Commercial Pressures on Land

Commercial pressures on land in Africa: A regional overview of opportunities, challenges and impacts

Cover illustration: © Aldo di Domenico 2011

The opinions expressed in this report are those of the author, and can in no way be taken to reflect the o�cial views of the International Land Coalition, its members or donors.

ISBN 978-92-95093-50-8

© 2011 the International Land Coalition

Resource Conflict Institute (RECONCILE) is a regional policy research and advocacy NGO registered in Kenya and implementing programmes in Kenya, Uganda and Tanzania. The Institute conducts policy and legal research on land, environment and natural resources. It also engages in national, regional and global advocacy to promote pro-poor land, environment and natural resource policies, laws and institutions. RECONCILE seeks through its work to empower resource dependent communities that they may more e�ectively influence policy processes and institutions to ensure security of their rights and sustainable management of land and natural resources.

Our MissionA global alliance of civil society and intergovernmental organisations working together to promote secure and equitable access to and control over land for poor women and men through advocacy, dialogue, knowledge sharing and capacity building.

Our VisionSecure and equitable access to and control over land reduces poverty and contributes to identity, dignity and inclusion.

CIRAD works with the whole range of developing countries to generate and pass on new knowledge, support agricultural development and fuel the debate on the main global issues concerning agriculture.

CIRAD is a targeted research organization, and bases its operations on development needs, from field to laboratory and from a local to a global scale.

Commercial pressures on land in Africa: A regional overview of opportunities, challenges, and impacts

Prepared by

Michael Ochieng Odhiambo

Nakuru, April 2011

Cover illustration: © Aldo di Domenico 2011

The opinions expressed in this report are those of the author, and can in no way be taken to reflect the o�cial views of the International Land Coalition, its members or donors.

ISBN 978-92-95093-50-8

© 2011 the International Land Coalition

Resource Conflict Institute (RECONCILE) is a regional policy research and advocacy NGO registered in Kenya and implementing programmes in Kenya, Uganda and Tanzania. The Institute conducts policy and legal research on land, environment and natural resources. It also engages in national, regional and global advocacy to promote pro-poor land, environment and natural resource policies, laws and institutions. RECONCILE seeks through its work to empower resource dependent communities that they may more e�ectively influence policy processes and institutions to ensure security of their rights and sustainable management of land and natural resources.

Our MissionA global alliance of civil society and intergovernmental organisations working together to promote secure and equitable access to and control over land for poor women and men through advocacy, dialogue, knowledge sharing and capacity building.

Our VisionSecure and equitable access to and control over land reduces poverty and contributes to identity, dignity and inclusion.

CIRAD works with the whole range of developing countries to generate and pass on new knowledge, support agricultural development and fuel the debate on the main global issues concerning agriculture.

CIRAD is a targeted research organization, and bases its operations on development needs, from field to laboratory and from a local to a global scale.

AcknowledgementsThe research project of the Commercial Pressures on Land Initiative was coordinated in the

ILC secretariat by Michael Taylor, with the support of Andrea Fiorenza. Ward Anseeuw of CIRAD

provided technical support to all studies and the project was based on a conceptual framework

developed by Michel Merlet and Clara Jamart of Agter. A large number of members and partners

of ILC and independent specialists have contributed to the research, analysis and documentation

of the project.

ILC wishes to thank the following donors, whose support made possible the research under the

Commercial Pressures on Land Initiative:

The views expressed herein can in no way be taken to reflect the official opinion of these donors.

ILC Secretariat would appreciate receiving copies of any publication using this study as a source

at info@landcoalition.org.

ForewordThe International Land Coalition (ILC) was established by civil society and multilateral

organisations who were convinced that secure access to land and natural resources is central to

the ability of women and men to get out of, and stay out of, hunger and poverty.

In 2008, at the same time as the food price crisis pushed the number of hungry over the one

billion mark, members of ILC launched a global research project to better understand the

implications of the growing wave of international large-scale investments in land. Small-scale

producers have always faced competition for the land on which their livelihoods depend. It is

evident, however, that changes in demand for food, energy and natural resources, alongside

liberalisation of trade regimes, are making the competition for land increasingly global and

increasingly unequal.

Starting with a scoping study by ILC member Agter, the Commercial Pressures on Land research

project has brought together more than 30 partners, ranging from NGOs in affected regions

whose perspectives and voices are closest to most affected land users, to international research

institutes whose contribution provides a global analysis on selected key themes. The study

process enabled organisations with little previous experience in undertaking such research

projects, but with much to contribute, to participate in the global study and have their voices

heard. Support to the planning and writing of each study was provided by ILC member CIRAD.

ILC believes that in an era of increasingly globalised land use and governance, it is more

important than ever that the voices and interests of all stakeholders – and in particular local land

users - are represented in the search for solutions to achieve equitable and secure access to land.

This report is one of the 28 being published as a part of the global study. The full list of studies,

and information on other initiatives by ILC relating to Commercial Pressures on Land, is available

for download on the International Land Coalition website at www.landcoalition.org/cplstudies.

I extend my thanks to all organisations that have been a part of this unique research project.

We will continue to work for opportunities for these studies, and the diverse perspectives

they represent, to contribute to informed decision-making. The implications of choices on

how land and natural resources should be used, and for whom, are stark. In an increasingly

resource-constrained and polarised world, choices made today on land tenure and

ownership will shape the economies, societies and opportunities of tomorrow’s generations,

and thus need to be carefully considered.

Madiodio Niasse

Director, International Land Coalition Secretariat

Table of contentsAcknowledgements

Foreword

Acronyms and abbreviations

Executive summary

1 Introduction 1Limitations defined by diversity across Africa 2

2 The CPL phenomenon and Africa: the issues, the perspectives 4Large-scale land acquisitions and competing visions of rural development 6

Concerns about land rights, livelihoods, environment, and equity 7

3 Opportunities and risks 13

4 Impacts of large-scale land acquisitions 17Positive impacts: the jury is still out… 17

Negative impacts: the poor most affected 20

5 Possible responses 23

6 Conclusions and key issues for discussions 26References 29

Case studies 30

TablesTable 1: Reported land deals by 2009 12

Table 2: Opportunities and risks of large-scale commercial land acquisitions 20

BoxesBox 1: Ethiopia: Easing large scale commercial land acquisition 11

Box 2: Potential positive impacts 18

Box 3: Negative impacts of acquisitions 22

List of tables and boxes

Acronyms and abbreviationsADLI Agricultural Development-Led Industrialization

AGRA Alliance for a Green Revolution in Africa

CAADP Comprehensive African Agriculture Development Programme

CBO Community-based organization

CPL Commercial pressures on land

CSR Corporate social responsibility

DRC Democratic Republic of Congo

EDBM Economic Development Board of Madagascar

EIA Environmental Impact Assessment

FAO Food and Agriculture Organization of the United Nations

FDI Foreign direct investment

GDP Gross domestic product

IFAD International Fund for Agricultural Development

IFPRI International Food Policy Research Institute

IIED International Institute for Environment and Development

ILC International Land Coalition

LBDA Lake Basin Development Authority

NEMA National Environment Management Authority

NEPAD New Partnership for Africa’s Development

NGO Non-governmental organization

ONE National Office for the Environment

PPP Public-private partnership

RECONCILE Resource Conflict Institute

UNCTAD United Nations Conference on Trade and Development

Executive summaryThis paper presents an overview of the evolution, trends, and impacts of commercial pressures

on land (CPL) in Africa from a regional perspective. From the outset, it is appreciated that there

are serious limitations to such an enterprise. For one, the diversity that characterizes Africa

between and even within countries and regions makes it dangerous to generalize. For another,

there is little by way of detailed information about large-scale land acquisition deals, most of

which are being negotiated between governments and investors behind closed doors.

Nevertheless, it is possible to compile a meaningful African regional overview. On the one

hand, there is sufficient similarity across Africa in terms of opportunities and challenges of

development, agriculture, and the management of land and natural resources. On the other,

there is sufficient information in the public domain about these deals and how they are evolving

to warrant credible generalizations about trends, challenges, and opportunities. The analysis in

this overview has been further authenticated by evidence from case studies undertaken by the

International Land Coalition (ILC) in Benin, Ethiopia, Kenya, Madagascar, Rwanda, and Zambia.

Acquisition of rural land in Africa for purposes of commercial production is not a new

phenomenon; nor indeed are the tensions and struggles that land acquisitions engender as

a result of their impact on community land rights and livelihoods. Such acquisitions were at

the heart of the colonial enterprise and have continued to define Africa’s post-colonial political

and economic interactions with international capital. The actors may have changed, but the

act remains pretty much the same today as it was in the last quarter of the 19th century. So it

is that some commentators have drawn parallels between the current surge in demands for

agricultural land and the appropriation of African land that accompanied colonization in the

latter part of the 19th century. Such commentators have referred to this phenomenon variously

as “the new scramble for Africa” and “the new African land grab” to assert the parallels.

