Markus Giger, the Land Matrix Initiative has just published its third scientific report on large-scale transnational land deals in the agricultural sector. What has changed since you published the last report in 2016?
The deals that were concluded up to 2016 are now increasingly being implemented. Meanwhile, the trend towards new large-scale transnational land deals has levelled off a bit in recent years. This may be because prices for agricultural commodities were no longer quite as high as from 2008 to 2015. But the trend risks picking up again, with food prices having resumed their rise in 2020.
Also, virtually all states are pouring a lot of money into their economies in response to the Covid-19 crisis – money that’s expected to generate profit. So we are likely to see massively more acreage being put into operation under existing deals, as well as new deals being concluded. Several countries, such as Indonesia, India, and Brazil, have already started to further liberalize their markets in order to attract more investors and boost their economies.
The impacts of the global land rush range widely, from deforestation and species loss to human rights violations. In the report, you describe the results of the latest analysis as sobering and even partly alarming. What is particularly worrying?
We compared our information with scientific studies on the impacts of large-scale land deals. The findings show that land deals continue to drive deforestation of the world’s last natural tropical forests. This strongly affects climate and biodiversity, and further intensifies competition for water. Meanwhile, the benefits of land acquisitions in terms of new permanent jobs, new infrastructure, tax revenues, and impetus for regional economies are usually very modest.
And what about transparency? What’s the situation there?
It’s alarming. We still lack even minimal information on more than 80 per cent of the land deals in our database. This means that neither the purchase price nor the exact location or perimeter of the area acquired are publicly known – let alone business plans or environmental and social impact assessments. Neither investors nor governments make these data publicly available, even though, in 2012, the many states and private-sector actors represented in the UN Committee on World Food Security adopted the “Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries, and Forests”, which require transparent handling of land deals.
Switzerland actively supported the development of these guidelines. Do we know more about the agricultural deals in other countries that Swiss companies are involved in?
Indeed, Switzerland showed a keen interest in these guidelines and took active part in their formulation. According to our data, relatively few Swiss companies invest directly in large-scale transnational agricultural land deals. The Land Matrix platform lists around 50 Swiss deals. But we don’t know whether some of the money that, for example, Swiss banks or pension funds invest in the capital markets also flows into this type of land deal. Our data show that, generally, many land purchases are made via offshore financial centres. These are financial flows we are unable to trace.
What does this lack of transparency mean for those affected?
It has far-reaching consequences for local populations. They are usually neither informed about the deals nor do they have a say in them. If land deals were transparent, they could try to influence them, to safeguard and defend their interests and rights. That’s why it’s so extremely important to establish transparency before a deal is concluded.
It is notable that many investors are not making full use of their concession area to date. Why is that?
Of the 33 million hectares covered by land deals currently in our database, we estimate that half, at most, has been put into operation so far. On the one hand, this may be due to operational reasons. It takes a lot of capital to develop the land and make it arable. Sometimes this capital is simply not available. That’s why the most suitable areas are put into production first. On the other hand, some deals are made with speculative intentions.
So with all this land waiting to be developed, must we expect a massive increase in harmful environmental impacts?
At least another 15 million hectares may go into operation in the coming years – not counting new deals. That will change land use. Forests and traditional, extensive forms of cultivation will be converted into monoculture. This will lead to a further increase in carbon emissions as well as further negative impacts on biodiversity and the water balance.
But we should bear in mind that these figures show only part of the global trend. The Land Matrix does not inventory all land deals worldwide. We do not have a comprehensive record of deals covering less than 200 hectares, or of domestic investments. Meanwhile, countries like Indonesia and Brazil have big agribusiness sectors that drive deforestation and monoculture cropping domestically. And all the many smaller deals add up to large areas too. Besides, we don’t record a deal unless we have at least an investor’s name and some information about the size and approximate location of the land.
Speaking of biodiversity and carbon emissions: the international community is preparing once again to negotiate ways of halting the loss of species and curbing the climate crisis. But don’t the goals of the environmental conventions ring hollow as long as we don’t end the system of huge monocultures that large-scale land deals rely on?
Our report calls, among other things, for a halt to land deals causing further destruction of the last natural forests. However, the production system is one thing; the extent is another. Our consumption patterns promote monoculture cropping. Soy, for example, is used primarily for meat production. If we don’t reduce our meat consumption, there will be no slowing the expansion of soy crops. Another example is palm oil. Half of what is exported to the EU goes into biofuels – so that we can drive around in cars. That’s where we urgently need a rethink. And the examples also show that the biodiversity and climate conventions must be considered in conjunction with land issues.
The report also addresses an issue that is being considered for the first time in the context of land deals: The risk of further pandemics. Is that not overly alarmist?
Our analyses have shown that over 85 per cent of land deals concern areas of medium and high biodiversity, especially tropical forests. One third of these areas are near or even within protected areas. The connection between changes in land use and the risk of new diseases has long been pointed out. Human penetration into increasingly remote areas increases the likelihood of people coming into contact with pathogens.
Remote areas and tropical forests have long been inhabited by humans.
As long as these are isolated populations, disease outbreaks usually remain local. Looking at individual land deals, the risk may not seem very great. But taken together, land deals have indeed become a risk factor for pandemics. Moreover, studies have shown that certain hosts of zoonotic pathogens, such as rodents, passerine birds, or bats, are more common in monocultures than in semi-natural areas. This, along with the trade, consumption, and farming of certain wild animals, increases the risk of zoonotic diseases. If we consider the immense cost of the Covid-19 pandemic, investing in a policy that better protects the world’s forests would be money well spent. But to date such systemic risks have been given far too little attention when it comes to acquisitions of land in the Global South.
So what’s the outlook? There seems to be no real trend reversal in sight.
That largely depends on the political conjuncture. The recent change of administration in the US gives us some hope that greater emphasis will be placed on the implementation of global conventions, including the Voluntary Guidelines on the Responsible Governance of Tenure.