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Up for grabs: how foreign investments are redistributing land and water across the globe

In 2007, the increased human population, increased prices in fuel and transportation costs, and an increased demand for a diversity of food products prompted a Global Food Crisis. Agricultural producers and government leaders world-wide struggled to procure stable food sources for their countries. But the crisis had impacts beyond 2007: it was also the impetus for what we now know as the global land-grabbing phenomenon.

“Land grabbing” involves capital-rich countries investing in land and subsequent agricultural operations in foreign countries. These countries tend to be developing nations, mostly in Africa and Asia, which are rich in natural resources, but poor in capital and eager for opportunities to generate economic stimulation.

In addition to providing new land areas for countries with a limited amount of arable land, land grabbing also diversifies and strengthens a country’s agricultural production. It’s a foreign insurance policy against pests, natural disasters, drought, and unpredictable events. In some instances, countries invest in foreign lands because the cost of agricultural production is high in their own countries, for example inflated fuel prices and water scarcity limit many in-country markets. In addition, private investors are also grabbing land to outsource food production for profit by producing cash crops and biofuels for export.

According to a recent paper in the Proceedings of the National Academy of Sciences (PNAS) by Maria Cristina Rulli with the Polytechnic University of Milan and colleagues, there are an estimated 62 ‘grabbed countries’ and 41 ‘grabbers,’ with the Middle East, South America, Europe, and Southeast Asia acting as the biggest grabbers. Estimates of the total amount of grabbed land are variable, but it is clear that numbers are steadily on the rise.

Children in Madagascar. Although Madagascar suffers high poverty and malnutrition rates, controversial foreign land deals have occurred here in recent years. Photo by: Rhett A. Butler.
Children in Madagascar. Although Madagascar suffers high poverty and malnutrition rates, controversial foreign land deals have occurred here in recent years. Photo by: Rhett A. Butler.

Ironically, grabbed countries with hefty foreign agricultural investments often suffer from food shortages themselves. Many denizens of grabbed nations suffer from malnutrition. These nations lack the organization, capital, and infrastructure to conduct their own agricultural operations and thus outsource their food production. So while grabbers acquire land to supply food for their increasing populations, grabbed countries’ increase their dependency on foreign-supplied food, leading to deeper economic problems and often social unrest.

Countries that do not have enough water to sustain their own agricultural operations are considered as “virtual water dependent,” according to the recent paper. Without land acquisitions from abroad, these countries may not be able to sustain their populations without importing most of their food. In fact, the scientists postulate that as early as 2030 we could be seeing declines in foreign populations due to a lack of water and subsequent agricultural products.

According to available records, more than a thousand land deals have occurred since 2000, redistributing ownership of land and natural resource rights of well over 200 million of acres of land. The amount of grabbed water is projected at 454 billion cubic meters of water per year, which amounts to around 5% of the annual global usage of water. That said land grabbing data are somewhat unreliable because many such records not publicly available.

“The estimates are as accurate as they can be if we consider the nature of the land (and water) grabbing process and the lack of transparency affecting many of these land deals,” co-author Paolo D’Odorico, of the University of Virginia, told
The actual amount of land grabbed is likely even greater than estimated.

Land deals are negotiated in the upper tiers of society and government with little or no input from the communities who are impacted by the sale and conversion of land. Often times native farmers do not have formal property rights to the land they farm, and even though it has been passed down through generations, these land rights have no legal recognition. And while land deals vary from country to country, the general trend is that locals affected by land deals are not informed of plans in advance or made aware of their rights to oppose deals or even negotiate terms.

Oil palm plantations, seen here in Malaysia, are a common crop grown on 'grabbed' lands. Many of these deals have become controversial. Photo by: Rhett A. Butler.
Oil palm plantations, seen here in Malaysia, are a common crop grown on ‘grabbed’ lands. Many of these deals have become controversial. Photo by: Rhett A. Butler.

Foreign investment in land and agricultural operations can provide jobs, infrastructure, new technologies, and a demand for local products. If crops are properly exported and taxed, this could bode well for local economies. Often times, however, these benefits do not trickle down.

“To solve both [land grabbing and food security] we need a win-win strategy for both target and investor countries, something that will guarantee food security in each country,” lead author Maria Cristina Rulli says.

It’s important to understand that countries that buy land on foreign soils are not just buying property, and not just influencing the microcosm of land within the boundaries of their parcels—they are also buying rights to water and other natural resources. Much of grabbed land is not agricultural land to begin with. The conversion of these lands to farmland entails deforestation, land clearing, and land use alterations that greatly modify local ecosystems, often resulting in carbon emissions, biodiversity loss, and local people losing access to natural resources. Altered distribution of water resources, changes in land use, soil degradation, and the use of fertilizers and pesticides, among other factors, affect the local environment and compromise the ecological sustainability of the environment.

Large-scale agriculture draws heavily on water resources from rivers, lakes, and groundwater; these water resources extend beyond the boundaries of purchased land parcels. Irrigated agricultural operations often channel water from areas outside the purchased landholdings, reducing water supplies for neighboring landowners, and on a greater scale, affecting global distribution of water and rights to water.

The amount of land that a country acquires is not directly proportional to the amount of water it draws from that land. Grabbed countries experience a diversity of climates, so the water garnered from land acquisitions for agricultural production varies. Grabbed land in tropical countries with heavy rainfall (like Indonesia) acquires much of its agricultural water from rainfall, while more arid countries (like Sudan) rely on bodies of water and groundwater supplies.

Land grabbing influences water distribution at both the local and global levels. When water is diverted for irrigation, local communities are drained of access to drinking water. Researchers predict that 86% of human-utilized freshwater is used in agricultural production.

Rulli and colleagues developed a complex hydrological model to parse out the details of water redistribution due to land grabbing. They estimate that 60% of the water grabbed in transnational property acquisitions is appropriated by only a handful of countries: the United States, United Arab Emirates, India, the United Kingdom, Egypt, China, and Israel. Countries like the UAE, Israel, and Egypt are water-limited, so acquiring land with abundant water resources provides an external supply for their in-country demand.

Children stand next to sweet potato plot in Indonesian Papua. Land grabbing often severs people from their traditional lands. Photo by: Rhett A. Butler.
Children stand next to sweet potato plot in Indonesian Papua. Land grabbing often severs people from their traditional lands. Photo by: Rhett A. Butler.

Organizations like GRAIN, an international NGO supporting small farmers and social movements, publicize the humanitarian issues associated with land grabbing. But Rulli tells that, “not much is being done on the ethical front—it’s hard to highlight the ethical, food security, and environmental problems associated to foreign lands appropriation.”

She hopes that governments will adopt regulations to address and rectify these issues.

D’Oricio warns that, “If countries or communities with relatively rich soil and water resources lose control on their land and water, their current future generations lose control on their livelihoods.”

So far, negotiations in land grabbing have been mostly diplomatic. This, however, may not be the case in the future. As demand for land and water rights increases and global water resources dwindle, future negotiations may be less congenial.

CITATION: M. C. Rulli, A. Saviori, P. D’Odorico. Global land and water grabbing. Proceedings of the National Academy of Sciences, 2013; 110 (3): 892 DOI: 10.1073/pnas.1213163110.

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