However, it is misleading to equate the ongoing land acquisitions with those associated with

colonization. The current deals are being negotiated by sovereign African states in exercise of

powers that they have under national laws. They are entered into voluntarily, unlike the colonial

acquisitions that were violently forced upon Africans on the basis of agreements entered into

between imperial powers meeting in Berlin in 1885, without the participation of the Africans or

their representatives.

There may be questions about the manner in which the deals are being negotiated and the

degree to which public interest is secured. The speed with which the acquisitions are being

concluded across Africa, the pace at which the number of deals has grown in the past two years,

and the terms and sums involved have raised concerns, particularly about their implications

for land-based rural livelihoods and smallholder production. Transactions involving nearly 20

million hectares of land in 15 countries across Africa were reported by the end of 2009, and more

have been reported since. But that is a different discussion, and it does not warrant equating the

current deals with colonial land acquisitions.

The ongoing large-scale commercial land deals raise questions about rural land rights and

livelihoods, sustainable development, terms of trade, and governance. There are concerns

about equity, given that the deals are being entered into without sufficient public scrutiny or

consideration of their long-term impacts on land, livelihoods, economies, and environment.

Reports from projects already under way in a number of African countries vindicate these

concerns as communities complain about displacement without compensation, loss of access to

critical livelihoods resources, restriction of movements and obstruction of routes, environmental

pollution, etc. The promised benefits in terms of employment, improved incomes, and physical

and social infrastructure are yet to be realized.

This overview concludes that the interest that investors have shown in rural land in Africa is

an opportunity that, properly used, could help mobilize the capital, technology, and expertise

needed to stimulate agricultural production and improve African economies. However,

for these benefits to accrue, substantial policy, legal, and institutional reforms have to be

undertaken at global, national, and local levels to circumvent the risks that have been identified

and demonstrated in some of the ongoing projects. It recommends collaboration between

investors, national governments, the international community, and civil society organizations in

the design of appropriate frameworks.

In conclusion, the report identifies the following seven issues for further discussion and reflection

with a view to optimizing the benefits of these deals and managing associated risks:

1. What kind of policies, laws, and institutions at different levels (local, national, global) are required to manage large-scale commercial land acquisitions?

2. What kind of capacities should be developed within governments and communities for African countries to be able to engage with these processes on a win-win basis?

3. How can compensation for communities that are displaced or denied access to land and natural resources by these projects be secured? What criteria should be used for calculating such compensation? What are the relative responsibilities of governments and investors for such compensation?

4. How best can community benefit sharing be integrated into these deals and projects? What forms of organization at the community level are needed to make possible commercial partnerships that will ensure that communities benefit from the projects on an ongoing basis? What innovations in policy and law are needed for this purpose?

5. What terms and conditions should be integrated into the agreements to protect and secure human and environmental health?

6. Appropriate monitoring and evaluation mechanisms should be developed throughout the period of the contracts and corrective measures taken where necessary.

7. The global nature of these transactions requires that a global framework for their oversight be put in place, whether this involves the creation of a new global institution or the adoption of this agenda by an existing institution.

1

IntroductionAcquisition of rural land for commercial production is not a new phenomenon in Africa. Nor is

the fact that in such acquisitions there exist power disparities between those acquiring the land

and their interests on the one hand and the indigenous rural peasants who traditionally own

and use the land for their livelihoods on the other. Indeed, it can rightly be asserted that this

phenomenon was at the heart of the colonial enterprise in Africa, and has continued to define

its post-colonial political and economic interactions with international capital. The actors may

have changed, but the act is pretty much the same today as it was in the last quarter of the 19th

century. Indeed, some of the actors of the 19th century have simply mutated in the 21st century.

Given this continuity, it is not surprising that some commentators have drawn parallels between

the current quest for land in rural areas of Africa and what happened in the latter part of the

19th century. Such parallels are easy to draw and have an inherent appeal, given the persistence

of the divide between Africa and its erstwhile colonizers well into the 21st century. Thus terms

such as “the new scramble for Africa” and “the new African land grab” have gained currency in

discussions of the phenomenon.

However, such parallels are only part of the narrative. It is granted that land, competing

perceptions and demands on it, and the dynamics of political power that define the leverage

between these competing imperatives are at the heart of this new phenomenon in much

the same way as they were in the colonial land grab. But that is as far as the parallels go. This

time round, Africans are not innocent victims under the invasion of foreign powers intent on

disinheriting them of their land. African political leaders are active players in the transactions. In

many cases, they are the ones inviting the investors and readily providing incentives to attract

them.

It is evident that the deals have tended to fall short of international standards of transparency

and accountability, and that some of the incentives being offered to attract investors undermine

the interests of local smallholder producers. But that is a different discussion. It demonstrates

failure of governance, the explanation for which has to be sought elsewhere, and the primary

responsibility for which lies inside Africa.

If the concerned African governments were run democratically and competently, with political

decisions informed by the collective interests of their populations, these would just be trade and

investment deals. As such, the controversy around large-scale commercial land acquisitions in

Africa is more a commentary on the governance deficit in the continent than it is about some

rich nations’ conspiracy in pursuit of some new form of colonialism.

1

2

Limitations defined by diversity across AfricaThis paper attempts to provide a regional overview of the evolution, trends, and impacts of

commercial pressures on land (CPL) in Africa.1 We refer to it as an “attempt” with good reason.

Firstly, it is probably presumptuous to attempt any analysis of a phenomenon from an Africa-wide

perspective. Such is the complexity of Africa and its political dynamics that defining an “African”

perspective can be overly ambitious. African countries may share the same geographical space

and face similar challenges and pressures at the global level. However, the strategies they use

to address the challenges, the policy, legal and institutional infrastructure available for the task,

how these function, and their competence and willingness to respond appropriately will vary

significantly from one country to another.

Secondly, the character of land, the way the land sector is organized, and the dynamics that

inform access to and control over land and land-based resources differ across and even within

countries. Indeed, the only thing that many African countries have in common when it comes

to land is colonial history. So critical is colonial history in defining what may be termed “the land

question” in Africa that similarities and differences are largely a function of which colonial power

ruled which country and for how long.

Finally, the discourse on commercial pressures on land is pretty much in its formative stages.

The climax of these pressures followed the slump in grain stocks that translated into a sharp rise

in global food prices in 2007–2008. However, even before that there was already a noticeable

increase in demand for land in Africa and other developing countries of Asia and Latin America

for biofuels production, driven in part by the predicted decline in oil reserves and pressures for

green energy as a strategy for addressing the challenges of global warming and climate change.

Much of the debate about commercial pressures on land has played itself out in the media,

based largely on anecdotal evidence. A key part of that debate has revolved around the secrecy

surrounding the deals being made between governments of Africa and investors, underscoring

the lack of empirical evidence about the content of these deals. As such, much of the analysis

of the phenomenon has to be tentative and subject to revision in the future as more evidence

becomes available.

Nevertheless, there is sufficient similarity across Africa in terms of opportunities and challenges

of development, agriculture, and the management of land and natural resources to justify this

kind of overview. These similarities cut across the politico-lingual divide between so-called

Anglophone, Francophone, and Lusophone African countries. Furthermore, the global capitalist

dynamics within which the phenomenon of commercial pressures on land has emerged dictate

a regional approach in which Africa, or at least large parts of it, is perceived as a single market

and investment destination.

1 Throughout this paper, the term “Africa” is used to mean sub-Saharan Africa.

3

A notable limitation of this overview is that it is informed only by case studies from a few countries

in Western, Eastern, and Southern Africa, and in each country only one project or deal has been

studied and analyzed. The case studies used to inform the overview are from Benin, Ethiopia,

Kenya, Madagascar, Rwanda, and Zambia. However, the challenges and opportunities for African

countries with regards to large-scale commercial land acquisitions are common across the

board, making it legitimate to generalize this analysis for the entire sub-Saharan region.

Despite these limitations, it is opportune to attempt this kind of overview if for no other reason

than to help structure the debate in a manner that will assist African governments and citizens

to design appropriate strategies for engaging with the phenomenon, in such a way as to ensure

that it is beneficial to their economies and does not undermine rural livelihoods and ecosystems.

This is the motivation that drives ILC and its members, who are behind this and other analyses

being undertaken at the global, regional, and national levels.

The paper is divided into six sections. Following this introduction, Section 2 outlines the key

issues and competing perspectives on the phenomenon of large-scale land acquisitions. It

demonstrates how these acquisitions have grown tremendously in number and pace over

the past two years, with Ethiopia recording the highest number of deals concluded or under

discussion. Section 3 analyzes the opportunities and risks of land acquisitions, noting that

the risks are more immediate while the benefits are yet to manifest themselves. Further, it is

noted that whether and to what extent the opportunities are taken advantage of and the risks

managed will depend on the development of appropriate policies, laws, and institutions as well

as capacities within the relevant African countries.

Section 4 discusses the impacts of the land acquisitions to date, considering both positive and

negative impacts. Again, it is noted that there are already reports of negative impacts being

experienced by local communities in the areas where the investments are being implemented,

but positive impacts are yet to be experienced. The negative impacts are experienced directly

by local communities, while most of the benefits promised will, if realized, manifest themselves

at the macro level and will potentially be shared by all citizens of these countries.

