Prometheus 6

Land grabs: Africa's new ‘resource curse’?
Khadija Sharife
2009-11-26, Issue 459

It has been called the next golden commodity by investment firms, and ‘neocolonialism’ by the now repentant director general of the UN’s Food and Agriculture Organization (FAO) Jacques Diouf.

The phenomenon better known as ‘land grabbing’ i.e.: Large-scale purchase or lease of farmland (often packaged as ‘idle’, ‘under-utilised’ and ‘uncultivated’) in ‘land-rich developing’ regions has catalysed a policy shift from geostrategic control over food production (institutionalised via structurally unjust trading mechanisms underpinning bodies such as the World Trade Organization), to that of sovereignty.

Whereas the US$1 billion per day in protectionist (Northern) subsidies served to artificially depreciate the price of primary commodities from developing regions, ‘land grabs’ are motivated by the intent of developed governments in ‘land-poor’ nations and representative corporate entities – composing over 50 per cent of the world’s largest economies, to secure exclusive rights to the assets used to produce food.

The global food crisis of 2008, forcing 100 million people below the poverty belt, may have been a catastrophe for the working poor of the world – peoples living in slums and on streets with no name, but for Wall Street, the ‘crisis’ – pushing up the price of grain by 140 per cent, was nothing less than the beginning of a new frontier: Harvesting power through dominion over farmland. Though the US squarely laid the blame for increased food prices on scarcity and the rapidly growing ‘middle class’ segment of both China and India – estimated at 650 million – a leaked document written by senior World Bank analyst Don Mitchell, revealed that 65-75 per cent of the increase was caused by the conversion of ‘crops for fuel’ ie: biofuels.

Massive profits punctuated the poverty underpinning the crisis: Monsanto – the company which declared that people would have GM soy ‘whether they like it or not’ posted three-month profits of US$1.2 billion, an increase of about 50 per cent from US$543 million, with Cargill experiencing a similar jump. ADM, allegedly the largest agricultural processor and also known as ‘the supermarket to the world’, posted increases of 42 per cent.

The precedent certainly existed: In 2007, for example, almost 40 billion litres of corn-based ethanol was produced in the US, which also produced 40 per cent of global corn trade. And the usual suspects profited in the build-up: During the last two years, reported profits from the world’s top three grain producers (ADM, Cargill and Bunge), controlling 90 per cent of global grain, rose by 103 per cent. Meanwhile, the profits of the top three seed/agro-chemicals (DuPont, Syngenta and Monsanto) and the top three global fertiliser companies (Yara, Mosaic and Potash) rose by 91 per cent and 139 per cent.

This was not an accidental occurrence, but rather a well-planned strategy. As Dwayne Andreas, former chairman of ADM stated, ‘The competitor is our friend, the customer is our enemy. There isn’t one grain of anything in the world that is sold in a free market. Not one.’

Andreas should know – just as oil giants are subsidised to the tune of US$300 billion per annum, ADM remained a chief recipient of billions in subsidies from the US government injected into the corn industry – a policy backed by President Obama and subsidised by US taxpayers. Unsurprisingly, ADM – one of several bundlers financing Obama’s ‘yes we can’ platform, recently stated that the company expected the percentage of ethanol allowed in US fuel supplies to increase from 10 per cent to 12 per cent or more....