Friday, March 12, 2010

Corporate Land Grab in Africa

Much of the modern world has been shaped, alas, by governments' grabbing land from peasants and yeomen, whose families had worked it for hundreds of years, in order to give it to the nobility or other privileged interests. As a result, many self-sufficient farmers became tenants of politically created absentee landlords.

As Ludwig von Mises wrote in Socialism:

Nowhere and at no time has the large scale ownership of land come into being through the working of economic forces in the market. It is the result of military and political effort. Founded by violence, it has been upheld by violence and by that alone.... The great landed fortunes did not arise through the economic superiority of large scale ownership, but through violent annexation outside the area of trade.

According to this story in the Observer (UK), this still goes on today, in Africa:

Ethiopia is one of the hungriest countries in the world with more than 13-million people needing food aid, but paradoxically the government is offering at least 7.5 million acres of its most fertile land to rich countries and some of the world's most wealthy individuals to export food for their own populations....

But Ethiopia is only one of 20 or more African countries where land is being bought or leased for intensive agriculture on an immense scale in what may be the greatest change of ownership since the colonial era.

An Observer investigation estimates that up to 50m hectares of land – an area more than double the size of the UK – has been acquired in the last few years or is in the process of being negotiated by governments and wealthy investors working with state subsidies.

The land rush, which is still accelerating, has been triggered by the worldwide food shortages which followed the sharp oil price rises in 2008, growing water shortages and the European Union's insistence that 10% of all transport fuel must come from plant-based biofuels by 2015.

In many areas the deals have led to evictions, civil unrest and complaints of "land grabbing"....

Leading the rush are international agribusinesses, investment banks, hedge funds, commodity traders, sovereign wealth funds as well as UK pension funds, foundations and individuals attracted by some of the world's cheapest land.

Together they are scouring 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 there, which investors have not been able to buy, is being leased for approximately $1 per year per hectare.

According to an Ethiopian living in England:

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.

All the land round my family village of Illia has been taken over and is being cleared. People now have to work for an Indian company. Their land has been compulsorily taken and they have been given no compensation. People cannot believe what is happening. Thousands of people will be affected and people will go hungry.

This is eminent domain and Kelo writ very large. Some, seeing the involvement of corporations, will conclude this is privatization and modernization. But true champions of liberty and property will be appalled and will condemn it loudly for the theft and usurpation it is.

9 comments:

Stephan Kinsella said...

Sheldon, nice post. The article seems a bit sketchy on exactly how it is the land being taken is owned by the villagers/locals. Is it land they have occasionaly used, or land that is actually titled in their name? If the latter, I wonder why there is no compensation paid--usually there is for eminent domain (not that that would justify it anyway).

Gary Chartier said...

Stephan, my instinct is that there's not a very sophisticated titling system in place. Wouldn't you guess the ownership was probably customary?

Sheldon Richman said...

Stephan, what are the chances that the governments there have legitimate title? I'm sure, also, that your are familiar with de Soto's work on the lack of Third World property titles.

Stephan Kinsella said...

Oh, there is zero chance. It's just that calling it eminent domain implies that it's taken from identifiable property owners--presumably the locals. I just wonder how we know this--the facts seemed sketchy from the report. Just curious.

Stephan Kinsella said...

Gary, could be. I don't know. I'm curiuos about it; the article is sketchy or leaves me wondering about how accurate some of its statements are.

If ownership is customary wouldn't it be recognized by the legal system that way, and compensation required?

My guess is that the argument is as follows: there is no clear legal title, but the villagers etc. were using bordering land on occasion, giving rise to a libertarian claim to at least some sort of usufruct/easement over the land. But I was not clear that this was actually the case or clearly established.

If the villagers/locals had no particular ownership claim to the land, and land no particular owner, then the state is acting as owner of the land, in claiming the right to sell it and name its new owner. In this case I'd say the public at large -- the victims of the state, taxpayers, and so on -- are the natural owners and have a claim on the land, or at least on the proceeds the state gets from its sale. And in any case the land would be turned from state to private hands, even if it's unjust for the state to keep the loot.

johanna said...

From the article:

"The land and labour is cheap and the climate is good here. Everyone – Saudis, Turks, Chinese, Egyptians – is looking. The farmers do not like it because they get displaced, but they can find land elsewhere and, besides, they get compensation, equivalent to about 10 years' crop yield," [Tegenu Morku, a land agent] said.

Sounds like eminent domain to me, complete with forced compensation and the smug "you can just go live somewhere else" dismissal. Title or no title, it seems pretty clear that the government didn't have any trouble recognizing who the real owners were.

Also:

...according to Michael Taylor, a policy specialist at the International Land Coalition. "If land in Africa hasn't been planted, it's probably for a reason. Maybe it's used to graze livestock or deliberately left fallow to prevent nutrient depletion and erosion. Anybody who has seen these areas identified as unused understands that there is no land in Ethiopia that has no owners and users."

Is this not clear, or is there evidence elsewhere that the reporting here is not to be trusted?

Sheldon Richman said...

I can't vouch for the article, obviously. But until we have information to the contrary, we can reasonably infer that that people without power are getting screwed.

Sheldon Richman said...

A commenter on Facebook said he read the same story in The Economist.

Sheldon Richman said...

The Economist article is here: "The acquirers are foreign regimes or companies closely tied to them, such as sovereign-wealth funds. The sellers are host governments dispensing land they nominally own.... The balance between the state and private sectors is heavily skewed in favour of the state....

"Host governments usually claim that the land they are offering for sale or lease is vacant or owned by the state. That is not always true. 'Empty' land often supports herders who graze animals on it. Land may be formally owned by the state but contain people who have farmed it for generations. Their customary rights are recognised locally, but often not accepted in law, or in the terms of a foreign-investment deal....

"Customary owners are thrown off land they think of as theirs. Smallholders have their arms twisted to sign away their rights for a pittance."