Section 5 suggests possible responses that will ensure that benefits of these ventures are

optimized and their threats managed. In particular, the need for appropriate policies, laws,

institutions, and capacities on the part of governments and communities is underscored.

Section 6 concludes the overview by making a number of conclusions and outlining issues for

further discussion.

4

The CPL phenomenon and Africa: the issues, the perspectivesThe extent of commercial pressures on land in Africa is based largely on estimates gleaned from

media reports. This is not surprising, given the secrecy surrounding the deals. Nevertheless, it

is now largely acknowledged that the amount of land already acquired or under discussion is

substantial, even though any figures quoted are bound to be tentative, given that these deals

are an ongoing phenomenon.

The most quoted estimates are based on two studies, one undertaken jointly by the Food and

Agriculture Organization of the United Nations (FAO), the International Fund for Agricultural

Development (IFAD), and the International Institute for Environment and Development (IIED),2

and the other by Germany’s Federal Ministry for Economic Cooperation and Development.3 While

the ILC project of which this analysis is part was going on, the World Bank published a definitive

study on the phenomenon,4 which contained case studies of two of the countries (Ethiopia,

Zambia) covered by the ILC study.5 Based on inventories conducted at the national level in the

countries covered, this World Bank study becomes an additional source of data on CPL.

The first report analyzed land deals involving acquisitions in excess of 1,000 hectares since 2004

in Ethiopia, Ghana, Madagascar, Mali, and Sudan, while the second reviewed media and other

available evidence for such transactions throughout the developing world. Between them, they

document transactions involving nearly 20 million hectares of land in 15 countries across Africa,

of which over 5 million hectares are done deals with contracts signed, nearly 12 million hectares

are planned or under discussion, and over 1 million hectares had been disrupted as at the end of

2009 (see Table 1).6 The World Bank report built on these previous studies with some additional

data collection in the respective countries.

2 L. Cotula, S. Vermeulen, R. Leonard, and J. Keeley. 2009. “Land Grab or Development Opportunity? Agricultural Invest-ment and International Land Deals in Africa”. London and Rome: IIED/FAO/IFAD.

3 Federal Ministry for Economic Cooperation and Development. “Development Policy Stance on the Topic of Land Grabbing – The Purchase and Leasing of Large Areas of Land in Developing Countries”. Discourse 015, August 2009.

4 World Bank. 2010. “Rising Global Interest in Farmland: Can It Yield Sustainable and Equitable Benefits?” Washington: the World Bank. September 2010.

5 The other African countries covered in the World Bank study are Democratic Republic of the Congo, Mozambique, Nigeria, and Sudan.

6 The countries for which data is available are Angola, Cameroon, DRC, Egypt, Ethiopia, Kenya, Madagascar, Mali, Mo-zambique, Nigeria, People’s Republic of Congo, Sudan, Tanzania, Zambia, and Zimbabwe.

2

5

Significant as the figures disclosed in the studies are, they are considered conservative. Some reports

have indicated that completed transactions in Africa have passed the 15 million hectares mark.7 In

any case, reports continue to emerge of new transactions in these and other countries. For instance,

by May 2010 it was reported that Ethiopia alone had approved more than 800 foreign-funded agro-

projects between 2007 and 2010, covering an unspecified but clearly substantial land area.8

Table 1: Reported land deals by 2009

Signed/contract in place

Country Land area in hectares

Angola 25,000

Cameroon 10,000

Democratic Republic of Congo 2,800,000

Ethiopia 13,000

Ghana 452,000

Kenya 40,000

Madagascar 502,000

Mali 100,000

Nigeria 10,000

Sudan 1,297,000

Tanzania 45,000

Zimbabwe 101,000

Planned/under discussion/status unknown

Egypt 10,000

Ethiopia 602,760

Madagascar 1,500,000

Mali 62,850

Mozambique 10,000

People’s Republic of the Congo 8,000,000

Sudan 378,000

Tanzania 505,500

Zambia 2,000,000

Disrupted

Madagascar 1,300,000

Mozambique Unspecified, value $800 million

7 Liz Alden Wily. 2010. “Whose Land Are You Giving Away Mr. President?”. April 2010.

8 “African land interest is opportunity and threat”. Business Report (Johannesburg) 25 May 2010. www.busrep.co.za/index.php (accessed 28 May 2010).

6

Even with caution about the veracity and completeness of the data above, it is clear that

commercial pressures on land are a significant phenomenon across Africa. The land area

involved in these transactions is a small proportion of what is estimated to be more than 800

million hectares potentially available as farmland across the continent. However, the speed with

which these acquisitions have been made, the pace at which the number of deals has grown in

the past two years, and the terms and sums involved have raised concerns, particularly about

their implications for land-based rural livelihoods and smallholder production.

Large-scale land acquisitions and competing visions of rural developmentIt is the same land that peasant producers across rural Africa require to support their livelihoods

and smallholder production that is targeted for large-scale acquisitions. Tensions between large-

scale land acquisitions and smallholder production are underpinned by competing perceptions

and approaches about rural land use, agricultural productivity, and overall development. On the

one hand are those who see the future of Africa in smallholder production. On the other are

those who reject the idea that “the haphazard produce of thousands of small African farmers

relying on their bare hands and God’s rain”9 can move African agriculture and its development to

the next level. These advocate for the introduction of intensive capital and technology through

foreign direct investment (FDI) in rural land.

African governments are haunted by the failure of rural transformation, which has rendered

political liberation a still-birth for the majority of rural African citizens, who continue to live in

abject poverty. During the past 50 years, African governments and their development partners

have experimented with different approaches, none of which has achieved the anticipated

agrarian reform, rural transformation, or overall national development.

The search for an African “green revolution” continues to underpin discussions about agriculture

and rural development in the continent. This is evident in the two most celebrated current

initiatives in this regard – the Comprehensive African Agriculture Development Programme

(CAADP) of the New Partnership for Africa’s Development (NEPAD) and the Alliance for a Green

Revolution in Africa (AGRA). Although these retain the rhetoric of smallholder production as the

foundation for food security, the appeal of large-scale commercial production driven by market

imperatives is evident in the strategies adopted.

Large-scale land acquisitions have significant appeal to African political leaders justifiably

9 The words are from R. Dowden. 2009. Africa: Altered States, Ordinary Miracles. London: Portobello Books Limited, p.537.

7

frustrated by the failure of development assistance-inspired efforts to improve agricultural

production and promote rural development. African leaders are generally enchanted with

large-scale projects. Leaders interviewed for the Benin case study believe that large construction

projects associated with industrialization and urbanization are the best means for achieving

development for the country and its people.10

Being transactions of trade rather than aid, these acquisitions sit well with the new thinking

among African political leaders frustrated by patronizing aid dependency and keen to forge

relationships of trade with the developed world. Thus it is that while local and international non-

governmental organizations (NGOs) have been scathing in their criticism of these deals, African

political leaders have continued to enter into ever more deals.

Concerns about land rights, livelihoods, environment, and equityBoth African civil society organizations (CSOs) and their international counterparts have

raised concerns about large-scale land acquisitions. The greatest opposition has come from

organizations concerned with land rights, livelihoods, sustainable development, terms of trade,

and governance. They are concerned about the impact of these deals on the livelihoods of rural

Africans, their land, and environments. They are also concerned that the deals are inequitable for

the people and governments of Africa.

Much of the land being targeted for these acquisitions is rural land occupied and used by

peasants under customary laws, which remain largely undefined and insecure throughout

much of sub-Saharan Africa. During much of the 20th century, modernization of the land sector

was equated with replacement of customary land laws.

One giant attempt to “modernize” customary law in the 1960s was the restatement project

of the School of Oriental and African Studies (SOAS) at the University of London, which was

abandoned without much success. It was undermined on the one hand by assumptions

underpinning its approach and on the other by the lack of interest in customary law on the part

of the emerging African legal profession. Subsequently, customary laws and their institutions

have been undermined over time, and no attempt has been made to develop a jurisprudence

of customary law. This has meant that even in countries such as Uganda, Mozambique, Namibia,

and South Africa, where statutory recognition has been given to customary land tenure, the

translation of this into real security for customary land rights is undermined by the absence of

capacity, resources, and legal/political will.

It is thus not surprising that both governments and international investors do not find it

10 “Evolution and impacts of coastal land use in Benin: The case of the Sèmè-Podji Commune”. Paulin Jesutin Dossou, Allagbe B.Y Simon, and Tatiana De-Souza. ILC and Vadid. January 2011, p.30.

