Published on Pambazuka News, by Nebiyu Eyassu, April 20, 2011.
Nebiyu Eyassu cuts through the supposed benefits of foreign agricultural investments – so-called land grabs – for a country like Ethiopia. Far from boosting employment and local food security, land grabs are likely to prop up a discredited government and increase hunger.
In recent years there has been an upsurge of agricultural investment in the developing world. Its alleged purpose is to curb the recent global food crisis that has seen serious volatility in the global food market system, causing significant price hikes on key global foods, such as rice.
The price hike in global food has prompted certain countries to seek cheap and fertile farmland beyond their borders in order to guarantee food security for themselves. To achieve this goal such states are encouraging their domestic agro-businesses, tied to their national interests, to invest in countries like Ethiopia, Sudan, Madagascar, Tanzania and Argentina, to name a few. Capital invested in far-away farms will produce food cheaply, which will then be exported back to the country where the original capital came from. In this way, the volatility of the international food market can be avoided and national food security achieved.
To accomplish this goal, a key step is to convince developing nations to give up their fertile land to foreign investors. One of the baits designed for the purpose of persuasion is the promise of infrastructure and the sharing of information and technology in agricultural science. The other promise made to host nations is of capital gained from food exports, which can then be reinvested in the country. For underdeveloped countries, who face serious food insecurity, and who are often unable to feed their population, this may sound too good to pass by, particularly if host nation governments are too naive, or are otherwise unconcerned.
In Ethiopia, we have had hundreds of foreign investors grabbing fertile land at incredibly low cost. The scale of the spree is unprecedented. Investors are describing the deal as ‘green gold’. Ethiopia’s untilled land, located in some of the most fertile parts of the country, is now being sold to foreign interests for less than its true worth. Foreign investors are given perks, tax holidays lasting years, and essentially they are exempt from any royalties … //
… It is important to point out that some of these excited shoppers include states with dreadful human rights records. One of these, among several, is Saudi Arabia. Surely if the going gets tough for Ethiopia’s ruling party, the Saudi’s can be counted upon to prop up their friend in need, no matter how badly democracy and human rights are trampled. It seems these two are a match made in heaven. Generally, although the loss is great for Ethiopia, the gain has been significant for the ruling party. Is the EPRDF trying to garner vested interest in the country for its own political existence and at the cost of the nation?
Politics aside, there are other alternatives for agricultural development in Ethiopia. If the government was truly interested, Ethiopia’s agricultural output can be developed in a way that is much more sustainable and equitable. For instance, although small, there is a significant amount of capital within the country to boost farming capacity in hitherto unexplored areas of the country.
Perhaps a genuinely interested government can enhance and facilitate the efforts of investors within Ethiopia’s borders to import technology and to train domestically run agro-business interests. The aim here is not to blow the bank, but to increase investment in a sustainable way. After all, isn’t this how major agri-businesses got their start in their country of birth? Another option to boost domestic farm output would have been to invite wealthy Ethiopians living abroad, especially those with interest and knowledge, to invest in the area.
Even though these later approaches were never discussed, for political reasons, there is a strong argument for their viability. Certainly they are much more likely to produce the intended result than the mostly unaccountable foreign companies ever will.
The scale of farming that is based on domestic investment would be smaller and thus friendlier to the local environment and local communities, while simultaneously allowing for a significant increase in domestic farm output. Most importantly, this option would have placed domestic interests in control of national food production, a much more viable and positive proposition for Ethiopia’s prospects. If Indian, Saudi, and Chinese companies are extending their reach beyond their borders to secure national food security for their domestic economy, why can’t Ethiopia do this within her own borders?
In terms of food availability, it seems like we are in a much more dire situation than they are. Moreover, the involvement of global agribusiness in Ethiopia would have been more acceptable if Ethiopia’s own farm industry was given priority. This is not xenophobia; it is how the most food secure nations in the world came into being. However, the guise that the local farm industry will develop alongside major foreign agricultural companies does not make economic sense. It is only a matter of time until they are eaten up. A developmental state does not endorse such an unfair take over of key national assets in this way. It is simply not developmental policy. It is a give away. (full long text).