a sugar cane plantation by a tycoon with political connections. It is best understood as the last episode of the unresolved Asian question in Uganda and East Africa at large (Mamdani 2007) which is being reignited by two decades of increased foreign investments from India and a revival of Asian migration to the region. All three examples above show that, although simplifying labels used by activists in the international arena may render invisible the underlying social dimension of these struggles, this does not diminish their legitimacy. Any possible assessment about brute electioneering, divideand-rule tactics, decentralised despotism and racialised discourses will not affect the fact that these forms of mobilisation are occurring. All these instances, though very different, are moments of active political participation in which the people affected directly or indirectly by land dispossession take an active stance against the state-sanctioned enclosures of land. These expressions cannot be dismissed simply because they do not correspond to modernist discourses attached to world activism championing land rights and social justice. The fact that the state emerges as a key referent of these struggles can be related to the historical fact that the state and its many agencies in Africa have been central to land control and invariably enforced land dispossession, with attached forced resettlements and eviction of local residents. This is true both for ex-settler colonies (see Potts, Chapter 1.2 in this volume) and for non-settler colonies, where small-scale farming prevailed (Amin 1976; Bernstein 2004, 2005). Whether for the benefit of non-native settlers, environmental conservation (Peluso and Watts 2001; Neumann 1997; Brockington and Igoe 2006), large-scale mining and oil extraction (ROAPE 2008), or state farms and ranches, land enclosures have been met with resistance and struggle. This struggle is discussed in the next section.

Struggles over land in Africa Social struggles for land and the attached natural resources have been ongoing in Africa and have intensified throughout the last two decades (ROAPE 2000). Pervasive and diffuse social conflicts over land have emerged, which are not accounted for by the ‘new orthodoxy on African land tenure’ (Peters 2004) focused on the negotiability and fluidity of land tenure systems in Africa. The enormous variety of forms of resistance and struggle over land in Africa prevents any simplistic categorisation. At the same time, this variety compels us to sharpen our interpretative tools, so as to detect the less visible forms and to interpret their potential to challenge existing class relations (Bush 2007). On the one hand, social struggles and resistance against processes of commoditisation and privatisation of land, water and natural resources are pervasive in most African countries, but less clearly identifiable with social classes than their European and Latin American counterparts. On the other hand, the resurgence of rural movements has been evident in some African countries (Moyo and Yeros 2005) and the current land grab trend has been rapidly triggering resistances and reactions. There has been a tendency to view popular resistance and struggles for land in Africa as weak and undecipherable, and this analysis has multiple roots. Among these is the assessment that, especially in comparison with historical land struggles on other continents, the colonial legacy in the African countryside has never been significantly challenged by revolutionary movements. Indeed, notwithstanding the fact that in all ex-settler colonies the land question was at the heart of nationalist movements and liberation wars, only in one African ex-settler colony (Zimbabwe) 460

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has the colonial agrarian structure been radically changed. This change has mainly occurred through the expropriation and division of a significant share of large white farms and the redistribution of land to medium- and small-scale black farmers. While a proper account of the land question in Zimbabwe is impossible here, it is important to note that the occurrence of a massive land occupation movement coupled with radical government-led land redistribution has sent ‘shockwaves through the region’ (Scoones et al. 2010), especially in South Africa. Given its established tradition of trade unionism, and associational life and activism, South Africa has been the privileged focus of scholarship on social movements (Ellis and van Kessel 2009). Resistance against evictions and occupations of urban land had been a prominent feature of the broader anti-apartheid struggle, but the land issue in itself was never put at the core of the anti–apartheid movement agenda (Baletti et al. 2009). Skewed land ownership and forced evictions were contested throughout the 1970s and 1980s by hundreds of anti-apartheid associations which co-ordinated localised struggles against forced evictions and dealt with the issue of homelands’ overcrowding as an issue of land rights and citizenship. (Thwala and Khosa 2008). Many of these associations obtained affiliation with the National Committee Against Removals (NCAR, then renamed NLC). In 1994, shortly before the first non-racial elections, some 400 organisations affiliated with NLC called a summit and unanimously advocated land expropriation as a tool for redistributive land reform. (Hall 2010; Fortin 2010). Post-apartheid governments have, however, not pursued speedy redistribution, while land-related NGOs have seen many of their members and professionals leaking into governmental agencies for land reforms, thus weakening the land advocacy arena. As the government endorsed neoliberal land reform, based on a ‘willing buyer–willing seller’ principle, many organisations have been facing issues of political strategy and identity crises as they found themselves split between the quest for redistribution and radical actions from their constituencies, and the pressures to co-operate with the government. Established in 2001, the Landless People’s Movement (LPM) expressed the influence of Zimbabwe’s land occupation movement over the southern African region, while taking the cue from the influential transnational agrarian movement of La Via Campesina. Heavily dependent on NLC for funds, LPM expressed the more radical elements of the debate, while NLC failed to reach an internal consensus for a common political strategy in relation to governmental stances on land reform. It eventually disbanded in 2006, thus weakening the debate on land reform in the country. To date, urban areas are the privileged focus of national electoral struggles; employment has been the strongest issue at elections and land reform has never become a central issue of electoral politics. Social movements related to land do exist, but fail to engage the realm of politics, notwithstanding the fact that agriculture – and land questions at large – are a major social issue (Walker et al. 2010). In contrast with southern Africa, no fully fledged land-related social movement has emerged in eastern Africa. Throughout the 1990s the World Bank and like-minded donors, supported by international NGOs, pushed for land law reforms aiming at ensuring protection of property rights and privatisation of land which, in hindsight, played into the hands of the current land grab, providing sound legal frameworks for investors and the banks. At the time, the discussion of new land laws spurred heated national land debates involving intellectuals, NGOs and governments, with the consequent rise of land advocacy movements and organisations. In Kenya, Uganda, Tanzania and Mozambique, existing NGOs established land-specific programmes and new land advocacy organisations were founded to react to land law reforms imposed as purely technical exercises (Palmer 2003). For example, Ugandan NGOs supported by Oxfam GB coalesced into the Uganda Land Alliance, a national network for land advocacy which has been replicated in other African countries (Palmer 2003). The Uganda Land Coalition, an urban, 461

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middle-class professional-based organisation, has successfully worked towards opposing the prevailing land tenure reform based on ITR models and has pressured for recognition of customary land tenure systems. During the same period, in neighbouring Kenya the growing land advocacy networks have been crucial in collecting hard evidence of land-related struggles in the country. Here land has often become the main tool of political patronage and its politicisation has spurred identity politics; political parties and power groups have made an instrumental use of socially constructed identities – in this case, based on claims of ethnic identity. These identities are subject to contestation and are open to change over time, as political alliances and material needs change. (Lynch 2006). Historically, though, the consolidation of identity politics in Kenya went hand in hand with the emergence of political reactions against colonial land alienation. Land control came to be at the centre of class domination by the politically connected elite – an element which marks a strong continuity between colonial and post-colonial Kenyan political history (Kanyinga et al. 2008). Forceful evictions and new dispossession engendered resistance and struggle, although these mobilisations were ignored by researchers until the mid-1990s (Klopp 1999). The fact that land-related activism and militancy has gained ground in the country has ensured an accurate reporting of violence, resettlements and collective land claims (Kantai 2007). It proved to be crucial to reporting of post-electoral violence in 2007, when political and land-related clashes caused an estimated 500,000 people to flee their homes. These clashes have exposed internal displacement as a lasting consequence of historically unsolved land grievances, worsened by the past policy of regionalism (Kanyinga 2009). Displaced people, refusing to go back to their home areas, have looked for alternative land and settlement elsewhere and have also established their own organisations (Elhawary 2009).

Land struggles outside formal organisations It is important to note that throughout the 1990s land advocacy organisations have been on the rise in many African countries. It is equally important to observe that the social dynamics of agrarian resistance and struggle are much wider and less visible than those represented by formal organisations, be they grassroots associations, national NGOs, political activist groups or trade unions. On this basis, when social analysis equates popular land-related resistance to the existence and the activities of formal institutions, the analysis ends up missing out the largest part of land struggles in Africa. One reason for overlooking this is that land advocacy has become the domain of NGOs, and in most African countries NGOs share a philanthropic relation with the masses, and fail to act ‘with, rather than for the people’ (Shivji 2004: 689). In so doing, they often inadvertently end up substituting for popular participation in the national political debate. In fact, they provide an official and clearly identified counterpart in public debates and eventually confront the state and its bureaucratic apparatus without being representative of clear-cut constituencies. In addition, they are prone to donor dependency and display an urban, middle-class character and an absence of large membership and constituencies (Amanor and Moyo 2008). While many land NGOs display an attitude of avoiding controversial stances in respect of governments and donors, some NGOs challenge repressive policies and are strongly committed towards reporting and supporting existent land struggles. None the less, the poor and more vulnerable social groups only rarely connect with these formal organisations, and in a context where the media are either manipulated, suffer urban bias or are weak or controlled, it is easy to understand that land and agrarian struggles go unreported 462

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in Africa. This becomes apparent when researchers collect evidence of land struggles, which otherwise only sporadically appear in the national press. For example, in Malawi groups of landless people engage in spontaneous land occupations, in areas where land scarcity had been exacerbated by environmental enclosures. Such enclosures include the national parks at Nyika, Kasungu, Lengwe and Liwonde – whose establishment entailed the displacement of villages – and also enclosures by private commercial plantations – such as tobacco estates at Kasungu and tea estates in Mulanje and Thyoto (Kanyongolo 2005). A further example can be found in Tanzania, where the privatisation of state farms was heavily contested by the different interest groups which had a stake in the interested area, including wage labourers, small and middle farmers, agricultural capitalists. Collective land claims in and around ex-parastatal, privatised estates proved to be ubiquitous, comprising both low-profile resistance and organised political actions at the level of local government (Chachage and Mbunda 2009; Greco 2010). Pastoral and agro-pastoral producers, an historically preferred target for eviction and land dispossession, have been claiming back lost pastures and land rights, through both organised action and low-profile resistance (Lane 1996; Shivji and Kapinga 1998). Contestation against deals on large mining ventures have occurred in Zambia, South Africa and Malawi, where local government officials, corrupted by the mining companies, have been put under pressure by citizens facing expulsion (ROAPE 2011). Localised conflicts between small miners and large mining ventures continue to be pervasive in several areas. Other extractive activities, such as extensive logging, have engendered competing claims on forests. This is borne out in northern Ghana, where contested control over forest land has spurred subtle forms of resistance, with youth gangs of ‘night harvesters’, farmers who plant their coffee inside forest areas, and also poachers (Amanor 2005). In contrast to low-profile and unreported protests is the experience of the ‘Niger Delta resistance’. This began as the only instance of organised and politicised movement reclaiming the ownership of extractive rights, before gradually turning into a violent expression of identity politics, in itself a consequence of the political marginalisation of the more vulnerable groups in society (Obi 2001). This conflict over land stands out as an extreme example, whereas in most African countries localised and isolated struggles prevail. However, the localised and isolated nature of these struggles, coupled with under-reporting, will perpetuate their minimal impact, unless ‘fluid networks of resistance’ emerge, as happened in the case of rural resistance in Egypt (Bush 2002, 2011). In most African countries, though, these networks are not apparent and there is a large gap between localised protests and national and international political arenas. In addition, resistance is often expressed and enacted in non-collective, non-overtly political ways. These forms of resistance are analysed in the next section.

Land and everyday forms of resistance Everyday forms of resistance (Scott 1985) are a set of low-profile actions and disguised practices put in place by the lower classes in society, aimed at undermining the existent system of appropriation of resources while avoiding institutionalised politics. The strategic viability of disguised forms of protests is evident in political contexts where the risks attached to open collective protest largely exceed potential benefits. This is why throughout Africa, where political repression, authoritarianism and state-sanctioned violence are pervasive, these scarcely detectable forms of resistance are dominant.2 Among agricultural workers, the most common forms of resistance comprise foot-dragging, petty theft and pilfering, illegal night harvesting, non-compliance with rules, arson and sabotage of machinery. Among people living in and around reserved areas, poaching inside reserved areas, smuggling of goods and silent 463

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encroaching on reserved lands for productive activities are widespread. Covert resistance is often enacted to protect livelihoods from disruption caused by ill-conceived environmental policies, such as those to prevent land degradation (Rahmato 2003). Scott (1989) highlights that in attempting to try to contrast overt forms of resistance with covert ones, it is apparent these two strategies of class conflict are not mutually exclusive and in fact feed into one another. Indeed they often share the same objective of contesting the appropriation of resources. Thus the quiet practice of silent encroachment on to private farms and state lands such as parks and parastatal properties for farming, hunting, fishing, fetching water and grazing the cattle is an act of everyday resistance, which can be contrasted with the politically confrontational act of squatting and invading plantations to reclaim legal land rights. While only the latter, by going public and in virtue of its collective nature, is usually recognised as an eminently political struggle, the former acts silently with the same goal: reappropriating the land, and challenging the existent control over property. In the longer term, the persistent and diffuse practice of everyday forms of resistance – be they directed against a private landlord, a state agency or a group of investors – can achieve considerable results which are not apparent when single actions of resistance are considered. Taking the example of large agricultural estates, the daily pilfering of oil, seeds and fertilisers, the sabotage of machinery, foot-dragging, arson of crops in the field and similar acts of silent resistance will, little by little, cause large losses to the estate. While on an individual level, an estate manager will put down these acts to an inferior moral background, such as a lack of workers’ work ethic and a dearth of moral integrity among supervisors, in the long run large losses could convey the underlying message that the business is unwelcome in that region. Although most of these strategies are not collective in the classic sense of the term, equally they could not succeed without a certain degree of silent co-operation from the wider social group to which the resisters belong. Poaching, night harvesting, and pilfering from large farms could not go unnoticed and unpunished without the tacit approval of the working people, not least those in charge of defending property and guarding it against theft. While it appears to be the opposite of a class struggle (the collective and organised action of one defined social class against the other), everyday forms of resistance are one of the manifestations that class conflict can take. These forms of resistance are distinct from the last form of land struggle which is considered in the final section: that caused by the process of social differentiation inherent to the same group of producers who, under the pressure of market forces, either scale up their activities or fall into the ranks of the landless.

