Global Hedge Funds Buying Land in Africa

Global hedge funds are gobbling up large tracts of land in sub-Saharan Africa and prominent American universities like Harvard are getting in on the action. Anuradha Mittal of the Oakland Institute has authored a new report on the so-called “land grabs” in Africa. She discussed the details with anchor Marco Werman.

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Marco Werman: I’m Marco Werman, and this is The World, a coproduction of the BBC World Service, PRI and WGBH Boston. Western hedge funds are buying up large tracks of land in Africa, and that could have an impact on food production on the continent. That’s according to a new report this week by the Oakland Institute, a California think tank. The report also says that prominent American universities, like Harvard and Vanderbilt are taking part in African land deals. Investors from the US and Europe are attracted to such deals by cheap land prices and the promise of huge returns. Anuradha Mittal, one of the report’s authors, says that could be misleading.

Anuradha Mittal: Investors have been looking for new opportunities to put their money in for the next soft commodity market, where they can invest in. And here come the private equity funds, the hedge funds, who are promising returns between 20-40%. Unfortunately, American universities, totally lured by these high returns, are moving forward to invest in such funds. One is not saying that they are the ones who are doing it knowingly. We do not know. But right now, their focus is to see higher returns. And just driven by that quest for high returns, they’re going into investment funds who are promising such returns on agricultural investments in Africa, without questioning that when the agricultural returns in the United States over the 15-20 years have been 5-6%. How do you get this kind of return in Africa?

Werman: If the promised return on the investment in this land in Africa is so high, are the people who the land is being bought from, getting a fair deal?

Mittal: The issue in Africa is that traditional lands, communal lands, are considered as state lands. So it is the states, which under the direction of world bank groups or international finance corporations, who are being told to offer their lands to foreign investors as a development paradigm. People are working these lands. They use these lands to grow foods for their families, to grow food for the local market. It is a means of livelihood. But they have no say in the process. So you find, whether it’s through the interaction with a chief, who might not be informed, or in the case of Mozambique, where we learned there was a lot of pressure from the local officials to sign the papers that they’re giving away their land. And they really have no choices. In Ethiopia, even when people are against it, the fear of repression, the fear that you cannot speak out, means that people are being displaced, are being relocated, and they have no choice in the batter.

Werman: Well, one company that is involved in some of these deals, EmVest Asset Management, took issue with your report and said that it was not involved in exploitative or illegal practices. The Africa director for the company, Anthony Porter, told the BBC “There are no shady deals. We acquire all land in terms of legal tender.” Is it necessarily a bad idea, these land purchases, if it puts otherwise unused land, into production, and gets investment to impoverished parts of the world?

Mittal: Well, there are different ways to look at this issue. First, just to answer Antony Porter at EmVest, it would require, not a debate between Mr Porter and myself, but really the families that I met, the children that I saw, who, and their helpless family that I met with, who suddenly was, well we don’t know what to do. We are waiting for our neighbors to finish planting, so we can use their land. because our land has been taken away. Secondly, in terms of, is investment in land and agriculture bad? We started this project because we believe agriculture needs investment. But to assume that just because you invest in land, it would translate into jobs for people, it would mean economic agricultural development for Africa, that’s a myth. It does not take rocket science to figure out that Africa does not need this form of agricultural development.

Werman: What do you think would happen if Harvard, Vanderbilt and other prominent american universities stopped making these sorts of investments? Do you think it mould have any impact on whether the acquisitions continued?

Mittal: If investors, such as Harvard University or Vanderbilt started caring for the impact of the investments, and not just the returns… We’re not saying, don’t care about your returns, but if you can have a balance between the two, we would see a different economy, and that’s what we are talking about here.

Werman: Anuradha Mittal is the executive director of the Oakland Institute and the author of a new report on land acquisitions in sub-Saharan Africa. Thank you very much for your time.

Mittal: Thank you, Marco.

Werman: We contacted EmVest Asset Management and Harvard University to get more on their side of the story. They did not get back to us by airtime.

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