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World Bank Urges Transparency In Foreign Farmland Deals – for Sep. 16, 2010

The World Bank is urging greater transparency in land investment transactions to protect local land owners as the volume of foreign farmland investment in poor countries swells.

Foreigners investing in agricultural land in developing countries should be open in their transactions and recognize the rights of existing owners to avoid weak governance, the World Bank said in a report released in early September.

The number of reported large-scale farmland deals increased tenfold in 2009 from the average rate during the past decade, thanks in a large part to the rise in food or agricultural commodity prices to record highs in 2008 and again this year.

“These large land acquisitions can come at a high cost. The veil of secrecy that often surrounds these land deals must be lifted so poor people don’t ultimately pay the heavy price of losing their land,” said World Bank managing director, Ngozi Okonjo- Iweala.

“With food prices still highly volatile, large-scale land deals are a growing reality in the developing world, highlighting the need for concerted action for the benefit of all parties.”

The bank said far too many governments had been caught unprepared by the increase in demand and made deals with foreign investors without recognizing existing rights.

Farmland purchases have been predominantly in Africa and parts of South America, driven by high world cereals prices that peaked in 2008 and nations that rely heavily on imports, wanting to boost food security.

Big investors, which include China and Middle Eastern energy producers with large cash reserves but small areas of land suitable for cultivation, have been criticized for focusing too much on land investment and not enough on making farming more efficient.

According to the World Bank, the number of reported large-scale farmland deals amounted to 45 million hectares in 2009. That compared with an average expansion rate of four million hectares a year in the decade leading up to 2008.

Improved farming efficiency could significantly increase yields in many countries, both with and without land available for expansion, and lead to increased food security.

“Currently none of the African countries of interest to investors achieves even a quarter of its potential productivity,” said Klaus Deininger, lead economist in the Bank’s Development Research Department and author of the report.

Maize Is A Staple For More Than 300 Million Africans

Distributing new varieties of drought-tolerant maize (corn) to African farmers could save more than $1.5 billion, boost yields by up to a quarter and lift some of the world’s poorest out of poverty, a study found.

The study by the Mexicobased International Maize and Wheat Improvement Centre (CIMMYT), with input from other food-research institutes, focused on 13 African countries in which it has been handing out drought-tolerant maize to farmers over the past four years.

It described maize as “the most important cereal crop in Africa,” a lifeline to 300 million vulnerable people.

The Drought Tolerant Maize for Africa plan aims to hasten the adoption of maize varieties that withstand dry weather.

“The vision of this project is to generate by 2016 drought-tolerant maize that… increases the average productivity of maize under smallholder farmer conditions by 20-30 per cent on adopting farms (and) reaches 30 million to 40 million people.”

It also aims to add an annual average of US$160 million to $200 million worth of additional grain to Africa’s harvest, it said.

Wilfred Mwangi, a Kenyan agricultural economist on the project, said the drought-resistant maize shows comparative yields that beat other varieties even if there’s no drought.

“We are saying that comparing with whatever farmers are growing now, these varieties will outperform what they are doing,” he told Reuters in a telephone interview.

Repeated droughts have scorched millions of hectares of food crops in southern Africa, the Horn of Africa and the Sahel belt from Mauritania to Sudan in the past decade. Niger and Chad have been particularly badly affected after rains failed this year, with millions facing hunger.

The study found that in zones with the lowest drought risk, the tolerant maize varieties could translate into yields 22-25 per cent higher than 2007, when the project started, by 2016.

But in very dry, disaster-prone areas where crops fail 40 per cent of the time, the improvement was only seven to 10 per cent.

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