Land and processes of social differentiation The last set of less visible land struggles in Africa result from historical processes of rural social differentiation and class formation, which goes towards the exclusion of pauperised groups from the access and property of natural resources. As discussed above, in most African countries the absence of the classic opposition between a landlord class and the landless masses contributes to obscuring land struggles from the observer (Bernstein 2005). While everyday forms of resistance take place over the appropriation of resources between competing social groups, a distinct kind of struggle occurs inside the same social group of rural producers (Peters 2004). Notably, the process of social differentiation and class formation in agrarian change is predicated on the gradual dispossession of the less successful producers and the formation of a landed class of farmers depending on wage labour (Bernstein 2010). It is apparent that such processes cause land disputes inside the kin group, being interlocked with gender and intragenerational issues, resulting in social exclusion attached to the loss of land. For example, allegations of witchcraft resulting in exclusion from inheritance of family land have been proved to 464

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be directly related to social exclusion and the deeper, long-term process of social differentiation and class formation among rural producers in southern Malawi (Peters 2002). Land disputes among women in post-war Mozambique underlined that an increase of woman-to-woman, intra-gender conflicts over land are a much more likely consequence of more generalised processes of land dispossession and privatisation (Gegenbach 1998). A basic qualification here is that gender matters in the organisation of land and labour for rural production. Gender is a central element in struggles over land, as unpaid female labour – taking the form of housework, caring and reproductive work, and farming work – is the pillar of African rural production based on the small family farm. Although taking diverse forms throughout the continent, compulsory and unpaid female labour of landless women depending on their male relatives’ farms is a key pillar of small rural production in Africa. Compulsion and violence inside the family as a productive unit unmask the populist vision of the promotion of small-scale farming as a viable solution to the agrarian question (Sender and Johnston 2004; Manji 2003). It is apparent that while privatisation of land is an add-on to jeopardised land access for women, the wider process of commoditisation is aiding the rich, regardless of gender, to buy land (Daley 2008). Gender is a co-variable in the larger process of class formation among rural producers. This goes hand in hand with land dispossession of the most vulnerable, to the advantage of the richer groups in both urban and rural areas.

Conclusions The chapter has underlined how social resistance to the current land grabs in Africa has emerged against a long-standing background of land struggles which, although ubiquitous, are not immediately visible, either because they assume covert forms – the everyday forms of resistance and the struggles related to social differentiation – or because they go unreported. The transformation of covert resistance into overt forms and the mobilisation on land issues interconnects with too many variables to be predictable; not least are economic conditions and the political context and dynamics, as the Zimbabwe land occupation movement has shown (Scoones et al. 2010). In non-settler colonies, colonialism commodified rural production without fully dispossessing the producers, through systems of taxation, forced commercialisation and wage labour, which tied small producers to the land. Today, the survival of small producers is dependent on the ever-increasing overexploitation of their own labour – self-exploitation – coupled with chronic underconsumption and predicated on the resilience of small rural producers farming small, fragmented plots. By contrast, it seems likely that, in the longer term, the current land grabs will challenge existing productive systems in Africa as they appear to serve as a precursor to a generalised creation of landless masses. This change would lessen the differences between ex-settler colonies and the rest of Africa, as the return of capital into previously disregarded geographical areas will trace a pattern of agrarian transformation which mirrors the South African colonial settler model (Hall 2011). A violent social disruption will occur in the longer term if the current land grabs sanction the prevalence of large, foreign-owned plantations over the system of small farming in Africa. What is evident is that the current land grab can exacerbate the agrarian situation, which already prevents rural producers from living a dignified life, but this is also true of other forms of farming which do not dispossess small farmers, such as contract farming and other intermediate forms of vertical integration. All these are predicated on the self-exploitation and underconsumption on the side of producers. As Marx (1974) has argued, scale and property are only of relative importance. These mechanisms of disenfranchisement of rural producers entail very different social and political outcomes, in which the issue of popular agency proves to be crucial. 465

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Note 1 The other two historical precedents of redistributive land reform on the African continent are Egypt after the revolution (1952) and the scantily researched land redistribution occurred in Zanzibar after the revolution (1964).

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Index Note: Page numbers in italic type refer to Figures; those in bold refer to Tables. Numbers followed by ‘n’ refer to information in the end-of-chapter notes.

AAAID (Arab Authority for Agricultural Investment and Development) 45, 108 Abbott, P. 305 ABCD companies 5, 327 Abdullah, Abdullah Ahmed 51, 52 Abernethy, C. 164 Abu Dhabi Fund for Development see ADFD Abu Hamad 400, 401–2 accountability, VA (voice and accountability) measures 265, 266–67, 267 ACS (American Colonisation Society) 71, 72–73 actual evapotranspiration see AET Addis Ababa region, Ethiopia 185, 186 ADFD (Abu Dhabi Fund for Development) 110, 112 ADM (Archer Daniels Midland) 5, 327 AET (actual evapotranspiration) 384, 385, 387, 388, 392, 392–93, 394, 395, 397, 403 Afar region, Ethiopia 185, 186, 187, 188, 189 AFESD (Arab Fund for Social and Economic Development) 108 Africa: agricultural exports 107, 135–36; Asian investment in 328, 329–30; biofuels 274, 276, 278–79, 280–83, 281; Chinese investment in 2, 91–101, 228, 229, 437–44; diamond industry 121; failing states in 225; food exports 107, 135–36; food imports 108; Gulf states investment in 6, 104–17, 111, 229, 259; impact of globalisation on 4–5; Indian investment in 2, 120–30, 228; land dispossession 11–15, 12–14, 15, 17–20, 24–25, 24–40, 25, 26–27, 28–40; Middle Eastern investment in 2, 6; oil production 279–80; Saudi Arabian investment in 104, 110; UAE investment in 111; weakness of states 14–15 Africa Policy White Paper, China 92, 438

AfricaInvest 165 African Development Bank 141, 291 African Fruit Company 76 African Lakes Company 33 AFRICOM 65, 66 Afrikaners see Boers Agadir, FDI in 198–99 AGRA 156 agrarian movements 458 Agrarian Reform Law (RAF) 155 agri-ecology 36–38, 37 Agri-Souss 196, 198 Agricultural Bank, Sudan 54 agricultural exports 107, 135–36, 195–96 agricultural inputs 365, 366–67, 368, 368 agricultural reform, Morocco 194–95 agricultural subsidies 1, 4, 325, 330 agriculture: Chinese aid to 93–94; demonstration centres 94; Ethiopia 313, 315; Gulf states 106–7; labour supply 35–36, 40; Morocco 193– 204; production potential 160–61, 168, 168, 169, 170, 246–47; production systems 364–65, 366–67, 368, 368; retiring land from 409–10; South Sudan 62 Agriculture for Development (World Bank report) 209 Agriculture Investment Support Directorate, Ethiopia see AISD AgriSA 226, 235 AISD (Agriculture Investment Support Directorate, Ethiopia) 181, 189 Al Ain National Wildlife 113 Al Bashaar 251 Al Qaeda 65 Al-Amoudi 114 Al-Andaluz see Morocco

469

Index

Al-Ingaz (‘Salvation’) regime, Sudan 43, 47, 48, 49, 50, 54 Al-Nahda Al-Zira’ayah see ARP (Agricultural Revival Programme), Sudan Al-Qudra Agriculture 112 Al-Rajhi International 113 albedo 385 Alden Wily, Liz 11–23, 442 alfalfa production, Sudan 113, 251, 252, 400, 401 Algeria: Chinese SEZs in 424; Gulf states investment in 111 Alien Tort Statute (ATS), US 81 alienation see land dispossession All-African People’s Conference 77 Allan, J. A. (Tony) 1–8, 328, 407, 408, 408 Almarai 113 Almeria 194, 196–97 American Colonisation Society see ACS Americo-Indians, land dispossession 16–17 Americo-Liberians 71 Amhara region, Ethiopia 185, 186, 186, 187, 188, 189, 190 Amri-Hamdab people 61–62 Amstutz, Dan 326 Amtar 113 Anambra sub-basin 387 ANC (African National Congress) 234; Youth League (ANCYL) 235, 239n17 Anglo-Boer War 31, 33 Anglo-Egyptian Condominium 44 Angola: agri-ecology 38; coffee production 38; and customary land ownership 14; oil production 279; Portuguese colonialism 25, 25; white settlement 18 Anseeuw, Ward 260, 261, 422–36 Antonelli, Marta 406–18 AP (Associated Press) 100 apartheid, South Africa 35, 234, 235, 462 aquifers: fossil water 104, 106, 113, 116, 386, 391; groundwater 377, 378, 379, 381–82, 390, 391 Arab Authority for Agricultural Investment and Development see AAAID Arab countries: investment in Morocco 196, see also Gulf states Arab Fund for Social and Economic Development see AFESD Arab League 105, 112 Arab Spring 317, 318, 321 Arab-Israeli conflict 65 Argentina: biodiesel production 274; food production 3; Gulf states investment in 111, 111; productivity gap 395 ARP (Agricultural Revival Programme, Sudan) 43, 47–55, 113 arsenic, in groundwater 377, 379 Asante, Kwaku Baprui 78 Ashamu, Elizabeth 448 470

Asia 225; biodiesel production 274; ‘green revolution’ 247; investment in Africa 2, 328, 329–30; post-war food supply 302 asparagus production, Morocco 196 Associated Press see AP Aswan Dam 230 Atlantic, The 91 AU (African Union): ‘Framework and guidelines on land policy in Africa’ 293; Land Policy Initiative 291 Australia: food production 1, 3; Gulf states investment in 111, 111; livestock industry 107; over-allocation of blue water resources 7, 317; water productivity 395, 403 Awakening Africa’s Sleeping Giant (FAO/World Bank report) 209, 246, 253, 329, 384 Azura Group 196, 198 Bahrain, investment in Africa 111 Barclay, Edwin 75 barley consumption, Saudi Arabia 106 Baro Wenz sub-basin 401 Al-Bashir, Omar 48, 49, 66 Basic programme for Agricultural Development, Sudan 108 Basotho people 30 Basutoland (Lesotho) 25, 29, 30, 31 Baumgartner, Phillip 178–92 Bechera Agricultural Development Project 428 Bechuanaland (Botswana) 25, 29, 30, 31 Belgium, and neocolonialism 77 Bending, T. 287 Benin 428, 429, 430, 433; commercialisation of agriculture 151; cotton production 150; customary land ownership 14; land tenure policies 149; local government 149 Benishangul Gamuz region, Ethiopia 185, 186, 187, 188, 189 Berlin Conference 17, 31 Bill and Melinda Gates Foundation 99 Binswanger, H.; Awakening Africa’s Sleeping Giant report 209, 246, 253, 329, 384 biodiesel production 228, 274, 275, 275, 280; Brazil 275, 276; costs 280–82, 281; Ghana 130; India 123; Mozambique 278 biodiversity 311, 430 biofuels 55n5, 104, 121, 123–24, 138, 207, 228–29, 360; Africa 274, 276, 278–79, 280–83, 281; Brazil 273, 274, 275–76, 275; China 275; Democratic Republic of the Congo 100–101; environmental impact of 273; Ethiopia 123, 124, 275, 320; and food prices 304, 307; Ghana 130; global demand for 278, 280; history of 274–75; India 123, 275; Indonesia 273; Mozambique 274, 278, 424; role in African land grabs 273–74; standards for 282; Tanzania 175, 275, 424; West Africa FDI

