Land grabbing


Land grabbing is the large-scale acquisition of land through buying or leasing of large pieces of land by domestic and transnational companies, governments, and individuals.
While used broadly throughout history, land grabbing as used in the 21st century primarily refers to large-scale land acquisitions following the 2007–08 world food price crisis. Obtaining water resources is usually critical to the land acquisitions, so it has also led to an associated trend of water grabbing. By prompting food security fears within the developed world and newfound economic opportunities for agricultural investors, the food price crisis caused a dramatic spike in large-scale agricultural investments, primarily foreign, in the Global South for the purpose of industrial food and biofuels production.
Although hailed by investors, economists and some developing countries as a new pathway towards agricultural development, investment in land in the 21st century has been criticized by some non-governmental organizations and commentators as having a negative impact on local communities. International law is implicated when attempting to regulate these transactions.

Definition

The term "land grabbing" is defined as very large-scale land acquisitions, either buying or leasing. The size of the land deal is multiples of Orders of magnitude #108 to 1014 sqm| or and thus much larger than in the past. The term is itself controversial. In 2011, Borras, Hall and others wrote that "the phrase 'global land grab' has become a catch-all to describe and analyze the current trend towards scale national commercial land transactions." Ruth Hall wrote elsewhere that the "term 'land grabbing', while effective as activist terminology, obscures vast differences in the legality, structure, and outcomes of commercial land deals and deflects attention from the roles of domestic elites and governments as partners, intermediaries, and beneficiaries."
In Portuguese, Land Grabbing is translated as "grilagem":
The term grilagem applies to irregular procedures and illegal private landholding with violence in the countryside, exploitation of wealth, environmental damage and the threat to sovereignty, given their gigantic proportions.

Situation in the 21st century

Land area

The Overseas Development Institute reported in January 2013 that with limited data available in general and existing data associated with NGOs interested in generating media attention in particular, the scale of global land trade may have been exaggerated. They found the figures below provide a variety of estimates, all in the tens of millions of hectares.
  • The International Food Policy Research Institute estimated in 2009 between 15 and 20 million hectares of farmland in developing countries had changed hands since 2006.
  • the Land Portal's Land Matrix data totalled 49 million hectares of deals globally, although only 26 million hectares of these are transnational.
  • A 2011 World Bank report by Klaus Deininger reported 56 million hectares worldwide.
  • Friis & Reenberg reported in 2012 between 51 and 63 million hectares in Africa alone.
  • The GRAIN database published in January 2012, quantified 35 million hectares, although when stripping out more developed economies such as Australia, New Zealand, Poland, Russia, Ukraine and Romania, the amount in the GRAIN database reduces to 25 million hectares.
  • Between 1990 and 2011, in the West Bank 195 km2 of land were expropriated by Israel, without compensation for the local owners, and allocated to immigrants for new settlements and for the establishment of mostly large farms. Water for the local population became extremely sparse. In 2016, as a part of a permanent process 300 acres of land were added.
Most seem to arrive at a ballpark of 20–60 million hectares. Given that total global farmland takes up just over 4 billion hectares, these acquisitions could equate to around 1 per cent of global farmland. However, in practice, land acquired may not have previously been used as farmland, it may be covered by forests, which also equate to about 4 billion hectares worldwide, so transnational land acquisitions may have a significant role in ongoing deforestation.
The researchers thought that a sizeable number of deals remain questionable in terms of size and whether they have been finalised and implemented. The land database often relies on one or two media sources and may not track whether the investments take place, or whether the full quantity reported takes place. For example, a number of deals in the GRAIN database appear to have stalled, including:
  • 1 million hectares taken between US firms Arc Cap and Nile Trading and Development Inc in Sudan
  • A 400,000 hectare deal between China and Colombia that seems to have stalled
  • The 325,000 hectare investment by Agrisol in Tanzania
  • A 324,000 hectare purchase of land by the UAE in Pakistan
  • A suspended 320,000 hectare purchase by Chinese investors in Argentina.
The researchers claim these are only those that have been checked, and already amount to nearly 10 per cent of the GRAIN database transnational land acquisitions. Deals are reported that use the estimate of the full extent of land that the firm expects to use. For example,
  • Indian investment in Tanzania is reported at 300,000 hectares, currently operating on just 1,000 hectares
  • Olam International's investment in Gabon reported at 300,000 hectares, currently operating on just 50,000
  • Three investments amounting to 600,000 hectares in Liberia, with Equatorial Palm Oil's deal reported at 169,000 hectares, despite their plans to reach just 50,000 by 2020.

