Espacios. Vol. 36 (Nº 19) Año 2015. Pág. 16

Land grabbing or opportunity for development: An analysis of the principles for responsible investment in agriculture and food systems

A grilagem ou oportunidade para o desenvolvimento: uma análise dos princípios para o investimento responsável em sistemas agrícolas e alimentares

Carlo Alessandro CASTELLANELLI 1; Luise Medina CUNHA 2

Recibido: 07/07/15 • Aprobado: 08/09/2015

Contenido

1. Introduction

2. The Emerging Phenomenon of Land Grabbing

3. Are the CSF's Principles Reliable?

4. Conclusion

5. References

1. Introduction

Private investment in the agricultural sector, including from foreign sources, offers significant potential to complement public resources. Many countries with reasonably functioning markets have derived significant benefits from it in terms of better access to capital, technology and skills, generation of employment, and productivity increases. In addition to establishing farms and plantations themselves, some large investors have managed to achieve broad-based benefits via contract farming, other outgrower arrangements, and joint ventures with local communities. This often involves formulating innovative schemes for sharing both risks and rewards.

According to FAO - Food and Agriculture Organization of the United Nations (2014), on the other hand, where rights are not well defined, governance is weak, or those affected lack voice, there is evidence that such investment can carry considerable risks of different types. Risks include displacement of local populations, undermining or negating of existing rights, increased corruption, reduced food security, environmental damage in the project area and beyond, loss of livelihoods or opportunity for land access by the vulnerable, nutritional deprivation, social polarization and political instability. Moreover, many large farming investments in the past have proven unsuccessful.

Proponents of large-scale land acquisitions argue that poor countries could benefit from foreign direct investment in land (World Bank 2011), while opponents argue that large scale land acquisition is nothing more than neo-colonial theft of poor peasants' livelihoods, that can be called as land grabbing (Borras and Franco, 2010).

In 2010, FAO, IFAD ( International Fund for Agricultural Development), the UNCTAD (UN Conference on Trade and Development) Secretariat and the World Bank Group, trought the CFS (Committee on World Food Security) have joined together to propose the Principles for Responsible Agricultural Investment that Respects Rights, Livelihoods and Resources. The document concludes with anticipated next steps, which point toward a toolkit of best practices, guidelines, governance frameworks, and possibly codes of practice by the major sets of private actors.

In 2014, there was another discussion and emerged a new guide. The Principles for Responsible Investment in Agriculture and Food Systems were approved by the 41st Session of CFS (Committee on World Food Security) on 15 October 2014. The new Principles were developed by an Open Ended Working Group over the course of October 2012 – October 2014. They are based on an inclusive process of consultations that occurred from November 2013 – March 2014. Regional consultations and workshops were held in Africa, Europe and Central Asia, North America, Asia and the Pacific, Latin America and the Caribbean, and the Near East. The Principles also include feedback received through an electronic consultation. Consultations included governments, UN agencies, civil society and non-governmental organizations, international agricultural research institutions, private sector associations and private philanthropic foundations, international and regional financial institutions. The objective of the Principles is to promote responsible investment in agriculture and food systems that contribute to food security and nutrition, thus supporting the progressive realization of the right to adequate food in the context of national food security.

However, land deals are having a devastating impact on some of the world's poorest and most vulnerable communities that depend on their land for survival. Most deals are happening in countries with serious hunger problems, yet the majority of crops grown on land from these deals are intended for export. Deals are usually done in secrecy, without the free, prior and informed consent of impacted communities. Despite the devastating impact on local people, governments are aggressively pursuing foreign investors with promises of free or cheap land, cut-rate loans and generous tax incentives including tax exemptions.

This paper aims to discuss the protection against the global phenomenon called Land Grabbing, throught the protection of control mechanisms such as the CSF´s principles.

2. The Emerging Phenomenon of Land Grabbing

The various aspects of the global crisis (financial, environmental, energetic and food) in recent years, has contributed to a dramatic urgency for the control of land, especially those located in the southern hemisphere. National and transnational economic actors of various business sectors such as oil, mining, energy, food, among others, are acquiring or intend to acquire lands to maintain or expand their industries.

