The land grab and corporate food regime restructuring

Abstract

Land grab appears to be a phenomenal expression of deepening contradictions in the corporate food regime. In particular, the end of cheap food (signaled in the 2008 ‘food crisis’) has generated renewed interest in agriculture for development on the part of the development industry, matched by a rising interest in offshore land investments, driven by governments securing food and fuel exports and financiers speculating on commodity futures and land price inflation. This paper interprets these developments as illusory solutions to a fundamental accumulation crisis of the neoliberal project. While this new (and final?) enclosure registers a restructuring of the food regime, as its geopolitical relations and productive content re-centers on Southern land and an emergent bioeconomic imperative, it is likely to only buy time (and space) in the short run for political and economic elites and a global consuming class. In the longer run, the attempt to resolve food regime contradictions by a spatial fix may well be catastrophic.

Keywords:

• food regime
• land grab
• financialization
• global ecology
• bioeconomy

Notes

¹While the so-called ‘land grab’ is quite heterogeneous, including urban expansion, tourism complexes, conservation initiatives, and smallholder grabbing (Zoomers 2010, Corson 2011, Hall 2011), this essay focuses on land grabs for agro-industrial purposes.

²For example, the FAO estimated, conservatively, that 20–30 million peasants were displaced in the 1990s following the institution of the WTO, and in Mexico upward of two million campesinos lost land through the destabilizing impacts of NAFTA (Madeley 2000, 75, Carlsen 2003).

³For example, arable land prices in the US rose 13 percent in 2007, and over 10.5 percent in 2008, while in the UK prices rose 28 percent in late 2007, and by more than 10 percent in the first quarter of 2008 (Berthelot 2009, 16).

⁴Weis refers to the ‘accelerating biophysical contradictions’ of agro-industry (2010) under conditions of rising costs of ‘biophysical override’ (2007). Here it is worth noting that a recent Global Citizen's Report on the State of GMOs expresses serious concern with the ‘increased use of synthetic chemicals to control pests despite biotech companies’ justification that GM-engineered crops would reduce insecticide use… Soya growers in Argentina and Brazil have been found to use twice as much herbicide on their GM as on conventional crops, and a survey by Navdanya International, in India, showed that pesticide use rose 13-fold after Bt cotton was introduced…. Ten common weeds have now developed resistance in at least 22 US states, with about 6m hectares of soya, cotton and corn affected’ (Vidal 2011, 7).

⁵Woodhouse and Ganho (2011), for example, offer a nuanced evaluation of the extent to which land grabbing includes accessing water flows, most likely through monopolistic infrastructural developments that alter and deprive access to water by smallholders.

⁶Here, the externalized costs of capitalism, absorbed by states and under-reproduced communities alike, are not only rising, but becoming more visible with climatic transformations and ecosystem degradation.

⁷As Merian Research (2010, 7) reports, greenwashing claims by investors about their associations with environmental NGOs are often bogus. For this reason, and reasons of legitimacy under pressure from civil society, the development agencies are engaged in formulating (voluntary) codes of conduct regarding land acquisition and use.

⁸‘The obvious motives for the deals are the spike in food prices and the subsequent decision of governments in several key producer countries to restrict their exports, threatening the food security of food importing countries such as the Gulf states, China and South Korea (the main participants in the deals). However, water shortages are another, hidden driver. Peter Brabeck-Letmathe, the chairman of Nestlé, claims: “The purchases weren't about land, but water. For with the land comes the right to withdraw the water linked to it, in most countries essentially a freebie that increasingly could be the most valuable part of the deal.” He calls it “the great water grab”’ Green (2011).

⁹An International Energy Agency (IEA) Report, From 1^st- to 2^nd-Generation Biofuel Technologies (2008), acknowledges shortcomings of first-generation biofuels, noting growing ‘interest in developing biofuels produced from non-food biomass. Feedstocks from lingo-cellulosic materials include cereal straw, bargasse, forest residues, and purpose-grown energy crops such as vegetative grasses and short rotation forests’. Such second-generation biofuels are expected to avoid many of the concerns with first-generation biofuels, including cost, but are not expected to be widely deployed until 2020. Even so, the Report's observation that the lack of risk assessment means ‘poor policy decisions could result in negative unexpected consequences for GHG emissions, the environment, biodiversity, land ownership, and producer and consumer welfare’ (IEA 2008, 34). As Wetter (2009) notes: ‘Impacts of increased residue removal will include impoverished soils (requiring more industrial fertilizers) and dangerous increases in soil erosion. We will see vast increases in pesticide- and herbicide-use. Removal of dead and dying trees from forests will increase biodiversity losses and decrease forest carbon-sequestration capacity. Additionally, many plants identified as good candidates for second-generation agrofuels are harmful to the environment as invasive species (e.g., miscanthus, switch grass, reed canary grass)’.

¹⁰Cotula (2011, 37) notes that some contracts (Sudan, Mali) ‘appear to create no safeguards to ensure that local food security needs are met’ – at odds with claims by host governments to improve domestic food security.

¹¹Thus, ‘The spectre of a hungry world is being used to push the agenda for industrial agriculture, but in reality, the majority of the land is used for producing animal feed and agrofuels, as well as land speculation, rather than food crops. A World Bank report on land acquisitions shows that only 37% of this land is used to grow food’ (Henriques 2011).

