Impact of Foreign Land Investors on Farmers in Africa - Assignment Example

? Impact of foreign land investors on farmers in Africa: Case study Sierra Leone Introduction The aftermath of food crisis hasled to increased demand for land in Africa due to its availability of large tracts of land suitable for large scale farming. The acquisition of land is happening much faster than policies can regulate and this is posing most countries in tricky situation. Under the current legal and institutional framework in most African countries, it’s difficult to determine the exact consequences of land grabbing. These land deals are driven my emerging economies in their attempts to look for alternative ways to secure food and fuel supply for to meet the increased demand. Since most of the African countries lack stringent land polices, land grabbers have greatly benefited and this has got a lot of impacts both economical and social lives of the millions of the inhabitants of these lands. Robust land policies could be the only solutions to solve this land grab issue in the most effective manner. Land grab is a complex situation to deal with considering that the issue is always catalyzed by the government in exchange of impressive goodies promised by the investors (De Schutter, 2011). Emerging economies like China, Brazil, India and the Gulf States have been the countries in the forefront in land grabbing deals especially in Africa in their desperate attempts to fulfill their ever increasing food and fuel demands (Cotula, 2012). Several organization have tried to come up with global land policies to solve the solution of land grabbing by developing voluntary principles and guidelines but the effectiveness of such policies is yet to be seen (Woodhouse, 2012). In their attempt to legitimize this type of land acquisition, the international actors like the World Bank, Food and Agriculture Association, European Union and the African Union, have tried to come up with common land policy (De Schutter, 2012). The legitimacy of such policy is also being questioned due to its voluntary nature and thus most states are still skeptical in applying such policies. Several NGOs in Africa are developing sharp criticism land grabbers due since most of the targeted counties have weak political systems and institutions. They argue that agriculture is the backbone of most of the African economies and any issue affecting agriculture should be handled with much caution lest they face the negative consequences (Cotula, 2012). These land grabbers come in the name of land investors and they justify their actions by providing employment opportunities and making good use of arable land in the most economic way. They also lure the government with tax benefits from their proceeds coupled with the use of modern technologies which gives a country a good development ranking. The improved agricultural infrastructure is the dream of most of the African economies and thus they are vulnerable to such good promises from these land grabbers. A good chunk of arable land in Africa is always termed as idle or underutilized therefore in an attempt to make such lands useful, they promise the good and better use of such lands. Criticism from the NGOs is based on the fat that these land grabbers are taking these lands in relatively cheap pries at the expense of local inhabitants and this has a negative consequence on the development of such people. The code of conduct developed by the international organizations is still debated due to its political, social and ecological consequences to the affected countries. The affected counties need to review the historical, cultural and environmental framework to be effective so as to avoid negative consequences in its implementation. Questions are now arising on the existence and the effectiveness of land property rights in the affected African countries and the civil will in implementing such rights. The need for formal and transparent land deals may be vital for this type of land acquisition to improve better relations and mutual development for the concerned states (Woodhouse, 2012). The concerned states also need to ask themselves whether these mega projects initiated so far has enabled them to solve their economic and social problems in the most desired way; moreover, according to Morris and Larson (2009) any investment should not leave the country miserable than it was. Overview of large-scale land acquisition Its estimate that about 50 million hectares of arable land has been acquired in Africa by 2010 alone and more are still in the process of acquisition to date (Cotula, 2013). It’s unclear how much has been acquired to date but the fat is that it’s huge and staggering. The shoddy process of such type of land acquisition is making it to be difficult to establish the exact hectares since some are secretly owned or are owned in proxies. Overview of large-scale land deals per region adapted from Politics of Land Deals (Verhoog, 2012) Region Land Deals Hectares Average/ Ha per deal North Africa 18 3,143,880 174,660 Eastern Africa 260 8,822,237 33,932 Central Africa 27 1,065,210 39,452 Southern Africa 5 42,248 8,450 Western Africa 98 3,828,934 39,071 African continent has the highest number of land deals followed by Asia then America therefore this makes Africa to be the biggest victim of land deals in in the world. The major players in