Index

water resources case study 340–56, see also ethanol production BioPar DMP dataset 389 Biougra 197 block farms: Lesotho 164–65; Zambia 207, 211–13 Blue Nile 371–72; Blue Nile Waters Study 317; Ethiopia Blue Nile project 400, 401–2 Blue Nile State 52 blue revolution 209–10; Zambia 207–18, 210–18 blue water 5, 254, 338, 386, 397, 406, 407, 407– 8, 408, 411; Africa 5–6, 289; definition 7n1, 373n1; over-allocation of 5, 7, 247–48, 317; and sustainable intensification 360, 362, 363, 364, 364, 368, 370–73, 412, 413, 414, 415, 416; West Africa FDI case study 340–56, see also irrigation BMP (Green Morocco Plan) 193 BMZ (German Ministry for Economic Cooperation and Development) 290, 291–92 Boamah, Festus 130 Boers 29, 30; Anglo-Boer War 31, 33 BonaFarm Group 212 Bonsor, Helen C. 376–83 boom and bust see economic cycles booms, in commodity prices 305–6 boreholes 38, 377, 378, 379, see also irrigation Boro de Battisti, A. 305, 308 Borras, J. 15 Borras, S. 15, 292, 294, 295 Botswana: commercialisation schemes 19; customary land ownership 14, 20; food price rises 305; land dispossession 27; SLUC (sensitivity to land use change) 397; unemployment rate 167, see also Bechuanaland Brabeck-Letmathe, Peter 105 Braütigam, Deborah 91–103 Brazil 227; agriculture 136–37; biofuel production 273, 274, 275–76, 275; food production 1, 3; Gulf states investment in 111, 111; market liberalisation 307; productivity gap 395; water productivity 395, 403 ‘Breadbasket’ vision: of Africa 329–30; of Sudan 45–46, 51, 52, 60–61, 63, 105, 107, 108–10 Brehon 15 BRICS economies 5, 225, 229, 248, 316, 325, 326, 437 Britain: Anglo-Boer War 31, 33; CDC (Commonwealth Development Corporation) 454; colonialism 24–25, 25, 29–30, 30–35, 44, 257; and Liberia 73–74, 75; and neocolonialism 77, see also England British Empire, influence on Sudan 64 British South Africa Company see BSA Brooke Bond 18 Brown, Lester 224 Bruijnzeel, L.A. 387 Brunot Commission (1931) 75

BSA (British South Africa Company) 25, 31–32 Buell, Raymond Leslie 74 buffer zones 165, 171–73 buildings, agricultural 368, 369 ‘bulge bracket’ banking 139 Bunge 5, 327 Bunsura sub-basin 395 Burke, S. M. 387 Burkina Faso: agricultural inputs 366, 368, 369; commercialisation of agriculture 151, 154–56; cotton production 96, 150; food security 156; inland valley management 153; inward investment in agriculture 154–56, 157; irrigation schemes 152, 369; land resources and productivity statistics 361; land tenure policies 149; local government 149; migration 148; recognition of customary landholding 14; unemployment rate 167 Burundi; CFA (Cooperative Framework Agreement) 317 Bush administration (George W. Bush) 64, 65 ‘businessmen’, investment in agriculture in West Africa 146, 148, 150–57 CAD-Fund (China-Africa Development Fund) 93, 101 Cahora Bassa Dam complex, Mozambique 233 CALF Cocoa International Company Ltd. 95 Cambodia 111, 111, 189n1 Cameroon: agricultural inputs 366, 368, 368, 369; land resources and productivity statistics 361; unemployment rate 167 Campanale, Mark 134–45 Canada, food production 1, 3 CANS (Civil Authority of the New Sudan) 448 CAP (Common Agricultural Policy) 302, 307, 325 Cape 25, 29–30, 33 Cape Town 29 capital accumulation, global 63–64 capitalist elites, global 225–26 Cargill 5, 326, 327 Caribbean region, investment in Ethiopia 184, 185 Carmody, Pádraig 120–33 Casablanca Group 78 catchment moisture fluxes 341, 343, 347–48, 347, 349–53, 350, 351, 352, 353 CC (control of corruption) measures 264–66, 265 CDB (China Development Bank) 93, 101 CDC (Commonwealth Development Corporation) 454 Central African Republic, unemployment rate 167 Central Asia, investment in Ethiopia 184, 185 Central Equatoria State, South Sudan 452 Central Intelligence Service see CIA Central sub-region 168, 169 Central West Coast basin 387 471

Index

Centre for International Forestry Research see CIFOR cereal yield statistics 361 CFA (Cooperative Framework Agreement) 317–18, 321 CFS (Committee on World Food Security) 291, 458 Chabal, P. 14 Chapagain, A.K. 224, 228, 229, 230, 237 Chayton Capital 141 child labour, Liberia 81, 82 Chilembwe, John 23 China 304, 306; agriculture 92, 367; biofuel production 275; food security 438; food trade 4; and globalisation 244; hegemony of 225; investment in Africa 2, 91–101, 228, 229, 437– 44; investment in DRC 91, 100–101; investment in Ethiopia 94, 184, 185, 189, 318, 319–20, 424; investment in Malawi 440; investment in Mauritania 94, 95, 95; investment in Mozambique 91, 92, 97–100, 439; investment in Sierra Leone 94; investment in Sudan 49–50, 53, 66; investment in Tanzania 93, 95, 95; investment in Zambia 95, 424, 440; investment in Zimbabwe 91, 92, 96–97; land resources and productivity statistics 361; overallocation of blue water resources 7; SEZs 424, 426; and Sudan 49–50, 53, 66; transit times 197; working conditions in Chinese companies 426–27 China Development Bank see CDB China Export Import Bank see Eximbank China Geo Engineering Company 212 China Gezhouba Group Corporation/Company 318, 320 China International Water and Electrical Corporation see CIWEC China National Agricultural Development Company see CNADC China National Cereals, Oils and Foodstuffs Corp. see COFCO China State Farms Agribusiness Corporation 93, 440 China-Africa Development Fund see CAD-Fund China-Zambia Friendship Farm 95 Chinese State Farm Agribusiness Corporation see CSFAC chloride, in groundwater 379 Chongqing Seed Corporation 93 Chott Hodna sub-basin 387 Chu, Jessica M. 207–20 CIA (Central Intelligence Service) 78, 79, 80 CIFOR (Centre for International Forestry Research) 100–101 Citadel Capital 252, 454 Citadel Group 63 citrus fruit production, Morocco 198 Civil Authority of the New Sudan see CANS 472

civil society 294 civil war 226; Sudan 46, 47, 52, 62–63, 447, 448–49 CIWEC (China International Water and Electrical Corporation), and Zimbabwe 96–97 CJTF-HOA (Combined Joint Task Force – Horn of Africa) 65 Clark, G. A. 301 class formation 465–66 climate 394, 395 climate change 161, 162, 306, 414; and biofuels 274; GHG (greenhouse gas) emissions 273, 274; India 122, 123–24; Nile basin 54; SubSaharan Africa 11, 209 climate-resilient green economy see CRGE Clinton administration 65 closed-end listed funds 138 Club of Rome 300 CNADC (China National Agricultural Development Company) 93, 95 CoC (codes of conduct) 129, 252–53, 290, 291, 292, 295 Coca-Cola 5 codes of conduct see CoC COFCO (China National Cereals, Oils and Foodstuffs Corp) 93, 99, 100 coffee production 38, 179–80 Cold War 64, 65, 224 collective land ownership 12, 13, 427–28, 433; Ethiopia 180; Sudan 46, 58; West Africa 147– 48; Zambia 208, see also community land rights; customary land ownership; land ownership Collier, P. 250 Colombia; coffee production 179–80 colonialism 262; Africa 17–19, 24–40, 128; Ethiopia 179; India 257; West Africa 147 colonisation societies 71, 72–79 Colonization Society of the City of New York 73 Combined Joint Task Force – Horn of Africa see CJTF-HOA commercial estates 166, 173; Zambia 213–14 Commercial Pressures on Land research project 422 commercialisation of agriculture 19, 136–37, 180; Burkina Faso 151, 154–56; Ethiopia 190; Mali 156–57; West Africa 150–51 Commission for Africa; Our Common Interest report 209 Committee on World Food Security see CFS commodity prices: booms in 305–6, see also food prices Common Agricultural Policy see CAP Commonwealth Development Corporation see CDC community land rights 292, 433; Ethiopia 180; South Sudan 62, 447–56; Sudan 58, see also collective land ownership; customary land ownership; land ownership

Index

community participation, in agricultural development 165 compensation 426 Comprehensive Peace Agreement see CPA Concord Agriculture 454 Congo see DRC (Democratic Republic of the Congo); Republic of Congo Congo basin 19, 395, 397, 398; sub-basins 391 Congo River 234 consolidated sedimentary rocks 380, 380 contract farming 163, 171, 431 Cooperative Framework Agreement see CFA corn production, Sudan 113 corporate social responsibility see CSR corruption 39; CC (control of corruption) measures 264–66, 265; Sudan 109–10 Costa Rica, coffee production 179–80 Cote d’Ivoire, customary land ownership 14 Cotonou 428, 430 cotton production 19, 36, 40, 44, 45; Burkina Faso 96, 150; Mali 156; Sudan 47, 60, 64; West Africa 150 Cotula, Lorenzo 422–36 Cotula, S. 140–41 Cowen, D. 226 CPA (Comprehensive Peace Agreement) 62, 64, 65, 66, 449, 451 CPD (crop per drop) 391–93, 394, 394, 395, 400, 403 ‘creative destruction’ 244, 245–46 CRGE (climate-resilient green economy), Ethiopia 314–16 crop per drop see CPD crop phenology characteristics 347 crop water requirements 341, 343, 345, 346, 348–49, 348, 349, 351, 353–54 croplands 384, 386–87, 388, 389, 393, 395, 396, 402, 403; DMP (dry matter productivity) 389, 391, 392 CROPWAT8.0 model see crop water requirements crystalline basement rocks 377, 379–80, 380, 382 CSFAC (Chinese State Farm Agribusiness Corporation) 94–95, 96, 97 CSR (corporate social responsibility) 141 customary land ownership: Africa 12, 13, 14, 19, 20–21, 39, 105, 109, 115, 146–47, 149, 294, 426, 427–28, 442; Botswana 14, 20; Ireland 15–16; Zambia 208, 216–17, see also collective land ownership; land ownership customary law 13; Ireland 15–16 cut flower production see floriculture

dams 209; DRC 234, 236; Egypt 230–32; Ethiopia 232, 311–21; Lesotho 233–34, 236; Mekong basin 316; Morocco 200; Mozambique 233; Sudan 43, 45, 49, 52, 54, 61–62, 106, 112, 317; Zambia 212–13, see also hydropower Davies, Sir John 15–16 De Janvry, A. 129 de Schutter, Olivier 290, 293 de Soto, Hernando 262, 438 decolonisation, Morocco 195 Deininger, K. 179–80, 259 Del Monte 18 Delassus 196, 198 Democratic Republic of the Congo see DRC Deng, David 252, 295, 452–56 Dennis, Charles Cecil 79 dependencia approach 225 desalination 201, 233, 251 Deutsche Bank 136–37, 139 development finance institutions see DFIs Development Trust of Zimbabwe 96 Developmentalism 224 DFIs (development finance institutions) 140, 144 diamond industry 31, 121 diesel 280, 281, see also biodiesel Dire Dawa region, Ethiopia 185, 186 dispossession see land dispossession Djibouti 107, 112, 167 DMP (dry matter productivity) 389, 391, 392, 393, 400, 403 DMP/P (DMP per unit precipitation) 391 DMP/PET (DMP per unit PET) 392–93 Doe, Samuel K. 80, 81 Doha Round, WTO (World Trade Organisation) 325, 326–27, 331 domestic investment in land: Ethiopia 184, 185, 189; South Africa 235; West Africa 146–57 downstream populations 384, 386, 397, 398, 399, 400, 402, 404 DRC (Democratic Republic of the Congo): Chinese investment in 91, 100–101; South African investment in 226, 234–35, 236 Dreyfus (Louis Dreyfus) 5, 327 drought 37; Morocco 200; Sudan 46; West Africa 148, 150 dry matter productivity see DMP Du Bois, William Edward Burghardt 71, 76, 77, 81 Dublin Principles 289 Dutch East India Company 29 Duxton Agriculture 140

Daewoo 294, 425, 426, 458, 460 dairy farming, Saudi Arabia 107 Daloz, J.-P. 14 dambos irrigation systems 38

East East East East

Africa basin 402 Africa, Gulf states investment in 107 African Agricultural Fund 140 African Coastal basin 404 473