8

necessary to talk to those who occupy and use the land, the assumption being that the land is

available for acquisition and that governments have the authority to negotiate its acquisition

without reference to communities. However, as the case study from Madagascar11 demonstrates,

the failure to involve communities in negotiations about acquisitions of large chunks of rural

land can prove fatal to the deals. Describing the fate that befell two major investors (Daewoo

Logistics of South Korea and Varun International of India) and the government of President

Ravalomanana with which they had been negotiating, the report states:

“These two agri-food projects, aimed at developing large areas of land, both

raised similar issues. Both have now been suspended and both investors have left

the country. The companies involved devoted more time to negotiating access

to land with central government authorities than with the populations and the

regional and local governments of the targeted land. The absence of transparency

in these negotiations and the – at best – hasty negotiations at local level drove

these projects to failure. The terms of the land contracts appeared to be extremely

unfavorable for local people.”12

Although customary land rights are vulnerable across the board, pastoralists and hunter-

gatherers are particularly at risk given the nature of their land use. Pastoral land use requires

large areas of land often extending across national borders. Pastoralists have to move with their

livestock over these large areas in response to the variable climate in the drylands. Hunters

and gatherers need secure access to forests that they have used for millennia, but which are

now invariably reserved land under the control and superintendence of government forestry

services that seek to restrict access. These land uses do not constitute the sustained and visible

use implied by mise en valeur13, and the land so used is often seen by governments and investors

as vacant and available.

Livelihoods concerns are closely linked to land rights concerns. They have to do with the

competing visions of rural development that we have alluded to above. While smallholder land

use is perceived to be backward and incapable of facilitating rural development, the kind of

investments coming in the wake of large-scale land acquisitions are seen to offer the prospect

of catapulting these societies towards industrialization.

Those opposed to this view push for an approach to rural development that builds on what exists,

seeing secure livelihoods as the foundation for overall economic development. In particular,

there are concerns about the implications of these acquisitions for food security, given that

11 “After Daewoo? Current status and perspectives of large-scale land acquisitions in Madagascar”. Rivo Andrianirina Ratsialonana, Landry Ramarojohn, Perrine Burnod, and André Teyssier, ILC/CIRAD/Madagascar Land Observatory. January 2011.

12 Ibid., p.x.

13 Productive land use which is the basis for protection of land rights in natural resource management laws in West Africa, specifically Mali, Niger and Burkina Faso. See generally, Hilhorst, T. (2008) Local governance institutions for sustainable natural resource management in Mali, Burkina Faso and Niger KIT Working Paper Series GI. Amsterdam: KIT

9

their stated objective is to produce not for the local market but for the purposes of ensuring

food security in the investor countries and for sales in international markets. It is intriguing that

countries such as Ethiopia, in which food insecurity is already a major problem, find it agreeable

to enter into arrangements that will potentially take land away from local food production to

help feed other countries.

Another concern has to do with sustainable development. This is informed by the “extractive”

nature of the deals, whereby investors seek to produce for their home consumption and for

international markets. Campaigners are concerned that, with the poor state of environmental

regulation in many of the African countries involved in these deals, investors will maximize their

outputs at the expense of the environment, externalizing associated costs to local people, who

will live with the consequences of environmental degradation once the investors have moved

on. The Benin case study reports how physical infrastructure developments are undertaken

without environmental impact assessments, and notes how these developments have adversely

impacted on conservation of biodiversity and the physical environment. The report asserts that

“commercial pressure on land in Sèmè-Podji is considerably degrading the landscape”.14

There is limited or no capacity in these countries to control or deter pollution of the air, soils,

and groundwater by the heavy chemicals likely to be used in these ventures. Such pollution will

add to the burdens of poor environmental health that rural populations already bear in many

of these countries. Furthermore, it is feared that the land being acquired may be used for the

production of genetically modified crops without the requisite safeguards, as many of these

countries lack the capacity to effectively police the type of large-scale technological production

envisaged over the large areas of land involved.

The secrecy with which the deals for large-scale land acquisitions are being negotiated and

concluded has raised concerns among campaigners about their terms. Even when they are

touted as trade transactions, details publicly available show the terms of these deals to be

inequitable to African countries, and there are concerns that they will perpetuate the imbalance

in terms of trade between African countries and the developed world. Unjust terms of trade,

including tariff and non-tariff barriers against African agricultural produce, have consistently hurt

African economies. Through these deals, Africans stand to lose even the chance to produce and

sell agricultural products to the rest of the world. It is difficult to see how this loss of opportunity

can be adequately compensated.

That these large deals are being negotiated without the benefit of public scrutiny demonstrates

the governance challenges associated with them. The absence of public consultations about

the deals before they are made creates the possibility that decisions are made that may infringe

on critical use rights of rural peasants. A case in point is the Mali–Libya deal signed in June 2009,

involving a lease of 100,000 hectares of land “at no cost to Libya for up to 99 years”.15 The land was

14 “Evolution and impacts of coastal land use in benin: The case of the Sèmè-Podji Commune”, p.32.

15 Wily, op. cit., p.4, quoting GTZ, 2009. “Foreign Direct Investment (FDI) in Land in Developing Countries”. Division 45, Agriculture, Fisheries and Food, Federal Ministry for Economic Cooperation and Development, Bonn.

10

declared to be “free from any juridical constraints or individual or collective property” that would

hinder its exploitation. Yet the land is customarily owned, occupied, and used for rice production

and as a corridor for transhumance by agro-pastoralists. No consultations were held with the

communities in negotiating the deal.

It is not surprising that these deals are being negotiated without reference to affected citizens,

given the status of democratic governance in many of the subject countries. The weakness

of democratic governance and associated institutions has created a context in which African

governments are effectively negotiating away the future of their rural citizens with impunity.

It is instructive that the country with the largest number of such deals already negotiated and

under consideration is Ethiopia, whose democratic credentials are among the most debatable

in the continent.

Lack of transparency and accountability on the part of government is also a cause of land

grabbing within countries, as is demonstrated by the case study from Kenya, where it is local

elites who pose the greatest threat to land rights.16 The case study reviews reports by different

agencies, including government-appointed commissions that have confirmed the grabbing

of huge chunks of land by politicians and “politically well connected” individuals. This is an in-

country phenomenon that differs in material respects from the large-scale land acquisitions

discussed in the other case studies. It was already being manifested long before the emergence

of CPL. It is driven by internal political dynamics and involves acquisition of land by local elites

rather than outside investors. Much of the land is acquired for speculation rather than investment

purposes – but it has the same devastating impact on land rights and land-based livelihoods.

Concerns about large-scale land acquisitions have generated a global response, with active

networking between community-based organizations (CBOs) and farmers’ associations at the

local level, national NGOs representing the different thematic concerns, and NGOs and networks

based in Africa and abroad. Within the United Nations, FAO has actively engaged with the issue,

while the United Nations Conference on Trade and Development (UNCTAD) has provided some

critical data on the phenomenon, its evolution, and likely impacts.

Table 1 shows how some African countries are more involved with large-scale land acquisitions

than others. Some African countries are better endowed with arable land than others, and

will thus be more targeted by investors. Moreover, there are countries such as Ethiopia, with

its Agricultural Development-Led Industrialization (ADLI) strategy, which are committed to

a development strategy that aims to use land and agriculture as the engine for economic

transformation. To spearhead large-scale land acquisitions, the government of Ethiopia

established the Agricultural Investment Support Directorate within the Federal Ministry of

Agriculture and Rural Development in October 2009. The Directorate is mandated to identify

and delineate potential agricultural investment areas, transfer agricultural lands to investors,

and provide comprehensive support to investors in the agricultural sector. It has proceeded to

16 “Irregular and illegal land acquisitions by Kenya’s eites: Trends, processes, and impacts of Kenya’s land grabbing phenomenon”. Erin O’Brien, in collaboration with Kenya Land Alliance. ILC. January 2011.

11

identify over 3 million hectares of land in five of the nine regional states of Ethiopia as available

for acquisition for large-scale commercial agriculture. Work is proceeding to identify more land

in the remaining four regional states.17

Ethiopia may be the country that has gone furthest so far in putting in place deliberate

mechanisms for attracting investors into the country to make large-scale commercial land

acquisitions (see Box 1), but in effect all countries in sub-Saharan Africa are potentially available

for and welcome these deals.

Box 1: Ethiopia: Easing large scale commercial land acquisition

Ethiopia has taken significant steps to make it easy for investors to acquire land for large-

scale commercial agriculture. The Federal Ministry of Agriculture and Rural Development

commits to:

1. Provide all necessary support to investors in a transparent and efficient manner;

2. Prepare contractual agreements, map of the investment land and all necessary related formalities;

3. Attribute the signed contractual land agreement, maps and other related documents to the investors and stakeholders.

Regional states will create conducive environment so that the investors do not face social,

economic and infrastructure problems by:

a. follow up and giving quick solutions;

b. Providing various agricultural inputs;

c. Providing the necessary technical and administrative support; and

d. Creating conducive and attractive environment for investors in the agricultural sector.

(Adapted from “A Case Study of Bechera Agricultural Development, Ethiopia”)

Sadly, even in the case of Ethiopia, the focus of policy thinking and planning for large-scale

commercial land acquisitions has been on making it easy for investors, and little attention has

been paid to the concerns enumerated above. In particular, no effort appears to have been

made to provide any protection for local populations. This is not surprising, given that the

position of the government is that the lands being made available to investors are empty and

not in use. Significantly, existing guidelines appear to have been developed exclusively by the

executive without the participation of the legislature or civil society.

Establishment of guidelines is an important starting point for reconciling competing imperatives

around large-scale commercial land acquisitions. Indeed, the absence of guidelines is one of

17 “A case study of the Bechera agricultural development, Ethiopia”. Messele Fisseha. ILC. January 2011.