The governments of countries that are rich in funds and poor in resources, are seeking background in countries that are rich in resources and poor in funds to help them in their food and energy needs in the future. At this moment, the issue relates to the strong dynamics among which stand out the accelerated technological modernization processes and their impact on rural production structure. Today, there are concerns related to different challenges with climate change, food security and financial problems.

A World Bank study shows that the growth of global agricultural production and consequently the demands on land´s purchase transactions, focuses on the expansion of only eight commodities. These are corn, palm, rice, canola, soybeans, sunflower, sugar cane and maize (TWB, 2010). Best prices of biofuels and government subsidies have led to expansion of these crops. In 2008, the estimate was 36 million hectares of the total area cultivated with raw material for biofuels, an area twice as large as in 2004 (TWB, 2010). According to Borras and Franco (2012), these commodities are mainly responsible for foreign investments in countries like Brazil, but also in other Latin America countries. The "foreignization" and the (re) concentration of land and capital, are beyond food production, with special emphasis on biofuels, mining and wood. The narrative of this race of the growing demand for food (Borras and Franco, 2012), and the interest in land is associated with biofuels production projects and other agricultural and non-agricultural commodities, attracting capital from various sectors, including investment funds (TWB, 2010).

One of the factors identified by the World Bank are speculative investments, which combined with productive investments, causing a won processes through land rent. The combination of price (less cost of land in border areas), the absence of taxes and government investment in infrastructure construction are key elements in speculation processes, transforming the land into financial asset (LEITE and SAUER, 2011). A significant factor in the World Bank report is the characterization of potential claimants of land. According to it, there are three types at the moment: (a) governments concerned about domestic demand and its inability to produce enough food for the population, especially from the food crisis in 2008, generated by rising prices; (b) Financial companies that predict advantages in land acquisition and (c) sector companies (agro-industrial and agribusiness) that due to the high level of trade and processing concentration, seeking to expand their business (TWB , 2010).

Although not directly address the issue, Fairhead et al. (2012), when discussing the "green grabbing" shows this subject, including "land alienation processes'' in a context of "accumulation by dispossession". The central theme, as already mentioned, is the land grab for food and biofuels, in a neoliberal logic of use of land (Fairhead et al., 2012). Consequently, today the land question in the XXI century is not restricted to political disputes, as part of a social problem (rural poverty) unresolved (Martins, 2000) in countries like Brazil, but there is growing interest worldwide for agricultural and non-agricultural commodities (Cotula et al, 2011; BORRAS et al, 2011.). Although Oliveira (2010), alerts that this question is not new, some studies points a global land rush.

The large-scale conservation crops with biofuel production purposes, among others, receive the name of  pro-environmental land grabbing, that is a kind of land grabbing in the name of the environment. There are a growing consensus that the phenomena of concentration and foreign ownership of land, lead to some issues in the several dimensions: political, economic, environmental and social.

In addition to the social question, the resulting environmental dimension of this act with the purely productive bias and profit maximization, can lead to an intensive use of soil and water contamination with pesticides and other environmental impacts. The absence of a regulatory framework regarding the use and purchase of land, can lead to a scenario of no socio-environmental sustainability.

Borras et al. (2011), shows that Brazil and Argentina, are configured as the South America countries with the highest incidence of land grabbing. He observed a common trend between the two countries, weak governance structure.

In October of 2008, the Grain website (an international nonprofit organization that works to support peasants, small farmers and social movements in their struggles to achieve food systems based on biodiversity and controlled communally) began to publish news and articles related to land grabbing worldwide by global companies, particularly those operating in the food trade and the investment funds and private investors. (www.grain.org) even created a specific website to convey the news regarding the ownership of land by foreigners. (http://farmlandgrab.org/).

Thus, GRAIN (2011), reported for the first time, the scheme of the acquisition of land by foreigners in the world: the current food and financial crises combined, triggered a new global land grab cycle. Governments with food insecurity, which rely on imports to feed its population, are rapidly taking agricultural land around the world, where they produce their own food out of the countryof origin. Global corporations that sell food and private investors, hungry for profits amid the deepening financial crisis, see investments in foreign farmlands as an important new source of profit. As a result, fertile agricultural lands are privatized and increasingly concentrated.

