July 26th, 2012
10:37 AM GMT
(Johannesburg) CNN – It is being dubbed by some as the “Second Scramble for Africa” - millions of acres of land being snapped up by companies from Asia and the Middle East.
The land rush was in part spurred by the food and financial crisis of 2008, when corporations, investment funds and governments began to re-focus their attention on agriculture as a profitable commodity.
Massingir Agro-Industrial is a South African and Mozambican company that has been given the use of 30,000 hectares of land in Massingir, western Mozambique, by the country’s government. Backed by European investors, once feasibility studies are complete, the company will begin planting sugar cane to produce sugar - 80% of which will be exported to Europe.
Under the deal, local villagers will not be relocated. Some land will be left for the villagers but the vast majority of it will be off limits.
Gloria has lived in Massingir since she was born. Although the deal means local farmers like her will lose land they can farm, she thinks they will benefit in the long run.
"For me it is great to see a foreign company coming here to use our land because with their help we can produce more,” she told CNN’s Robyn Curnow.
But projects like this one are under close local and international scrutiny. Some watchdog groups warn that Africa's governments are giving away land cheaply to investors, with little or no regard for the people currently living off the land.
“What is happening is now they are giving away their land,” said Camilo Nhancale, president of the Youth Development and Environmental Advocacy Organisation. “It's a sort of land grabbing from the communities, they are giving away the land instead of negotiating and leasing the land to the company so if things do not go well they can say ‘no, this is our land.’”
Across the continent, Africa's governments are entering into land deals with foreign investors.
According to data released by "Land Matrix," an organization that keeps track of international land deals, Africa is the most targeted continent for land deals.
Its figures show that of the known and reported deals since 2000, 83.2 million hectares of land involved are in developing countries worldwide - and 56.2 million hectares of that are in Africa. That's almost 5% of the continent's total agricultural area.
But for water-scarce countries like Saudi Arabia and the United Arab Emirates, the threat of a food crisis is a very real fear. This has propelled them onto the top-10 list of countries investing in land deals - along with the Unites States, Malaysia and China.
Analysts say individual deals can involve hundreds of thousands of acres of land.
“For the Saudi government it is an elevation of food security for long-term structural demand that we are seeing in that economy,” said Simon Freemantle, senior analyst at the Standard Bank African Political Economy Unit.
But he believes Afican nations can benefit too. Freemantle said: “For the African (governments), if those deals can be struck pragmatically and if those funds can be channelled into the agri-sectors, they can develop the skills, they can increase the uptake of fertilizer usage, benefit through better use of irrigation mechanisms, for example.
“It should elevate domestic food security, and of course, that influx of capital is a necessary means to elevate agricultural potential and yields on the continent."
Alda Salomao is the director of Centro Terra Viva. She specialises in environmental law and has taken the Mozambican government to court over one of the land deals it negotiated.
“Or main issues and concern is to ensure that whatever initiative comes to the country, be it from Brazil, from China or from anywhere else, needs to be conducted according to the national laws and policies. Because we have enough provisions in these instruments to ensure that there is going to be fairness and tangible benefits for the country, for its people and for the companies.
“The government is failing to give itself enough time to take the time it needs to prepare itself to receive these kinds of investments.”
The local administrator for the district, Artur Macamo, denies that the government has handled this deal in Massingir badly. The government cancelled a contract with another company to use the same land and the administrator says this a sign that Mozambique will court investors on its own terms. This is a view shared by Massingir Agro Industrial.
“I think it is a win-win situation,” said Octavio Mutemba of Massingir Agro Industrial. “They (foreign companies) would be grabbing land if they came and they did not pay anything, if they implemented their projects, they took money out without any benefit for the population, for the communities.
“In that case I could say they are profiting from the land but in this particular case, in our project, and in other projects in this country that I am aware of, that situation does not happen.”
African villagers like Gloria are caught between their government's need to promote agricultural development through foreign investment and to protect the rights of the citizens who depend on that land.
But with volatile food prices, hungry populations and investors wanting to feed those cravings, it may be that it is the villagers who get left behind.
From around the web
About Global Exchange
Global Exchange explores how emerging markets are impacting and influencing the global financial community, at a time when business is a vital driver of the international news agenda.
Global Exchange is presented live from Abu Dhabi by emerging markets editor, John Defterios, who will be joined by CNN correspondents from around the world.
Global Exchange also includes the “GX20,” a global hotlist of some of the world’s biggest economic thinkers. The GX20 will be drawn from the key emerging markets, from across China, Russia, India and South Africa, contributing to the show and this blog.
Watch on CNN International Sunday to Thursday:
Follow the show on Twitter @CNNGlobalEx and use the #CNNGlobalEx hashtag to join the conversation.