The New Land Rush

As foreign investors pour in—from Arab princedoms, India, South Korea, China, and other nations—hundreds of thousands of Ethiopians are being relocated.

Ironically, key targets of foreign agro-investment include the world’s hungriest countries: In Ethiopia, 13 million people receive international food aid and 41 percent are undernourished. The country’s massive transfer of physical wealth to foreign corporations is overseen by Prime Minister Meles Zenawi. One of the parties he controls owns at least five state-affiliated companies and has major stakes in the agricultural products market. Zenawi’s regime has granted control of 1.48 million acres to foreign entities, according to the Mail and Guardian.

Foreign land investors are banking on profits of up to 25 percent, buoyed by loose environmental and labor regulations common in desperately poor and corrupt countries. “Lack of transparency and of checks and balances in contract negotiations creates a breeding ground for corruption,” the FAO says, adding with understatement, “and deals that do not maximize the public interest.”

One of the public costs, lax environmental regulation, is a key perk for investors. If history is any guide, eventually—but not before great profits can be extracted—industrial monoculture agriculture will deplete soil and water; perpetual chemical inputs including fertilizers, pesticides, and herbicides will poison the environment; and pest and disease problems will strangle biodiversity.

But even when host governments impose contractual restrictions and protections, “there does not appear to be any significant enforcement of lease terms,” according to the Oakland Institute report. “Government is charging us a rent,” a foreign investor in Ethiopia told the institute. “What we choose to do on the land for our own commercial intent is our own business. There are . . . no constraints, no contracts, none of that.”

With $332 billion in assets, the China Investment Corporation is one of the world’s largest sovereign wealth funds. And like the Saudis’, China’s concerns about growing unrest and food insecurity are factors in its increasing investment in foreign farmland.

China’s “embrace of [Africa] is strategic, planned, long-term, and still unfolding,” writes Deborah Brautigam, an American University specialist in China-Africa relations. She argues that China is more concerned with economic expansion than with food security, which significant portions of its leadership believe is better ensured by adequate home production.

That may be difficult to achieve. While the United States has almost 3 acres of farmland per person, China has only .23. And 5,000 years of intensive farming has depleted China’s soil, industrialization has poisoned much of its water, and development and urbanization have depleted rivers and land so that even as population and per capita consumption increase, the country has lost more than 20 million acres of arable land—just since the mid-1990s.