GRAIN was not only this statement, the text also decreed, without any doubt, the end of peasant agriculture and the countryside for a living: Faced with the inability to stop this process, the appropriation of global land could mean, in many parts of the world, the end of small-scale agriculture.

About the process of acquisition and leasing of land by foreigners, Oliveira (2010), explain that the texts in English began to use various notions / concepts: farmland grab; land grab (Arezki, Deininger and Selod, 2010; cotula, VERMEULEN, LEONARD and KEELEY, 2009; Kugelman and Levenstein, 2010); land grabbing (BRAUN, von J., and R. Meinzen-DICK 2009;. FIAN 2010;. SAUER, S. and LEITE, SP 2011). Lee Mackey (2011), the Department of Planning, University of California, Los Angeles uses the notion of foreignization of space, and remember also, that there is the use of the notion foreignization of land. (MACKEY, 2011).

As Merlet (2010), remembers correctly, this process can not be reduced only to the purchase of the land mechanism, which requires the operation of a land market marked by the purchase and sale of farms. According to the study requested by the Committee Technique - Foncier et Développement, we are facing a movement of appropriation and concentration of land and natural resources on a large scale (appropriation and concentration of land - and natural resources - in large scale) (MERLET, 2010).

3. Are the CSF's Principles Reliable?

The Principles addresses all types of investment in agriculture and food systems - public, private, large, small - and in the production and processing spheres. They provide a framework that all stakeholders can use when developing national policies, programmes, regulatory frameworks, corporate social responsibility programmes, individual agreements and contracts. They are voluntary and non-binding, but represent the first time that governments, the private sector, civil society organizations, UN agencies, development banks, foundations, research institutions and academia have agreed on what constitutes responsible investment in agriculture and food systems that contribute to food security and nutrition (FAO, 2014).

According to FAO (2014), the Principles represent the first global consensus on defining how investment in agriculture and food systems can benefit those who need it most. Now the Principles need to be translated into actions. What do the Principles mean for each stakeholder and how do we all work together to apply them and make a real difference in ensuring food security and nutrition on the ground? While the Principles provide the basis for moving forward together, the people responsible for translating global policy into action –  policy makers, lawmakers, investors, farmers, processors, traders, retailers, consumers, etc. – need to think through the practical steps at all stages of food systems.

The four key dimensions of food security are availability, access, utilization and stability. The Principles are based on the following documents as the foundation for responsible investment in agriculture and food systems:

1. Universal Declaration of Human Rights - Adopted by the UN General Assembly on 10 December 1948 and human rights treaties which are binding for the respective State Parties;
2. International Labour Organization Declaration (ILO) on the Fundamental Principles and Rights at Work – Adopted by the International Labour Conference in June 1998;
3. Voluntary Guidelines on the Progressive Realization of the Right to Adequate Food in the Context of National Food Security – Adopted by FAO in 2004;
4. United Nations Declaration on the Rights of Indigenous Peoples – Adopted by the United Nations General Assembly on 7 September 2007;
5. Guiding Principles on Business and Human Rights – Endorsed by the UN Human Rights Council in June 2011 and the ten Principles of the UN Global Compact in 2000; 6. Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security – Adopted by the CFS in May 2012;
6. Voluntary Guidelines for Securing Sustainable Small-scale Fisheries in the Context of Food Security and Poverty Eradication –Endorsed by the Committee on Fisheries at its 31st Session in June 2014;
7. Global Strategic Framework for Food Security and Nutrition(GSF) of the CFS
8. Rio Declaration on Environment and Development, proclaimed by the UN Conference on Environment and Development in June 1992;
9. The Outcome document on the UN Conference on Sustainable Development The Future We Want adopted UNCSD in June 2012.

To better understand the criticism that will be built, it is shown below the principles organized in 2010 and 2014.

3.1. Principles for Responsible Agricultural Investment that Respects Rights, Livelihoods and Resources (2010).

Principle 1: Existing rights to land and associated natural resources are recognized and respected.

