World Bank admits ‘land grab’ risks, proceeds anyway

30 September 2010

A long-suppressed report by the World Bank, Rising global interest in farmland, remains supportive of large-scale land acquisitions in developing countries by foreign investors, despite highlighting significant risks for vulnerable populations. Civil society groups have argued that the Bank is complicit in violations of human rights associated with so-called ‘land grabs’ through its investment advisory services (see Update 71).

The Bank report was finally published in early September, despite being promised in April. It documents the dramatic increase of investor interest in agricultural land since the 2008 food price spike, with reported farmland deals amounting to 45 million hectares in 2009 alone.

The Bank highlights a number of cases where large-scale investments in land have been successful, including Peru’s auctions of public land worth almost $50 million.

Bank should not be allowed to sweep the damning findings under the rug

Despite these supposed successes, the report emphasises the exploitative nature of many investments, finding that investors have targeted countries with “weak land governance”, enabling them to gain land “essentially for free and in neglect of local rights”.  According to the report, land deals between investors and governments have occurred in secrecy, marginalising affected communities and farmers from the consultation phases and consequently leading to the eviction of people from their land without proper compensation.

Additionally, it finds that investors have not created the number of jobs they promised, and have failed to effectively invest in purchased land either due to lack of agricultural expertise or because they were more interested in speculative gains rather than in growing crops. The report notes that the deals exacerbated existing problems of gender discrimination, which an April report, Fertile ground by NGO ActionAid International calls one of the key barriers to reducing hunger in the developing world. According to the Bank’s report, “many of the projects studied had strong negative gender effects, either by directly affecting women’s land-based livelihoods or, where common property resources were involved, by increasing the time required of women to gather water or firewood and take care of household food security.”

Nevertheless, the Bank claims that these risks “correspond to equally large opportunities” for “increased productivity and effectiveness” in the utilisation of large areas of land not previously cultivated. This is in line with the Bank’s focus on large-scale land investment and farming (see Update 61,58 ). The report advocates the implementation of the seven principles on land investments it helped draft, which were criticised for legitimising land-grabbing (see Update 71).

Speaking at a UN conference in May, UN special rapporteur on the right to food, Olivier De Schutter, argued that the prioritisation of large-scale, capitalised forms of agriculture neglects smallholders who feed local communities and claimed that such methods will not solve the problems of hunger and malnutrition. Antoine Bouhey of NGO Peuples Solidaires said: “What we need is constraining legislation, both in recipient countries and at home where the investing corporations are headquartered … In the meantime a moratorium on these investments should be declared in developing countries that have not reached millennium development goal one” (to halve extreme poverty and eradicate hunger).

US think-tank the Oakland Institute has highlighted the contradiction between the report’s findings and the Bank’s agricultural policies (see Update 71). Anuradha Mittal, director of the Oakland Institute called for “heightened scrutiny of the Bank’s activities in promoting investor-friendly policies that spur foreign direct investment in agriculture in poor countries”, saying it should not be allowed “to sweep the damning findings under the rug.”