Biofuels policies and the 2008 financial and food crisis ignited a worldwide ‘land rush’ that’s increasing world hunger without addressing the underlying long term threats to world food security Dr. Mae-Wan Ho
In the past three years, foreign governments and investment companies have been buying or leasing vast tracts of farmland in Africa and elsewhere for producing biofuels or food for their own use [1].
This ‘land rush’ was triggered by the demand for biofuels, and accelerated [2] with the financial and food crisis of 2007/8 (see [3] Financing World Hunger, SiS 46).
Government policies promoting biofuels are based on the mistaken belief that fuels made from plants are ‘carbon neutral’, in that burning them would simply release the carbon dioxide fixed by photosynthesis and would not increase greenhouse gases in the atmosphere. The European Union is aiming for10 percent of its transport on biofuels by 2020 [4] (Europe Unveils 2020 Plan for Reducing C Emissions, SiS 37). George W. Bush, for his part, proposed to cure the US’ “addiction to oil” by increasing federal budget 22 percent for research into clean fuel technologies including biofuels to substitutes for oil to power the country’s cars [5] (Biofuels for Oil Addicts, SiS 30). The hope is to replace more than 70 percent of oil imports from “unstable parts of the world” - the Middle East - by 2025.
Meanwhile, the United Nations Food and Agricultural Organisation helpfully identified immense areas of ‘spare land’ in developing countries that could be used for planting ‘bio-energy’ crops to be turned into biofuels. The World Bank’s recent report on the 2008 commodities price hike includes a diagram entitled [6] “The stock of unused but potentially arable land is enormous”, depicting more than 700 million hectares of ‘unused’ land in sub-Saharan Africa, and more than 800 m ha in Latin America and the Caribbean.
International agribusinesses, investment banks, hedge funds, commodity traders, sovereign wealth funds, UK pension funds, foundations and ‘individuals have been snapping up some of the world's cheapest land, in Sudan, Kenya, Nigeria, Tanzania, Malawi, Ethiopia, Congo, Zambia, Uganda, Madagascar, Zimbabwe, Mali, Sierra Leone, Ghana and elsewhere. Ethiopia alone has approved 815 foreign-financed agricultural projects since 2007. Any land investors can’t buy is leased for about $1 per year per hectare. In many cases, the contracts have led to evictions, civil unrest and complaints of “land grabbing”, John Vidal reports in UK’s Guardian [1].
Nyikaw Ochalla, an indigenous Anuak from the Gambella region of Ethiopia now living in Britain but in regular contact with farmers in his region, told Vidal [1]: “All of the land in the Gambella region is utilised. Each community has and looks after its own territory and the rivers and farmlands within it. It is a myth propagated by the government and investors to say that there is waste land or land that is not utilised in Gambella.
“The foreign companies are arriving in large numbers, depriving people of land they have used for centuries. There is no consultation with the indigenous population. The deals are done secretly. The only thing the local people see is people coming with lots of tractors to invade their lands….People cannot believe what is happening. Thousands of people will be affected and people will go hungry.”
Indian companies, backed by government loans, have bought or leased hundreds of thousands of hectares in Ethiopia, Kenya, Madagascar, Senegal and Mozambique, where they are growing rice, sugar cane, maize and lentils to feed their domestic market.
The Ethiopian government denied the deals were causing hunger and said that the land deals were attracting hundreds of millions of dollars of foreign investments and tens of thousands of jobs. A spokesman said that Ethiopia has 74 m hectares of fertile land, only 15 percent is currently in use. Of the remaining land, only 3 to 4 percent is offered to foreign investors.
Local government officers in Ethiopia said that foreign companies were not being charged for water, and in Awassa, the al-Amouni farm set up by Saudi billionaire businessman, Ethiopian-born Sheikh Modhammed al-Amoudi, uses as much water a year as 100 000 Ethiopians.
Saudi Arabia and other Middle Eastern emirate states, Qatar, Kuwait and Abu Dhabi, are thought to be the biggest buyers of African land. In 2008, Saudi Arabia, one of the Middle East's largest wheat-growers, announced it was to reduce domestic cereal production by 12 percent a year to conserve water. The government earmarked US$5 bn to provide loans at preferential rates to Saudi companies to invest in countries with strong agricultural potential.
Saudi Arabia is also leasing land from other countries such as Pakistan [7], already water-stressed, water-depleted. Ayesha Siddiqa, a strategic and political analyst said the idea is for individual landowners to lease to investors, opening the door to large-scale corporate farming. “Big landowners who are now renting out their land to small farmers will throw them out and put it up to the highest foreign bidder,” she said, predicting that small landholders with 5-10 acres would be bought out, and “landlessness and rural poverty will increase.”
