Land robbery: governments seeking food security sow seeds of discontent

Donald Trump stole the headlines as President of the United States when he was reported to be interested in buy Greenland. The self-governing Danish territory rejected the idea and declared it not for sale. But cross-border land transactions are hardly unusual.

Food insecurity is speeding up progress. Turkey is among those looking for new grasslands to feed its population. As inflation soars, the country hopes to revive flag transaction for a 99-year lease on 800,000 hectares in Sudan.

According to Grain, an NGO that tracks farmland leasing activities, it used data from the project to show that nearly 500 such deals took place in the decade to 2016. This epidemic covers more than 30 million hectares of land in 78 countries, many in Africa. That adds to the pressure of depleting resources like water. But the decline in food, exacerbated by refugee crises, climate change and war, suggesting more activity to come.

Lex chart showing top 10 target counties for foreign land buyers

Private companies were involved in the land grab. In 2008, Korea’s Daewoo Logistics signed a 99-year lease on 1.3 million hectares – half the size of Belgium – in Madagascar. Recommended price tag: no. “We want to grow corn there for our food security,” said one manager tell FT at that time. “Food can be a weapon in this world.”

The backlash that the deal provoked, especially because it contributed to President Marc Ravalomanana’s invisibility, has scaled back some of its future plans. Elsewhere, including in Latin America, have been restructured into more palatable forms, such as those based on securing the yields of farms rather than the land itself.

Lex chart showing purchases by land use type

But the controversial deals are continuing. Abu Dhabi-based Elite Agro, a major landowner in Serbia, has contracted to buy farmland in Madagascar. The US-based African Agriculture Sector (AAGR) has big plans to grow alfalfa in Senegal and late last year signed land deals in Niger.

The group is controlled by Romanian Australian mining magnate Frank Timis, submit listed on Nasdaq at the end of June. AAGR says it already provides schools and food in Senegal, and is seen as a good mover. But some communities in Senegal are protesting, saying the land belongs to them. they are require that it is returned.

There will be more scuffles between the locals and the new global landowners. But such wars are unlikely to stem the tide of land investment.

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