Jan 07, 2010

Is Agro-Imperialism Really Agro-Opportunity?

by Laura Starita

2009 may go down as the year that food scarcity emerged as a source of global economic opportunity. Yes, I just used the terms “food scarcity” and “economic opportunity” in the same sentence, and not without some concern. I find it theoretically distasteful that one group may go out of their way to benefit from the disadvantage of another, and so I began reading a few weeks ago with some trepidation two separate pieces—one in the Times, one in the Post—about the land-grab taking place in a part of Africa called the Guinea Savannah Zone. The Guinea Savannah Zone is a fertile crescent of land that includes parts of Sudan, Ethiopia, Congo and Angola, among others. The Zone is earmarked as fertile, “underutilized” land by the World Bank and others.

Investors from countries with a lot of money but very little arable land—such as Saudi Arabia, South Korea and India—have purchased the rights to develop millions of acres for agriculture and export the yield for sale in their native countries. Not limited to the Guinea Savannah Zone, international agriculture acquisitions have become more common in the past few years. For example, a controversial attempt by South Korean conglomerate Daewoo to acquire significant volumes of Madagascar’s arable land played a role in fomenting a coup last summer. In aggregate, the increase in international agricultural deals raises significant questions, especially since the country most enthusiastically selling rights to its land is Ethiopia, known best by Westerners for the millions of citizens who starved to death in the 1980s and the millions more who receive food aid every year. Both the Times and the Post implicitly conclude that the lease of Ethiopian land to foreign developers amounts to nothing less than exploitation of the poor by the wealthy. But does it have to be?

It does not take long for the subject of agriculture to come up in any discussion of global poverty. The majority of the rural poor around the world rely on agriculture for income, food, or both. And they are likewise most affected by agricultural “shocks” such as drought, conflict, soil nutrient depletion and climate change. None of this is news. Nor is it unknown that, despite this vulnerability, most international aid agencies have focused their attention elsewhere for the last two decades. This means less money going to the development of drought- or pest-resistant seeds, and less money to subsidize fertilizer, provide education in new methods or invest in infrastructure to bring crops to market.

Some entities in the aid world are working to make up the difference—particularly in Africa, where food scarcity in many countries of the sub-Saharan region is a frequent issue. In 2007 the World Bank’s annual report on development highlighted agriculture in the developing world as needful of major investment by the Bank itself, and the wealthy economies that fund it. In 2008, The Bill and Melinda Gates Foundation announced increased investments in agriculture, including for the creation of new seeds and helping farmers connect to markets where they can get better prices for their goods, all in the interest of creating a “Green Revolution” for Africa.

When I try to put together the the fact that, on the one hand, there are a billion acres of underutilized arable land in Africa, and on the other hand, ongoing food scarcity in that same region, I get pretty confused. While I can understand why the reporters at both the Times and the Post might see the lease of agricultural land in Ethiopia as exploitation, I can’t help but see it as a failure on the part of developed economies to help a country with known challenges take advantage of existing resources. The fact that a number of private investors are now pursuing those same resources for both commercial gain and to solve a similar problem for their own people, well…I don’t mean to be cynical, but, it’s too late now to look shocked and dismayed—you snooze, you lose.

And private investment in agricultural production in Ethiopia is not necessarily a bad thing. The Times piece points repeatedly to a recent Foreign Affairs article by Oxford economist Paul Collier, in which he argues that commercial agriculture in Africa may play a role in economic development and decreased food scarcity. Creating larger, more efficient farms with better yields may create more reliable employment and income than the dozens of subsistence level peasant farms that exist throughout the continent. Indeed, the wages of local workers are likely to be far steadier than the uncertain income they would earn from their own small farms. People working on a Saudi—owned farm in Ethiopia profiled in the Times complained that the pay was “poor,“ yet the farm is paying the going wage in the region, and it is not clear that the workers have better employment alternatives. What neither story makes clear, and is a substantial concern, is to what degree land is being expropriated from local owners to sell to international investors.

Other critics point to environmental concerns: Ethiopia is leasing the land rather than selling it, and its investors are foreign, which raises alarms about whether the lessor truly cares about sustaining the resource for long-term use. Will they use water resources sparingly and engage in proper land stewardship if they don’t own the resource and don’t have any personal investment in the community? These are real issues—but it is not clear that native people working land they view as their own are more likely to engage in sustainable practice than businesses whose commercial interests are at stake. Just look at India and the dramatic water scarcity issues it is now facing as a consequence of overuse by land-owning farmers. In any event, Collier again offers some useful thought on these matters. If foreign land deals are going to become more common in the future, given the challenges of food and water scarcity, then countries with available land would be advised to adopt functional laws and charters that set a fair lease price for the land, a fair wage for the workers, fair rules about use of local vs. immigrant labor and fair and responsible practices around environmental matters. Certainly, concerned aid agencies and advocates can offer help and guidance, but the real actors in any functional and long term relationship have to be the involved countries and their people. The result could be opportunity for everyone, and exploitation for none.