Index

East African Royal Commission on Land Tenure 19 East Central Africa sub-basin 397 East Central Coast basin 395 East Europe: FDI in land 189n1; investment in Ethiopia 184, 185 East India Company 257 East Saharan Africa basin 402 Eastern Agricultural Development Company 95 Eastern Europe, post-war food supply 301–2 Eastern sub-region 168, 169 Eastman, Ernest 77 EC (European Commission), report on Morocco 204 ECA (Economic Commission for Africa) 291 ecological land grab 238n3 Economic Commission for Africa see ECA Economic Community of West African States 123 economic cycles 243, 244–45 economic philosophy, and green economics 248–50 Economic Salvation Programme, Sudan see ESP Economist, The 91 ecosystems services 413; and water resources 338, 339, 340, 354, 385 Egypt 226; 2011 revolution 318, 321; agriculture 44–45, 366, 368, 369; Chinese SEZs in 424; colonialism 44–45; Gulf states investment in 111, 111; influence on Sudan 64; investment in Morocco 199; investment in South Sudan 252; investment in Sudan 53; land resources and productivity statistics 361; land and (virtual-) water deals 223, 224, 230–32, 236, 237–38, 259; Saudi Arabian investment in 231, 232, 236; UAE investment in 231, 236 EIA (Ethiopian Investment Agency) 179, 181, 187 EIAs (environmental impact assessments), Zambia 212, 214 EISA (Energy Independence and Security Act), US 277 EITI (Extractive Industries Transparency Initiative) 294 El Allaqi sub-basin 387 El Ejido 197 El Salvador, coffee production 179–80 electricity generation see hydropower Elfora Agro-Industries 114 Ellman, M. 302 emblematic events 1–2 Emergent African Agricultural Land Fund 140 EMFTA (EU Mediterranean Free Trade Agreement) 201, 204 Emirates see UAE Empinotti, Vanessa 223–42 employment: creation by FDI 426; Morocco 201–2; South Sudan 57, 454 enclosure 225, 226; England 17, 58, see also land dispossession energy demand: Ethiopia 313–14; India 123 474

Energy Independence and Security Act, US see EISA energy industry 3, 4 Energy Policy, Ethiopia 313 energy prices, relationship to food prices 1–2, 3–4, 6, 45, 300, 302–3, 308 England: land dispossession 17, 58, see also Britain; UK environmental degradation 360; West Africa 148–49 environmental economics 249 environmental impact assessments see EIAs environmental impacts of FDI 429–30 environmental pollution 306, 379, 381–82, 385, 430; Morocco 199, 201 Environmental Protection Agency, US see EPA environmental regulations, Morocco 202–3 environmental standards, investment in agriculture 141–42, 144 EPA (Environmental Protection Agency), US 277 EPRDF (Ethiopian People’s Revolutionary Democratic Front) 126 Equatoria Teak Company 454 equities 137, 138 Erkossa, Teklu 337–57 ESP (Economic Salvation Programme, Sudan) 47–48 ethanol production 55n5, 274, 275, 275, 280; Brazil 274, 275–76, 275; costs 281, 281; Ethiopia 123; Mozambique 278; Sudan 113; Tanzania 175, see also biofuels Ethiopia 57, 92; agricultural inputs 366, 368, 369; biofuels 123, 124, 275, 320; Chinese investment in 94, 184, 185, 189, 318, 319–20, 424; food insecurity 111; Gulf states investment in 107, 111, 111, 113–14; hydropower 311–21; Indian investment in 121, 123, 124–28, 178– 92, 185, 229, 423, 424, 425, 428; investment in 121, 178–92, 229, 318, 319–20, 371–72, 423, 424; Italian investment in 318, 319–20; land resources and productivity statistics 361; land titling programmes 13; Middle East investment in 184, 185, 189; Nile water rights 230; sesame seed production 96; soil/water conservation 371; South African investment in 185; South Asian investment in 184, 185, 189; Southeast Asian investment in 184, 185 Ethiopia Blue Nile project 400, 401–2 Ethiopian Investment Agency see EIA Ethiopian Millennium Dam 232 Ethiopian People’s Revolutionary Democratic Front see EPRDF EU: agricultural surpluses 306; and biofuels 274, 275, 275, 277–78, 282, 283; CAP (Common Agricultural Policy) 302, 307, 325; EMFTA (EU Mediterranean Free Trade Agreement) 201, 204; food prices 229; food subsidies 1, 4; and food trade 2, 3; and geopolitics 225, see also Europe

Index

EUREGAP certification 142 Europe: colonialism in Africa 17–19, 24–40; food imports 228; food price rises 301; free trade agreement with Morocco 195–96; investment in Morocco 193; post-war food supply 301–2; productivity gap 395; water resources 225, 227, see also EU European Commission see EC European Union see EU evapotranspiration (ET) 200, 337, 340, 343, 347, 348, 349, 353, 362, 368, 371, 385, 408, 411, 413; actual (AET) 384, 385, 387, 388, 392, 392–93, 394, 395, 397, 403; potential (PET) 343, 347, 387, 392 everyday forms of resistance 464–65 Eximbank (China Export Import Bank) 93, 98, 320 Eximbank (India Export Import Bank) 123, 127 exports, agricultural 107, 135–36, 195–96 externalities 249 Extractive Industries Transparency Initiative see EITI failing states in Africa 225 Faisal Islamic Bank see FIB Falkenmark, M. 289 fallowing systems 154 family farming see small-scale agriculture famines: Ethiopia 126; Ireland 46, 127; Sudan 46 FAN (Fincha Amerti Nesse) Dam 320 FAO (Food and Agriculture Organization) 94, 98, 129, 130, 136, 246, 307, 308, 309, 444n1; Awakening Africa’s Sleeping Giant report 209, 246, 253, 329, 384; PRAI (Principles for Responsible Agricultural Investment) 142, 290– 91, 293, 458; private investment in agriculture 139–40; sub-regional grouping of African countries 168, 168; Voluntary Guidelines on the Responsible Governance of Tenure of Land 458; water resources data 269; and Zambia 210 Farm Bill, US 325 Farm Block Development Plan 2005–7, Zambia 211, 212 farm blocks see block farms farming cooperatives 166 Faysse, N. 203 FDI (foreign direct investment) 5, 6, 191n1, 223, 243, 324–25, 328, 329–30; comparison with ‘land grabs’ 257, 258, 264, 266–67, 268–71; current trends 250–52; environmental impacts of 419–20; in Ethiopia 318, 319–20, 371–72; host country outcomes 424–25; investors 2, 423–24; in Madagascar 121, 259, 423, 425, 426, 428, 458, 460; in Mali 121; in Morocco 193–204; in Mozambique 259; outcomes and impacts of 422–34; in South Africa 121, 229, 259; in South Sudan 63; in Sudan 48–51, 52– 53, 53, 54, 57; and sustainable intensification

359–60, 368, 370–73; and water resources 328– 29, 329, 330, 337–39, 339, 340, 342–43, 343, 344–45, 345, 346, 347–50, 347, 348, 349, 350, 351, 351, 352–56, 352, 353, 384–404, 429; West Africa 147, 150–57; in West Africa 147, 150–57; in Zambia 207–18, see also investment; land grabs; LSLA Fernando Po 74, 75 fertiliser use 365, 366–67, 368; and nitrate pollution 306, 381, 382, 385 FIB (Faisal Islamic Bank) 61, 110 Fifth National Development Plan, Zambia see FNDP Finance Corporation of America 74 financialisation of food market 327 Finley, Robert 72 Finnish Fund for Development Cooperation 454 Firestone Tyre and Rubber Company, and Liberia 18, 71, 73–76, 79, 81–82 First World War 18, 34 Flomo v. Firestone Natural Rubber Company 81 floriculture 124, 196 flouride, in groundwater 377, 379 FNDP (Fifth National Development Plan, Zambia) 210, 211–12 FOCAC (Forum on China-Africa Cooperation) 92, 99 fodder crops, Gulf states 107 fog 387, 388–89, 390, 397, 398, 399, 400, 402 Food and Agriculture Organization see FAO food imports: Africa 108; Europe 228 food market, global 324–26; Western corporate power in 326–28 Food for Peace see PL 480 (Public Law 480 Programme) food prices 4, 7, 48, 138, 228, 424; increases (1940s) 299, 300, 301–2, 307, 308–9; increases (1970s) 250, 299, 300, 302–3, 306–7, 308–9; increases (2007–8) 104–5, 116, 147, 182, 207, 211, 229, 245, 273, 299, 300, 303–7, 308–9; increases (2011) 121, 299; relationship to energy prices 1–2, 6, 45, 300, 302–3, 308 food, production potential 160–61, 168, 168, 169, 170, 246–47 food security 1, 3, 5, 6, 48, 115, 121, 135, 136, 161, 170, 192, 237, 243, 259, 273, 291, 300, 326, 425, 432, 458; Burkina Faso 156; China 438; Ethiopia 111; and Gulf states 104–5; Qatar 251–52; South Sudan 57, 454; Sudan 57, 111; West Africa 115; Zambia 208 food self-sufficiency, water-limited food selfsufficiency ratio 362, 363, 364, 364 food subsidies 1, 4, 325, 330 food trade: African exports 107, 135–36; African imports 108; international 2–3, 3–4 food trading companies 2, 5, 327 food-water 3, 7n1, see also virtual water 475

Index

football World Cup (2010), South Africa 233, 235, 238 Foras International Investment Company 114 forced labour, Liberia 74–76, 81 forest laws 13 forests 19, 430, 464; community forestry programme, South Africa 164; South Africa 413; South Sudan 448, 454; West Africa 147–48 Forum on China-Africa Cooperation see FOCAC fossil water aquifers 104, 106, 113, 116, 386, 391 FQD (Fuel Quality Directive), EU 277–78 Fraco, J. 15, 292, 294, 295 Framework for Land Policy in Africa 291–92 France: investment in Morocco 193–94, 195, 196, 198, 199; and Liberia 73, 74, 75; and neocolonialism 77 Franco, J. 15 free market economy 325, 330 free trade 330 free trade agreements 432; Morocco 195–96, 201–2 French Congo (Gabon), land ownership 18 Friis, C. 259, 264 fruit 18, 107, 111 Fuel Quality Directive, EU see FQD Gabon: Chinese agricultural investment in 95; colonial land ownership 18; unemployment rate 167 Gadet, Peter 449, 453 Gambella region, Ethiopia 126, 127, 179, 185, 186, 187–89, 188, 188, 189, 190, 400, 401–2, 428, 460 GAP 142 Garang, John 49, 58 gas industry 3, 251 GATT 307 Gavelkind case, Ireland 15–16 Gedaref scheme 59 GEF (Global Environment Facility) 113 Genale Dam 320 gender, and land conflict 466 Geneif, Ali 50, 51, 52 General Agreement on Tariffs and Trade see GATT genocide 29 geopolitics 223; domestic layer 226–27; Egypt/ South Africa comparisons 236; and Sudan 64– 66; theories 224–26; of water resources 224 geostrategy 224 GERD (Grand Ethiopian Renaissance Dam) 314, 317, 320, 321 German Cameroon, land ownership 18 German Ministry for Economic Cooperation and Development see BMZ Germany: agricultural inputs 367; colonialism 24, 25, 31, 33–34; land resources and productivity 476

statistics 361; and Liberia 73, 74; and neocolonialism 77 Gerten, Dieter 359–75 Gezira scheme 44, 45, 47, 59, 60, 109, 113, 115–16 Ghana 77; agricultural inputs 366, 368, 369; Chinese agricultural investment in 95; FDILSLA water resources case study 338, 340, 341, 342–43, 343, 345, 345, 346, 347–48, 347, 348–49, 349–53, 349, 350, 351, 351, 352, 353, 353, 354, 355; foreign investment in 121; Gulf states investment in 111; land resources and productivity statistics 361; military coup 78; recognition of customary landholding 14, 20; SLUC (sensitivity to land use change) 397; unemployment rate 167 Gharb plateau region, Morocco 193, 197 GHG (greenhouse gas) emissions 273, 274, see also climate change GI (Gulf International) 109 Gibe Dams 319, 320 GIIN (Global Impact Investment Network) 142, 143 Gilgel Gibe I dam 318 Gilmont, Michael 406–18 Glencore 327 Global Environment Facility see GEF global financial crisis 1, 6, 245, 249 Global Hunger Index 128 Global Impact Investment Network see GIIN Global Subsidies Initiative see GSI globalisation 128–30, 224, 431; and economic cycles 244; global capital accumulation 63–64; impact on African farmers and economies 4–5; ‘inverse’ 324 GlobCover dataset 386 GMP (Green Morocco Plan) 193, 195, 201, 204 GOANA (Major Offensive for Abundance) programme, India 425 Goldman Sachs 139 Goldstein, A. 233 Goodrich 76 Görgen, M. 260 governance: GG (good governance) measures 265, 267, 268, 270; of water resources 288–95 government of the Republic of Zambia see GRZ GRAIN 111, 211, 259, 264, 265, 271, 287, 444n1 Grand Ethiopian Renaissance Dam see GERD Grand Inga III Dam, DRC 234, 236 Grand Millennium Dam 319 grassland 347, 348, 348, 349, 354 Greco, Elisa 457–68 green economy 243–44, 245, 246–47, 252–55; CRGE (climate-resilient green economy), Ethiopia 314–16 Green Morocco Plan see GMP green water 5, 248, 289, 338, 386, 406, 407, 408, 410, 411; Africa 5–6; definition 7n1, 373n1;