this global land deal mainly come from developed economies such as U.S, U.K, Canada and Ireland. These players represent state, companies and multilateral agencies; therefore, they have good chunks of money to establish themselves comfortable in their ventures. The private companies from U.S and U.K are the most active investors due to their aggressiveness and their links to African countries due to colonial reasons (Verhoog, 2012). Top 10 investor countries according to Verhoog, 2012 Investor country Hactares India 6,331,016 Malaysia 5,698,590 Indonesia 5,487,902 U.S.A 2,737,356 U.K and northern Ireland 2,352,104 emirates 1,882,739 china 1,742,824 South Africa 1,396,411 Canada 1,248,697 Philippines 1,066,721 Code of conduct Due to contentions issues, which are evident from land acquisition, the World Bank Group (2009) developed a code of conduct for the foreign land acquisition in an attempt to legitimize these transactions. The code of conduct stipulated that land acquisition process should be negotiated in a transparent manner in order to avoid suspicion that may arise from them. This is possible when all concerned stakeholders are involved in the process of land acquisition so that they contribute fully in the process to reduce future complaints. The media and the civil culture of the concerned countries must be informed and be involved due to the character they play in support of human rights. The code of conduct also envisage for the respect for the existing land rights including the traditional and customary property rights in totality. This calls for the lend investors to study carefully the local community and their customs in order to compare if they can accept the planned projects without initiating problems. The code of conduct also calls for the sharing of benefits between the land investors and the community concerned so that the community may appreciate the benefits of the land deals (Morris and Larson, 2009). Measures should be taken in advance to engage the communities in talks in order to come up with ways and means in which the concerned communities can fully benefit from the concerned land deals. According to Morris and Larson (2009), Environmental sustainability is also advocated for in the code of conduct to ensure safety of the environment. This entails careful and exhaustive environmental impact assessment and continuous monitoring aimed at reducing environmental damage as low as possible. This helps to avoid many conflicts between the investor and the environmental protection agencies in those states, which are good for sustainable development. Adherence to national trade policies of the concerned state is also advocated for in the code of conduct in those states to avoid being in conflict with the existing laws, which can be a hindrance to envisaged developments. The land developers should clearly understand the land policies and the trade policies in order to streamline their policies with those laws to minimize conflict, which may be costly for such operations. The land developers are also required to come with projects that do not jeopardize food security in concerned countries but instead initiate programs that boost food security. Social sustainability is also a requirement by the code of conduct in attempts protect the social characters of concerned communities from being eroded by such investments. Situation in Sierra Leone Agrarian revolution is being witnessed in Sierra Leone, which is being driven by foreigners since a fifth of the country’s land has been leased to foreign companies to practice large-scale agriculture. Sierra Leone is one of the smallest countries in the world with an area of 7.1million Hactares. This country is ranked by the 2011 United Nations Human Development index to be among the least developed country in the world. The country is trying to recover after the 11 year civil war which loosened its economic strength of this country. It’s the fight for resources (diamonds) which is believed to be the cause of this civil war, which brought the country to its knees economically. The mortality rate is 192/1000 childbirths which is the highest in the world; therefore, due to the effects of the war, the current government is on the brink of trying to reduce the negative legacy of the war and keep the country in good economic rating. Adult literacy is as low as 47 percent therefore the levels of education in that country is low compared to other African countries. Poverty levels in Sierra Leone are high since 70 percent of the population lives below the national poverty line, which is US$2 per day; therefore, about three quarters of the land in Sierra Leone is arable land and this makes it suitable for agriculture in large scale for commercial purposes. Most of the landowners in Sierra Leone are small scale and almost half of the population practice agriculture as the means of livelihood. Agriculture accounts for about 52 percent of the country’s GDP and therefore proper management of land policy is vital for the development of this country. In the 1970s and early 1980s before civil war, the country was self-sufficient in food production until the civil war began is when the country experiences a decline in food production (Oakland Institute, 2012). Although agricultural production has been rising steadily in this country, a lot still needs to be done to ensure it is