"Land Grabbing" by Foreign Investors in Developing Countries

Risks and Opportunities

One of the lingering effects of the food price crisis of 2007–08 on the world food system is the proliferating acquisition of farmland in developing countries by other countries seeking to ensure their food supplies. Increased pressures on natural resources, water scarcity, export restrictions imposed by major producers when food prices were high, and growing distrust in the functioning of regional and global markets have pushed countries short in land and water to find alternative means of producing food. These land acquisitions have the potential to inject much-needed investment into agriculture and rural areas in poor developing countries, but they also raise concerns about the impacts on poor local people, who risk losing access to and control over land on which they depend. It is crucial to ensure that these land deals, and the environment within which they take place, are designed in ways that will reduce the threats and facilitate the opportunities for all parties involved.

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IFPRI invites observers to share evidence-based information on land deals by posting a contribution on this blog.

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Deborah Brautigam/Ruth Meinzen-Dick discussion - May 2009

Comment by Deborah Brautigam:

Interesting take on a hot topic. Regarding the subtopic of Chinese agricultural engagement in Africa, however, a few comments: (1) Despite much speculation there is no evidence that Chinese companies are going to Africa for the purpose of exporting rice back to China. (tobacco, sesame, yes, but not rice). Chinese official policy is to maintain self-sufficiency in rice, not to produce it in Africa. (2) The news sources you have listed for your reports on Chinese engagement in Africa are of questionable reliability. The East Timorese student who authored your Mozambique story, for example, assumed Chinese interest in rice production in Mozambique was for export since Mozambicans, he alleged, are not major consumers of rice. But over the past few years, Mozambique has imported more than 300,000 mt of rice annually, a big market for import substitution. http://www.poptel.org.uk/mozambique-news/newsletter/aim366.html#story3

In Zimbabwe, your policy brief lists a 101,171 hectare “overseas land investment to secure food supplies” by China. In fact, this was not an investment but an infrastructure contract given to a Chinese engineering company (CIWEC) to develop new land at Nuanetsi (possibly part of Nuanetsi Ranch) for irrigated maize. Reports from Zimbabwe state that when the government of Zimbabwe was unable to make the first payments on this project, the Chinese company pulled out. http://www.thezimbabweindependent.com/index.php/local/12261 Given the ownership of Nuanetsi Ranch by a foundation set up by the late Joshua Nkomo, it is possible that there is even more intrigue behind this story…

IFPRI is a highly respected organization. The text of your report emphasized quite rightly that Table 1 contains “Typical examples of reports” but someone glancing at Table 1 (which appears to list “real” investments, not rumors reported by journalists) could easily assume this is hard data, which it clearly is not.

Deborah Bräutigam
Associate Professor
International Development Program
School of International Service
American University
Washington, D.C. 20016

Meinzen-Dick, Ruth (IFPRI) wrote:

Dear Prof. Brautigam,

Thanks for drawing our attention to the ambiguity in our table and some of the questions on the underlying news reports. We have edited the table to repeat some of the caveats about the sources of cases and numbers, which are stated in the text just before the table, but might be missed by someone who looks only at the table.

With regard to the particular cases you cite,

According to news reports we have seen, Chinese non-rice investments overseas are bigger: 2.8 million ha secured for palm oil in DRC (International Herald Tribune, May 2008) and 2 million ha requested for jatropha production in Zambia (EarthTimes website, April 2, 2009), but there are also some reported examples of investments in rice production:
10,000 ha secured for rice production in Cameroon
300 ha project for rice production was signed with Tanzania (ChinaDaily, May 9, 2008)

According to the article in our table: “In early 2008, the Chinese government pledged to invest $800 million in modernizing Mozambican agriculture, with the goal of boosting rice production from 100 000 tons to 500 000 tons a year in the next five years.” Indeed, this investment refers to boosting rice production in Mozambique, and might not be targeted for export to China. Other sources are also not clear on this issue.

We removed this example from the policy brief because it is an old deal from 2003. There are other sources on the deal (The Guardian: http://www.guardian.co.uk/world/2003/feb/13/zimbabwe.andrewmeldrum), which report acquiring land for food production: “a Chinese state company, the China International Water and Electric Corporation, has been awarded a government contract to farm 100,000 hectares (250,000 acres) in southern Zimbabwe.” However, this is another example of how information on the same project is reported in different ways.

All of this illustrates the difficulty of assessing these arrangements, and we appreciate your comments to help clarify some ambiguous cases.

With best regards,
Ruth Meinzen-Dick

Deborah Brautigam responded:

Documenting Chinese engagement is truly a challenge.

Believe me, I know as I have just finished writing a book that tries to do just that:
http://www.oup.com/us/catalog/general/subject/Economics/Developmental/Re…

And in the course of my research I have learned to be very cautious about believing reports even in the International Herald Tribune (or the Financial Times or the NYT) as credible sources. I have been amazed to see what is reported in some of the best newspapers, when it comes to Chinese engagement of various kinds.

In the IHT story you note below, for example, the reporters clearly just recycled the Zimbabwe CIWEC construction contract story from 2003 without checking up on it. The ZTE contract for palm oil is another interesting case. While news reports in July initially gave a figure of 3 billion plus hectares, those that were reported later in the Congolese press: http://www.mediacongo.net/show.asp?doc=7456
http://www.lobservateur.cd/index.php?option=com_content&task=view&id=239…
after the deal was submitted to the parliament, give a figure of 100,000 hectares, at least as approved for the first phase. This strikes me as quite plausible and both local sources report the same thing.

Still big, but not 3 billion.

I find Horta’s statement about an $800 million pledged by the “Chinese government” in early 2008 implausible (and have not been able to confirm this anywhere). Much more typical in Mozambique and elsewhere is this kind of agreement www.poptel.org.uk/mozambique-news/newsletter/aim369.html:

good luck in your work,
Deborah Brautigam