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Written by: Michel Merlet
Organizations: Association pour contribuer à l’Amélioration de la Gouvernance de la Terre, de l’Eau et des Ressources naturelles (AGTER)
Type of document: Paper / Document for wide distribution
Translation of the article published as part of report on: “Agricultural land: both a common good and source of tension”. Produced by GREP & Terre de Liens for review, POUR n°220, December 2013.
Translators : Elisabeth Gross, Niels Zwarteveen
What are we talking about?
AGTER was the first organisation in France to raise questions about the phenomenon commonly known as “land grabbing” after the association GRAIN (Genetic Resources Action International) first alerted the public to this worrying trend back in 20081. The authors of numerous works that have been conducted since, insist on the dangers associated with land grabbing, but neither agree on the nature nor the scale of this phenomenon, nor on the specific mechanisms currently in use in regard to historical antecedents. These differences are due not only to the very real difficulty of acquiring reliable information, but also because of differing research objectives and the use of distinct theoretical and conceptual models.
The various labels applied to this phenomenon are not a coincidence, and provide an initial insight into the differing views surrounding this topic. In English Land Grabbing means literally the “seizing of land” and implies an active and hostile or even violent action. The French word accaparement, commonly used to translate land grabbing, has however a slightly different meaning, and would be best translated as the act of “hoarding” or “taking for oneself”, but without necessarily the use of force. Others still, speak of land or agricultural investment, the transfer of agricultural assets, commercial pressures on land, or land acquisition. In their 2010 “Analysis and Propositions” report, AGTER and the Technical Committee for Land Tenure and Development chose the terms “land appropriation” and “land concentration” in order to better reflect the variety of situations that may occur.
Words and analysis often betray the contradicting interests of different social groups and reveal that the interests of a given group are not always consistent with the official statements made by their representatives. At various levels of the hierarchy, positions may diverge. Let us mention three of them here: the economy, the nature of land tenure laws, and the respective advantages of both large- and small-scale agricultural production.
Let us start with the disagreements concerning economics. For the World Bank, numerous academics, and politicians with neoliberal leanings, land is an asset, a capital like any other, and is thus treated as such. Without intervention, the market will distribute land optimally. Privatising public and community lands and enabling their sale or lease, allows unused or underused land to become productive. Thanks to investors, yield gaps between countries will be reduced, enough food will be produced to feed the world, and jobs will be created. However, for many peasant and indigenous organisations, and for all economists that subscribe to the classical economic tradition, land is distinct, and thus can be neither considered a good nor capital. People around the world express this particularity through the use of words such as Mother Earth, Demeter, or Pachamama, while economists refer to the concept of ground rent (or land rent). This concept has however fallen into disuse over the last 30 years, as the market value of goods as the sole driver for optimal land allocation, as it is with all goods, became the unique and dominant ideology. AGTER brought forward this concept that had fallen into disuse in its analysis of land grabbing in 2009.
Although there appears to be a consensus around the need to respect the rights of land users affected by land grabbing, opinions differ regarding the nature and foundation of land and natural resource rights. The dominant thought today is that only absolute and exclusive property rights are able to secure investments. Therefore, in order to enable development, communally held and public land should be privatised and land registration should be put in place after the distribution of private property titles. Other actors however, from observations of various societies around the world, underline the fact that different types of land rights always coexist on a given plot of land, which can belong to either an individual, be collectively held, or shared among an entire community. In this vein of thought, natural resources and land in this respect have always been to a degree, a common good, with different communities holding different rights at both a local and global scale. Let us after all remember that commons would not exist were it not for the diverse communities that establish rules concerning access and usage of resources.
Economic notions and the assessment of land rights are in fact connected. A system of absolute and exclusive private property rights, i.e. ownership, goes hand in hand with the idea that land rights are of the same nature as those that exist for ordinary consumer goods. Recognising the unique nature of land however and specifically the existence of a “bundle” of rights, both individual and collective, lets us guess the presence of natural wealth which may be seized, and leads us to differentiate it from profit, which one may gain from the production process.
The third topic of debate concerning land grabbing concerns both the advantages and disadvantages of large-scale and small-scale farming, namely family farming (translation of the French term agriculture paysanne), and questions whether they complement each other or rather find themselves in a state of competition. This question has been at the heart of a number of heated debates over the past few centuries. Up until very recently in many regions around the world, development never went down the road of large-scale agricultural production units with paid labour, but rather by modernising existing small-scale farms, which remained the dominant form of agriculture. Only socialist countries opted to develop large scale agricultural production (state-farms and large cooperatives). Recently however, land grabs by a powerful minority have vindicated supporters of large-scale agriculture who see it as a superior form of production. Is this truly the case? Or just a red herring? Mainstream language is rife with obscure terms, which in turn hinder our ability to fully understand the situation. The use of the word “investment” for example provides us with a useful illustration.
