For over a year a half now, we have been watching carefully how investors are trying to take control of farmland in Asia, Africa and Latin America as a response to the food and financial crises. In the beginning, during the early months of 2008, they talked about getting these lands for “food security”, their food security. Gulf State officials began flying around the globe looking for large areas of cultivable land that they could acquire to grow rice to feed their burgeoning populations without relying on international trade. So too were Koreans, Libyans, Egyptians and others. In most of these talks, high-level government representatives were directly involved, peddling new packages of political, economic and financial cooperation with agricultural land transactions smack in the centre.
But then, towards July 2008, the financial crisis grew deeper, and we noticed that alongside the “food security land grabbers” there was a whole other group of investors trying to get hold of farmland in the South: hedge funds, private equity groups, investment banks and the like. They were not concerned about food security. They figured that there is money to be made in farming because the world population is growing, food prices are bound to stay high over time, and farmland can be had for cheap. With a little bit of technology and management skills thrown into these farm acquisitions, they get portfolio diversification, a hedge against inflation and guaranteed returns — both from the harvests and the land itself.
To date, more than 40 million hectares have changed hands or are under negotiation — 20 million of which in Africa alone. And we calculate that over $100 billion have been put on the table to make it happen. Despite the governmental grease here or there, these deals are mainly signed and carried out by private corporations, in collusion with host country officials. GRAIN has compiled various sample data sets of who the land grabbers are and what the deals cover, but most of the information is kept secret from the public, for fear of political backlash.