Land grab has indeed intensified since the 2007/8 food commodity price crisis. The international not-for-profit organization Grain produced a comprehensive report warning that [2]: “If left unchecked, this global land grab could spell the end of small-scale farming and rural livelihoods.”
The Asian Peasant Coalition (APC), with 15 million members in 26 peasant organizations and 6 other supporting non-government organizations from Bangladesh, India, Malaysia, Nepal, Philippines, Sri Lanka and Pakistan, launched an Asia-wide protest against the global land grab in July 2009 [8]. It said that “state terrorism” and widespread land grab in poor Asian countries took place at the height of the financial crisis.
The APC represents farmers, landless peasants, dalits, forests peoples, indigenous people, agricultural workers, herders, pastoralists, and the women and youths across these sectors [9].
Approximately 365 million people in Asia derive their livelihoods from land, but, landlessness in Asia is worsening at an alarming rate over past decade, owing to [8] “the greater degree of integration of Asian countries with the global market, and increasing demands for land by big corporate interests.” Landlessness among Asian peasants is very high: 49.6 percent in Bangladesh, 22 percent in India, 10 percent in Nepal and almost 75 percent in Pakistan and the Philippines, and the trend is growing, according to Danilo Ramos, APC secretary general.
More than 100 cases of land grab have been compiled by Grain. “Land grabbers” are driven by two different agendas, but they eventually converge.
The first agenda is food security. A number of countries that rely on food imports see outsourcing food production in foreign land as a long-term strategy to feed its own people cost-effectively, instead of having to pay the high prices in the world commodity markets. Saudi Arabia, Japan, China, India, Korea, Libya and Egypt, fall into this category. Foreign governments are buying up farmland in countries like Sudan, Cambodia, and the Philippines that depend on food aid delivered by the UN World Food Programme.
The second agenda is financial return, in particular, as the result of the financial meltdown of the housing and stock markets in 2007/8, investment fund managers have been turning to food and agricultural commodities and derivatives [3]; and coincidentally, agricultural land and produce are also seen as good sources of revenue.
Where these tracks come together [2] is that in both cases it is the private sector that will be in control. In the drive for food security, governments take the lead through a public policy agenda.. But while public officials negotiate and make the deals for land contracts, the private sector is explicitly expected, and even encouraged, to take over. It is effectively a ‘new colonialism’ by transnational corporations.
China, for example, has been remarkably self-sufficient in food, though at a cost of using so much fertilizers that its soils are ruined, and its waterways putrid with pollution [10, 11] (China’s Soils Ruined by Overuse of Chemical Fertilizers, China's Pollution Census Triggers Green Five-Year Plan, SiS 46). The Chinese government has been gradually outsourcing its food production well before the global food crisis. Some 30 agricultural cooperation deals have been sealed to give Chinese firms access to foreign farmland in exchange for Chinese technologies, training and infrastructure development funds, not only in Asia but all over Africa.
“From Kazakhstan to Queensland, and from Mozambique to the Philippines, a steady and familiar process is under way, with Chinese companies leasing or buying up land, setting up large farms, flying in farmers, scientists and extension workers, and getting down to the work of crop production,” Grain reports [2]. Most of China’s offshore farming is dedicated to rice, soybean, and maize, along with biofuel crops like sugarcane, cassava or sorghum.
The Gulf States, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, have neither the water nor the soil to produce food. But they have plenty of oil and money. Because they depend on food imported mainly from Europe, and their currencies are pegged to the US dollar, the simultaneous rise in food prices on the world market and the fall in the US dollar have boosted their import bill from US$8 bn to US$20 bn within the past five years. Given that water is already in short supply, the Saudi government decided to stop growing wheat, their main staple, by 2016, and instead, to grow it elsewhere and ship it back.
The United Arab Emirates, similarly, under the aegis of the Gulf Cooperation Council (GCC), banded together with Bahrain and the other Gulf nations to formulate a collective strategy of outsourcing food production, particularly to Islamic countries, where they will supply capital and oil contracts in exchange for guarantees that their corporations will have access to farmland and export the produce back home. The most heavily targeted states are Sudan and Pakistan, followed by a number of south-east Asian countries - Burma, Cambodia, Indonesia, Laos, Philippines, Thailand and Vietnam – as well as Turkey, Kazakhstan, Uganda, Ukraine, Georgia, Brazil and so on.