sustainable. Due to poor agricultural policies and practices, the country is faced with food insecurity, malnutrition and high levels of poverty (Baxter, 2013). The government of Sierra Leone is aware that youth employment and poverty can effectively be solved by robust agricultural policies in good time (Provost and McClanahan, 2012). This is the reason the government designated agriculture as the main economic engine to combat poverty and unemployment. The government of Sierra Leone injected about 400 million U.S dollars in 2010 to the ministry of agriculture to promote farming as a business to promote small-scale farmers. These funds are targeted in research to come up with best ways and means to fully utilize the available resources aimed at maximizing agricultural output. The funds are also used to focus on value addition and increasing agricultural production through intensification and mechanization to remove traditional practices, which are unsustainable. The government is also very active in promoting direct foreign investment in agricultural sector, which has attracted a number of multinational companies. Among them are Addax Bioenergy of the Oryx group, Indian SIVA group and Socfin, a subsidiary of Luxemburg Belgium conglomerate just but to mention a few (Verhoog, 2012). These are some of the companies which have set foot in Sierra Leone and are investing in large scale agriculture for commercial purposes characterized with intensive farming and mechanization. The country’s export promotion agency is in the forefront in spearheading a drive in direct investment in agriculture with the aim of encouraging good use of agricultural land. This agency is receiving a lot of support from World Bank, U.K Department for International Development (DFID), International Trade Centre and the European Union therefore its efforts are highly motivated (Verhoog, 2012). This agency is advertising great fiscal incentives aimed in attracting large scale multinational direct investment companies to carry out agricultural investment in Sierra Leone. Among the incentives include exemptions from import duties on agricultural equipment; machinery and output to enable them use these to spur economic growth in their counties (Mittal, 2012). They also include complete foreign ownership and full repatriation on profits in their desperate attempts to promote foreign investments in agriculture. Guidance on how to find huge tracts of land suitable for agriculture and facilitation of lease is also part of their wide incentives for direct foreign agricultural investment. With these government robust policies, locals are less involved in the process and in most cases, they find themselves in awkward situations when these companies set up their operations (Tran, 2013). This is because the locals are considered by the government to be land users and the government therefore sidelines not landowners during consultations with these multinational companies. Since most of these land deals are opaque, serious concerns are being raised about the possibility of corruption in these secret processes, this is most likely considering transparency international ranking Sierra Leone as highly corrupt country in the world. It is estimated that about 21 percent of arable agricultural land have been taken out for long leases of about fifty years with possible extensions. Since this country has got vast mineral resources most of which have also been leased for multinational companies, little land is available for locals to practice agriculture. Several crops can be grown due to fertile soils and good rainfall distribution throughout the year. The figure below shows some of the crops grown in Sierra Leone by the year 2004 according to Verhoog, 2012. Crop % Upland and inland swamp rice 30.5 Coffee 17.3 Cassava 12.7 Oil palm 11.6 Cocoa 7.4 Groundnuts 6.6 Sweet potatoes 4.5 Vegetables 3.7 Maize 3.0 Citrus 2.6 Land laws and policies in Sierra Leone With more the a fifth of the land in Sierra Leone already allocated to foreigners for the next three to four years, more people are becoming concerned about the future of countless farmers. Of great concern is how the existing land laws can help and the political will needed to protect the poor citizens from being driven out of their ancestral lands. According to the existing land laws, land cannot be bought or sold outside Freetown and it’s viewed to be of common good but most locals feel otherwise (Cotula, 2013). Several calls for reforms have been made to enable youth and women access land for agricultural use, but unfortunately, most of these reforms are seen to help large scale investors. New draft policies has been developed by the government in dealing with foreign investors but what is worrying is that little attention has been given to monitoring and enforcement of such regulations. Cotula (2012) argues that little attention is also been given to women who do most of the farming activities in Sierra Leone and thus some feels that the reforms are inadequate. This is evident because foreign companies can lease for 50years and at the same time sign for multiple renewal for two periods extending their lease to 99years. Bioenergy and Food Security Group is also drafting a set of guidelines that can be of great help in Bioenergy investment but little indication is that this will be binding. These are enough evidence to prove