¹²Parallel deregulation in the financial services industry thus enabled cross-over investments by banks, in addition to a process of concentration and centralization, such that between 1980 and 1998 some 8,000 bank mergers occurred, accounting for assets of over $2.4 trillion (Shattuck 2008).

¹³Thus, ‘the excessive speculation in the financial commodity markets has seen a parallel increase in food prices. The increase between March 2003 and March 2008 of the agricultural commodities futures has been in parallel with the price increases during the same period for coffee with 167%, for soybean oil with 199% and for wheat with 314%’ (Kerckhoffs et al.2010, 7).

¹⁴As of July 2008, the Standard & Poor's-Goldman Sachs Commodity Index accounted for about 63 percent of the index fund market share, and a 32 percent share was held by the Dow Jones-AIG index – with agricultural commodities accounting for about 30 percent of these indices, and the rest in energy, base metals and precious metals (IATP 2008).

¹⁵Financial speculation compounded food price inflation, which spiked in 2008: rice prices surging by 31 percent on 27 March 27, and wheat prices by 29 percent on 25 February 2008. Diana Henriques wrote in The New York Times (22 April 2008), ‘This price boom has attracted a torrent of new investment from Wall Street, estimated to be as much as $300 billion;’ with the Commodity Futures Trading Commission noting that ‘Wall Street funds control a fifth to a half of the futures contracts for commodities like corn, wheat and live cattle on Chicago, Kansas City and New York exchanges. On the Chicago exchanges… the funds make up 47 percent of long-term contracts for live hog futures, 40 percent in wheat, 36 percent in live cattle and 21 percent in corn’ (quoted in Berthelot 2008).

¹⁶For example, Total, Shell, BP, Exxon-Mobil, Petrobras, ADM, Cargill, Bunge, Monsanto, Syngenta, Dow Chemicals, Bayer, DuPont, BASF, etc. (Houtart 2010, 131-2).

¹⁷Weis (2010, 327) notes: ‘Just under half of the world's total grain production (48 percent) is directly consumed by humans, while 35 percent is fed to livestock and 17 percent to biofuel production. The surge in the latter two comes at a time when the yield gains associated with the Green Revolution have effectively maxed out, and the volume of per capita grain production on a global scale has been level since peaking in 1986’.

¹⁸Steven Blank (1998) was one of the first to draw attention to this.

¹⁹By 2030, it is predicted that the global supply of phosphorus, a key plant nutrient, will peak. In combination with rising oil prices, the upward trending of inorganic fertilizer will consolidate (Cordell 2009).

²⁰Thus a GRAIN researcher notes: ‘Rich countries are eyeing Africa not just for a healthy return on capital, but also as an insurance policy. Food shortages and riots in 28 countries, declining water supplies, climate change and huge population growth have together made land attractive’ (Vidal 2010).

²¹Houtart's suggestion that agrofuels ‘have come just in time to revive the prices of agricultural products and their role as a financial refuge in times of crisis’ (2010, 128) is a partial explanation of this phenomenon. Agribusiness profited substantially from the ‘cheap food regime’ – providing low priced commodities for subsidized trading and processing, contributing to a process of concentration and centralization of agri-capital. Agrofuels, heavily subsidized with public monies, offer alternative financial outlets, simultaneously raising the price of foodstuffs. Arguably, agrofuels amplify the centralization of agri-food capital, via financial agglomeration and recombinant capital, as energy, chemical, auto and biotechnology capitals join the rush for cheap land. In 2007, biofuels were the fastest growing segment of the world agricultural market (ETC 2007, 2).

²²For example, in Colombia between 2001–2005, 263,000 peasant families were expropriated from 2.6 million hectares by agrobusiness and/or paramilitaries interested primarily in oil palm development (Houtart 2010, 107; see also Grajales 2011). Houtart (2010, 119) claims that 60 million people risk expulsion by biofuels.

²³According to Friends of the Earth and EarthTrack, the combination of the Renewable Fuels Standard Mandate (which provides a market for biofuels) with tax credits would subsidize the US biofuels industry to the tune of $400 billion through 2022 (www.foe.org/biofuelsubsidies). Analyst Bloomberg New Energy Finance reported that ‘in 2009 governments provided subsidies worth between $43bn (£27bn) and $46bn to renewable energy and biofuel industries, including support provided through feed-in tariffs, renewable energy credits, tax credits, cash grants and other direct subsidies’ (Business Green 2010).

²⁴For O'Connor (1998) this process represents the ‘second contradiction of capitalism’.

²⁵Visser and Spoor (2011) rightly underscore the strategic significance of Eastern European lands (notably in Kazakhstan, the Ukraine and Siberia) where Northern investors and Southern states grab large agricultural land reserves – allowing land grabbing food regime circuits their managed universality.

²⁶For critical reviews, see the Journal of Agrarian Change, 39, 6 (2008).

²⁷This is also the case elsewhere, such as in Southeast Asia – see e.g. Cotula et al. (2008).

²⁸IFC expenditures in Sub-Saharan Africa rose from $167 million in 2003 to $1.8 billion in 2009 (Daniel 2010, 12).

²⁹Analogously, biodiversity conservation projects alienate land and resource rights from forest-dwellers (see e.g. Corson 2011 and Kelly 2011).

Additional information

Notes on contributors

Philip McMichael

The author is grateful to three anonymous reviewers for invaluable feedback on an earlier version of this essay.