Inequality in land and natural resource sectors

Thursday, December 3, 2015 - 11:12

Traditionally, economists have considered land (including natural resources on land), labor, capital and entrepreneurship as the primary factors of production. It has been assumed that these four factors neither become part of the product, nor are they changed by the production process. This however does not hold true anymore.

In the recent past, we have seen a jostling for land and land-based natural resources, not just as factors of production, but as the fundamental foundation for wealth building and wealth accumulation. Land in itself is currently considered an asset and a great source of wealth, either in its use for production, or as a commodity to be sold in the market. It is not unusual for the powerful and wealthy to be recognized as such depending on the expanse of land attached to their names, leading to huge skews in land distribution within and across countries.

2007/08 saw a new surge in international land acquisitions, following the food, fuel, and financial crises. It is estimated that 500 million acres (200 million hectares) of land were acquired in the developing countries between 2000 and 2011 - about 10 times the size of Great Britain, or 2/3 the size of India - largely for food and biofuel production.

But where did or does this land come from? The World Bank continues to assert that Africa is home to nearly half of the world’s usable uncultivated land, some 202 million hectares that can be brought under the plough. The Bank sees huge potential here for enticing more corporate investment in Africa. And the Bank is consistent in calling for market-oriented land reforms across countries, orchestrating life-altering displacement for hundreds of thousands of Africans who depend on informal systems of land tenure and natural resource use (Fian 2000).

Through policy-targeted programmes like “Enabling the Business of Agriculture” (formerly “Benchmarking the Business of Agriculture”), the Bank has been encouraging developing countries to enact land reforms that ease access to land for private investment, by reducing land to a market commodity. Of course when the World Bank “encourages,” it’s more like soft coercion: if your country doesn’t respond to their encouragement, it will be ranked poorly as an investment destination for agriculture (see LGAF for example).

Similar initiatives such as the G7/G8 New Alliance for Food Security and Nutrition, initiated in 2012, are pursuing the same policy paradigm. ActionAid’s research shows that in the three years since it was started, the New Alliance has facilitated the acquisition of over 1.8 million hectares in just four countries in Africa- Nigeria, Malawi, Mozambique and Senegal. Additionally, the New Alliance supports mainly a few companies with substantial control of global markets in seeds (e.g. Syngenta, Monsanto, and Africa Cashew Initiative); inorganic fertilizer (e.g. Bayer); agricultural machinery (e.g. Agro tractors) and food markets (e.g. Coca-Cola, Hoyo Hoyo Agribusiness - a subsidiary of BXR Agro).

The medium-term effect of such initiatives and policies is a detrimental shift in land and land-based resource control from the hands of women, smallholder farmers, and indigenous people; who are recognised to produce 80% of the food consumed in the developing world; into the hands of the corporate sector, for export-oriented food and fuel production with high-input (water, fertilizer, pesticide, seeds, even GMOs) agriculture.

The New Alliance initiative is also propelling an unprecedented haste in policy reforms in the agriculture sector, aimed at removing barriers to market control by large corporations. Most detrimental are the intellectual property rights policies, which have big impacts on access to and control over seeds and the use of genetic modification.

African governments signing onto the New Alliance are required to reform their seed policies so that seeds can be officially registered in an official catalogue to facilitate trade by registered agents -- thus again depriving smallholder farmers of control. African farmers have for generations saved and shared seeds based on the use of indigenous knowledge to select genetically suitable seeds for local agro-ecological conditions, including resistance to the effects of climate change.

The emerging seed policies are taking away this control of agricultural genetic material like seeds, away from the women and smallholder farmers, and instead subjecting them to the mercies of the market for the seeds that were once ready at hand. While these companies lease the land for a limited period of time, the cost of the resulting ecological degradation and environmental damage is left to be borne by the poor and landless, once the private investors are done exploiting the land resources.

Unless there is a clear shift in economic and political power at all levels -- local, national and international -- inequality will continue to drive the world’s majority into the clutches of poverty and unjust dispossession, while propelling those with economic and political power to accumulate even more.