Within food industry circles, Japanese and Arab trading and processing corporations have are the most involved.
Japanese firms already own 12 m ha of farmland abroad for the production of food and fodder crops, some of that in China, where in 2006, Asahi, Itochu and Sumitomo began leasing hundreds of hectares of farmland for organic food production for the Chinese and Korean markets. In 2007, Asahi expanded to develop the first Japanese dairy farm in China. A year later in September 2008, Asahi took advantage of the melamine milk tragedy to launch its first liquid milk product at a 50 percent mark-up.
Japanese firms have also targeted Brazil. In late 2007, Mitsui bought 100 000 ha of Brazilian farmland for soybean production.
The finance industry is getting in on the act. Throughout 2008, an army of investment houses, private equity funds, hedge funds and the like have been targeting farmlands throughout the world [2], with the World Bank and the European Bank for Reconstruction and Development “greasing the way for this investment flow” and “persuading” governments to change land ownership laws to ease the transactions. As a result, land prices have started to climb.
Deutsche Bank and Goldman Sachs have taken control of China’s livestock industry; its biggest piggeries, poultry farms and meat processing plants, including rights to the farmland. New York-based BlackRock Inc, one of the world’s largest money managers with nearly US$1.5 trillion on its books, set up a US$200 m agricultural hedge fund, of which US$30 m will be used to acquire farmland around the world. Morgan Stanley, which nearly joined the queue for a US Treasury Department bail-out, bought 40 000 ha of farmland in the Ukraine, where Renaissance Capital, a Russian investment house has acquired rights to 300 000 ha. Meanwhile, Black Earth Farming, a Swedish investment group, acquired control of 331 000 ha of farmland in the black earth region of Russia, where Alpcot-Agro, another Swedish investment firm, also bought rights to 128 000 ha. Landkom, the British investment group, bought 100 000 ha of agricultural land in Ukraine and vows to expand to 350 000 ha by 2011. All these land acquisitions are for producing grains, oils, meat and dairy for those in the world market who can pay.
Not surprisingly, the food crisis worsens for the poor. At the end of 2009, over one billion of the world’s population are critically hungry, with 24 000 dying of hunger each day, more than half of them children. The United Nations Food Programme faces a budget shortfall of US$4.1 billion [12, 13]. Food prices have remained high despite the economic downturn, and extreme weather patterns affecting production are causing more hunger.
Many commentators rightly blame the deregulated financial speculation in the global agricultural commodities markets for precipitating the 2007/8 world food crisis [3], and the ensuing land grab has almost certainly made it worse.
However, other more serious, longer term threats to food security are in danger of being overlooked, which no amount of land grab can insure any country or individuals against.
Veteran world watcher Lester Brown reminds us that many past civilizations collapsed on account of shrinking food supplies, and we may well meet the same fate from [14] “our failure to deal with the environmental trends that are undermining world food economy - most importantly failing water tables, eroding soils, and rising temperatures.”
Our agriculture and food system has been showing signs of collapse [14, 15], with world grain yields falling to meet demand most years since 2000, and reserves reached their lowest in 50 years. Growth in yields has slowed despite record amounts of fertilizers being applied [16]. In the major croplands of the world – China, India and US, which contain half the world’s population - industrial farming practices have severely depleted underground water, dried out rivers and lakes, eroded topsoil, and decimated wild life with fertilizers and pesticides run-offs. Most alarming is the recent disappearance of bees and other pollinators (see [17] Mystery of Disappearing Honeybees and other articles in the series, SiS 34).
At the same time, world oil production has passed its peak [18] Oil Running Out (SiS 25) with the peak of natural gas not far behind [19]. Conventional industrial agriculture is heavily dependent on fossil fuels (especially in the manufacture of N fertilizers), as well as water.
In addition, climate change has emerged as a major threat to agricultural productivity. Direct field monitoring showed that crop yields fell 10 percent for each ˚C rise in night-time temperature during the growing season [20]. The International Food Policy Research Institute predicts that wheat yields in developing countries will drop 30 percent by 2050, while irrigated rice yields will drop 15 percent [21]. Climate change may hit the developing world harder, but the developed world is not immune. Increasing frequencies of drought, flood, and storm associated with climate change will devastate crops and livestock, and spells of extreme heat are also damaging as plants will start to deteriorate at about 32 ˚C. The yields of corn, soybean and cotton could fall by 30 to 46 percent under the slowest warming scenario, or 63 to 82 percent under the fastest warming scenario.