12

the key concerns of CSOs that are opposed to the deals. However, for the guidelines to be

really useful, they have to be prepared in a consultative manner with the participation of all

concerned stakeholders, especially communities and their representatives. More importantly,

the guidelines will need to be enforced. In this regard, it is not lost on keen observers that African

governments are notorious for being incapable of enforcing policies, laws, and guidelines.

Regulatory institutions rarely have the technical capacity or political backing to force major

actors in the economic sphere to abide by requirements of law and policy. Corruption and

political interference also undermine the effectiveness of regulatory institutions.

13

Opportunities and risksOpportunities and risks of large-scale land acquisitions have been the subject matter of much

analysis. The oft-quoted Policy Brief on the phenomenon by the International Food Policy

Research Institute (IFPRI) was specifically on risks and opportunities.18 Proponents of these

acquisitions see them as an opportunity to enhance agricultural productivity in Africa through

increased investments of capital and infusions of technology and capacity. Opponents see them

as likely to exacerbate insecurity of livelihoods for rural peasants by restrictions on access to

land and natural resources, environmental degradation, and undermining production for local

consumption (see Table 2). However, even those who support the deals agree that accrual of

the perceived and promised benefits will depend largely on how the investments are actually

implemented. This in turn will depend on the capacity of African governments to hold investors

to account and to police their activities in the long term. The absence of appropriate policies

and institutional capacities for doing this is part of the reason for pessimism about the benefits

being realized.

Table 2: Opportunities and risks of large-scale commercial land acquisitions

Opportunities Risks

1. Access to capital and technology for increased agricultural production

2. Development of infrastructure in rural areas

3. Employment opportunities, both on- and off-farm

4. Improvement of food security

5. Stabilization of global food prices

1. Restriction or denial of access to strategic resources for peasants, engendering conflicts and livelihoods insecurity

2. Undermining production for local consumption and food security

3. Undermining local genetic resources and environment through monoculture and use of pesticides

Discussions about large-scale commercial land acquisitions tend to be polarized between those

who support and those who oppose the deals. The polarity of this discussion is unfortunate,

as it undermines the opportunities for the kind of balanced consideration needed to ensure

appropriate cost-benefit analyses that would help ensure that benefits of the deals are optimized

and the risks contained. It is this gap in analysis that ILC and its partners have sought to fill

through the case studies and synthesis.

It is clear that there are potential benefits from these deals and that it is wrong to write them off altogether as

land grabs. But equally, it is clear that a number of conditions are necessary for the promised benefits to be

realized. It is also evident that there are real threats to local livelihoods and economies, which should be taken

into account. It is only through a balanced consideration of arguments on both sides of the divide, informed

by evidence from initiatives already under implementation, that appropriate responses can be designed.

Those who support the deals tend to focus only on the opportunities that they offer, while those

18 J. Von Braun and R. Meinzen-Dick. 2009. “‘Land Grabbing’ by Foreign Investors in Developing Countries: Risks and Opportunities”. IFPRI Policy Brief 13. April 2009.

3

14

who oppose them tend to focus only on the risks. African governments and the investors that

they are entering into the deals with are on one side of this divide, while CSOs and smallholder

farmers are on the other. For investors, these are legitimate trade deals entered into voluntarily

by parties that have competence and legitimacy to make the deals. They involve a quid pro

quo, as access to land is given in return for significant infusion of capital. The investments they

seek to undertake in the acquired lands are legitimate investments that will supply real human

needs for food and fuels. What is more, they will invest substantial capital and introduce new

technologies of production in the receiving countries, thereby making a significant contribution

to the development of the countries and improvements in the lives of their people.

African governments involved in these deals make the same arguments in their favour. They

invoke national constitutions and laws for their authority to enter into them. In most African

countries, land is vested in the State or the president, with powers to allocate it, often without

reference to citizens. Even where constitutional provisions appear to be protective of land rights

of rural landholders, the detailed legal provisions used to administer the land often have the

effect of undermining these provisions.

Ethiopia is a case in point. The Constitution of the Democratic Federal Republic of Ethiopia

provides in Article 41(3) that “the right to ownership of rural and urban land, as well as of all

natural resources is exclusively vested in the State and in the peoples of Ethiopia”. It declares

land to be common property of the “Nations, Nationalities and Peoples of Ethiopia” that shall not

be subject to sale or other means of exchange. It proceeds to declare that “Ethiopian peasants

have the right to obtain land without payment and the protection against eviction from their

possession”, but asserts that the implementation of this protection should be specified by law.

Laws that have been enacted in Ethiopia to implement these provisions tend to have the effect

of undermining constitutional protection against evictions. Two examples, the Rural Land

Administration and Land Use Proclamation19 and the Expropriation of Land Holdings for Public

Purposes and Payment of Compensation Proclamation,20 will suffice to demonstrate this.

The former provides, inter alia, that:

1. “Government being the owner of rural land, communal rural land holdings can be changed to private holdings as may be necessary.21

2. Subject to giving priority to peasant farmers/semi pastoralists and pastoralists:

a) Private investors that engage in agricultural development activities shall have the right to

use rural land in accordance with the investment policies and laws at federal and regional

levels.”22

The latter proclamation appears to take away even the priority that the above provision gives to

19 No. 456/2005.

20 No. 455/2005.

21 Article 5.3.

22 Article 5.4.

15

peasants. It provides that:

“A Woreda or an urban administration shall, upon payment in advance of

compensation in accordance with this proclamation, have the power to

expropriate rural or urban landholdings for public purpose where it believes that

it should be used for a better development project to be carried out by public

entities, private investors, cooperative societies or other organs, or where such

expropriation has been decided by the appropriate higher regional or federal

government organ for the same purpose.”23

For the African governments involved in these deals, the imperatives of national development

are seen to override the interests of local communities. It is about putting the land to better

and more productive use than that to which the communities are putting it. However, what

governments perceive to be unused or under-utilized land is often land that communities

use in common to support a whole range of livelihoods, while it performs a whole range of

environmental services.

Wetlands are a good example in this regard. The idea that wetlands should either be “reclaimed”

(meaning converted to other land uses) or used to support commercial agriculture runs deep

within governments. Yet, when governments convert wetlands to commercial agricultural land

they often end up undermining rural livelihoods and environments. It is as if African governments

are yet to appreciate the importance of wetlands in a context of rapid climate change.

The Benin case study reports how swamps that are traditionally common property available to

all have been turned into private property owned by individual families.24 Concerns about the

impact of commercial agriculture on the environmental benefits traditionally available from the

wetlands have been ignored by both the government and the investor. In Ethiopia, the Bechera

Agricultural Development Project includes wetlands that hold strategic pastures for dry grazing

by local pastoralists.

In Ethiopia, an Indian company, Karuturi Agro Products Plc (a subsidiary of Karuturi Global

Limited), leased 10,700 hectares of land from Oromiya Regional State in 2008 for 30 years for

large-scale commercial agriculture production. By the time a case study was conducted for the

CPL project, about 4,000 hectares of the leased land in Bako Tibe had been cultivated for maize

and palm tree nurseries, while field trials were being carried out on about 1.5 hectares for rice,

bottle gourd, banana, pepper, and different maize varieties. The local community complained

about loss of access to their traditional grazing grounds, while promised benefits from the project

were yet to be realized. Moreover, communities were no longer convinced that any benefits that

might accrue to them would sufficiently compensate for the multiple social, economic, cultural,

and environmental benefits lost through the transfer of the land to the investor.

23 Quoted in the Bechera case study, op.cit., pp.7-8. The author observes that there is no requirement to consult the users of the land being so acquired.

24 “Evolution and impacts of coastal land use in Benin: The case of the Sèmè-Podji Commune”, op. cit.

16

In most cases, the transfer of land to investors is justified partly on the grounds that the land is not

under cultivation. The idea that land not under cultivation is thereby not in use demonstrates a

lack of appreciation for diverse land uses that underpin rural livelihoods and landscapes in Africa.

Yet, in fact, employment opportunities offered by a large-scale commercial farm are unlikely to

adequately compensate for the loss of use of such land. In the Bechera project, it is reported

that only 11% of the respondents have members of their families employed in the project. All

of them (100%) used to graze their livestock in the land. They have lost access to the grazing

without any compensation, and have no alternative grazing land.

The benefits promised to communities when they lose access to land transferred to large-

scale commercial producers include improved access to social services. The Bechera case study

reports that the investor promised to construct roads, schools, and clinics, in addition to digging

water wells. None of these promised benefits had materialized by the time of the study.

In any case, social services are an entitlement of all citizens of Ethiopia, including the residents

of Bako Tibe. Article 41 of the Constitution entitles every Ethiopian national to equal access to

publicly funded social services, and enjoins the State to allocate resources for the provision of

education, public health, and other social services. As such, it is both wrong and unconstitutional

for the provision of social services to communities to be presented as some form of reward by

the government or as compensation for loss of access to strategic natural resources essential for

people’s livelihoods.