Index

South Sudan 252; and sustainable intensification 360, 362, 363, 364, 364, 368, 370–73, 412, 413, 414, 415–16; West Africa 154, 340–56 green world-systems 225 greenhouse agriculture, Morocco 193–94, 195, 196–97, 198 greenhouse gas emissions see GHG Greenleaf, John Simon 73 groundnuts 19, 348, 349 groundwater 6, 261, 376–77, 378, 379–82, 380, 386, 390, 391, 404; depth to groundwater 378, 379, 390; groundwater storage 377, 378, 379, 390; Morocco 194, 197, 199, 200, 201, 203 Growth and Transformation Plan, Ethiopia see GTP GRZ (government of the Republic of Zambia) 210, 211 GSI (Global Subsidies Initiative) 278 GTP (Growth and Transformation Plan), Ethiopia 313–14 Guatemala, coffee production 179–80 Guinea 78, 80; Chinese agricultural investment in 94, 95, 95 Guinea Savannah 209, 210, 246, 329 Gulf of Guinea sub-region 168, 169 Gulf International see GI Gulf states: and food security 104–5; investment in Africa 6, 104–17, 111, 229, 259; investment in Argentina 111, 111; investment in Ethiopia 107, 111, 111, 113–14; investment in Mauritania 111, 111, 114; investment in Morocco 111, 111; investment in Pakistan 111, 111; investment in Philippines 111, 111; investment in Sudan 45, 48, 49, 50, 60, 61, 107–10, 111, 111, 112–13; investment in Tanzania 111, 111; investment in Thailand 111, 111; investment in Turkey 111, 111; investment in West Africa 114–15; water resources 229, 429, see also Arab countries; Middle East Gurley, Ralph Randolf 73 HADCO 113 Hahn, Niels 71–87 Hala’ib (Halayeb) Triangle 232, 236 Halele Werabesa Dams 320 Hamdi, Abdelrahmin 47 Hansen, M. 397 Harari region, Ethiopia 185, 186 Hardman and Co. 135, 136, 143 Harvey, David 249 Hassad Food 110, 113 Hassan II Fund 195 Hassan II, King of Morocco 202 Havnevik, Kjell 125 Hayek, Friedrich 325 Heilberg, Phil 453

Helms, Jesse 326 Herero people 29, 31 High Aswan Dam 317 High Level Commission on Food Security 458 high veld land, Southern Rhodesia 32, 36 Hijmans, R. J. 387 Hilhorst, Thea 146–58 HIV/AIDS 65 Hobsbawm, E. 17 Hoekstra, Arjen 224, 228, 229, 230, 235, 237, 328 Hoff, Holger 248, 359–75 Hoffman, Clemens 57–70 ‘holons’ 253 homelands, South Africa 35, 37 Hoover, Herbert 74 Horn of Africa basin 397, 398, 402 Horta, Loro 97, 98, 99 housing 428–29 Hubei Provincial Farming Bureau 99 Hubei-Gaza Friendship Farm 99 Huelva 194, 197 Hugon, P. 233 human footprint on water quality 397, 399, 400 human rights 290, 292, 293, 432–33; South Sudan 448, 451 hydro-agricultural mission, Sudan 49–50, 52 hydrogeological environments 370–71, 378, 380 hydropower 234–35; Ethiopia 311–21, see also dams IAEA 113 ICARRD (International Conference on Agrarian Reform and Rural Development) 458 Idllalene, Samira 193–206 Idyl 196 IFAD (International Fund for Agricultural Development) 98, 444n1; PRAI (Principles for Responsible Agricultural Investment) 142, 290– 91, 293, 458 IFC (International Finance Corporation) 115; Environmental and Social Standards 142, 144; Performance Standards on Social and Environmental Sustainability 141 IFPRI (International Food Policy Research Institute) 97, 207, 290, 291, 440, 444n1 IIED (International Institute for Environment and Development) 98, 140–41, 444n1 ILC (International Land Coalition) 259 Illovo Sugar 137 IMF (International Monetary Fund): and Egypt 231; and Morocco 195; and Sudan 46, 60, 109 Impact Reporting and Investment Standards see IRIS standards imperialism 224, 262 Incomati basin 401 India 304, 306; agricultural inputs 367; biofuels 123, 275; colonialism 257; diamond industry 121; food security 176n6; and globalisation 244; 477

Index

investment in Africa 2, 120–30, 228; investment in Ethiopia 121, 123, 124–28, 178– 92, 185, 229, 423, 424, 425, 428; investment in Senegal 425; land resources and productivity statistics 361; lobby groups 175; over-allocation of blue water resources 7; productivity gap 395; and rice price spike 305 Indian Ocean Coast basins 391, 393; sub-basin 395, 401 Indian Ocean Islands sub-region 168, 169 indigenous people: customary system of land ownership 12, 13, 14, 19, 20–21, 39; genocide of 29, 31; treaties with 31 Indonesia: biofuel production 273; FDI in land 189n1; Gulf states investment in 111, 111 industrial revolution 244 inland valley management, West Africa 153 Institutional Profiles Database 269 integrated water resource management see IWRM Intergovernmental Panel on Climate Change see IPCC International Commission of Enquiry into the Existence of Slavery and Forced Labour in the Republic of Liberia 75, 81 International Conference on Agrarian Reform and Rural Development see ICARRD International Conservation Union see IUCN International Covenant on Economic, Social and Cultural Rights 293 International Economic Cooperation Centre, China 93 International Finance Corporation see IFC International Food Policy Research Institute see IFPRI International Fund for Agricultural Development see IFAD International Institute for Environment and Development see IIED International Labour Rights Fund 81 International Land Coalition see ILC International Monetary Fund see IMF International Political Economy 225 International Rice Research Centre 99 International Rights Advocates 81 International Water Institute 105 investment: alternative modalities for 160–76; and the green economy 246–47; private see private investment; socially responsible 140–43, see also FDI (foreign direct investment); land grabs; LSLA (large-scale land acquisition) Investment Promotion Centre, Tanzania 20 investment promotion laws 20 investors 259–60, 423–24 inward investment see FDI (foreign direct investment) IPC environmental and social standards 142 478

IPCC (Intergovernmental Panel on Climate Change) 123 Iran, livestock industry 107 Iranian revolution (1979) 2 Ireland, land dispossession 15–21, 127 IRIS (Impact Reporting and Investment Standards) 143 iron, in groundwater 377, 379 irrigation 5, 7n1, 38, 209, 210, 408, 410, 413, 429; Burkina Faso 152, 369; Cameroon 369; Egypt 369; Ethiopia 369; FDI-LSLA case study 347–48, 347, 352–53, 352, 354, 355; Ghana 369; indigenous systems 38; Kenya 369; Mali 429; Morocco 195, 199, 200; Niger 368, 369; Nile 44–45; Office du Niger 151–53, 261; production potential 169, 170; and salinisation 381, 382; Senegal 369; small-scale village schemes 152–53; South Africa 368, 369; Sudan 45, 47, 48, 54, 59, 61–62, 109, 115–16, 251; sustainable intensification study 362, 365, 366– 67, 368, 369; Zambia 207, 210, 212–13, 214, 215–16, 369; Zimbabwe 96–97, 369, see also blue water Islamic banks 61, 110, 112, 114 Islamic Chamber of Commerce and Industry 114 Islamic Development Bank 112, 114 Ismar, Julia 286–98 ISO certification 142 Israel, and neocolonialism 77 Italy, investment in Ethiopia 318, 319–20 IUCN (International Conservation Union) 165 IWRM (integrated water resource management) 253, 289, 429 James I, King of England 15, 16 Japan 306; food trade 3; post-war food supply 302; water resources 229 Jarch Group 63, 453 Jatropha curcas tree, and biofuel production 123, 275, 275, 281, 281, 400, 401; West Africa water resources case study 342, 343, 347, 348, 349–50, 351, 351, 352, 353, 353, 354, 355 Johnson and Graham’s Lessee v. William M’Intosh case 16 Johnson, Sirleaf 20 Johnson, Wesley 80 Johnston, Harry 33, 120 Jordan 53, 238, 251 Juba basin 395 KAISAIA (King Abdullah Initiative for Saudi Agricultural Investment Abroad) 104, 110 Kariba Dam 212 Karuturi 124, 127, 128 Kazakhstan 111, 111, 189n1 Kenana Sugar Company 52, 55n5, 109, 113

Index

Kenya 433; agricultural inputs 366, 368, 368, 369; biofuel production 273; and CFA (Cooperative Framework Agreement) 317; colonialism 28; commercialisation schemes 19; food price rises 305; fruit production 18; Gulf states investment in 111, 111; land law reform 462, 463; land resources and productivity statistics 361; land titling programme 19; soil/water conservation 371; tea production 18; unemployment rate 167 Kesicki, Fabian 273–85, 307 Keulertz, Martin 243–56, 324–33 Keynesian economics 302, 303, 307 Khashoggi, Adnan 109, 115 KhoiKhoi people 29 Kiir, Salva 49, 63 Kilimo Kwanza Programme, Tanzania 20 Kilubi, Freddy 100 Kimminic Estates see Kobre, water resources case study King Abdullah Initiative for Saudi Agricultural Investment Abroad see KAISAIA King Saud University see KSU Kingdom Agricultural Development Company 231 kings and peasants theory 261–62, 270 Kisangata Estate Sisal Farm 95 Kizito, Fred 337–57 Klare, M. 224 Koba Farm, Guinea 94, 95, 95 Kobre, water resources case study 341, 342–43, 343, 345, 345, 346, 348–49, 349–50, 349, 350, 351, 351 Kondratieff, Nikolai 244–45 Koramas sub-basin 387 Korea, food trade 3 Korean War 302 Kru people 73–74 KSU (King Saud University) 114 Kuwait: investment in African agricultural resources 111; investment in Sudan 49, 50, 52, 53; virtual-water dependency 238 Kuznet, Simon 245 La Contre-Saison 341 La Saison 341 La Via Campesina 458, 462 labour costs, Morocco 197 labour supply 167–68, 167; agriculture 35–36, 40; Liberia 74–76; pact of large-scale investments on 180 labourers, landlord/labourer model of investment 164–65, 172, 174 Lake Chad basin 387, 395, 397 Lake Victoria sub-basin 391, 393, 395 Lalara sub-basin 387 Lamu Port and Lamu Southern Sudan-Ethiopia Transport Corridor see LAPSSET

Land Act, South Sudan 449–51, 452, 453 Land Acts; Zambia 208 Land Acts, Zambia 216–17 land advocacy organisations 462–64 land alienation see land dispossession Land Apportionment Act (1930), Zimbabwe 26, 34, 34 Land Bank, Ethiopia 181, 187 land conflict 457, 459–61, 459–66; and gender 466; Mali 148; West Africa 148 land conservation 238n3 land dispossession 427–29, 459; in Africa 12–14, 15, 17–20, 24–25, 25, 26–27, 28–40; AmericoIndians 16–17; Botswana 27; and civil war 226; compensation for 342, 344, 426; England 17, 58; Ethiopia 126, 460; Europe 59; Ghana 342, 354–55; Ireland 15–21, 127; and the labour supply 35–36; Liberia 71–82; Malawi 27, 464; Mali 344, 354–55; resistance to 457–66; South Africa 26, 462; South Sudan 62–63, 454; southern Africa 25, 26–27, 28, 29–40; Sudan 59–62; and water 36–38; West Africa 147; Zambia 212, 213, 216–17, 429 land grabs 259; CoC (codes of conduct) 129; codes of conduct 129, 252–53, 290, 291, 292, 295; comparison with FDI (foreign direct investment) 257, 258, 264, 266–67, 268–71; definition 163; demand side of 259–60; and neo-imperialism 262–64; resistance to 457, 459–61; role of biofuels in 273–74; supply side of 260; and water resources 260–61, 263, 267– 70, 269, 286–88, see also FDI (foreign direct investment); LSLA (large-scale land acquisitions) land law 12–13; Ethiopia 180–81; reform of 20– 21, 438, 441–44, 461–66; South Africa 33–35, 234–35; South Sudan 58, 67, 447, 449–51; Sudan 46, 60, 61; West Africa 147; Zambia 208, 216–17, see also Land Acts land ownership 11–12, 433; and colonialism 17– 19; Ethiopia 180–81; French Congo (Gabon) 18; post-colonial 19–20; South Africa 234–35; South Sudan 452–55; West Africa 149, see also collective land ownership; community land rights; customary land ownership Land Policy Initiative 291 Land Reform Decree (1975), Uganda 19 land, retiring of from agricultural production 409–10 land rights; Zambia 216–17 land rush: Africa 11–15, 17–20, 24–38; AmericoIndian 16–17; England 17; Ireland 15–16 Land Tenure Act (1969), Zimbabwe 26, 34, 34 land use change, SLUC (sensitivity to land use change) 396–98, 398, 399, 400 Landless People’s Movement see LPM landlord/labourer model of investment 164–65, 172, 174 479

