Lec 25: The Global Land Rush Flashcards
There has been a rapid rise in large scale land acquisitions (LSLA) since the great recession. There is a long legacy of foreign land acquisitions. What makes recent LSLA different from past land acquisitions?
how did purchasing strategies change?
What is different now?
⚫ Size and frequency
⚫ New players (China, Malaysia, UAE, India)
⚫ Disillusionment with smallholder farming
⚫ Vertical integration of agribusiness (farming)
⚫ New crops (biofuels and carbon forests)
strategy
before: buy land and use it
now: buy land and hold onto it as an investment
Where are LSLA mainly situated?
Africa and SE Asia. Africa is the main focus for large scale acquisitions
What are the drivers of the global land rush?
- high food prices: Food prices went up with oil prices
- competing land uses: Scared of land scarcity: buy land just to be safe
- Land has always been a good investment
○ Its value is not correlated with equity markets
○ Land appreciates
○ Value of land increased 3x between 2002 and 2019
§ Partly due to speculation
According to the global land trade network, does Canada purchase more land than it rents out?
yes
What is land acquired for? rank in order of largest percentage
food production
non-food crops
flex crops (can be both)
multiple uses
Who are the main people making these land purchases?
Which country is the top investor?
nationals
- urban elite
- diaspora
foreign investors
- local foreign investors (ex Gulf States)
- global foreign investors (private companies, sovereign wealth funds, pension funds, hedge funds)
Top 3 investors: USA, Malaysia, China
What are the 5 reasons for the shift to large farms?
1) economies of production and processing
- demanding product standards (ex organic)
- quick processing
- machinery use
2) easier access to credit + insurance
3) new crops are expensive
4) lack of local available labor
5) public policy bias towards large scale farming
What are primary concerns about the global land rush? (5)
- land governance: rich people take land from poor people
- food insecurity
- loss of smallholder farms
- not a lot of jobs in large scale farming
- environmental impacts
What were the majority of lands acquired in LSLA used for before their acquisition?
less than 50% were used commercially. More than 30% were used for smallholder agriculture
why are LSLAs slowing down?
- Slowing down because of:
○ Slowed down interest in biofuels
○ Countries don’t want to give their land away anymore
What are 4 measures to be taken/that have already been taken regarding LSLA?
1) Land purchase restrictions
- need to demark existing land rights
- need a land registry
2) Strengthen land governance and better manage land investments
- need transparency in transactions (using global land price dataset and certified investors)
3) guidelines for best practices
- need to look beyond purchase of individual plots of land, look at aggregate picture
4) level the playing field for smallholder farms
- support in terms of investment and information
