Africa Land Grab: New Century, More Colonisers
Author / Source / Date:
Newsclick Presentation, Sept 12, 2011
Indian companies acquire land in Africa at throw away prices to ensure India's food security. Prof Jayati Ghosh analyses the issue and offers alternative solutions.
Prabir Purkayastha (Prabir): Hello and welcome to Newsclick. Today, we have with us Prof. Jayati Ghosh to discuss the new emerging land grab that is taking place in Africa in which the Indian Companies are also leading the way. Jayati, good to have you with us. It appears that Indian companies are veiwing what global multinationals much earlier grabbing land in Africa and it seems that they have gone to most distressed areas, Ethiopia and Somalia and similar areas. What do you think of this phenomenon that is emerging.
Jayati Ghosh (Jayati): Well, this something that started fifteen years ago with countries like Kuwait and others encouraging their companies to go out and in fact some of them are offering investment funds to go out and acquire land in long term basis. The Indian companies have got into this I would say about ten years ago and have massively expanded their holdings in five years ago. This is a part of a global trend yes or right and it's a repetition of great sort of land grab that occurred in 18th and 19th centuries. But it is slightly different in this cases as well because it reflects a pattern of investments that Indian corporates would not be allowed to do in India.
Prabir: Basically, well above the the land ceiling act and so on.
Jayati: Certainly, you know lease arrangements are not subject to land ceiling. What happens in India is that it's harder to get contiguous land on lease because we have stronger small holders complicated sort of land holdings which prevents often companies from holding contiguous land and we have some protection of the people who are giving out the land and we have some kinds of control on corporate activity. What is happening now in number of companies it appears in Somali and others is that hundreds and thousands of hectares are offered by the governments at very very low rent. Something like, in some of the cases the rents are extra ordinary. In Ethiopia for e.g. which shows that the initial cost of transfer is 35 dollar per hectare and the annual rent on lease is one dollar twenty per hectare.
Prabir: Compared to this what would be the India lease for instance per hectare leasing rent.
Jayati: 340-350 dollars per hectare. Let's say in Punjab something like that. Now mind you this is largely undeveloped land and the idea is these are companies who have come to develop it. It is also argued by the Ethiopia government that it is the surplus land. We know it is not true. We know it is grazing land pastorals have effectively evicted from and a land part is also cultivated land. But it was dry land area. Now imagine if you went to the dry land areas of Central India and say this is land we are going to take over and we are going to allow a company to come and they will be given access. They will be allowed to drill their own pumps and borewells and get water from the ground and so on. There would be a massive outcry.
Prabir: Also it seems that it is not only borewells but also dams and rivers . Those have been promised to the corporates who will invest in that.
Jayati: Well, effectively it is not promised as much as they have been allowed to do what they can and the contracts that we have seen, some six or eight of them are very hazy on the details. They don't say what kind of payment would be made for this water. Not clear whether payment have to be made. If a company choose to divert a river or dig a canal from the existing water source, there is no restraint whatsoever and there is no clear payment that has to be made. So you are really offering them carte blanch in a way.
Prabir: Are the local communities involved in it anyway or it is purely between government and corporate sectors which are going in.
Jayati: You see the difficulty in large parts of Africa, specially large surplus countries they really don't have traditional land rights. So there isn't a defined ownership. So often they are seen as tenets of the government land. So once they have this hazy land rights the government can do what it really likes. No body can claim compensation. Nobody can say it is my land and you have to give me so much compensation. So evictions can occur without of any compensation.
Prabir: What you are saying is no defined land rights in the sense, the traditional rights are not being recognized by the state.
Jayati: Absolutely. The traditional rights of the people who are living there for centuries is ignored and compensations are not clear at all. The most of the lease agreements promise that the government will hand over land free of any encompasses. Which is to say that they are promising they are going to get rid of anybody who have been living there, settling there or using that land to raise livestock. Pasture is moving through land in magnetory fashion. All of them will be cleared of that premises.
Prabir: The thing that 99 years lease is no where used where because it is something which any country would allow today for instance, which has at least strong peasant movement. No country will really allow this kind of lease today.