17

Impacts of large-scale land acquisitionsAs indicated at the outset, it is too early to speak with any certainty about long-term positive

and negative impacts of large-scale commercial land acquisitions. Discussions about impacts at

this point are more predictions about what is likely to occur in the future than they are analyses

of situations already manifested on the ground. Much of what is articulated as negative impacts

is based on analogies with previous experiences of such ventures, while positive impacts are

being promised but have yet to materialize.

Positive impacts: the jury is still out…Positive impacts are the selling points for large-scale commercial land acquisitions. Governments

and investors use to them to make the case for the promotion of these acquisitions. It is clear,

however, that the positive impacts are expected at the macro level. African governments expect

that investments in the agricultural sector will bring much-needed capital and technology,

capacity, infrastructure, and market access that will help transform the sector and improve

overall economic development. They also expect that this infusion of capital and technology

in the agricultural sector will stimulate rural economies through employment, services, and

linkages with other sectors of the economy.

For communities that are losing access to land and natural resources, the promise of positive

impacts sounds a lot like trickle-down economics, which has a less than enviable record in rural

development discourses in Africa. In any event, the challenge of rural development in Africa is

a function of much more than just the revenue available to governments. Policies and actions

of governments regarding the equity and spread of development have to be addressed as well.

The failure by governments to engage local communities in negotiations of these deals is a

missed opportunity with respect to the actualization of promised benefits. In the Bechera case

study, it is reported that when local communities and even local administrators raise concerns

with the investors about promised benefits and access to natural resources, the latter argue that

they are paying taxes to the government and are thus under no obligation to local communities.

This is an understandable reaction given the manner in which the deals are negotiated. If

governments do not show through their actions that they take their populations seriously, it is

only logical that investors will have no reason to treat the citizens any differently.

Expectations that governments have about the positive impacts of these investments may

in any case be undermined by monopolistic tendencies on the part of investors, especially as

4

18

they end up being the largest players in their sectors. In the Rwanda case study, complaints are

reported among outgrowers about the way they are treated by Madhvani Group, the investor in

Kabuye Sugar Works. They are totally dependent on Madhvani as the sole sugar factory for the

purchase of their sugar cane, with the result that they have to put up with arrangements that

are structured largely to the advantage of the company. Specifically, most outgrowers have no

contracts, while even the few who have contracts complain that these protect only the interests

of Madhvani. Thus, even for those locals who are able to benefit directly from these investments,

the playing field is far from level.

Box 2: Potential positive impacts

1. Infusion of capital into the agricultural sector

2. Introduction of new technologies and technical capacity for improved agricultural production

3. Improved revenues for government from taxes and rents

4. Development of physical and social infrastructure

5. Improved access to international markets for agricultural produce

6. Improved opportunities for employment in agriculture and rural areas

7. Improvement of food security

8. Increased economic activity and incomes resulting in improved rural livelihoods

9. Stabilization of global food prices

Governments contend that these investments will help in the development of physical

infrastructure. This is probably the most difficult to claim to justify. It is difficult to understand why

investors should be expected to construct physical infrastructure and provide social services as

an integral part of their investment pursuits in a country. Beyond corporate social responsibility

(CSR), it is difficult to see how the building of physical infrastructure and the provision of social

services can be an enforceable part of the contracts between governments and investors. How,

in fact, will such obligations on the part of investors be enforced, and by whom? Is it not enough

that investors pay taxes and rents and purchase relevant licences? It is instructive that the

guidelines by the Ethiopian government on large-scale commercial land acquisitions provide

technical and administrative support and ensure a conducive environment for investors.

19

In any case, some of the infrastructure promises made by investors sound outrageous, and

unlikely to be realized in fact. The Madagascar case study is most instructive in this regard. It

reports:

“The companies announced significant investments: Daewoo intended to

mobilize about USD 6 billion over 25 years and Varun announced an initial

investment of USD 1.17 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, eight airports, 30 factories and silos,

eight ports, among other projects. Varun’s commitments were no less impressive:

the construction of health facilities, schools, and electricity and drinking water

systems was announced, though not quantified. The creation of numerous jobs

–70,000 by Daewoo and 1,500 by Varun International – was announced, as well

as detailed projects, which more or less involved the construction of new towns.”

However, such investments could contribute to the development of physical infrastructure if

they were structured as public-private partnerships (PPPs) between governments and investors.

That would require the design of appropriate policy, legal, and institutional frameworks and

strategies. At the moment, although PPPs are touted as an important approach for creating

positive linkages between private and public sectors, there are no policies and laws in place

for managing them. Such PPP projects as have been implemented have been of limited scope,

involving collaboration between local governments and business associations, especially in

cities, with the latter providing support to the development of infrastructure such as street

lighting and so-called “beautification” projects, in return for which they are recognized as key

stakeholders and represented in city governance committees.

The investments are also expected to create employment opportunities in rural areas, improving

incomes and local livelihoods. The experiences of investments already in operation do not,

however, bear out these claims. In the Bechera Agricultural Development Project, more than

50% of the permanent employees (30 out of 50 technicians, supervisors, and drivers) are Indians.

Over 500 seasonal workers are employed at the peak of the agricultural activities, but these

are menial jobs for periods ranging from one to three months. Earnings from these kinds of

short-term menial jobs are unlikely to be sufficient to meet the livelihood needs of families on

a sustainable basis.

In the Rwanda case study, respondents complain that working for Madhvani or its outgrowers

is the worst of the options for employment available in the area, which include working in

construction, mining, or rice cooperatives. The working conditions are said to be poor, the work

hard, and wages low. Workers complain that the wages paid are not sufficient to support a

livelihood. Significantly, respondents consider themselves poorer now than they were before

the investor came into the area. Even their diets are worse because they are no longer able to

produce vegetables, and both husband and wife have to work.

20

In effect, therefore, even the benefits of the employment opportunities created by these

investments are more likely to be realized at the macro level. For local communities, it often

ends up being no more than a case of “giving a few farmers employment, mainly as night or day

guards”.25

Negative impacts: the poor most affectedThe negative impacts of large-scale commercial land acquisitions are more obvious and

immediate. They are most directly experienced by the poor, smallholder farmers, pastoralists,

indigenous peoples, and other vulnerable groups who depend on land for their livelihoods.

These are also the groups least likely to access alternative livelihoods support systems when

they lose access to land and natural resources. They are based in rural areas away from capital

cities and other centres where policy decisions touching on their rights are made, are rarely

represented in decision-making forums, and have least capacity to organize and articulate their

concerns in such a manner as to influence decisions.

The poor survive in a subsistence economy that involves producing what they eat and eating

what they produce. They lack the means to participate in the modern cash economy. Thus,

when they are denied access to land, they are effectively pushed to destitution. The Benin case

study reports how farmers who sell their land use the income to fulfil immediate needs such

as organizing traditional ceremonies, paying debts, or putting up houses, after which they end

up worse off than before as they no longer have access to productive resources. The same fate

can be expected to befall those who receive one-off compensation payments, where these are

provided for.

With no skills for jobs in a modern economy, poor people cannot benefit from the much-touted

employment opportunities offered by the investments. The case study from Rwanda shows how

it is the elite of the local population – better educated and possessed of disposable income and

business acumen – who are able to take advantage of opportunities offered by such investments.

In this case, such elites have become outgrowers for the Kabuye Sugar Works. In effect, it is those

who were already commercially oriented and who had the means that benefit.26

A number of the large-scale commercial agricultural investments have targeted the production

of maize and rice. These are two of the major staple crops in sub-Saharan Africa, and are what

25 Bechera case study, p.21. In some cases, even the macro level employment benefits are in doubt. It is reported, for instance, that in the Libyan rice scheme in Mali, it is mainly Chinese contracted labour that is being used, thus limit-ing local employment benefits (see Wily, op. cit., p.4).

26 “Socio-economic impact of commercial exploitation of Rwandan marshes : A case study of sugar cane production in rural Kigali”. M. Veldman and M. Lankhorst. ILC and RCN Justice & Démocratie. January 2011.

21

smallholder farmers produce mainly for subsistence and the local market. Thus, in focusing on

them, investors undermine opportunities for smallholder farmers.

Pastoralists are among those most adversely affected by large-scale commercial land acquisitions.

Lands used by pastoralists, especially for transhumance, are prime candidates for acquisition.

Nomadic pastoralists are rarely party to government decisions about land, and their concerns

are rarely taken into account. Either they are not residents of the locations where decisions are

made or they are not adequately represented in local decision-making organs. Blockage of

transhumance routes used by pastoralists within and across national borders often results from

these acquisitions. The Libyan rice scheme in Mali is reported to have blocked transhumance

routes for both local and regional pastoralists.

Drylands have come under increasing pressure with the rise in demand for biofuels. For many

governments, the fact that biofuels can be produced in drylands provides an opportunity to

turn what is seen as unproductive land to productive use. In Zambia, farmers growing crops

and raising livestock were the main losers when local communities were evicted from Macha

Mission land to make way for a jatropha project.27

Apart from pastoralists, other indigenous groups also suffer disproportionately as a result of

commercial land acquisitions. Hunters and gatherers face the same predicament as pastoralists

in that their land uses are not recognized by governments. When forests are felled and land

fenced off, they are denied access to resources that support their livelihoods. Like pastoralists,

they are not sufficiently organized as a political constituency and have little influence on policy

processes.

