Land acquisitions and development: two competing narratives

1. Land acquisitions and development: two competing narratives Ton Dietz African Studies Centre Leiden and Chair CoCooN steering committee

2. The optimists Foreign large-scale land acquisitions in Africa for purposes of producing food and biofuels for export will have many positive effects on the economy and society of areas and countries where they take place. These are mainly underutilised lands, that could become much more productive and Africa is the major remaining frontier for the acquisition of those types of land. And they use underutilised labour

3. +1: Impact on the national budget Land leases will bring land taxes to the (national) government, while before these lands did not give any direct tax benefits to the government The investment will result in export products, which will be taxed as well (export levies) The investment will attract management and some labour from abroad, who will contribute to the economy via indirect taxes The investment will expand local jobs, and labourers start paying higher (in)direct taxes than they ever did before.

4. +2: Impact on economic growth The investment will increase the economic value production in areas where that was very limited before It will expand agricultural land use to areas that had mainly non-agricultural or low-intensity agricultural production before It will create a lot of extra direct employment It will enable value chain development that creates a lot of indirect employment

5. +3 Impact on the land market Land acquisitions will increase the value of land in the country as a whole as a result of increasing land pressure; this will improve the commercial land markets, It will give land owners more economic security, and banks an incentive to use land as mortgage (and hence increase farmers� access to credit and banking services) It will be an incentive for more productive farmers to buy land from less productive farmers

6. +4 Impact on access to food and energy The area and labour involved in production of food and biofuels for export will be more productive than before, and will enable labourers/farmers to buy more food (if necessary imported) with their income than they could have produced themselves with the same labour time and on the same land. In case of national food and energy shortages the government can decide to ban export of food/biofuels and make that available for support operations within the national territory.

7. +5 Impact on networks and capabilities The exposure to foreign investors from �new backgrounds� will create possibilities for new networks of contacts (trade, migration, knowledge exchange) and will diminish one-sided cultural orientations The increased exposure to multi-focal global influences will create incentives for increased learning, and higher levels of information exchange, with more language and cultural skills.

8. The pessimists Foreign large-scale land acquisitions for food and biofuel production for export will have devastating effects on the land and the people of the receiving areas The suggestion that land and labour are underutilised is wrong, and the suggestion that the land/labour use by these foreign companies will improve their economic position is in illusion.

9. -1: the impact on the land and the hydro-ecology Foreign-owned plantations on hitherto non-agricultural land are detrimental to biodiversity, and to the natural roles these areas play for a much larger area (e.g. water storage; gene pool) the export of natural resources will not be compensated; and particularly the upstream use of (ground)water will harm water access of downstream areas in a much larger region; without compensation The option value of �natural� land (e.g. for future tourist and heritage functions, but also for receiving nature preservation awards) will be lost

10. -2 Impact on the local economy Although most of the captured areas were indeed thinly populated before, they provided economic security for many relatively marginal people, and in particular pastoralists, and inland-fishermen The introduction of land rent and physical access barriers may endanger existing arrangements of land acquisition and sharing The access to common property and lands with unclear property arrangements provided important fallback options to the poorest segments of society, and often provided safe havens for people who wanted to maintain a culturally deviant form of society and live a different lifestyle. For these people the new opportunities are often not available: labour recruitment follows established patterns; what is left are starvation; deep poverty and migration to urban slums.

11. -3 Impact on the political economy A small national elite will capture the rewards for alliances with the foreign investors, invest those abroad or in ways that are not assisting large numbers of nationals It will further feed a political mentality of quick resource capture and �primitive accumulation� It will feed hostility to competing claimants and to adversaries who contest the new developments (including the people who feel themselves victims of the new development); hence it creates a breeding ground for conflicts; human rights abuses and dictatorial government

12. -4 Impact on land and labour productivity Although in the early phases gains can be expected in terms of land and labour productivity (in terms of volume and in terms of value), these will not be sustainable, as land will soon deteriorate, and large-scale immigration of numerous job-seekers will depress actual wages and rewards; while increasing the price of consumer goods The most rewarding labour and management positions will be foreign and local elitist; and the local multipliers will be very minimal.

13. -5 Impact on social cohesion The many overt and covert conflicts that will be a result of these foreign land acquisitions will create a politically very unstable environment, undermining long-term stability, It will create �enclaves/nodes and spines of securitised accumulation� and �elite consumption fortresses� amidst vast areas of deep poverty, neglect and insecurity

14. Challenge for CoCooN Both narratives are relevant The scientific challenge is: is it possible to know under which conditions the �optimistic� or the �pessimistic� scenario is most relevant to understand what is happening? Or even: is it possible to get a balanced scientific view? Also: what methods will give the best and cheapest access to the information that is needed? And what are the costs and benefits of both conflict and cooperation in cases of contested positions?

15. And the policy challenges If we get a better scientific idea about the tipping points that create cooperation, growth and inclusive development and that make conflict, and primitive accumulation less rewarding, how then can �policies� and �implementation institutions� assist in creating or stimulating those tipping points?