European biofuels firms scramble for 'idle' lands in poor countries

This phenomenon, a product of the twin food and fuel crises of last year, is threatening local communities whose traditional use of such lands is being undermined by the food and energy security needs of others.

This all comes from a warning issued on Monday (11 May) by the US-based International Food Policy Research Institute (IFPRI), an agricultural research centre funded by an alliance of 64 governments around the world.

A year after the global food crisis that saw food riots and protests spread throughout the developing world - and even to some rich countries - a number of nations have learnt their lesson.

These countries - largely emerging nations such as China, India and the Gulf states - feel they must ensure food security for their people, even at the cost of the food security of other countries.

At the same time, exacerbating the problem is the scramble by mainly European firms for so-called idle or marginal lands on which to grow biofuels.

Stung by the criticism of scientists last year that using farmland for such crops can actually boost carbon emissions and increase food prices, biofuels firms have been scouting about for cheap ‘wasteland'.

"EU policies is certainly contributing to Western biofuels investment," Ruth Meinzen-Dick, one of the report's two authors, told EUobserver,

"When you hear the word ‘wasteland' or ‘unused', it usually does have some use, just not uses that are officially recognised," she added, "whether as a village common or as pastureland, gathering nuts, honey, or for rattan."

The danger is, her report warns, that these companies risk setting off unrest as communities react to the loss of their lands.

Jatropha, palm oil

Details about the deals, the size of land purchased or leased, and the amount invested are often murky and shrouded in secrecy, according to IFPRI, but they highlight a number of agreements.

UK-based Sun Biofuels has secured land in Ethiopia and Mozambique for the cultivation of biofuels produced from jatropha, as well as some 5,500 hectares in Tanzania for the same purpose. Britain's CAMS Group has also purchased 45,000 hectares for jatropha biofuels in Tanzania. The researchers found that another 10,000 hectares have been secured in Nigeria by Trans4mation Agric-tech, also of the UK.

Ethiopia is home to 13,000 hectares secured under a contract farming agreement with Germany's Flora EcoPower for biofuel crop cultivation.

Sweden's Skebab has secured 100,000 hectares in Mozambique for biofuels as well.

Meanwhile in the east, Denmark's Trigon has secured 100,000 hectares from Russia. Sweden's Alpcot Agro has secured 128,000 hectares and Black Earth Farming 331,000 hectares in the country. Landkom, a UK firm, has leased 100,000 hectares in Ukraine.

Food production meanwhile is usually the focus of the land acquisition by emerging economies. The UAE has secured some 378,000 hectares to grow corn, alfalfa, wheat, potatoes and beans, while Saudi Arabia is in the process of gaining access to 500,000 hectares in Tanzania.

Some emerging economies as well are also getting in on the biofuels bonanza. China has secured a whopping 2.8 million hectares in the Democratic Republic of Congo for oil palm and is hoping to access another 2 million hectares in Zambia for jatropha.

All told, the acreage secured through lease or purchase by Asian and European private and public investors amounts to 15-20 million hectares, at a cost of €15-20 billion ($20-30 bn).

By comparison, annual net official development aid by OECD countries amounted to around €90 billion ($120bn) in 2008, €50 billion of which came from the EU.

Jobs, infrastructure

"Additional investments in agriculture in developing countries ... should be welcome in principle," the report says.

These land acquisitions could inject much-needed investment into agriculture and rural areas in poor developing countries, with the monies potentially creating farm jobs, improving rural infrastructure and aiding technology transfer.

But, avers the report, "the scale, the terms, and the speed of land acquisition have provoked opposition in some target countries" as local people lose access to and control over land on which they depend.

Often the agreements are not made on equal terms between the investors and local communities, resulting in smallholders who cannot effectively negotiate with these big players being displaced from their land and unable to seek redress in the event of foreign investors failing to live up to agreements.

Elsewhere, people may not have formal title to the land on which they depend, but instead use it under customary tenure arrangements. As a result, they are frequently pushed off the plot so that the official ‘owner' of the land can profit from the sale or lease to the investor.

According to IRIN, the UN's humanitarian information news service, the lease of coastal wetlands in Kenya by Qatar threatens to displace thousands of locals who use the region for produce and livestock farming. Local councillors have said they will go to court to prevent the government from leasing the property.

In Madagascar meanwhile, the IFPRI researchers write, negotiations with South Korea's Daewoo Logistics Corporation to lease 1.3 million hectares for maize and oil palm played a role in the political conflicts that led to the overthrow of the government in 2009.

Code of conduct

"It is possible to have win-win scenarios," said Ms Meinzen-Dick, "but it requires making sure that local people will at least be no worse off and hopefully derive some share of the benefits from the investment."

To this end, IFPRI has recommended a code of conduct for foreign land acquisition and is developing guidelines on negotiations with investors in tandem with the African Union. The researchers want to see transparency in negotiations so that existing landholders are informed and involved in any land deal negotiations.

There should also be respect for existing land rights, including customary and common property rights.

And when national food security is at risk, they say, domestic supplies should have priority and foreign investors should not have a right to export during an acute national food crisis.

The IFPRI-African-Union guidelines are to be presented to the continent's leaders at their July summit.