Jayati: Yes, certainly they will not be allowed in India or we hope they will not be allowed. There will be a lot of resistance to that in India. I think it is very important to realize that the companies that are doing this are not companies of the wonderful track record even in India. What is effectively happening is that the companies that are interested in production of oil seeds, in the production of Maize for bio fuel are moving in along with those that are looking for food. It is really a transfer of lot of land that was used in traditional staples. In Ethiopia there is tef. A lot of that land is used for tef cultivation which goes into one of their staples. The price has has quadrupled in last four years basically related to the fact that there is a decline in that kind of production.
Prabir: If you look at in two ways. One is the interest of government of India. They are obviously supporting it and there is also lot of loans being extended. That's one part. What is the government of India's argument to give this kind of incentives for companies to go out and grab land?
Jayati: Well you know, first of all government has generally been giving lot of incentives to domestic investors for outward foreign investors. Second it is a part of global pattern. In fact, it's quite extra ordinary now every country thinks, the Bangladesh Prime Minister recently announced, we should give our companies subsidies before all land gets used up. So there is a perception, that this land is available to be grabbed and quickly in on it before any other country like China, Kuwait or Saudi Arabia gets in on it and grabs this land. That's very much part of it. There is this notion that there will be some greater food security for India. We actually grow food crops or oil seeds that are also or pulses which are all problematic in terms of domestic supply. I think that is fundamentally mis conceived because the way we will get food security is to encourage our small holders to become more viable to make them actually engage in more viable and sustainable cultivation and there is a whole range of policy that you can do for that. Instead of doing that we are basically moving to a corporate pattern of cultivation both internally and externally.
Prabir: What would be the interest of countries like Ethiopia? What explains the government, will it be sacrificing their own internal traditional communities for this kind of pillage in the larger sense.
Jayati: There is a perception that and it's true relatively speaking these are countries that are land surplus, relatively low population density on this land and this land is not adequately utilized. Now just like our own government, the government in these countries have a feeling that the small holding agriculture can't do it. So they are not really inclined to promote the small held agriculture. Very few, Malawi is one of the few countries in the region which have recently actively promoted small holding cultivation. There is a perception that corporates are better at it, they bring in new technology , they will bring in capital, they will bring in infrastructure and that is going to somehow modernize agriculture. I believe it is a false premise. But it is a premise that is shared by the Indian government as well.
Prabir: Do you think there is an alternative model in which the Indian investment can take place which will be cooperative and not adversarial to the traditional communities of this land.
Jayati: Yes, but I don't even really see why you need FDI. I would argue that both in India and in Ethiopia, Somalia, Kenya and all these countries what we really need to do is to make small holder cultivation viable, give them access to best technologies, give them sustainable means of cultivation, give them cooperative methods of marketing, access to credit and so on and which will enable them to get economies a scale where they are relevant and in that sense modernization.
Prabir: And also higher investment by state in agriculture and infrastructure.
Jayati: Absolutely. Higher investment and so on by the state which will be very rapidly recouped. Water is a very critical issue. A lot of a land grab in these countries is water grab. If you look at it most of these regions the conflict is really been about mineral resources or water. All those conflicts, which are called civil war, ethnic conflict or such other etc. they are either about diamonds, minerals or water. And the recent land grab is ultimately about water or the ability to appropriate surface water and ground water. Water management is critical because it is not about this generation but about future generation. What is happening today is completely unplanned extraction of the available water specially ground water.
Prabir: If you look at it this seems to be taking wheel back not forward in terms of development for these countries as well as these communities.
Jayati: Yes, I think it is important for us in India to worry about not just in terms of international solidarity. That of course is the case, we worry that investors in India are behaving exactly the way the neo colonial investors from other parts of the world in some of the poorest countries of the world. I think it matters because if these companies behave in this way in Africa then it's matter of time before it starts behaving in India too. So if we really have to be concerned about the way the Indian corporates are being allowed to behave whether in India or outside, if we want to preserve any kind of economic inside our own country.
Prabir: Thank you very much. We will come back on this issue again as the things unfold.
Jayati: Thank you.