The scramble for biofuels by developed nations was a major factor in precipitating the 2007/8 food crisis [3] and the ensuing ‘land grab’, as described here. Policies supporting biofuels such as those of the EU and US are grossly misguided.
The US imported 19.5 million barrels of petroleum a day in 2008, which made up 57 percent of its total consumption [22]. In 2008, 9 billion gallons of ethanol were produced from 33 percent of the corn harvest subsidized at US$ 6-7 billion, to supply just 1.3 percent of the country’s oil consumption. It takes 1 700 gallons of water to produce one gallon of ethanol [23]. Even if all 341 Mt of corn in the US were to be converted into ethanol, it would provide only 5 percent of the total oil consumption in the country, leaving nothing for livestock feed or food [24].
The US is a major exporter of corn accounting for over 60 percent of the world’s export. Globally, the scramble for ethanol from corn and sugarcane and biodiesel from soybean, oilseeds, oil palm and jatropha resulted in accelerated deforestation (with large CO2 emissions) as well as forced evictions [25, 26] (Food Without Fossil Fuels Now, SiS 42) and land grab.
Biofuels from crops not only jeopardize food production; they are highly unsustainable, requiring huge inputs of fertilizers and pesticides as well as water, depleting soil fertility, accelerating soil erosion and generating a great deal of polluting wastes. A realistic energy accounting shows that all biofuels except one require more energy input in fossil fuels than the energy in the biofuel product. In other words, they have net negative energy returns and hence result in more CO2 emissions than just using the fossil fuels [24]. The energy returns for the major biofuels are: corn ethanol -46 percent, switchgrass -68 percent; soybean biodiesel -63 percent; and rapeseed biodiesel -58 percent. Even palm oil produced in Thailand has a -8 percent net energy return. The only exception is ethanol from sugarcane in Brazil, with a positive energy return of 128 percent [27], though it is still unsustainable in other respects.
Are genetically modified (GM) crops desperately needed for feeding the world and saving the climate as proponents claim? A three-year assessment by 400 scientists, policymakers and non-government organization representatives – IAASTD (International Assessment of Agricultural Knowledge, Science and Technology for Development) [28] – concluded that GM crops are at best irrelevant for food security and poverty alleviation, and small scale agro-ecological farming is the way ahead [29] (“GM-Free Organic Agriculture to Feed the World”, SiS 38).
GM crops are actually much worse than the high input green revolution varieties they replace, as documented by the large dossier of evidence we have accumulated over the years [30, 31] (The Case for A GM-Free Sustainable World, GM Science Exposed, ISIS publications). They require more fertilizers, more pesticides, more water, but yield less. GM crops are less resilient to environmental stresses, pests and diseases and hence highly vulnerable to climate change. But they cost more because of the corporate monopoly developed around gene patenting [32] US Farmers Oppose 'Big Ag' in Anti-Trust Hearing (SiS 46). After 15 years of allowing GM varieties to take over its major crops, the United States is facing ecological meltdown [33] (GM Crops Facing Meltdown in the USA, SiS 46). The same has happened with the introduction of GM cotton in India, where, in addition, it has accelerated farm suicides by increasing farmers’ indebtedness [34] (Farmer Suicides and Bt Cotton Nightmare Unfolding in India, SiS 45). Above all, genetic modification introduces specific hazards as I have indicated for more than ten years [35] (Genetic Engineering Dream or Nightmare, ISIS publication). Many scientists now acknowledge those hazards, some having done their own studies to find out [36] (GM is Dangerous and Futile, SiS 40).
There is no alternative to addressing the serious long term threats to food security other than a decisive and comprehensive shift worldwide to organic agriculture and localized food and energy systems (see [37, 38] Food Futures Now: *Organic *Sustainable *Fossil Fuel Free , Green Energies - 100% Renewable by 2050, ISIS/TWN publications)
Article first published 28/04/10
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adam brian Comment left 2nd October 2010 07:07:57
Although I'm not a scientist I benefited tremendously from this article. I hope things improve in the world. GM is definatly not the way forward. The human being and the earth are delicate. Any interference will upset the balance and lead to the eventual destruction of the earth and all those living on it.
Lucinda Townsley Comment left 26th August 2012 22:10:56
Wow, this was a really enlightening article. I had no idea that our 'green' alternatives to fossil fuels were so redundant and actually just causing more harm! It's really overwhelming and hard to not feel helpless against all of this. For my part I intend to be even more careful about what I consume and where it has come from. Thank you for this article - freedom of information is a great thing. Keep up the good work.