    Land value

The researchers found that in terms of value of transnational land acquisitions, it is even harder to come across figures. Media reports usually just give information on the area and not on the value of the land transaction. Investment estimates, rather than the price of purchase are occasionally given
They found a number of reports in land databases are not acquisitions, but are long-term leases, where a fee is paid or a certain proportion of the produce goes to domestic markets. For example:
  • An Indian investment in Ethiopia, where price per hectare ranged from $1.20 to $8 per hectare per year on 311,000 hectares
  • Indian investors paid $4 per hectare per year on 100,000 hectares.
  • Prince Bandar Bin Sultan of Saudi Arabia was reported to be paying $125,000 per year for 105,000 hectares in South Sudan
  • A South Korean investor in Peru was reported to be paying $0.80 per hectare.
The estimated value has been calculated for IFPRI’s 2009 data to be 15 to 20 million hectares of farmland in developing countries, worth about $20 billion-$30 billion.
Researchers discovered global investment funds are reported to have sizeable funds available for transnational land investments.
  • One estimate suggests “$100 billion waiting to be invested by 120 investment groups” while already “Saudi Arabia has spent $800 million on overseas farms”. In 2011, a farm consultancy HighQuest told Reuters “Private capital investment in farming in expected to more than double to around $5 billion-$7 billion in the next couple of years from an estimated $2.5 billion-$3 billion invested in the last couple of years”.
There is significant uncertainty around the value of transnational land acquisitions, particularly given leasing arrangements. Given the quantity of land and the size of investment funds operating in the area, it is likely that the value will be in the tens of billions of dollars.

Land destinations

Researchers used the Land Portal's Land Matrix database of 49 billion hectares of land deals, and found that Asia is a big centre of activity with Indonesia and Malaysia counting for a quarter of international deals by hectares. India contributes a further 10 per cent of land deals. The majority of investment is in the production of palm oil and other biofuels.
They determined that the Land Portal also reports investments made by investors within their home country and after stripping these out found only 26 million hectares of transnational land acquisitions which strips out a lot of the Asian investments. The largest destination countries include
  • Brazil with 11 per cent by land area
  • Sudan with 10 per cent
  • Madagascar, the Philippines and Ethiopia with 8 per cent each
  • Mozambique with 7 per cent
  • Indonesia with 6 per cent.
They found the reason seems to be biofuels expansion with exceptions in Sudan and Ethiopia, which sees a trend towards growth of food from Middle Eastern and Indian investors. Represented in the media as the norm they seem to be more the exception.

Land origins

The researchers found a mixed picture in terms of the origins of investors. According to the Land Portal, the United Kingdom is the biggest country of origin followed by the United States, India, the UAE, South Africa, Canada and Malaysia, with China a much smaller player. The GRAIN database says:
  • United States, the UAE and China all constitute around 12 per cent of deals
  • India with 8 per cent
  • Egypt and the UK with 6 per cent
  • South Korea with 5 per cent
  • South Africa, Saudi Arabia, Singapore and Malaysia all with 4 per cent.
Both the Land Portal and the GRAIN database show that the UK and the US are major players in transnational land acquisitions. This is agribusiness firms, as well as investment funds, investing mostly in sugar cane, jatropha or palm oil. This trend has clearly been driven by the biofuels targets in the EU and US, and greater vertical integration in agribusiness in general.
The smaller trend is the picture of Middle Eastern investors or State-backed Chinese investments. While the UAE has done some significant deals by size, some driven by food deals, with Saudi Arabia a smaller number, this is not the dominant trend. While this aspect of land trade has gathered much media attention, it is not by any means a comprehensive story.