The majority of those who campaign against land grabbing favour an ethical and moral approach, and only rarely touch upon economic issues. Economic analyses produced by leading international organisations, states, and multinationals are not fundamentally questioned, and instead, campaigners tend to focus solely on the cultural importance of land. The implementation of codes of good practice and principals of social and environmental responsibility, seem henceforth capable of creating solutions to the violations of fundamental rights condemned by all. And yet tackling economic questions critically, with the use of appropriate theories, is essential if we are to reverse this worrying trend.
A global upheaval
In June 2012, the oft quoted observatory for land appropriation, Land Matrix, calculated that at least 71 million hectares of land had been appropriated since the year 2000. This number was however later reduced in July 2013 to 34 million hectares. The number takes into account all transactions, brought to Land Matrix’s attention of over 200ha of land since 2000, and that were approved and carried out. The land had to have been used by local communities or left as part of a natural ecosystem, and then transformed into a commercial agriculture production or used for other purposes. This count however does not claim to be complete. Moreover, it doesn’t take into account similar events that occurred prior to 2000 nor the more gradual and continuous phenomenon known as “land concentration”. In our opinion these figures barely reflect the true scale of the on-going changes currently effecting agrarian structures around the globe. Data from a number of countries such as Brazil, Cambodia and Cameroon, to mention but a few, show that the amount of natural land and land held in common appropriated by a small minority is probably much higher than originally thought. However, while such appropriations have existed for a very long time, their scale, the speed of their development, and the profile of those involved (pension funds, multinationals, states, etc.) has changed, and instead given birth to a new type of process where elites, chiefs and national entrepreneurs play an important role.
At present a repeat of the enclosure2 movement that took place in England before and after the industrial revolution is taking place. This movement led to the dispossession of land of rural populations, the development of a rural proletariat, novel ways of managing poverty and heralded the beginning of blind faith in progress. As Karl Polanyi3 reminds us, the enclosure movement in England created a social disaster, which sowed the seeds for colonial expansion right up until the political and economic crises of the 1920’s and 30’s, and which in turn resulted in two enormous worldwide conflicts both with dramatic consequences.
The potential for expansion for these new enclosures is vast, as the first target is underused land (which is not necessarily unpopulated and on which certain land rights may already exist, and which could potentially be used for a rain-fed farming). According to the FAO and IIASA4 underused land is approximately equal in surface area to that of cultivated land. All the more worrying is the fact that these zones also include forested areas inhabited by indigenous populations.
But there are other important distinctions one must make between the actions of the past and those of the present, the main ones being that today’s enclosures are the result of a revolution that is not of an industrial nature, but financial. Profit is no longer contingent on the size of the workforce, the world is finite, interstellar colonial conquest is still unfeasible; and on the other hand, we are living through a major environmental crisis. Ultimately, societies risk being outpaced by the speed of these developments, thus hindering their capacity to organise and put in place solutions and regulations.
In the 1970’s a new agrarian dynamic took hold. New and “modern” farming techniques (as well as biotechnologies and new mining techniques) opened the possibility to a ten-fold increase in production and extraction, all the while needing ever less manual labour. This in turn made it both possible and profitable to privatise resources that had been up until now public, held in common, or simply inaccessible (seeds and genomes of wild species, and energy and mining deposits, for example). Markets became globalised and along with it, the free trade of goods became generalised. Prices were now fixed at a global level despite agricultural and land policies still being decided nationally. Even a global economic policy was inexistent. We are witnessing an unprecedented development of the finance sector, in which enormous virtual wealth is “created” or “destroyed” and which in turn has a radical impact on the question of investment.
As a consequence, a new dynamic in land grabbing and natural resource accumulation has taken root, one of which we need to better understand its principal mechanisms. “Primitive accumulation”, usually associated with pre-capitalist systems, has returned.
Understanding current trends: the development of agribusiness and land grabbing
Land grabbing and land concentration tend to occur on a large scale in three specific situations: In historically colonised regions where private appropriation of land was widespread (e.g. many parts of Latin America), in former colonial territories where community land tenure systems were predominant (Africa and Indonesia for example), and in areas belonging to socialist countries where forced collectivisation took place. While developed countries may also have vast surfaces of underused land, they do not however suffer from large scale land grabs5 they are today the scene of land concentrations.
After gaining their independence, former colonies also regained sovereignty over their lands and resources, but failed however to recognise the land rights which had been developed independently by the population. These new states consider themselves “owners” of all land which hasn’t been registered, and thus, believe they can cede this land freely to whomever they want. Often, national legislation authorises these procedures. However, this in no way means that their actions are legitimate! The legacy of colonialism is still felt heavily both politically and socially. Even today, Indigenous peoples often face difficulties setting up autonomous organisations to defend themselves and their lands.
In socialist countries that underwent a collectivisation of their agricultural sector, there was also a strong proletarianization of small farmers which in turn destroyed their ability to self-organise.
