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September 10, 2010

World Bank on land grabs: Proceed with care

A much anticipated World Bank report was released a few days ago on a controversial but important issue: foreign direct investment in land, particularly in poorer countries. Dubbed "land grabs" by the critics, a surge in investor interest in buying or leasing land abroad was one of the unexpected but dramatic responses to the surge in food prices in 2007-08. For a while, newspapers were full of stories of big but vague deals between foreign companies and governments of land in some of the world's poorest countries (as well as some not so poor countries). In the most publicized case, in Madagascar, it was a bid for nearly half the country's arable land in 2008 by a South Korean firm, Daewoo, that tipped a country already rife with political dissent into demonstrations that overthrew the government. We have commented on the phenomenon from time to time, and Alexandra Spieldoch and I wrote a chapter on the issue for a book published by the Wilson Center in D.C.

It won't be hard to find fault with the World Bank report. It's a highly politicized issue, and the World Bank has a long and controversial history of financing investment in natural resource extraction in projects that fail to meet appropriate social and environmental standards. Too often, the WB fails to meet its internal standards. The audience of NGOs, in any case, is likely to be skeptical at best.

Without jumping into that controversy here, I think it's worth underlining some of what the report has to offer. First, as the authors say themselves, this is an issue where there has been considerably more talk than action. The report estimates that only 20 percent of the proposed ventures have actually started production, for example. Other data, though some of it only goes up to 2006 and therefore predates the big explosion of interest, suggests that a significant share of the investment is actually domestic. That is, while it's clear that a lot of land has started to change hands, it seems not all of it—in some countries not more than 10 percent of it—is being signed over to foreigner entities.     

Second, the report does not pull punches as to the (many) areas of concern that the investments give rise to. For example, the report says:

However, countries with poorer records of formally recognized rural land tenure also attracted greater interest, raising a real concern about the ability of local institutions to protect vulnerable groups from losing land on which they have legitimate, if not formally recognized claims.

Many of these same countries face chronic food shortages, are regular recipients of food aid from the World Food Program and have suffered from historically poor governance. 

Third, the report makes a few points that need attention, with or without large-scale land deals. First, there is a significant gap between the actual and potential output of much of the world's existing farmland, especially in sub-Saharan Africa. This gap should be narrowed. Second, land rights need urgent attention and regulation in many local, national and international contexts, whether it be the struggles of indigenous peoples the world over, of women confronted with patriarchal customary laws, or of the landless, such as Brazil's landless workers (MST), forcibly occupying abandoned land in the name of their right to survive. Large-scale investments by foreign governments and companies bring attention to a much broader set of struggles for justice related to land. The World Bank report makes the point that, looking ahead, land is only going to get more valuable. In that process, the poor (and otherwise marginalized) will be dispossessed unless direct measures are taken.

There's plenty more to say on this topic, and on the report itself. For now, I think it's worth welcoming this contribution to the debate, not least for shining a carefully documented and thoughtful light on what has been and all too opaque and alarming trend.

Sophia Murphy

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