Index

LandScan dataset 397, 398, 399 Lankford, B. A. 253 Laos, FDI in land 189n1 LAPSSET (Lamu Port and Lamu Southern Sudan-Ethiopia Transport Corridor) 57 large-scale farming: efficiency of 179–80; West Africa 150–57 large-scale land acquisitions see LSLA Latin America: coffee production 179–80; ‘green revolution’ 247; investment in Ethiopia 184, 185; migrants’ remittances to 203 Lawry, Steven 453–54 League of Nations 33; and Liberia 75, 81 Lesotho 30; block farms 164–65; Lesotho Highlands Water Project (LHWP) 233–34, 236; South African investment in 233; unemployment rate 167, see also Basutoland Lewis, A. 300, 302 liberation movements 78 Liberia 225; customary land ownership 14; and Firestone Tyre and Rubber Company 18, 71, 73–76, 79, 81–82; land dispossession 71–82; land law 20; resistance in 78–81; state formation 72–73; unemployment rate 167 Liberia Company 76 Libya; virtual-water dependency 238 Libyan desert sub-basin 393 lignocellulosic biomass 275 limestone rocks; and groundwater 380 Limits to Growth (Club of Rome) 300 Limpopo; Mozambique Limpopo project 400, 401–2 Limpopo basin 395 listed companies 137 livelihoods; and water resources 338, 339, 340, 341, 342, 344, 349, 354–55 livestock production: Ethiopia 114; Gulf states 107; Sudan 111; West Africa 149–50 livestock ranching 29, 36; West Africa 149 lobby groups 175 local government; West Africa 149 local populations; impacts of FDI on 425–33 Locke, John 16 Logan, James 76 Louis Dreyfus 5, 327 LPM (Landless People’s Movement) 462 LSLA (large-scale land acquisitions): outcomes and impacts of 422–34, 452–55; and water resources 337–39, 339, 340, 342–43, 343, 344– 45, 345, 346, 347–50, 347, 348, 349, 350, 351, 351, 352–56, 352, 353, see also FDI (foreign direct investment); land grabs Mabira Forest reserve 460–61 McCartney, Matthew 337–57 MacDonald, Alan M. 376–83 Machar, Riek 63 480

machinery, agricultural 368, 369 Mack, R. 164 McKinsey 156, 195 MACO (Ministry of Agriculture and Cooperatives, Zambia) 210 Madagascar: customary land ownership 14; foreign investment in 121, 259, 423, 425, 426, 428, 458, 460; land resources and productivity statistics 361; land titling programmes 13 Magbass sugar complex, Sierra Leone 94 Mahonda State Sugar Cane Farm and Processing Factory 93 maize 36, 40, 347, 348, 348, 349, 352; and ethanol 275, 275, 277; Ethiopia 400, 401; Lesotho 164 Major Offensive for Abundance (GOANA) programme, India 425 Malagarasi sub-basin 395 Malawi 33; block farms 165; Chinese investment in 440; food security 129–30; land dispossession 27, 464; South African investment in 233; white settlement 18 Malaysia, Gulf states investment in 111 Malema, Joseph 239n17 Mali: Chinese agricultural investment in 94, 95; commercialisation of agriculture 151, 156–57; cotton production 150; FDI (foreign direct investment) in 121; FDI-LSLA water resources case study 338, 340, 341, 344–45, 345, 346, 349, 349, 353, 355; Gulf states investment in 111, 111, 114; inland valley management 153; irrigation schemes 151–52; land conflicts 148; land resources and productivity statistics 361; land tenure policies 149; local government 149 Mali Niger project 400, 401–2 Mali Niger sub-basin 400 Malibya see San, water resources case study Malthus, T. 299–301, 308 Manasir people 52, 61–62 Mandela, Nelson 233 manganese, in groundwater 379 market liberalisation 303, 307, 308, 431–32 markets: access to 38, 39–40; local 166; regional 167 Maroc Fruit Board see MFB Mars 5 MARS FOOD project 389 Marshall, Chief Justice 16–17 Marshall Plan 302 Marx, Karl 58–59, 82n7, 458, 459, 466 Marxism 225 Maryland State Colonization Society 73 Massaquoi, Roland 76 Matabele people 32 Matip, Gabriel 453 Matip, Paulino 453 Matthews, Nathanial 232, 311–23

Index

Mauritania: Chinese agricultural investment in 94, 95, 95; Gulf states investment in 111, 111, 114; unemployment rate 167 Mauritius, Chinese SEZs in 424 Mayom County 453 Mayom Declaration 449, 453 Mbandzeni, King of Swaziland 33 Mbarali Rice farm 93 Mechanised Farming Corporation see MFC Mediterranean Coast sub-basins 393, 395 Mekong basin 316 Meldrum, Andrew 96 Merowe dam, Sudan 61–62, 112, 115, 317 MFB (Maroc Fruit Board) 198 MFC (Mechanised Farming Corporation) 60 Middle East 236; and globalisation 244; investment in Africa 2, 6; investment in Ethiopia 184, 185, 189, see also Arab countries; Gulf states MIGA (Multilateral Investment Guarantee Agency) 213 migrants: and land ownership 148; remittance income from 203, 313 mining 19, 25, 31, 208, 464 Ministry of Agriculture, China 93, 95 Ministry of Agriculture and Cooperatives, Zambia see MACO Ministry of Agriculture, Food Security and Cooperatives, Tanzania 174 Ministry of Agriculture and Rural Development, Ethiopia see MoARD Ministry of Commerce, China see MOFCOM Ministry of Science and Technology, China 93 MoARD (Ministry of Agriculture and Rural Development, Ethiopia) 179, 181, 187, 189 MODIS dataset 387, 398, 399 MOFCOM (Ministry of Commerce, China) 93, 94, 426 Mohamed V, King of Morocco 201 Mohamed VI, King of Morocco 193, 194 molasses;, and ethanol production 281, 281 Möller-Gulland, Jennifer 257–72 Monetarism 307 Monrovia Group 77, 78 Morgan Stanley 139 Morocco: agricultural exports 195–96; employment 201–2; Gulf states investment in 111, 111; investment in 193–204; investment in Sudan 53; Saudi Arabian investment in 193; Spanish investment in 193–94, 195, 196, 198, 199; UAE investment in 193, 198, 199 Mosley, J. 226 Mossi plateau, Burkina Faso 148 Mozambique: agri-ecology 38; biofuels production 274, 278, 424; buffer zones 165; Chinese investment in 91, 92, 97–100, 439; dams 233; foreign investment in 259; land law

20, 462; land resources and productivity statistics 361; Portuguese colonialism 25, 25; recognition of customary landholding 14; SLUC (sensitivity to land use change) 397; South African investment in 233, 235; unemployment rate 167; white settlement 18 Mozambique Limpopo project 400, 401–2 Mpoli Farm, Mauritania 95, 95 Mu, Q. 387 Mugabe, Robert 96 Muhammad Ali Pasha 44 Mukaya Payam 452 Mulligan, Mark 384–405 Multilateral Investment Guarantee Agency see MIGA Al-Muta’afi, Minister of Agriculture, Sudan 49, 50, 52 Mzimkulu sub-basin 393 Nakambala Sugar Estate 215 Namibia: agri-ecology 37, 37, 38; customary land ownership 14; irrigation 38; land dispossession 27; SLUC (sensitivity to land use change) 397; white settlement 19, see also South West Africa Nansanga Farm Block, Zambia 211–13, 216 Natal 25, 26, 33 National Alcohol Programme, Brazil 275 National City Bank of New York 74 National Food Security Programme, Qatar 251 National Irrigation Plan, Morocco see NIP national law 13 National Mission on Biodiesel, India 123 National Vision 2030 report, Zambia 210 National Water Resource Strategy, South Africa see NWRS National Water Saving Programme in Irrigation see PNEEI Native Americans, land dispossession 16–17 Native Land Act (1936), South Africa 26 Native Trust and Land Act, South Africa 26 Natives Land Act (1913), South Africa 34 NATO 230 NCAR (National Committee Against Removals), South Africa 462 NCP 61, 66 Nelen, Joost 146–58 neo-imperialism 262–64 neocolonialism 76–78, 224, 227 neoliberalism 125, 247–48, 250, 254, 325 neopatrimonialism 14 Nestlé 5, 105, 224 net primary productivity see NPP Netherlands: agricultural inputs 367; land resources and productivity statistics 361; and Liberia 75 New Valley project see Toshka Project 481

Index

NGOs (non-governmental organisations) 462–63 Nicol, Alan 311–23 Niger: agricultural inputs 366, 368, 369; land resources and productivity statistics 361; Mali Niger project 400, 401–2 Niger basin 387, 395, 398, 401, 429; commercialisation schemes 19; sub-basins 397, 398, 401 Niger Delta resistance 464 Nigeria: Chinese SEZs in 424, 426; Gulf states investment in 111; oil production 279; unemployment rate 167 Nile: and agriculture 44–45; Sudan Nile project 400, 401–2; Toshka project 230–32; water agreements 47, 112, 230, 317, 317–18 Nile basin 387, 393, 395, 397, 401, 429; climate change 54; southern 391; sub-basins 387, 393, 395, 397, 401 Nile Basin Initiative 232, 236, 316–18, 321 Nile Delta basin 395; sub-basins 393, 397 Nile Trading and Development 452 Nimeiri, General Ja’afar 45–46, 51, 109–10, 115 Nimery, President 60, 61 NIP (National Irrigation Plan, Morocco) 195 nitrate pollution 306, 381, 382, 385; groundwater 381, 382; Morocco 199, 201 Nkomo, Joshua 96 Nkrumah, Kwame 77, 78, 79 NLC (National Committee Against Removals), South Africa 462 non-brand traders 5 non-food water 7n1 non-governmental organisations see NGOs North Africa, investment in Ethiopia 184, 185 North African basin 404; sub-basins 402 North America, investment in Ethiopia 184, 185, 189 North, D. 15 North East Coast basin 387; sub-basins 393 North Interior basin 387 North West Coast sub-basins 395 Northern Rhodesia (Zambia) 25, 25, 31, 32, 38, 208 NPA (Norwegian People’s Aid) 252 NPP (net primary productivity) 359 Nuanetsi Ranch 96–97 Nubian people 61–62, 231–32 Nubian Sandstone Aquifer 113 nucleus estates 163–64, 171–72 nutrient balances 365, 368 nutrient mining 360 NWRS (National Water Resource Strategy, South Africa) 233, 239n14, 239n15 Nyasaland (Malawi) 18, 28, 31, 32–33 Oakland Institute 211, 212 OAU (Organisation of African Unity) 78, 79, 105 482

Odib sub-basin 387 OECD (Organisation for Economic Co-operation and Development): agricultural policies 4; investment guidelines 142, 144; and private investment in agriculture 139–40 OEICs (open-ended investment companies) 138 Office du Niger 147, 150, 151–53, 261, 429 OIC (Organisation of the Islamic Conference) 114 oil industry 279–80; big-oil 3; South Sudan 49, 57; Sudan 47, 126 oil palm 351; and biofuel 273, 275; DRC 100– 101; Liberia 82 oil prices 273, 280, 282; relationship to food prices 1–2, 3–4, 6, 45 Okovango sub-basin 395 Oman, investment in Africa 111 OPEC (Organisation of the Petroleum Exporting Countries) 3, 61, 302 Open Door Policy, Liberia 79 open-ended investment companies see OEICs opportunity cost analysis 410–11 Orange basin 387, 393, 395; sub-basins 387, 393 Orange Free State 25, 30, 33 Organisation of African Unity see OAU Organisation for Economic Co-operation and Development see OECD Organisation of the Islamic Conference see OIC Organisation of the Petroleum Exporting Countries see OPEC Oromia region, Ethiopia 185, 186, 187, 188, 189, 190, 460 Ottoman Empire, influence on Sudan 64 Our Common Interest (Commission for Africa report) 209 outgrowers 163–64, 171–72, 174 Ovambo people 31 Oxfam GB 462 Pacific region, investment in Ethiopia 184, 185 Padmore, George 77 PAK (Progressive Alliance of Liberians) 80 Pakistan: FDI in land 189n1; Gulf states investment in 111, 111; investment in Sudan 53; productivity gap 395 Pale, the 15 palm oil see oil palm pan-African movement 71, 76–78 Paraguay, water productivity 395, 403 Parliamentary Enclosures, England 17 partnerships 165–66, 172–73, 174 pastoralism 59, 428; South Sudan 62–63; Sudan 54, 109; West Africa 149–50, 153 pastures 384, 386–87, 388, 389, 392, 394, 396, 403 Patriotic Front 210 peak water 408–10, 414