The development of financial markets creates an abundance of highly volatile capital. Some investors look to invest a portion of their capital in real assets that are less likely to lose value than other speculative and derivative ventures. Former colonies and ex-socialist countries looking to develop their agriculture, offer exceptionally favourable conditions to large capitalist companies who are looking to expand into agriculture. New forms of production, erroneously referred to as “win-win”, are based on contractual relations, thus voluntarily signed between states and companies, and between companies and individuals. In both cases, vast quantities of potential farming land were never put to productive use, with the lack of capital usually being the main reason. Large scale production, considered to be the most efficient by the dominant groups, was thus usually put forward as the solution. In both situations, “investors” can gain access to land for a pittance, often even for free, by putting pressure on the States. The quasi-absence of any local, community based organisations tends to tip the balance of power heavily in favour of the companies. Very cheap labour, significant tax benefits, as well as guarantees which establish a binding right heavily in favour of investors, are provided by bilateral investment agreements and promoted by international financial organisations which strongly contribute to this process.
The return on investment has to be high enough to attract capital holders, who could otherwise invest their money in opportunities elsewhere. The return on investment of course comes from wealth that is created i.e. added value, but the share that goes to shareholders is greater than the shares received by workers, land owners, and the state which has a reduced income as a consequence of lowering taxes. Hence, it’s not so much the absolute added value, but rather the way added value is distributed that’s important. Studies carried out in Ukraine showed that 80% to 90% of the added value created in agro-holdings served to reward shareholders, showing the extremely favourable profit margins despite mediocre agricultural performances6.
Thus, the multiplication of large-scale agricultural production units using mainly wage labour, and the disappearance of many small-scale farmers does not in any way confirm the superiority of the former over the latter. The explanation is rather the distribution of created wealth. The superiority of large-scale production lays in its ability to appropriate unearned incomes of all types, first the ground rent (from land and natural resources), but also extra income derived from public policies such as ones encouraging biofuel production.
A global threat to humanity
Land appropriations and concentration of land by a few lead to the destruction of traditional family-farming communities, the exclusion of millions of small scale producers, the destruction of ecosystems and an acceleration of global warming. Beside the effects on a local scale, dispossession of the population and the violation of their customary rights, effects can also be felt further afield, as large-scale production units enter into direct competition with small scale farmers, who often suffer from much lower work productivity.
Provided they have access to sufficient amounts of land and tools, small scale farmers are often better suited to fulfilling society’s needs by producing more wealth per surface unit than large scale productions, who depend on paid labour. The consideration of future generations comes as naturally to the small-scale farmer as the quest for maximising short-term profits does to the large-scale capitalist one. Small scale farmers are able to adapt to diversity, and thus are more respectful of the environment, and as a final benefit, create employment that can potentially stem a rural exodus. Nevertheless, millions of small-scale farmers today have fallen victim to the transformation of agrarian systems around the world.
The unprecedented scale and speed of land appropriations today are as much a threat to mankind as climate change. Alongside the numerous unacceptable human rights violations, there are also environmental, economic and social consequences. If we are to feed and insure the calorific needs of 9 billion people by 2050, maximising wealth production by surface unit will be essential. It is estimated that if current trends continue, the creation of 3,8 billion jobs will be needed in order to achieve full employment7. It will also be necessary to find systems that are compatible with the environment and that both maintain and promote a biodiverse ecological balance. The fight against the exclusion of small-scale farmers and the maintaining of as many small farms as possible is thus a necessity not only for the farmers, but for the whole of humanity as well.
The initiatives put forward today, such as appealing to a voluntary respect of fundamental human rights, the generalisation of private property in order to safeguard land rights, the calls for more investment in the agriculture sector, and appeals to companies to become more socially responsible, are all by far insufficient and in some cases even counterproductive.
As with other global threats that are often mentioned such as climate change, putting in place actions that can potentially slow or halt our course towards a catastrophic scenario will be difficult. The only solution is to work towards creating a new mode of global governance, which will enable us to manage our commons sustainably. This will however demand the creation of a new binding legal framework at a global level concerning everything that threatens the survival of humanity. However, only a tremendous popular movement will able to bring about its implementation.
1 AGTER has worked with various organisations such as the International Land Coalition, the Committee for Land Tenure and Development of the French Ministry of Foreign Affairs and French Development Agency, Via Campesina, and has partaken in a number of events with researchers and NGO’s.
2 The enclosure of plots which resulted from the division of communal land
3 Karl Polanyi, The Great Transformation, 1944
4 GAEZ, IIASA (International Institute for Applied Systems Analysis) – FAO 2002, Land with rain fed potential (mixed technology)(Very Suitable + Suitable + Moderately Suitable) – Land in use for crop cultivation
5 This however does not exclude them from other types of appropriation, such as the accumulation of public subsidies
6 H.Cochet, M.Merlet, 2011, Op cit
7 Rouille d’Orfeuil, Henri. 2013. Op cit.
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