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“Land grabbing” and the concentration process in Mercosur members

Thursday, April 26th 2012 - 06:10 UTC
Full article 13 comments
The price of land in Uruguay increased seven-fold in the last 10 years The price of land in Uruguay increased seven-fold in the last 10 years

The processes of concentration, foreign ownership and land degradation came to be a central concern of supranational bodies and NGOs that warn, like the United Nations Organizations for Food and Agriculture Organization (FAO), of the “negative effects of these phenomena on food security, agricultural employment and the development of family farming.”

A FAO study focusing on South America – and specifically, the four Mercosur members: Argentina, Brazil, Paraguay and Uruguay, all major food producers — warns of the situation.

The report, “Land grabbing in Latin American and the Caribbean viewed from broader international perspectives”, confirms “we face a new wave of foreign capital that caused a tremendous concentration process” and an “unchecked rise in the price of land, that in Uruguay for example increased seven-fold in the last 10 years”.

Uruguay has a total acreage of 16 million hectares. In the last decade transactions were carried out for 6.3 million hectares. According to the latest statistics from the country’s National Institute of Colonization, 83% of the fields sold in 2010 (336,000 hectares) were bought by foreigners, including Europeans, Brazilians, Argentines, New Zealanders, Koreans, and US citizens.

Until now, when talking about foreign ownership of land, UN agencies referred to the private actions of investors (speculators) driven by the pursuit of profit. In the report, released in November 2011, the emphasis is for the first time on “land grabbing”, defined as the purchase of land for food production in which foreign governments are also involved.

Just as the FAO is concerned with the sale to foreigners of land to use for the production of food or other plants intended to make bio-fuels, other entities are talking about the sale and concentration in certain hands of land for the development of mining or tourism.

Grain, an international organization that supports campesinos and social movements, cites the cases of mining companies like US firm Newmont Mining, which is digging in the Yanacocha gold deposit in Cajamarca, Peru, and investments by Canada´s Barrick Gold in “South America highlands”

But Grain also sets its sights on the countries that are involved in land grabbing. While it doesn’t specify the purchases by country, it states that South Korea ranks first, with 2.3 million hectares, followed by China, 2.1 million hectares and Saudi Arabia, 1.6 million hectares. The motivations behind the purchases, according to Grain, are obvious: they are countries with large economic growth that have the funds to buy land wherever there are resources they don’t have, like soy, wheat, and rapeseed.

In the case of China — consumer of virtually all the transgenic soy produced by Argentina, Brazil, Paraguay and Uruguay— “there is an attempt to buy land in countries of great natural wealth and produce the food needed to supply its domestic market”, according to Grain. In 2010 Argentine courts halted a contract of Patagonian province of Rio Negro with Chinese company Heilongjiang for the sale of 254.000 hectares to be used for just such a mega-project.

Also in Argentina, on Feb. 22 the government in the Northern province of Chaco announced it had reached an agreement with a semi-state Saudi Arabian firm, turning over 200.000 hectares of public lands, a virgin forest known as “El Impenetrable” which will be used for food production to be exported to the Middle East. In return, the Riyadh-based company will invest 400 million dollars. There are currently 60.000 members of the Wichi indigenous community living there who will be displaced.

The International Land Coalition, or ILC, a global alliance of civil society and intergovernmental organizations working to promote secure and equitable access to land, highlights the “significant role played by national elites in the process of concentration of the lands”, a phenomenon also observed by Fernando Eguren, president of the Peruvian Centre for Social Studies. There are also the issues, he added, of “a concentration of influences, political power in the geographic areas under development, and ... restrictions on democracy.

The ILC study, which refers not to Latin America exclusively, but rather to “a set of developing countries”, offers a startling conclusion that affirms the speculative underpinnings of these investments: of the 71 million hectares that changed hands in 2010, 58% was for bio-fuel crops, 22% went towards mining, tourism, and logging, and only 20% was earmarked for food production.

Top Comments

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  • TipsyThink

    There are ~ 7000 Indian agri firms to purchase many lands all around the world.

    Apr 26th, 2012 - 08:49 am 0
  • JoseAngeldeMonterrey

    The rush to grab lands in South America by Chinese, South Corean and other countries spells trouble for the region. What they are doing is trying to secure shipments of cereals and other crops, at low prices, leaving people in Argentina, Brazil and Paraguay without the opportunity to prosper in this bonanza of commodities.

    What Argentina and Brazil need to do is to create fiscal regulations to ensure that pricing between these “privates companies” and their homeland main offices does not become a tool to rip their countries off those benefits.

    But these countries will be better prohibits massive purchasing of cultivation lands and to promote ownership and investment in their current national farmers and producers.

    Apr 26th, 2012 - 10:37 am 0
  • reality check

    Agree with you, a nations land should be used to feed its own people, first and foremost. Only then, should surplus be sold for economic purposes and for the benefit of those same people.

    Apr 26th, 2012 - 10:52 am 0
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