Other vulnerable groups who suffer as a result of commercial land acquisitions include women,

youth, and disabled people. Not consulted or otherwise engaged with in the course of

negotiations and policy discussions around these acquisitions, their interests are rarely factored

into project designs. While men have the option of going away to towns and cities in search of

menial jobs, women remain in the villages around the acquired land and suffer the consequences

of restrictions on their access to basic resources. Young people in Bako Tibe, Ethiopia complain

that, as a result of the Bechera Agricultural Development Project, they are unable to access land,

as the administration tells them there is no land available for allocation.

More generally, restrictions on access to productive land and natural resources in rural areas increase

pressure on rural land, engendering conflict and increasing the potential for improper land use and

environmental degradation. Conflicts over access to land and natural resources are an integral part of

rural Africa. Traditional mechanisms operate with varying degrees of effectiveness to manage competing

needs for resources between different land users. The effectiveness of these traditional institutions is

undermined once control is taken away from them. The area of land available for the different land uses

is reduced and access to key resources that support the use of the land is restricted or obstructed. This

results in increased conflicts within and between communities as well as between them and investors.

27 “Social impacts of land commercialization in Zambia: A case study of Macha mission land in Choma district”. John T. Milimo et al. ILC and Zambia Land Alliance. January 2011.

22

Box 3: Negative impacts of acquisitions

1. Displacement and denial of access to land for production – farming, grazing, hunting, and gathering

2. Restriction of access to water and other environmental goods

3. Appropriation of customary land rights without compensation

4. Restriction of movement and disruption of social networks through fencing

5. Pollution through use of agrochemicals and pesticides

6. Flooding the local market with grains, thereby crowding out smallholder producers

7. Engendering new land use conflicts and exacerbating existing ones

In the Bechera case study, conflict is reported between the investor and the local community

because of restrictions on access to water, grazing, and even crop residues. It is also reported

that the investor has sought to cultivate land near the homesteads of the farmers, which the

latter have resisted, sometimes violently.

Commercial agricultural production entails the use of agrochemicals and pesticides, with

potential adverse impacts on human and environmental health. In Mali, local populations have

complained of dust pollution from the Libyan construction works for the rice scheme.

The social impacts of large-scale land acquisitions are often less visible but far-reaching. The

dislocation of communities from lands in which they have lived for generations has serious

implications for identity and place. Old people are forced to acclimatize to new environments

and to find new friends in places that are less familiar to them. Many African communities have a

close connection with long-dead ancestors and are seriously traumatized when they are forced

to abandon graveyards of their ancestors and other family members.

Among the first things investors do on acquiring land is to fence it. In so doing, they obstruct

access to critical resources and disrupt social networks. In the Zambia case study, respondents

complain about the greater distances locals have to travel to reach hospitals and schools. It

is quite clear that such inconveniences could be avoided if local people were involved in the

negotiations and consulted about the design of these projects.

23

Possible responsesThe foregoing discussion demonstrates that lack of consultation is a major hindrance to ensuring

benefits of large-scale commercial land acquisitions for the people of Africa. Consultations would

ensure that the interests of all stakeholders are taken on board in the negotiation and design

of the projects. In particular, it is critical that communities living in rural areas are effectively

engaged in the negotiation and design of projects – more so, because the projects are justified

on the basis of their potential for stimulating rural economies to improve livelihoods. Appropriate

innovations in policy, legal, and institutional design will be necessary to make this possible.

The growth of large-scale land transactions has proceeded faster than the evolution of

appropriate policies, laws, and institutions for their management. Even where laws exist and

institutions for their implementation are in place, lack of capacity hinders implementation. In

Madagascar, there are three legal regimes that apply to large-scale land acquisitions. These are

the Law on Investments, the Decree to Make Investments Compatible with the Environment,

and the Land Laws. The institutional framework for enforcement of these laws is made up of the

Economic Development Board of Madagascar (EDBM), the National Office for the Environment

(ONE), and the State-Owned Land Administration (Services des Domaines). The case study reports

that there is a gap between what exists on paper and what happens in practice. Inadequate

capacity, conflicting interpretations of provisions of law between investors, government, and

citizens, and favouritism are quoted as the reasons undermining enforcement of the law. The

situation is bound to be worse in other countries which do not even have the requisite laws and

institutions.

Furthermore, there has been little or no public discussion of the phenomenon within countries

to provide opportunities for serious reflection on potential benefits and likely threats, and how

to manage them. Many of the investors are attracted to Africa not just by the ready availability

of land, but also by the perceived low cost of labour and lax regulatory frameworks. These last

two have implications for the promise of employment and the potential for negative impacts on

human and environmental health.

Communities and those who advocate for their rights are concerned about informed consent,

compensation, and benefit sharing. It is important that affected communities are fully informed

of the implications of these investments and that their consent is obtained within the framework

of the negotiation process. Compensating communities for loss of use of the land is critical

for vindication of their property rights and ensuring the legitimacy of these deals among local

communities. Benefit-sharing arrangements create lasting linkages between investors and local

communities, engendering a sense of ownership among the latter, and thereby reducing the

potential for conflict.

These are challenging imperatives to meet for governments and investors, as well as affected

communities. They increase transaction costs and may in fact be disincentives to some

investors. Communities are rarely sufficiently organized or possessed of the technical capacity to

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participate effectively in such negotiations. This means that their involvement may be perceived

as a drag on the negotiations to the disadvantage of investors, who have to operate within

specific timeframes.

Furthermore, communities are rarely homogeneous and in such negotiations their internal

differences along clan, class, and gender lines may play out, further complicating the process.

Often, community organization is undermined by intra-community differences that are

exacerbated by local political dynamics, making it impossible for the community to make

credible representations to governments and investors in a timely manner. As community

differences are played out, the investor and the government are likely to be closing the deal,

creating a fait accompli that the community may thereafter find very difficult to counteract.

Compensation is a major concern for communities that lose their land use rights to large-scale

commercial land acquisitions. In many of the cases reported so far, communities have not been

compensated. The manner in which amounts to be paid in compensation are determined

and the fact that communities are often not parties to these discussions add to the feeling of

disaffection on their part. In any event, the standard methods of calculating compensation with

a focus on “improvements on the land” work against land uses such as grazing, hunting, and

gathering that do not involve any visible physical changes to the land.

Benefit sharing is equally problematic. While it is the most appropriate way to ensure that

communities share in the proceeds of the investment on an ongoing basis, there are challenges

regarding management of such benefits. The traditional approach to benefit sharing involves

periodic payments to community projects. However, even where investors agree to make

direct remittances to communities, there are challenges about how these are shared within

communities. There is a real risk of capture of the benefits by the elite within the community,

further complicating the situation of the very poor, who most need these benefits to make up

for loss of use of land and access to natural resources.

To counteract these challenges, governments and investors need to establish business

partnerships with communities so that they may derive benefits that are pegged to the

performance of the investments. To begin with, governments need to consider letting

communities be the ones who lease out the land to commercial investors, so that they receive

the rent returns for the duration of the investment. Furthermore, there should be opportunities

for communities to enter into partnerships with investors, exchanging land and labour for

capital and technology. In this way, the benefits of these investments will actually be realized at

the community level.

However, before such arrangements can be possible, governments have to design appropriate

legal and institutional frameworks, incorporating innovations in investment and corporate law

and forms of community organization that will make them work for communities, investors, and

governments. At the moment, benefits to communities are presented more as philanthropy

than as business. Yet these investments are coming into these countries as private sector

initiatives rather than as development assistance.

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Defining relations between communities and investors in business rather than philanthropic

terms will make it possible for governments to play their appropriate role of regulation and

creating an enabling environment. It may mean that governments lose some of the revenue

they currently receive directly for leasing out the land to investors, but they would still receive

payments that are properly due to them in terms of taxes and rents.

In the final analysis, achievement of better outcomes will depend on the lengths to which

governments and investors are prepared to go to effectively involve communities in these

transactions, from their negotiations through to their implementation on the ground. That will

require substantial investments in time and resources and will no doubt increase the transaction

costs. It is also an area in which all parties concerned will for some time have to be open to

learning from doing and innovating new forms of relationships and new ways of doing things.

That, however, is the price that all parties concerned have to pay in order to optimize the

opportunities and benefits of large-scale commercial land acquisitions in Africa.

No examples of good and promising practice have been identified so far. This is not surprising,

given that many of these investments are still pretty much in their formative stages. It may well

be that good and promising practice will not be evident in any one single project, but rather

that different elements of good practice in different projects will be collected over time to help

put together the component parts of what should ultimately be the appropriate project design

for these investments.

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Conclusions and key issues for discussionsLarge-scale commercial land acquisitions are a reality that African governments and communities

have to live with. For better or for worse, they have become part of the rural development

discourse in Africa. All indications are that they are here to stay.