Principle 2: Investments do not jeopardize food security but rather strengthen it.

Principle 3: Processes relating to investment in agriculture are transparent, monitored, and ensure accountability by all stakeholders, within a proper business, legal, and regulatory environment.

Principle 4: All those materially affected are consulted, and agreements from consultations are recorded and enforced

Principle 5: Investors ensure that projects respect the rule of law, reflect industry best practice, are viable economically, and result in durable shared value.

Principle 6: Investments generate desirable social and distributional impacts and do not increase vulnerability

Principle 7: Environmental impacts of a project are quantified and measures taken to encourage sustainable resource use, while minimizing the risk/magnitude of negative impacts and mitigating them.

3.2. Principles for Responsible Investment in Agriculture and Food Systems (2014).

1. Principle 1: Contribute to food security and nutrition.
2. Principle 2: Contribute to sustainable and inclusive economic development and the eradication of poverty.
3. Principle 3: Foster gender equality and women's empowerment.
4. Principle 4: Engage and empower youth.
5. Principle 5: Respect tenure of land, fisheries, and forests, and access to water.
6. Principle 6: Conserve and sustainably manage natural resources, increase resilience, and reduce disaster risks.
7. Principle 7: Respect cultural heritage and traditional knowledge, and support diversity and innovation.  
8. Principle 8: Promote safe and healthy agriculture and food systems.  
9. Principle 9: Incorporate inclusive and transparent governance structures, processes, and grievance mechanisms.
10. Principle 10: Assess and address impacts and promote accountability.

These principles are presented as indicators for "responsible agricultural investment" as a solution that everyone wins, however, It has to be considered that the principles could be used to legitimize what is unacceptable: companies (foreign and domestic) seeking to take over large amounts of land.

Responsible agricultural investments in fact could be a rationalization of land grabbing (FIAN 2010; Via Campesina 2009). These principles seems to be more concerned with ensuring a smooth transfer of existing land rights to investors, which keep land of farmers and communities in their own hands now and in the future. The concept of "existing rights to land" does not include the right of the landless to re-obtain effective access to land. In most contexts, land reform, including land redistribution, is a compulsory measure under the human right to food. Reducing land resources available for redistribution and orientation of agricultural policies in order to stay away from an agrarian reform is a regressive measure and therefore violates the human right to food.

Food security assessments usually are based on official national aggregate data on supply and demand for food, regardless of who produces it, where they come from, how they are produced, or who have real access to below these data aggregated nationally. In the end, what can happen is that some countries that produce food and fuel for trade within and outside their national borders, end up importing food products from abroad.

Savaresi (2015), discuss that he Principles are defined as voluntary and were not intended to add new content, but rather to synthesize existing relevant binding and non-binding international instruments. The Principles mark the difference between these two categories clearly, by using three different expressions under "Roles and Responsibilities": "States should" with regard to national and international law, trade and investment agreements, on the one hand; while "States are encouraged" or "States play a key role" with reference to non-binding agreements, thereby making it more difficult to use the Principles as a means to balance the discrepancies between different areas of international law. With regards to the latter, there is a risk that previously agreed standards may be overly simplified, weakening previously agreed language and thus de-emphasizing the need to honour earlier commitments.

It is import to discuss the way that the principles makes transparency more responsive to the demands of transnational corporations, such as a transparent process for land acquisition to allow a "climate of stable and efficient investment" in order to avoid insecurity / instability transactions land and informal investments.

About the principle concerning ''All those materially affected are consulted, and agreements from consultations are recorded and enforced'', we can conclude that the outcome of the consultations will always be acceptance of the investment project. The central point here is that national and transnational companies, national elites and governments have exploited or manipulated can manipulate it to promote their interests in land operations.

Instead of giving priority to a model of agricultural production where women, farmers, food producers are small-scale in the center, agro-ecological forms of agriculture and strengthening local markets, government policies have been serving big investors and destructive model of industrial agriculture.