that stringent laws and regulations that can govern the size and duration of land leases by multinationals have not been put into place. If these legal loopholes are not addressed with critical urgency, Sierra Leone may experience a lot of uncertainty in their agricultural production. The correcting such loose regulations in the future may also have little impact since some of these companies have signed laws the exempt them from future amendments. A good example is MOU between Addax Bioenergy and the government exempts it from any law that is amended or repealed that has negative consequences to its operations. The MOU also has a clause that implies that any dispute that shall arise in its operation shall be resolved by arbitration in London under the rules of International Chamber of Commerce. Such loosely signed treaties is likely to put Sierra Leone in a tricky situation when conflict arise which needs to be solved with great urgency. Laws that are designed to protect soil fertility are less enforced by the government and this has seen a reduction in soil fertility measures in Sierra Leone. This irrational use of land is leading to considerable environmental degradation, which may have negative effects to farming in future land use and cultivation. Since most of the small-scale land users plant traditional crops for subsistence, the government is giving very little emphasis on traditional crops in their attempts to promote cash crops. With increased land acquisition, food insecurity still remains a problem to most of the residents of Sierra Leone and this makes people to wonder the legitimacy of foreign direct investments in agriculture. Impacts of large-scale farmlands investment in Sierra Leone Even though it may be difficult to carry out full cost benefit analysis of the impact of these direct foreign investments, some comparisons on the state of life before and after can be made. Land possession to the people of Sierra Leone is more customary rather than a title deed thus is of great cultural importance. The bushes are used to perform cultural rites, which are of great importance to the community, but most of these bushes have been cleared to pave way for agriculture. The community also uses land to bury the dead and these cemeteries are of great essence to the cultural requirement of the community. The diversity of crops grown and found in the bushes has diminished significantly after the investor arrived due to increased pressure in need of land. The traditional crops are no more due to bush clearing to pave way for large-scale agricultural investments. The bushes are also a source of traditional meat from hunting which has reduced drastically as the community no longer practices hunting. These are some of the benefits enjoyed by the communities and are of great importance to them than incentives and goodies promised and given by the investors. The coming of investors in Sierra Leone has seen most of the locals lose their arable land to be used by investors with the promise of employment opportunities. Most of the families profess that the wages from these investors is not sufficient to meet their daily needs and thus they prefer their small scale farming. Some of these lands had traditional wild fruits and vegetables that acted as alternative to cultivated crops thus ensuring constant food supply. These fields also contained wild herbs which are medicinal in nature and the local communities found them more effective than the hospital medication. With such variety of local foods and importance medicinal crops lost due to investor activities, the community faces great risk of malnutrition due to imbalanced diet. The income and economic benefits from investor is way below what they used to get before the investor arrived. There is an increased household expense because products, which were used to be obtained at low cost of free from the bush, are now very scarce. The salaries and wages from employees who work for the investor cannot adequately supplement the gap left in the absence of the crops. Most of the employees in these companies are just temporary workers and thus cannot fully rely on such employment for livelihood. Traditional land cultivation involved the youth, women and children but the investor can only employ less people thanks to mechanization applied in production. This therefore means that most people are left jobless due to fewer vacancies for employment and reduced space for cultivation. The surplus of food generated by the communities in their small land holdings is used as a source of income and thus makes most families stable. The situation changed with the arrival of investor since most of the lands are taken and the price of these local commodities has risen rapidly due to scarcity. The sale of most commodities reduced drastically since most customers lack regular income to purchase these goods and services after the coming of the investor. Lack of materials to make certain goods also become a problem to the community due to reduced natural resources. The carpenters cannot find enough wood to do carpentry works and the customers suffer due to increased prices of such commodities. The arrival of investor in Sierra Leone saw a shift in household expenses due to dwindling fortunes in local farming activities. Before the investor arrived, schooling was the biggest consumer of household expenses