70.2 million hectares taken over by foreigners
An estimated 70.2 million hectares of agricultural land globally was taken over by foreign private and public investors since 2000, according to Worldwatch Institute.
This is taking advantage of opportunity that investment companies have been touting heavily for the last few years. Investments of land purchases and leases are lead by Africa and Latin America. Much of the investment is because of the possible return on money compared to putting the money into non-agricultural properties, businesses or stocks and bonds.
Worldwatch doesn’t see this as good investment but as “land grabbing” with some governments being cozy with outside investors and other investors taking advantage of countries’ poverty-stricken small landowners.
The bulk of these acquisitions (leases and purchases) took place between 2008 and 2010, peaking in 2009, according to Worldwatch. “Although data for 2010 indicate that the amount of acquisitions dropped considerably after the 2009 peak, it still remains well above pre-2005 levels,” wrote Worldwatch author Cameron Scherer.
“Africa has seen the greatest share of land involved in these acquisitions, with 34.3 million hectares sold or leased since 2000. East Africa accounts for the greatest investment, with 310 deals covering 16.8 million hectares. Increased investment in Africa's agricultural land reflects a decade-long trend of strengthening economic relationships between Africa and the rest of the world, with foreign direct investment to the continent growing 259 percent between 2000 and 2010,” Worldwatch reported.
“Asia and Latin America come in second and third for most heavily targeted regions, with 27.1 million and 6.6 million hectares of land deals, respectively,” it was further noted.
When it comes to countries making investments or where the private money is coming from, the report claimed, Brazil, India and China account for 16.5 million hectares, or around 24 percent of the total hectares sold or leased worldwide. When the East Asian nations of Indonesia, Malaysia and South Korea are included, there have been 274 land deals covering 30.5 million hectares.
The United States and the United Kingdom account for a combined 6.4 million hectares of land deals. The Arab Gulf countries including Saudi Arabia, the United Arab Emirates and Qatar make up the final group of major land investors responsible for 4.6 million hectares, according to the report. This number is lower than would be expected because there is considerable talk about these countries having the money and very limited agricultural production land.
"In several cases--namely, South Africa, China, Brazil and India--there is an overlap between investor and target countries," the author Scherer explained. "Yet most of the data paint one of two pictures: First, there is a new 'South-South' regionalism, in which emerging economies invest in nearby, culturally affiliated countries. The other trend is one of wealthy (or increasingly wealthy) countries, many with little arable land, buying up land in low-income nations--especially those that have been particularly vulnerable to the financial and food crises of recent years."
She contends, the food crisis of 2007-08 helped spark the dramatic increase in foreign acquisitions in 2009, as investors looked to capitalize on the rising prices of “staple crops.”
An interesting concept proposed by Scherer is that demand for land to grow other than food and feed will increase as investors look for biofuels production land.
Worldwatch takes the side of the underprivileged by contending, “The implications of the recent surge in foreign land acquisitions are still unclear. In many cases, the deals displace local farmers who already occupy and farm the land, but who frequently lack formal land rights or access to legal institutions to defend these rights. The land grabs also often result in the use of industrial agriculture and other practices that can bring serious ecological and other impacts to these regions. In the absence of clear regulations, robust enforcement mechanisms, government transparency and channels for civil society participation, further investments in land may benefit a group of increasingly wealthy investors at the expense of those living in the targeted land areas.”
- Woman arrested in seed theft case released on bond
- Mosaic to halt muriate of potash output in New Mexico
- Dow Chemical adds more assets to "for sale" list
- U.S. farmers resort to giant storage bags to avoid cheap sales
- Fafinski Mark & Johnson launches UAS practice group
- Most ag markets are higher, but hog futures are tumbling Thursday