Western Hedge Funds In African Land Grab

By Steve Hynd

Via the BBC comes the latest round of venal corporate short-termism of the kind that's been sinking us (literally) for decades now. Hedge funds are grabbing African land, often under dubious legality, to run biofuels operations, cut-flower plantations and, of course, grab world fuel prices by the throat.

"This is creating insecurity in the global food system that could be a much bigger threat than terrorism," the report said.

The Oakland Institute said it released its findings after studying land deals in Ethiopia, Tanzania, South Sudan, Sierra Leone, Mali and Mozambique.

It said hedge funds and other speculators had, in 2009 alone, bought or leased nearly 60m hectares of land in Africa - an area the size of France.

"The same financial firms that drove us into a global recession by inflating the real estate bubble through risky financial manoeuvres are now doing the same with the world's food supply," the report said.

It added that some firms obtained land after deals with gullible traditional leaders or corrupt government officials.

When those same hedge funds bet on the cost of food rising because there'll be shortages, it's not exactly a bet. More a sure thing.

The Guardian follows up with the news that some of America's most prestigious colleges are involved in the land-grabbing for profit.

The new report on land acquisitions in seven African countries suggests that Harvard, Vanderbilt and many other US colleges with large endowment funds have invested heavily in African land in the past few years. Much of the money is said to be channelled through London-based Emergent asset management, which runs one of Africa's largest land acquisition funds, run by former JP Morgan and Goldman Sachs currency dealers.

..."No one should believe that these investors are there to feed starving Africans, create jobs or improve food security," said Obang Metho of Solidarity Movement for New Ethiopia. "These agreements � many of which could be in place for 99 years � do not mean progress for local people and will not lead to food in their stomachs. These deals lead only to dollars in the pockets of corrupt leaders and foreign investors."

"The scale of the land deals being struck is shocking", said Mittal. "The conversion of African small farms and forests into a natural-asset-based, high-return investment strategy can drive up food prices and increase the risks of climate change.

The BBC notes that the aquisitions have already displaced millions of small farmers across Africa, often to create multi-million dollar profits from resource exploitation and carbon credit refunds but employing very few people. The Guradian quotes one of the study's authors:

Frederic Mousseau, policy director at Oakland, said: "This is creating insecurity in the global food system that could be a much bigger threat to global security than terrorism. More than one billion people around the world are living with hunger. The majority of the world's poor still depend on small farms for their livelihoods, and speculators are taking these away while promising progress that never happens."

Climate change denial is not just about a river in Egypt, or power generation in the First World.

Update: How the World Bank is facillitating land grabs in India (via Tina).