followed by food and healthcare in that order. The arrival of the investor saw food consuming most of the household budget and followed by education and healthcare. This is quite paradoxical considering that the investor came to do farming and the local expectation was that food prices would fall. When investors arrived most of the locals were promised a lot of good things which could have helped in the economic development. Road development, employment opportunities, improved health, education, electricity, water wells and many more promises were made to the communities. These promises raised expectations of these communities and the failure of these promises raises anger and despair and brings a lot of mistrust between the investor and the locals. No legal guarantees were made for these promises and thus most of them have either been fulfilled partially or totally neglected. The levels of education reduced in most of these places upon the arrival of investors since parents could not afford to pay school fees for their children. The improvements in infrastructure witnessed in most parts of the country were only helpful to the investor since only roads leading to investment areas were improved. The communities also witnessed social problems due to new set up brought about by the investor. Conflicts and family disputes were more evident than before due to competition for strained resources. More teenage pregnancies were witnessed since parents had little time for their daughters due to increased economic requirements. More land disputes were evident due to reduced land sizes, theft also increased due to joblessness among the youths (Africa Focus, 2012). Conclusion Land is a greatest asset and there is urgent need to reduce rural poverty by supporting small scale farmers in order to improve their livelihoods. Farming solutions are not only found in leasing arable land to foreign investor but can also be found in supporting the small scale farmers with suitable incentives from the government. The provision of rural infrastructure and access to amenities like education and healthcare should not be left for private developers alone but the government also. The government should put in place measure to ensure that promises made by private developers are followed to the latter. The government should also come up with elaborate land policy which is beneficial to local farmers and investors alike to encourage mutual benefit between them. Since these investors benefit greatly from the government due to tax exemptions, they should also be ready to lift the livelihoods of the local community to prove their relevance. It’s ironical that Africa is faced with food insecurity while at the same time it’s the breadbasket of the world due to intensive agriculture practiced by multinationals. African states need to address the problem of land grabbing with much decorum to avoid future uncertainties in food security. References Africa Focus. (2012). Sierra Leone: Resisting land Deals. Retrieved from http://www.africafocus.org/docs12/sl1205.php Baxter, J. (2013). Who is benefiting? The social and economic impact of foreign investment. International Land Coalition. Retrieved from http://www.commercialpressuresonland.org/research-papers/who-benefitting-social-and-economic-impact-three-large-scale-land-investments-sierra Cotula, L. (2013). African land deals: Is a policy shift underway. International Institute for Environment and Development. Retrieved from http://www.iied.org/african-land-deals-policy-shift-underway Cotula, L. 2012. The international political economy of global land rush: A critical appraisal of trends , scale , geography and drivers. The journal of peasant studies. Vol. 39, NOs, 3-4, 649-680. De Schutter, O. (2011). How not to think of land grabbing : three critiques of large scale investments in farmland. The journal of peasant studies. Vol.38, No. 2, March 2011, 249-279. Mittal, A. (2012). Understanding Land Investment Deals In Africa Morris, M. and Larson, G. (2009). Awakening Africa’s Sleeping Giant : Prospects for Commercial Agriculture in the Guinea Savannah Zone and Beyond. World Bank: Washington, DC Oakland Institute. (2012). Farmers Make Their Voices Heard On Large Land Investments In Sierra Leone. Retrieved from http://www.oaklandinstitute.org/farmers-make-their-voices-heard-large-land-investments-sierra-leone Provost, C and McClanahan, P. (2012). Resistance grows as investors snap up lands. The guardian. Retrieved from http://www.theguardian.com/global-development/poverty-matters/2012/apr/11/sierra-leone-local-resistance-land-deals Socfin Land Investment In Sierra Leone. Oakland report. Retrieved from http://www.oaklandinstitute.org/land-deal-brief-socfin-land-investment-sierra-leone Tran, M. (2013). Sierra Leone's smallholder farmers 'worse off' after large land deals. The guardian Retrieved from http://www.theguardian.com/global-development/2013/jul/26/sierra-leone-farmers-land-deals Verhoog, S. (2012). The politics of land deals; A comparative analysis of global land policies. academia.edu. Retrieved from http://www.academia.edu/2117640/The_Politics_of_Land_Deals_A_Comparative_Analysis_of_Global_Land_Policies_on_Large-Scale_Land_Acquisition Woodhouse, P. (2012) New Investment, old challenges: Land deals and the water constraints in African Agriculture. The Journal of peasant studies, 39: 3-4, 777-794. Read More