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Q+A: Will 'land grab' rules benefit developing countries?

by olesya-dmitracova | Thomson Reuters Foundation
Wednesday, 14 July 2010 14:47 GMT

LONDON (AlertNet) - The United Nations' Food and Agriculture Organisation (FAO) is leading efforts to draw up the first ever global guidelines to ensure land access for farmers and investors, boost food security and prevent arbitrary land grabs.

The high food prices that sparked riots and supply scares in 2008 have pushed countries such as Saudi Arabia, China and South Korea to seek farmland abroad to feed their growing populations, a practice that has prompted criticism for harming the interests of local people.

Investors have also been leasing land abroad for mining, timber and tourism.

Since 2006, foreign buyers have acquired or are negotiating to acquire between 15 million and 50 million hectares of farmland in poorer nations, according to different estimates released in the past year. Ongoing research by the International Land Coalition indicates the real figure could be many times higher.

Problems relating to land tenure are often caused by weak governance, the FAO said in October when it set out to develop the voluntary guidelines.

Based on consultations with governments, the private sector, farmers, indigenous groups, local authorities, academics and independent experts, the organisation plans to produce a draft of the new guidelines in October 2010.

UNDERLYING PRINCIPLES

The guidelines will be based on seven broad principles, developed by the World Bank and U.N. bodies Â? the FAO, International Fund for Agricultural Development (IFAD) and United Nations Conference on Trade and Development (UNCTAD).

The principles were laid out in a January 2010 publication by the four bodies and are summarised below.

Governments and investors must:

1. Respect existing rights to land

This applies to both use and ownership rights, whether statutory or customary, primary or secondary, formal or informal, group or individual.

"There are few areas truly 'unoccupied' or 'unclaimed'," the publication says. "Frequently land classified as such is in fact subject to long-standing rights of use, access and management based on custom."

Ways to ensure all rights to land are respected include paying the holders of the rights fairly and promptly, and allowing any disputes to be resolved via independent channels.

Particular attention should be paid to lands abandoned by their owners or users due to conflict or a natural disaster and which may be reclaimed later, and to the land rights of often-neglected herders, women and indigenous groups.

2. Ensure investments prevent hunger

If a land lease or acquisition threatens the supply of food for those who lived off the land previously, policy-makers must provide them with job opportunities outside farming.

Also, "attention should be given to improving the peopleÂ?s ability to purchase food by ... generating downstream employment in packing sheds, processing operations, or ancillary services such as handling, transport or marketing", the paper says.

Another way to prevent a land lease contributing to a food crisis in the host country is to write provisions into investment agreements that prevent the export of large amounts of food from that country under specific market conditions.

3. Make processes for investing in land transparent, and work on improving business, legal and regulatory conditions

Lack of transparency creates distrust, leads to allegations of corruption and fuels conflicts, the publication says.

Its recommendations include making all relevant information - such as requests for land, key features of prospective investments and potential tax revenues - publicly available, and regularly auditing institutions that handle the selection and transfer of land to investors.

As examples of good practice, the paper cites websites in Cambodia and Sudan that provide information on investorsÂ? requests for land and the digitising of land records in India which has reduced corruption and increased the number of deals.

Many land investors say they are reluctant to put money into countries with constricting business rules and biased or weak enforcement of policies. Dialogue between investors, governments and other affected people can help improve the investment environment.

4. Consult all those materially affected, and record and enforce the resulting agreements

If the people affected by a land deal are not consulted, they are likely to become worse-off.

They could, for instance, lose their rights to a plot of land without due compensation, see their surrounding environment deteriorate, lose access to a culturally important area or miss out on possible profits from the land - all of which can lead to conflict, the paper says. They should be given the opportunity to turn down land investors.

5. Ensure projects respect the rule of law and industry best practice, and are economically viable

Investors should "strive not only to increase shareholder value but also to generate significant and tangible benefits for the project area, affected communities and host country".

6. Work to generate positive and fairly distributed social effects

Neither governments nor investors tend to focus on the social effects of investments in land. Yet even economically viable projects can have negative social consequences by forcing people to relocate without due compensation, for example, or if local elites capture all the economic benefits.

Governments and investors should collaborate to make sure their land deals produce social benefits such as improvements in infrastructure, transfers of technology and expertise, and job creation.

The publication cites the Sichuan Urban Development Project as an example of how to compensate fairly people who are asked to leave their farmland.

The farmers were consulted before the project started, and as a result, the government committed to provide them for life with the same amount of income they used to derive from their land and gave them access to training courses to help them find new jobs.

7. Analyse and minimise negative environmental impacts

Investors have little incentive to take into account their projects' impacts on natural resources and the environment outside the immediate project area or beyond its lifespan. Regulators - local, national or global - should therefore ensure investors prevent negative environmental effects, such as reduced access to water for local people or worse soil quality.

The paper recommends conducting an independent analysis of possible environmental impacts of a land project before it is approved; reclaiming or increasing productivity of areas already used rather than clearing new land; choosing a production system that uses natural resources most efficiently; and monitoring the project's effects during its implementation.

WILL RULE-BASED LAND INVESTMENT HELP POOR NATIONS?

Yes:

"If done well, resource-intensive agro-investments can generate new and higher-paying jobs, upgrade the skills of the labour force, facilitate technology transfer, open new and better markets, and generate complementary infrastructure," the four institutions say in their publication.

Investment in farming is something Africa - where many farmland deals have been made - sorely needs, FAO Director-General Jacques Diouf said in May.

"African agriculture faces multiple constraints, ranging from lack of access to water and modern inputs to poor rural infrastructure... Underinvestment in agriculture has been the core reason for African hunger and malnutrition," he said in a statement.

Lorenzo Cotula, a senior researcher at the International Institute for Environment and Development (IIED), also wrote in March that farmland deals can be good news for local populations when not made behind closed doors.

"The key problem is the lack of transparency in the ways governments make land available to investors. This opens the door to corruption and means the rich and powerful can capture the benefits of land deals without sharing them fairly," he said.

Such investments can also produce environmental benefits, according to the World Bank/FAO/UNCTAD/IFAD paper.

For example, large-scale operations in the southernmost areas of South America have pioneered the routine use of GPS to monitor soil and plant conditions and so reduce the amount of fuel and fertiliser needed.

No:

Opponents of land grabbing say the capital, technology and expertise from large land investments are unlikely to trickle down to poor farmers.

More than 100 social organisations and movements said in a statement in April: "These principles will not accomplish their ostensible objectives. They are rather a move to try to legitimise land grabbing. Facilitating the long-term corporate (foreign and domestic) takeover of rural people's farmlands is completely unacceptable no matter which guidelines are followed."

"(The principles) aim to distract from the fact that todayÂ?s global food crisis, marked by more than 1 billion people going hungry each day, will not be solved by large-scale industrial agriculture."

They proposed the following alternative measures:

- Keep land in the hands of local communities and implement agrarian reform to ensure all citizens have equal access to land and natural resources

- Strongly support small-scale farmers, fishermen and shepherds to help them produce ample, healthy and safe food

- Overhaul farm and trade policies and support local and regional markets

- Enforce strict regulations that curb the access of corporations and other powerful actors - state and private - to agricultural, coastal and grazing lands, forests and wetlands.

Sources/further reading:

- "Principles for responsible agricultural investment that respects rights, livelihoods and resources" by FAO, IFAD, UNCTAD and the World Bank

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- "Land grab or development opportunity? Agricultural investment and international land deals in Africa" by IIED, FAO and IFAD

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- "Deals can be good news when not made behind closed doors" by Lorenzo Cotula of IIED

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