Index

peanuts see groundnuts peasant farming 36–37, 40, see also small-scale agriculture peasants; kings and peasants theory 261–62, 270 pension funds 137 People’s Redemption Council, Liberia 80, 81 People’s Republic of China see China Pepsi 5 periphery 225 pesticide consumption 365, 366–67 PET (potential evapotranspiration) 343, 347, 387, 392 petrol 280, 281, see also biofuels PetroSA 234 PG (productivity gap) 393–95, 395, 396 Phatisa African Agricultural Fund 140 Philippines: FDI in land 189n1; Gulf states investment in 111, 111 Piesse, J. 308 Pigou, Arthur 249 Pioneer Column 25 Pittman, K. 386, 388, 391, 392, 393, 394, 396 PL 480 (Public Law 480 Programme) 76, 80 plantations: and economies of scale 179–80; in Ireland 16 PNEEI (National Water Saving Programme in Irrigation, Morocco) 201 political ecology 225, 287 population: Africa 359; global 135, 161, 162, 247, 300, 301; sub-Saharan Africa 11, 364; Zambia 209, 212 port facilities 112 Portugal, colonialism 24, 25, 25, 38 potential evapotranspiration see PET Potts, Deborah 24–42 Poulton, C. 167 poultry industry, Gulf states 107 PRAI (Principles for Responsible Agricultural Investment) 142, 290–91, 293, 458 Precambrian crystalline basement rocks 377, 379–80, 380, 382 Prime Minister’s Office, Ethiopia 179, 187 primitive accumulation 67, 82n7, 224, 249; concept of 58–59; land rush as 14–15; and South Sudan 57–58, 62–63; and Sudan 59–62 Principles for Responsible Agricultural Investment see PRAI Principles for Responsible Investment see UNPRI private companies 137, 138 private equity funds 134, 137–38, 139; investment in Zambia 207–8, 213–14 private investment in agriculture 115, 134–37, 143–44, 164, 229; impact in Africa 140–43; strategies and structures 137–40; in Sudan 109; in West Africa 114 pro-poor development 140, 141

ProAlcool 275 Producer Support Estimate see PSE production systems 364–65, 366–67, 368, 368 Productive Safety Net Programme, Ethiopia 127 productivity gap see PG profitability of agricultural investments 166–67 Progressive Alliance of Liberians see PAL PSE (Producer Support Estimate) 325 public revenues, generation of from FDI 424 public-private partnerships, Zambia 208, 214–15 publicly-listed companies 137, 138 Pyrethrum Company of Tanzania Ltd. 165 Qatar: food security 251–52; investment in African agricultural resources 110–11; investment in Sudan 49, 50, 53; virtual-water dependency 238; water resources 251–52 Qatar Investment Authority 110 QNFSP (Qatar National Food Security Programme) 110–11 racism 77 RAI (Responsible Agricultural Investment) see PRAI (Principles for Responsible Agricultural Investment) railways, access to 38 rainfall: and agri-ecology 36–37; datasets 387; rainwater harvesting 370, 404, 414 rainfed agriculture 5, 6, 36–37, 169, 404, 408, 410, 411; strategies to upgrade 412–13; Sudan 109; West Africa 153–57 Ramankutty, M. 386, 388, 389, 391, 392, 393, 394, 395, 396 RAMSAR sites 151 rangelands, DMP (dry matter productivity) 389, 391, 392 rapeseed, and biofuel 275 RBPs (River Basin Plans), Morocco 203 Realpolitik 224 recharge, of groundwater 378, 379 RED (Renewable Energy Directive), EU 277, 278 Reenberg, A. 259, 264 Regional Administrations, Ethiopia 179, 187 Registered Land Act, Sudan 46 relocation programmes 428–29; Egypt 231–32; Ethiopia 126, 460; and human rights 292; Mali 344; South Africa 235; Sudan 52; Zambia 212– 13, 429 remittance income from migrants 203, 313 Renewable Energy Directive, EU see RED Renewable Fuel Standard see RFS2 Republic of Congo 270; South African investment in 235, 425, 426 resistance 457, 459–61, 459–66 Resolution on Neocolonialism 71, 77, 78 resource efficiency 246, 252 483

Index

Restitution of Land Act 1994, South Africa 234 RFS2 (Renewable Fuel Standard) 277 Rhodes, Cecil 25, 31–32, 330 Rhodesian Land Apportionment Act (1930), Southern Rhodesia 26, 34, 34 Ricardo, David 308, 330 rice 351; China 92; crop phenology characteristics 347; Ethiopia 114, 400, 401; Guinea 95; India 121; Liberia 76, 80; Mali 153; Mozambique 97–100; price of 305; Sudan 109; Tanzania 174; West Africa 114–15 Rice Riot 80, 81 Riddell, Phil 160–77 Rising Global Interest in Farmland report (World Bank) 290 River Basin Plans see RBPs roads, access to 38 Roberts, Joseph Jenkins 73 root-zone water resources 6 Roseires Dam, Blue Nile State 52, 112 rubber production, Liberia 18, 71, 73–76 Rudewa Estate Sisal Farm 95 Rural Lands (Planning and Utilisation) Law (1973), Tanzania 19 Russia; see also USSR Russia, water productivity 395, 403 Ruvu State farm 93 Rwanda 13, 317, 427, 428 SA-Eskom 234, 236 SABMiller 5 Sachs, J. D. 300–301, 306 al-Sadat, Anwar 230, 231 SADC (South African Development Community) 175, 210, 233, 236 SAF (Sudan Armed Forces) 448 Saharan Africa sub-basin 397 Saharan sub-basin 402 Sahel 148–49, 414 Salini Construction 318, 319 salinisation 381, 382 San people 29 San, water resources case study 341, 344–45, 345, 346, 349, 349, 355 Sandstone Capital 127 sandstone rocks, and groundwater 380 Santiago-Alcade, J.J. 204 Sasol 234 Saudi Arabia 236; agricultural inputs 366; investment in Africa 104, 110; investment in Egypt 231, 232, 236; investment in Morocco 193; investment in Sudan 49, 50, 51, 52, 53; land resources and productivity statistics 361; virtual-water dependency 238 Saudi Star 114 Schumacher, E. F. 245, 249, 253 Schumpeter, J. 244, 245 484

Schuurs, Peter 454 Scramble for Africa 17–19, 25, 25, 31 Scrope, George 127 sea-level rise 162, see also climate change Sebastian, Antoinette 223–42 Second World War 19; food price rises 301–2, 303 secrecy, and land deals 263–64 sedentarisation 149, 150 Segou, water resources case study 341, 344–45, 345, 346, 349, 349 Seide, Wondwosen Michago 311–23 semi-periphery 226, 227, 230 Sender, John 129 Senegal: agricultural inputs 366, 368, 368, 369; Chinese investment in 441; Gulf states investment in 111, 111, 114; Indian investment in 425; land resources and productivity statistics 361; unemployment rate 167 Senegal River Development Organisation see SRDO Serou sugar complex, Mali 94 sesame seed production 19, 96 seven sisters (oils companies) 3 SEXAGON 344 shea-nut trees 154 Shebelli basin 395 sheep industry, Sudan 107 shifting cultivation 59, 62, 109, 428 Shire Highlands, Nyasaland 28, 32, 33 side-selling 165 Sierra Leone 92, 225; Chinese investment in 94; landlord/labourer model of investment 174 Sikasso tea complex 95 Sime Darby Plantation Inc. 82 Singapore, food trade 4 Sinohydro Corporation 318, 319, 320 sisal production, Tanzania 95, 95 slavery: Gulf states 105; Liberia 74–76, 81; Saudi Arabia 105; UAE 105 slaves, freed; and Liberia 71, 72–73 SLC Agricola 136–37 SLUC (sensitivity to land use change) 396–98, 398, 399, 400 small-scale agriculture 36–37, 40, 115, 125, 250, 412, 429, 442; Chinese support for 94; Ethiopia 181, 190; investment in 141; landlord/labourer model of investment 164–65; limited potential of 161–62; marginalisation of 430–31; Morocco 198–99, 203; Sudan 54; Thailand 253; and water resources 253–54; West Africa 149, 150, 151–52; Zambia 214–15, 216–17 Smith, Adam 16, 58 Smith, N. 226 SNNPR region, Ethiopia 185, 186, 187, 188 social movements, Morocco 203–4 social performance standards, investment in agriculture 141–42, 144

Index

social welfare 249 socially responsible investment 140–43 SODEA 195, 199, 202 SOGETA 199, 202 soil erosion 126, 154, 213, 273, 354, 371, 385, 414 soil management 412–13; West Africa 154 soil quality 360 soil/water conservation 371 Sojamo, Suvi 324–33 Solar Harvest see Yendi, water resources case study Somali region, Ethiopia 185, 186, 187, 188, 189 Somalia 65, 66, 225 sorghum 19, 348, 349; Sudan 45, 50, 51, 110 SoSuMar see Segou, water resources case study Souss-Massa-Drâa region, Morocco 193, 197, 198–99, 200 South Africa 226; agri-ecology 37, 38; agricultural inputs 366, 368, 369; community forestry programme 164; customary land ownership 14; foreign investment in 121, 229, 259; forestry 413; fruit exports 107; investment in DRC 226, 234–35, 236; investment in Ethiopia 185; investment in Mozambique 233, 235; investment in Republic of Congo 235, 425, 426; investment in Tanzania 233, 235; investment in Zambia 233, 235; irrigation 38; land dispossession 26, 462; land laws 33–35, 433; land resources and productivity statistics 361; land and (virtual-) water deals 223, 224, 233–35, 236, 237, 238; and neocolonialism 77; pesticide consumption 365, 366; recognition of customary landholding 14; soil/water conservation 371; unemployment rate 167; wine production 124 South Africa basins/sub-basins 393, 398, 402, 404 South Africa sub-region 168 South African Development Community see SADC South Asia, investment in Ethiopia 184, 185, 189 South Atlantic Coast basin 395 South Korea 229, 302 South Sudan 43, 47, 49, 50, 318; CPA (Comprehensive Peace Agreement) 62, 64, 65, 66, 449, 451; Egyptian investment in 252; FDI in 451–55; food security 57, 454; land reform 452–55; and primitive accumulation 57–58, 62–63, 67; recognition of customary landholding 14, see also Sudan South West Africa (Namibia) 25, 31, 33, 34 Southeast Asia 189n1; investment in Ethiopia 184, 185 southern Africa, land dispossession 25, 26–27, 28, 29–40 Southern Rhodesia (Zimbabwe) 25, 25, 31, 32; agri-ecology 36–37, 37, 38; Land Acts 33, 34, 34, 35

Southern sub-region 168, 169 Southern Sudan Land Commission 453–54 sovereign wealth funds see SWFs soyabeans 348, 352; and biofuel 275, 275; crop phenology characteristics 347; Mozambique 99, 100 Spain, investment in Morocco 193–94, 195, 196, 198, 199 speculation 304, 424, 454 SPLA/M (Sudanese People’s Liberation Army/ Movement) 47, 49, 52, 59, 64, 66, 448 SPOT VEGETATION dataset 389 SRDO (Senegal River Development Organisation) 114 stakeholders: in agricultural development 160, 163; and investment typology 170, 171–73, 174 states, failing, in Africa 225 statutory land 13; West Africa 147; Zambia 208, 211, 216 Stevenson Restriction Act (1922) 74 Stiglitz, Joseph 203, 245 Stimson, Henry L. 75 Stop Firestone 81, 82n6 Strategy 2020, Morocco 195, 199, 201 strawberry production: Huelva 194, 197; Morocco 196, 198 ‘String of Pearls’ strategy, China 66 Sub-Saharan Africa: climate change 209; comparison between land grabs and FDI (foreign direct investment) 258, 263–71; food production potential 246; investment in Ethiopia 184, 185; land resources and productivity 360–62, 361; sustainable intensification study 359–60, 362, 363, 364, 364, 368, 370–73 Sub-Saharan basin 404 subsidies, agricultural 1, 4, 325, 330 subsistence farming see small-scale agriculture Sudan 64, 225; Agricultural Revival Programme (ARP) 43, 47–55, 113; and China 49–50, 53, 66; colonial land ownership 18; commercialisation schemes 19; CPA (Comprehensive Peace Agreement) 62, 64, 65, 66, 449, 451; food security 57, 111; foreign investment in 121, 229, 259; Gulf states investment in 45, 48, 49, 50, 60, 61, 107–10, 111, 111, 112–13; investment in 48–51, 52–53, 53, 54, 57; Jordanian investment in 251; land law 19; land resources and productivity statistics 361; livestock industry 107; Moroccan investment in 53; Nile water agreements 47, 112, 230, 317; and primitive accumulation 57–58, 59–62, 67; Qatari investment in 252; Saudi Arabia investment in 49, 50, 51, 52, 53; SLUC (sensitivity to land use change) 397; ‘Sudan Poised’ notion 485

