Agricultural land acquisitions: how do things stand, ten years after the surge?

In the areas concerned, scant consultation with affected communities is common, and compliance with principles of responsible business conduct rare. The non-consensual and uncompensated loss of land experienced by local communities often comes with very limited socioeconomic benefits, be they jobs, new technologies, or infrastructure. Overall, less than 0.5% of the national workforce will be employed on the acquired land in the majority of countries.

Besides economic woes, LSLAs continue to destroy rainforests, natural habitats, and biodiversity on the agricultural frontiers of the Amazon, Southeast Asia, and the Congo Basin. Water resources are also under threat: 54% of the land deals recorded in the Land Matrix database are intended to produce crops with high water use, even in dryland zones.

“We cannot deny that substantial political progress has been made, with voluntary guidelines on a global level and land investment policies on a national level”, says Ward Anseeuw, a CIRAD researcher based at the International Land Coalition and co-author of the new Land Matrix report. “But their implementation on the ground is sketchy, and in some cases non-existent.” 

The report flags up the lack of application of voluntary guidelines on land tenure, and the lack of transparency of most land acquisitions, since there is little information available on investors, contracts or agricultural production operations.

The fear is that land acquisitions look set to gather pace

After substantial growth in LSLAs in the 2000s, investment has stabilized in recent years. However, the Land Matrix is concerned that they are likely to gather pace once more. As Ward Anseeuw explains: “In the post-Covid world, we are seeing an increase in the price of agricultural commodities and wood. These signals, coupled with more favourable economic conditions, suggest that a new surge in land acquisitions is on the horizon.” 

Given the likelihood of a new land rush, it is vital to take stock of the socioeconomic and environmental impacts of LSLAs.

Who are the main investors?

The Land Matrix report highlights that LSLAs are primarily related to big global business, with investors originating from the North, South and tax havens. Developing countries with competitive agricultural sectors, such as Malaysia and Brazil, feature in the list of top investor countries, along with high-income countries such as the United States, the Netherlands, and Great Britain. In recent years, China has also climbed up the ladder, and now ranks third among investor countries

Cash crops are threatening local supplies

Most investors focus on international commodity markets: oil palm-related LSLAs account for more than 20% of the area currently cultivated with this crop worldwide. Other cash crops, such as rubber, sugar beet and sugarcane, are also significant commodities.

This focus on cash crops casts doubt on the expectation that LSLAs will substantially improve local food security. On the contrary, the report considers that local food supply might actually take a downturn as local smallholders switch to cash crops, or be entirely replaced by export-oriented large-scale farms. Moreover, while the evidence from Southeast Asia suggests relatively positive income impacts of LSLAs, the Land Matrix expects that the effects for most other countries will be very limited.

Few jobs are created

“Growing cereals on acquired land creates between one and seven jobs per hectares”, Ward Anseeuw laments. “Rubber and oil palm create more jobs in comparison, but the numbers involved are still marginal compared to other crops, such as flowers, and other economic sectors.” 

The Land Matrix estimates show that less than 0.5% of the national workforce will be employed on the acquired land in most countries. Aside from the lack of employment opportunities, local smallholders are likely to draw the short straw because of increasing competition for land.

Natural habitats are being degraded and conflicts triggered over resources

In addition to the socioeconomic consequences, LSLA-related agricultural expansion is a major factor in large-scale deforestation in the humid tropics. It is estimated that between 2000 and 2019, around 1.3 million hectares were lost as a result of LSLAs in East Asia. In Africa, the large share of yet- to-be implemented deals foreshadows a significant threat too, in particular to the Central African rainforests. 

Another risk associated with this ongoing deforestation is the emergence of zoonotic diseases and pandemics, yet this is seldom factored in when assessing the benefits and costs of agricultural investments. And it is not just forests that are under threat: 54% of the land deals recorded in the Land Matrix database are intended to produce crops with high water use. This drastically increases pressure on local water resources. 

Speeding up the implementation of land governance policies

“Political solutions already exist”, Ward Anseeuw points out. “Voluntary guidelines were drawn up on an international level in the 2000s, in response to the first surge in transactions. They were followed by a raft of national policies. What we need to see now is practical application, on the ground, of these political measures.”

The report proposes five priority areas for policy change:

• Governments must pursue and fast-track land governance reforms and their effective implementation, based on the voluntary guidelines on the responsible governance of tenure.
• Local development should take centre stage in such policies. The focus should be on spillovers to and the inclusion of smallholder farmers. 
• International investment treaties must integrate human rights and environmental provisions, and human rights due diligence should be mandatory.
• LSLAs that lead to deforestation and the conversion of other valuable natural habitats, or damage important carbon stores such as peatlands, need to be stopped. 
• Binding commitments to increase transparency are needed, for all stakeholders.

Reference

The Land Matrix Analytical Report III

About the Analytical Report III

On 28 September 2021, the Land Matrix Initiative will release its third flagship report, which takes stock of LSLAs in developing countries and their socioeconomic and environmental impacts. Its findings draw on evidence from the Land Matrix database as well as a literature review in order to analyse and better understand the wide-ranging effects of these LSLAs. 
Find out more: https://landmatrix.org

About the Land Matrix Initiative

The Land Matrix Initiative (LMI) is a partnership between the Centre for Development and Environment (CDE) at the University of Bern, the French Agricultural Research Centre for International Development (CIRAD), the German Institute for Global and Area Studies (GIGA), the Gesellschaft für Internationale Zusammenarbeit (GIZ), and the International Land Coalition (ILC) at global level, and the Asian Farmers’ Association for Sustainable Rural Development (AFA), Centre for Environmental Initiatives Ecoaction, Fundación para el Desarrollo en Justicia y Paz (FUNDAPAZ), and University  of Pretoria at regional level. The LMI was established in 2009 to address the gap in robust data on the real extent and nature of the “global land rush”, and has evolved into an independent land monitoring initiative that promotes transparency and accountability in decisions over LSLAs in low- and middle- income countries in response to the need to monitor such complex investment flows.