Africa on the Auction Block

Millions of acres of fertile farmland in the developing world are being sold or leased to outside powers, raising the spectre of a new era of agricultural colonialism

Between 2007 and 2008 worldwide grain prices almost doubled. Food riots shook Haiti and many parts of Africa, and wealthy nations with growing populations dependent on agricultural imports stepped up their search for alternatives to secure their own future food supplies -- as well as lucrative new sources of biofuels. The Gulf states, India, South Korea, and others have bought up millions of acres of farmland in places like Madagascar, Mozambique, Sudan, and Ethiopia, some of the poorest, hungriest, and most politically unstable nations in sub-Saharan Africa.

The International Food Policy Research Institute, a Washington, D.C.–based think tank, estimates that since 2006 as many as 50 million acres, equal to all the farmland in France, have been the target of foreign purchasers. Sometimes the land is leased rather than sold outright, and the leases can be very long: 50 to 99 years. While a number of the deals are struck directly between governments, most involve private companies as well. And the lure of raising increasingly valuable crops on relatively cheap farmland, where labor costs are low, has also engaged the interest of private investment funds.

Will the quest for food security or profit bring much-needed investments in these poor host nations? Will it bring jobs, schools, roads, hospitals, irrigation, technology, port facilities, and revenue from export duties? Or will these vast "land grabs," as some NGOs have called them, mark the beginning of a new era of agricultural colonialism, in which local farmers and herders are forced off their land and left to labor on foreign-owned plantations producing food for export?

It's too early to tell. A June 2009 report by the Food and Agriculture Organization of the United Nations (FAO), the U.N.'s International Fund for Agricultural Development (IFAD), and the private International Institute for Environment and Development (IIED), sought to assess the impact of the land acquisitions. It found few paper trails to follow and even fewer details of what the deals entailed. They have been struck with no oversight from international bodies and seemingly little input from local communities, and have sometimes been committed to without the knowledge or consent of elected officials.

In some cases this egregious lack of transparency has had dire results. The Ugandan parliament had to step in and halt a deal -- on which it had never been consulted -- that would have leased two million acres of the country's farmland to firms representing the Egyptian government. When it was announced last year that Madagascar's president had unilaterally agreed to grant the South Korean company Daewoo Logistics a 99-year lease on 3.2 million acres -- nearly half the country's arable land -- to raise corn for export, the public protests were one of the factors that led to the president's ouster by military coup.

Reports of new deals, however, are unabating. The Republic of Congo is said to be intending to lease some 25 million acres to South African farmers. Saudi Arabia has decided to quit farming water-intensive wheat crops altogether on its own small reserves of farmland and is looking to lease 1.2 million acres in Tanzania, adding to its already substantial holdings in Ethiopia and Sudan, in order to produce the 2.6 million tons of wheat it says it needs per year.

"I'm not at all convinced [these deals] will be anything but predatory," says Alexandra Spieldoch of the Institute for Agriculture and Trade Policy, a nonprofit research institute that analyzes global trade policies.

While she recognizes Africa's desperate need for investment in agriculture, her concern with the transactions is their inherently "lopsided power relationships" -- not only the imbalance between the wealth of the investors and that of the host countries, but also between those within the countries who are making the deals and the local communities whose land is being bargained away.

This is especially problematic in Africa, where those who live on the land and farm it may not hold any registered title. The FAO-IFAD-IIED report found that this gave government and private investors the mistaken impression that Africa has a surfeit of under-utilized fertile land. The reality, the report said, is that lands not seen as commercially productive often "play a crucial role in local livelihood and food security strategies." This is especially true in sub-Saharan Africa, where some 60 million pastoralists live, and where land that elsewhere might be considered available, idle, or unproductive may be valuable for shifting cultivation and dry-season grazing.

A separate June 2009 report by the U.N. special rapporteur on the right to food also warned that the new investors -- both private and government -- might find it more cost-effective to create large-scale plantations that rely on environmentally damaging intensive and mechanized farming methods.

The future of these deals may ultimately depend on how quickly the world's food needs grow and how quickly scarcity translates into rising prices -- just as the search for new sources of energy increases along with oil prices. Despite the cheap land, these are expensive ventures that require a great deal of new infrastructure. And they are not without risk: many of the countries in question are politically volatile. That is why the United Nations hopes it can convince both host and investor countries of the importance of making considered and transparent deals.

"There are large areas of rural Africa with few economic opportunities," says Michael Taylor, Africa program manager for the International Land Coalition, an NGO based in Italy. "These projects could bring new employment. But local people should be asked, consulted, and allowed to negotiate face-to-face with investors. It's not only a land rights issue. It's a human rights issue."