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New rules needed for African farm investments, Oxfam report says

The Oxfam report says private investments in Africa have forced tens of thousands from their lands, taken land out of production, and reduced food security, especially as investors focus on bio-fuels.

By Scott BaldaufStaff writer, Max DelanyContributor / September 23, 2011

A woman works in her small family farm in Uganda. A new report by the aid group Oxfam finds that much foreign investment actually hurts developing economies, taking fertile land out of production, weakening a country’s ability to feed itself, and displacing tens of thousands of citizens with no recourse or compensation.

Mary Knox Merrill/The Christian Science Monitor/File

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Boston and Kampala, Uganda

On the surface, foreign investment in African agriculture would seem to be a great idea, helping countries to learn new techniques and to generate more jobs.

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But a new report by the aid group Oxfam finds that much foreign investment actually hurts developing economies, taking fertile land out of production, weakening a country’s ability to feed itself, and displacing tens of thousands of citizens with no recourse or compensation.

In one deal alone, in the highlands of Uganda, more than 20,000 villagers were forced to move out, the report details.

“Our food supply system is broken, and it needs a radical fix,” says Ray Offenheiser, president of Oxfam America, in a recent interview in Boston. “After riots broke out in the capitals of 35 countries in Africa, we started tracking the land issue. We tracked 110 million hectares of land, leased or purchased, in 1,200 transactions, which is an area equal in size to all of Western Europe.”

What Oxfam found was a pattern of “land grabs,” in which land was sold or leased in private deals to foreign investors at preferential terms, with local citizens paying a heavy price in terms of livelihoods and food security.

“Seventy five percent of the deals happened in Africa, a lot of them involved displacement, there was not a lot of transparency, government policies seemed to favor the investors,” says Mr. Offenheiser. “Our interest is not to discourage investment in agriculture, but to create a framework for reasonably ethical practices for foreign investors.”

The Oxfam report comes at a time when food stocks are falling and food prices are rising, when bio-fuels production removes much of the global food crop from consumption as food, and when famine has taken hold in the Horn of Africa. Higher food costs disproportionately affect the world’s poorest citizens, the majority of whom live in Africa. According to the Cereal Price Index, released by the UN's Food and Agriculture Organization in early September, overall cereal prices are up 36 percent from where they were in August 2010, and up 2.2 percent from where they were in July.

Demand for food and competition for arable land is only likely to increase, as global population levels are expected to rise to 9 billion by 2050. The global economy is likely to triple over the same period.

In a public statement, Oxfam International’s Executive Director Jeremy Hobbs said: "The unprecedented pace of land deals and the increased competition for land is leaving many of the world’s poorest people worse off. In the scramble for more land, investors are ignoring the people who currently live on the land and depend on it to survive."

The Oxfam report provides several case studies, from Uganda to Guatemala. In the Uganda case study, a $47 million, 9,300-hectare forestry project in Uganda has been leased for 10 years by the London-based New Forests Company.

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