Although the quest for rural land in Africa by investors has increased in pace over the past

two years, the phenomenon is not new to Africa. What is new and has raised concerns among

advocates for rural land rights is the scale and pace of these acquisitions. Otherwise, the history

of Africa is defined in large measure by the competing demands of commercial and subsistence

production.

Governments since colonialism have sought to appropriate rural land for commercial agriculture

and other large-scale investments. African communities who depend on the land for their

livelihoods have always resisted these moves as undermining their livelihoods and land rights.

The customary land tenure under which they hold and use these lands has been ineffective in

securing their interests against the claims of governments.

The trend so far indicates that these acquisitions are set to rise over the coming years. Over

the past two years, the focus of the acquisitions has been on land for large-scale commercial

agriculture to produce mainly grains, particularly rice, maize, and vegetables, and also for the

production of biofuels. These trends are clearly a response to developments at the global

level. The sharp rise in food prices in 2007–2008 following a sudden slump in grain stocks got

governments and investors thinking about how to secure supplies of food grains. Countries of

the Middle East, which are unable to produce grains in their desert environment but are well

endowed with petro dollars, have turned mainly to Africa and are leasing commercial land to

produce food grains for home consumption as well as for trade in international markets. At the

same time, concerns about climate change and fears about declining oil reserves have created

interest in biofuels, and this is also driving up demand for land in rural Africa.

In many ways this is good for Africa. Much of the continent’s productive land is lying unused.

It is estimated that Africa has over 800 million hectares of arable land, of which less than 200

million hectares are under cultivation.28 While there are many reasons behind this, lack of capital,

technology, and markets are some of the key factors. These new demands for African land

to support production of food crops and biofuels provide an answer to at least these three

constraints to agricultural development in Africa. They provide an opportunity to stimulate

rural development while improving food production. Equally, using African land for biofuels

28 G. Fischer, H. van Velthuizen, M. Shah, and F. Nachtergaele. 2002. “Global Agro-Ecological Assessment for Agriculture in the 21st Century”. Rome, Food and Agriculture Organization of the United Nations (FAO), and Laxenburg: Interna-tional Institute for Applied Systems Analysis (IIASA).

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production provides a possibility for promoting green development and contributing to

reduction of global warming and climate change. The capital, technology, and technical

capacities that will accompany these investments have the potential of helping to improve

opportunities for Africans by providing employment and enhancing incomes.

To characterize ongoing large-scale land acquisitions as a new “scramble for Africa” is clearly

an exaggeration. These deals are being negotiated with sovereign African states exercising

powers that they have under national laws. They are trade deals and partnerships entered into

voluntarily, unlike the colonial acquisitions that were violently forced upon Africans on the

basis of agreements struck between imperial powers meeting in Berlin in 1885, without the

participation of Africans or their representatives.

Nevertheless, there are legitimate concerns about the manner in which the deals are being

negotiated and their potential impacts on the land rights and livelihoods of African smallholder

farmers, pastoralists, hunters, and gatherers, whose livelihoods are directly tied to access to land

and natural resources. These land users are not involved in the negotiations, they are not being

compensated for loss of land use rights, and no provisions for benefit sharing with them are

included in the project designs. Already there are indications that livelihoods are being adversely

affected in places where some of these investments are being implemented.

The failure of these deals so far to address these concerns has a lot to do with the status of

political and land natural resources governance in Africa. That governments are negotiating

such major deals without any serious public scrutiny and oversight is a commentary not on the

nature and potential of these deals but on the status of democratic governance, transparency,

and accountability in these countries. There is therefore a strong case for these deals to be

interrogated on the basis of equity and ethics of international trade and development. This is

the motivation for the case studies by ILC of which this overview is part.

This overview shows, with examples from case studies of ongoing projects, that the adverse

impacts of these deals are already being experienced by communities across Africa, while

the benefits are yet to be demonstrated. It also underscores the need for policy, legal, and

institutional innovations to ensure that large-scale commercial land acquisitions and the

ensuing investments will benefit African economies and peoples. Ongoing efforts at the global

level to develop guidelines and standards for these deals are welcome, but ultimately it is what

governments put in place and apply at the national level that will matter for those whose rights

are directly affected by these deals. It is therefore proposed that more reflection and analysis

be directed at the following issues with a view to putting in place appropriate measures for

ensuring that Africans benefit from large-scale commercial land acquisitions:

1. What kind of policies, laws, and institutions at different levels (local, national, global) are required to manage large-scale commercial land acquisitions? Existing land policies, laws, and institutions are clearly not adequate for the task. New frameworks of governance that provide opportunities for informed participation of local communities in these negotiations are called for. At the global level, frameworks and standards should be created for managing PPPs of the type involved in deals such as the one reportedly signed between Kenya

28

and Qatar.29 At the national level, appropriate laws and policies are needed to ensure compensation and direct benefits for communities whose lands rights are affected by these deals.

2. What kind of capacities should be developed within governments and communities for African countries to be able to engage with these processes on a win-win basis? Often the playing field for these negotiations is not level. International investors have access to substantial technical capacity and resources, while African governments and communities do not. The latter need to be supported through the development of appropriate capacities for negotiation and ongoing management of these projects.

3. How can compensations for communities that are displaced or denied access to land and natural resources by these projects be secured? What criteria should be used for calculating such compensation? What are the relative responsibilities of governments and investors for such compensation?

4. How best can community benefit sharing be integrated into these deals and projects? What forms of organization at the community level are needed to make possible commercial partnerships that will ensure that communities benefit from the projects on an ongoing basis? What innovations in policy and law are needed for this purpose?

5. What terms and conditions should be integrated into the agreements to protect and secure human and environmental health? Fears about the impact of agrochemicals and pesticides on the health of local people and the environment need to be addressed upfront through appropriate measures in the agreements. The laxity of environmental regulation in African countries should not be an excuse for international investors to apply lower standards of environmental management in Africa than apply in their home countries.

6. Appropriate monitoring and evaluation mechanisms should be developed throughout the period of the contracts and corrective measures taken where necessary. In this connection, questions about what happens to the land when the investment period ends and the investors leave should be addressed upfront.

7. The global nature of these transactions requires that a global framework for their oversight be put in place, whether this involves the creation of a new global institution or the adoption of this agenda by an existing institution. Such a framework will facilitate ongoing learning and the development of standards as well as sharing of good practice.

Addressing these concerns and finding solutions to the questions raised by them will require close

collaboration between international investors, African governments, the international community,

and civil society groups in Africa as well as abroad. It is imperative that this is done if the phenomenon

of large-scale commercial land acquisitions is to deliver its promised benefits, and not mark a new

beginning of further marginalization of African smallholder farmers, pastoralists, and indigenous

peoples. Failure to deal with these concerns will mean seeing the phenomenon further aggravate

the insecurity of livelihoods across rural Africa and engender even more land-related conflicts.

29 The deal is reported to secure access to productive land in Kenya for Qatar in exchange for the construction of a modern port and a road network linking the port with Southern Sudan.

29

ReferencesCotula, L., S. Vermeulen, R. Leonard, and J. Keeley. 2009. “Land Grab or Development Opportunity?

Agricultural Investment and International Land Deals in Africa”. London and Rome:

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Fischer, G., H. van Velthuizen, M. Shah, and F. Nachtergaele. 2002. “Global Agro-Ecological

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Case studies“After Daewoo? Current status and perspectives of large-scale land acquisitions in Madagascar”.

Rivo Andrianirina Ratsialonana, Landry Ramarojohn, Perrine Burnod, and André

Teyssier. ILC/CIRAD/Madagascar Land Observatory. January 2011.

“A case study of Bechera agricultural development, Ethiopia”. Messele Fisseha.ILC. January 2011.

“Evolution and impacts of coastal land use in Benin: The case of the Sèmè-Podji Commune”.

Paulin Jesutin Dossou, Allagbe B.Y Simon, and Tatiana De-Souza. ILC and Vadid.

January 2011.

“Irregular and illegal land acquisitions by Kenya’s elites: Trends, processes and impacts of Kenya’s

land grabbing phenomenon”. Erin O’Brien in collaboration with Kenya Land Alliance.

ILC. January 2011.

“Socio-Economic Impact of Commercial Exploitation of Rwandan marshes: A case study of

sugar cane production in rural Kigali”. Muriel Veldman and Marco Lankhorst. ILC and

RCN Justice & Démocratie. January 2011

“Social impacts of land commercialization in Zambia: A case study of Macha mission land

in Choma district”. John T. Milimo, Joy H. Kalyalya, Henry Machina, and Twamana

Haamweene. ILC and Zambia Land Alliance. January 2011.

Commercial Pressures on Land

Commercial pressures on land in Africa: a regional overview of opportunities, challenges and impacts

This report is part of a wider initiative on Commercial Pressures on Land (CPL). If you would like further information on the initiative and on the collaborating partners, please contact the Secretariat of the International Land Coalition or visit www.landcoalition.org/cpl

International Land CoalitionSecretariat

fax: +39 06 5459 3628info@landcoalition.orgwww.landcoalition.org

Via Paolo di Dono, 4400142 – Rome, Italytel: +39 06 5459 2445