Rass (2006), explain that in many developing countries and particularly in Sub-Saharan Africa, for exemple, the rights of landusers are not properly secured. Much of the land is formally owned by the government, and the landusers have no property titles on the land they cultivate; in many cases too, a complex combination of property rights and users' rights results in a situation in which those who cultivate the land do not own it, although they may or may not be paying rent in cash or kind or may or may not have a formal agreement with the nominal owner. This situation is the source of legal uncertainty. It also implies that landusers will not have access to legal remedies, and receive adequate compensation, if they are evicted from the land they cultivate, for instance after the government has agreed that foreign investors take possession of the land. It is also important to recognize other use rights on land such as grazing and gathering wood, which are often critical sources of livelihood especially for women. The rights of pastoralists in particular are generally neglected in public debates. Yet, as drylands constitute nearly half of the land area of sub-Saharan Africa, pastoralism is of particular importance for the continent: almost half of the total amount of about 120 million pastoralists/agro-pastoralists worldwide resides in sub-Saharan Africa, where the largest pastoral/agro-pastoral populations (of seven million each) are in Sudan and Somalia, followed by Ethiopia with four million.24 In this context, there is a real risk that land considered 'empty' or 'idle' will be sold or leased to investors, including foreign investors, without taking into account the important services this land renders to the local population.

4. Conclusion

In John Locke's famous argument, a person mixes his labour with the natural resource and thereby makes it his property (Locke 2003). However, since the earth is endowed to human kind as a common good from God, according to Locke, one should also respect others' equal right to appropriate land. Hence, Locke's proviso that there should be enough, and as good, left in common for others. At the time of Locke's writing the Two Treatises, the 1680's, land was considered abundant.

None of the above is to suggest that large-scale land leases or purchases cannot be beneficial for all parties – the investor, the host State, and the local population concerned. Large-scale investments in farmland can work for the benefit of all parties concerned. But that presupposes that an appropriate institutional framework is in place – and if it is not at the time of the investment, the arrival of large investors may in fact make it less likely, not more, that it will be set up in the future. It is therefore vital that the negotiations leading to such agreements comply with a number of procedural requirements ensuring informed participation of the local communities and therefore adequate benefitsharing, and that the agreements themselves take into account the human rights which could be negatively impacted by such investment. Agreements to lease or cede large areas of land in no circumstance should be allowed to trump the human rights obligations of the States concerned. It is a joint responsibility of both the host State and the investor to respect the human rights involved. Where the investor is a private entity, it is the responsibility of its home State to ensure that these obligations are complied with. (De Schutter, 2009).

Large-scale land acquisition and land grabbing remains a contested issue. On the one hand, there is evidence that foreign direct investments in developing countries often cause harm to local small-scale peasants. However, such investments are also needed, as they present a genuine opportunity for development. In order to obtain an overview of the discussion on the subject. It can be observed two ethical issues raised by two approaches: the contested issue of a human right to land and the need for an ethics of inclusion and determination of responsibility for land grabbing. The human right to land could be argued as being compatible with the liberal tradition based on the notion that use rights to land entail some kind of property right to land, i.e., a right to land that must be respected as a human right. The second issue, that of inclusion and the need to take into account the participation of land users themselves in the process of reaching fair standards, required an ethical approach that could allow for a dialogical perspective on moral deliberation. The responsibility for land grabbing could also include a broader, global, and even individual kind of responsibility. Following Thomas Pogge's theory of a global institutional responsibility, it becomes clear that citizens who participate in a global structure that facilitates land grabbing also become responsible, due to their upholding these very same institutions.

A strong governance scheme is necessary to respect the concentration and land grabbing, not only in the form of non-mandatory principles, but rather analyze the regulations of each region and countries due their different social, environmental and economic aspects.

5. References

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BORRAS, S.  and FRANCO, J. Towards a broader view of the politics of global land grab: Rethinking land issues, reframing resistance. ICAS Working Paper Series No. 001., 2010.

BORRAS, S. and FRANCO, J. Global land grabbing and trajectories of agrarian change: A preliminary analysis. Journal of Agrarian Change, 12(1), 34–59, 2012.

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1.Mestre em Engenharia de Produção (UFSM) Universidade Federal de Santa Maria - UFSM. Email: castellanelli@bol.com.br
2. Bacharel em Direito Universidade Federal de Santa Maria - UFSM