Evidence is mounting that these deals do little to help the poor nations. The cases where the poor government or it's people actually receive the benefits are very rare.
From the Economist, we find out more about the latest study on the land for development deals. The full study results can be found at the Future Agricultures website.
Still, some conclusions seem warranted. When land deals were first proposed, they were said to offer the host countries four main benefits: more jobs, new technology, better infrastructure and extra tax revenues. None of these promises has been fulfilled.
Locals usually regard jobs as the most important of these. But so far they have been scarce, and only partly because many projects are not yet up and running. In Mozambique, the World Bank found, one project had promised 2,650 jobs and created a mere 35-40 full-time positions. A survey by Thea Hilhorst of 99 smaller projects in Benin, Burkina Faso and Niger reported “hardly any” rural job creation. Only one of the publicly available contracts studied by Mr Cotula even specifies a number of new jobs to be created. And when there are jobs, foreign investors often bring in outsiders to staff them, leading to “conflict or accusations of cheating”, according to the World Bank. The manager of one project was killed during an argument about jobs.
Evidence of the transfer of technology and skills is mixed. Ms Hilhorst found almost no impetus towards greater professionalism in farming, although she concedes that closer links with food processors and distributors might improve matters. The World Bank’s study argued that technological improvements in Ukraine and Mexico had helped reduce rural out-migration (though this was surprising: you might have expected new labour-saving technologies to encourage underemployed farmers to leave the land). Mr Cotula’s study of land-deal contracts found few examples in which the foreign investor was obliged to exchange materials or ideas with local farmers. At the moment, land-grabbing foreigners seem to be creating islands for themselves, cut off from the poverty-stricken countryside.
Grabbing sans giving
Some projects’ operators have done better in building new schools, clinics and other “social infrastructure”. Madagascar may be a surprising example as it witnessed what is perhaps the most notorious land grab of all: a South Korean company was offered half the country’s arable land—a proposal that fuelled protests which eventually toppled the government who approved the deal. Two years later Perrine Burnod of CIRAD, a French research organisation, found that the number of land deals on the island had fallen by two-thirds. And those that remained had begun to look more like aid projects, with investors committing themselves to building schools and clinics. Local mayors were welcoming them in to help finance projects no longer supported by the cash-strapped central government.
Yet this is atypical. Most land deals contribute little or nothing to the public purse. Because markets for land are so ill-developed in Africa and governments so weak, rents are piffling: $2 per hectare per year in Ethiopia; $5 in Liberia. Tax and rent holidays are common. Indeed, it is not unusual for foreign investors to pay less tax than local smallholders. And upfront compensation to local farmers for use of their land is derisory: often just a few months of income for agreeing to a 100-year lease.
“The risks associated with such investments are immense,” concludes the World Bank. “In many cases public institutions were unable to cope with the surge in demand…Land acquisitions often deprived local people, in particular the vulnerable, of their rights…Consultations, if conducted at all, were superficial…and environmental and social safeguards were widely neglected.”