Index

44–46; UAE investment in 49, 53; unemployment rate 167; and US(A) 64–66, see also South Sudan Sudan Armed Forces see SAF Sudan Nile project 400, 401–2 Sudan Nile sub-basin 400 Sudanese People’s Liberation Army/Movement see SPLA/M Sudano-Sahelian sub-region 168, 169 Suez Canal 230, 237–38 sugar production 38, 94; economies of scale 179; Ethiopia 123; Mali 400, 401; Sudan 45, 113; Tanzania 175; West Africa 151; Zambia 215; Zanzibar 93 sugarcane 351; and biofuel production 273; crop phenology characteristics 347; and ethanol production 275, 275, 281, 281 supermarkets: and food waste 247, 252; market power of 327 sustainable intensification 359–60, 362, 363, 364, 364, 368, 370–73; and water resources 406–16 Swaziland 25, 26, 29, 30, 31, 33, 167 SWFs (sovereign wealth funds) 110, 111, 115 Syria 53, 107 Taha, Ali Osman 48, 49, 50 Talal, Prince 231 Tana Beles Dam 319 Tanganyika, white settlement 19 Tanistry case, Ireland 15–16 Tanzania: biofuels 175, 275, 424; CFA (Cooperative Framework Agreement) 317; Chinese investment in 93, 95, 95; commercialisation schemes 19; Gulf states investment in 111, 111; land dispossession 464; land law 19, 20; land law reform 462; land resources and productivity statistics 361; partnerships 174; recognition of customary landholding 14; South African investment in 233, 235 Tanzania Investment Centre 174 Taylor, M. 287, 422–36 Taylor, Richard G. 376–83 tea production, Kenya 18 teak 448, 454 Tekeze Dams, Ethiopia 317, 319 Tekezze Dam, Ethiopia 317 terra nullius (lands empty of owners) 14, 16, 18, 126, 225 Terragua Group 142, 143 Thailand: ‘green revolution’ 253; Gulf states investment in 111, 111; and rice price spike 305 Thirtle, C. 308 Thompson, E.P. 17 Tigray province 126 Tigray region, Ethiopia 185, 186, 187, 188 Tigrayan people 125 486

Tigrayan People’s Liberation Front/Ethiopian People’s Revolutionary Democratic Front see EPRDF Tindaho Sugar Project 123 Tiris Euro Arab investment fund 198 titled lands 12, 13, 19 TNCs 2, 5; and the global food market 326–28; and Morocco 196; voluntary guidelines for 294, 295 tobacco production 36, 96 Tolbert, Stephen A. 79 Tolbert, William Richard 78, 79, 80, 81 tomato production: Almeria 194, 197; Ethiopia 400, 401; Morocco 196, 198 Tomei, Julia 273–85, 307 Tonga people 212 Torero, M. 304 Toshka Project 230–32, 236 Touré, Ahmed Sékou 78, 80 transit times 197 transnational companies see TNCs transport infrastructure, access to 38, 39–40 Transvaal 25, 25, 30, 33 Treaty of Aliwal North (1869) 30 TRMM (Tropical Rainfall Monitoring Mission) dataset 387, 388, 390, 400 Truth and Reconciliation Commission of Liberia 81 Tubman, William V. S. 76, 77, 78 Al-Turabi, Hassan 47, 48, 110 Turkey: free trade agreement with Morocco 195; Gulf states investment in 111, 111 UAE: free trade agreement with Morocco 195; investment in Africa 111; investment in Egypt 231, 236; investment in Morocco 193, 198, 199; investment in Sudan 49, 53 UDI (Unilateral Declaration of Independence), Rhodesia 34 Uganda: CFA (Cooperative Framework Agreement) 317; land law 19; land law reform 462; recognition of customary landholding 14; Ugandan Constitution (1995) 20 Uganda Land Alliance 462 Uganda Land Coalition 462–63 UK: CDC (Commonwealth Development Corporation) 454; and food waste 247, see also Britain; England Ukraine: FDI in land 189n1; Gulf states investment in 111, 111 UN (United Nations): and African land dispossession 19; Basic Principles and Guidelines on Development-based Evictions and Displacements 292; CFS (Committee on World Food Security) 458; Principles for Responsible Investment see UNPRI; Water Conferences 289

Index

unconsolidated sediments, and groundwater 380, 380 UNCTAD (United Nations Conference on Trade and Development) 331; PRAI (Principles for Responsible Agricultural Investment) 142, 290– 91, 293, 458 UNDP 113 unemployment rates 167–68, 167 UNEP (United Nations Environment Programme) 246–47, 406 Unilever 5 Union of Soviet Socialist Republics see USSR United Arab Emirates see UAE United Nations see UN United Nations Conference on Trade and Development see UNCTAD United Nations Educational, Scientific and Cultural Organisation see UNESCO United Nations Environment Programme see UNEP United States (of America) see US Universal Energy Access Programme, Ethiopia 314 UNPI standards 142 UNPRI (UN Principles for Responsible Investment) 140, 141–42 Unregistered Land Act, Sudan 19, 59, 60 unregistered lands 12–13 upper Nile sub-basins 395 Uruguay Round, WTO (World Trade Organisation) 325, 326 Uruguay, water productivity 395 US: agricultural subsidies 325, 330; biofuels production 274, 275, 275, 277; and Egypt 230; food prices 229; food production 1, 3; food subsidies 1, 4; food trade 2–3; free trade agreement with Morocco 195; influence on Sudan 64–66; land dispossession 16–17; and Liberia 71, 73–76, 77–78, 79–82; loss of hegemony 225; and neocolonialism 77; overallocation of blue water resources 7; post-war food supply 301; productivity gap 395 USAID 109 USSR (Union of Soviet Socialist Republics) 78, 230, 302, 317, see also Russia VA (voice and accountability) measures 265, 266– 67, 267 Van Cauwenbergh, Nora 193–206 vapour shift 368, 370, 413 Varun 425, 426 VCF (Vegetation Continuous Fields) data 397 Vegetation Continuous Fields data see VCF vegetation, and water resources 384–85 Verhoeven, Harry 43–56, 106 Vermuelen, S. 140–41 Vieira, M. 227 Vietnam 111, 111, 305 Vietnam War 302

villagisation programmes 126, see also relocation programmes virtual water 223–24, 225, 227–29, 237–38, 328–29, 330, see also food-water voice and accountability (VA) measures 265, 266–67, 267 volcanic rocks, and groundwater 380, 380 Voluntary Guidelines on the Responsible Governance of Tenure of Land (FAO) 458 Von Braun, J. 304 wage labour 59; Ethiopia 127; Liberia 74–76, 81; Sudan 67 Waha, Katherine 359–75 Wal-Mart 327 Wallerstein, Immanuel 224, 226 war on terror 64, 65 Warner, Jeroen 223–42 waste reduction 246, 252 water balance 384–85, 387–89, 390, 397, 398, 399, 400, 403–4 Water Law (1995), Morocco 203 water pollution 306, 379, 381–82, 385, 430 water pricing 203, 254 water productivity 391–93, 394, 400, 403, 411–12 water quality 385, 397, 398, 399, 400, 430 water resources 209, 210, 246, 247–48, 249, 328–29, 329, 330, 338, 339, 340, 354; adaptive management strategies 252–54; Algeria 377; Burkina Faso 414; Chad 377; China 328, 364; Egypt 236, 364, 377; Ethiopia 124, 311–21, 364, 371–72; Europe 225, 227; Germany 364; Ghana 269, 270, 414; and globalisation 227; Gulf States 429; India 122, 328, 364; Kenya 364; and land grabs 36–38, 39–40, 260–61, 263, 267–70, 269, 286–88; Lesotho 233–34; Libya 377; local populations’ access to 429; Mali 414, 429; Mauritania 269, 270; Middle East 328; Morocco 194, 197, 199, 200–201, 203; Mozambique 233; Namibia 269, 270; Netherlands 364; Niger 414; nitrate pollution 189, 201, 306; removal from local control 288–90; Republic of Congo 269, 270; Sahel 414; Saudi Arabia 364, 429; South Africa 236, 364; sub-optimal development trajectories 407–10, 408, 409; Sudan 43, 45, 49, 52, 54, 113, 269, 270, 377; and sustainable intensification 360, 362, 363, 364, 364, 368, 370–73, 406–16; Tanzania 253; water vulnerability index 269–70, 269; water wars 4; West Africa 151–52, 154, 337–39, 339, 340, 342–43, 343, 344–45, 345, 346, 347–50, 347, 348, 349, 350, 351, 351, 352–56, 352, 353; Zambia 210, 212–13, 215–16, 217 water-limited food self-sufficiency ratio 362, 363, 364, 364 487

Index

WEAP mode see catchment moisture fluxes Weber, Max 62 West Africa: and colonialism 28, 147; domestic land acquisition 146–57; FDI (foreign direct investment) 147, 150–57; food security 115; Gulf states investment in 114–15; water resources 151–52, 154, 337–39, 339, 340, 342– 43, 343, 344–45, 345, 346, 347–50, 347, 348, 349, 350, 351, 351, 352–56, 352, 353, see also Economic Community of West African States West African Coastal basin 404 West African sub-basin 397, 402 West Central Africa sub-basin 397 West, decline of 225 West Europe, investment in Ethiopia 184, 185, 189 Western Equatoria State, South Sudan 454 western South Africa sub-basin 397 wetlands, West Africa 153 WFP (World Food Programme) 101, 107, 304; Ethiopia 111; Sudan 57, 111 wheat production 1; Saudi Arabia 104, 106; Sudan 45, 47–48, 50–51, 51, 109, 113, 251, 400, 401; Tanzania 19 White Highlands, Kenya 28 White Nile basin 395 White Paper for China-Africa Economic and Trade Cooperation 92, 438 Williams, Edwin 79 Williams, Timothy O. 337–57 wine production, South Africa 124 Winters, A. 203 witchcraft 465–66 Woertz, Eckart 104–18, 232, 259 women: Mali 153; Mozambique 466; South Sudan 451 Woodhouse, Philip 209 working conditions, Chinese companies 426–27 World Bank 20, 60, 109, 111, 112, 115, 125, 126, 152, 207, 211, 246, 264, 293–94; Agriculture for Development report 209; Awakening Africa’s Sleeping Giant report 209, 246, 253, 329, 384; Environmental, Health and Safety Guidelines 141; Food Index 307; MIGA (Multilateral Investment Guarantee Agency) 213, 214; PRAI (Principles for Responsible Agricultural Investment) 142, 290–91, 292–93, 458; Rising Global Interest in Farmland 290 World Commission on Dams 209 World Cup football games (2010) 233, 235, 238 World Food Confederation 303 World Food Programme see WFP World Social Forum 458 World Trade Organisation see WTO World Water Forum, Kyoto 228

488

world-systems analysis 224–25 WorldClim dataset 387, 388, 390, 390, 393, 398, 399, 400 WTO (World Trade Organisation) 2, 307; Agreement on Agriculture 326; Doha Round 325, 326–27, 331; Uruguay Round 325, 326 Xai-Xai 99 Xiangyang Wanboa Group 99 Xu, Xiuli 437–46 yam 347, 348, 352 Yendi, water resources case study 341, 342–43, 345, 345, 346, 348–49, 349, 350, 351, 351, 352, 353, 354, 355 yield gap 210, 361–62, 372 Yom Kippur War 302 Young Men’s Colonization Society of Pennsylvania 73 Yuan Longpin High-Tech Agriculture Co. Ltd. 93 Yuan Longping 92 Zambezi 395 Zambia 92, 129, 429; agricultural inputs 366, 369; Chinese investment in 95, 424, 440; food security 208; Gulf states investment in 111; investment in 207–18; land dispossession 26; land resources and productivity statistics 361; South African investment in 233, 235; unemployment rate 167, see also Northern Rhodesia Zambia Development Agency see ZDA Zambia Land Alliance 208, 211 Zayed, Sheik 231 ZDA (Zambia Development Agency) 208, 212, 213 Zenawi, Meles 125–26 Zetland, David 257–72 Zhao, Yongjun 437–46 Zhingken Farm 440 Zhongken Estates Ltd. 95 Zhongken Friendship Farm Ltd. 95 Zhongnog Mauritania Agriculture Co. Ltd./Mpoli Farm 95 Zimbabwe: agri-ecology 37; agricultural 366, 368, 369; agriculture 40; Chinese investment in 91, 92, 96–97; land dispossession 26, 461–62, 466; land resources and productivity statistics 361; tobacco production 96; unemployment rate 167, see also Southern Rhodesia ZTE (Zhongxing Telecommunications) Agribusiness 100–101 Zulu people 30