Mozambique Farmland Is Prize In Land Grab Fever

Jun 14, 2012
Originally published on June 15, 2012 1:37 pm

First of a two-part series. Read part 2.

In these days of financial uncertainty, the hot new investment tip is farmland.

This spring, 750 Wall Street types crowded into New York's Waldorf-Astoria Hotel for a conference on investing in global agriculture. Philippe de Laperouse, managing director of HighQuest Partners, which organized the event, says those investors started out just looking for a safe haven for their money. But with food demand up and future production uncertain, many of them have caught the scent of future profits.

Many development NGOs and advocacy organizations have sounded an alarm about this surge of private money. (Here are critical reports from GRAIN, Oxfam, the Oakland Institute and even that paragon of mainstream thinking, the World Bank.) Many of them call it a global "land grab."

Investors, naturally, see opportunity for everyone. Jes Tarp, CEO of Aslan Global Management, says "Africa has a tremendous future in terms of agriculture. Africa could feed much of the world."

I decided to take a closer look at the reality behind this rhetoric and went to Mozambique, which has become a hot spot in the global rush for land. It's a country in southern Africa with beautiful beaches and also extreme poverty.

Mozambique is a little bigger than Texas, and with slightly fewer people. It has a lot of land, and in many areas, a good supply of fresh water.

Nobody can actually buy land in Mozambique. The government owns it all. But the government will give companies exclusive rights to land for 50 or 100 years, and it's really cheap. Mozambique's government, in fact, has been encouraging investors to come take advantage of this land.

Dozens of companies, both foreign and local, have lined up to seize the opportunity, setting up mega-farms that cover thousands of acres. (You can find a list of land deals in Mozambique and many other countries in databases compiled by the Land Matrix or by GRAIN.)

One of these farms has landed right beside a small village called Ruasse, in northern Mozambique.

Getting there takes work. In my case, it meant bouncing along 60 miles of dirt road, passing a steady stream of people walking along the side of that road carrying firewood and bags of corn.

Ruasse is a collection of one-room brick houses with thatched roofs, scattered across hard-packed dirt. People here survive mainly on the crops they can grow on the land nearby.

Caterina Alberto, one of the most prosperous farmers in this village, says the arrival of a huge farming enterprise next door was a shock. "It was said that a company was coming here. But no one told us that the company was coming to destroy us," she says.

The company, in this case, is Quifel Natural Resources, based in Portugal.

Here's what happened, according to Alberto and others in the village.

Corporate Neighbors Move In

Representatives from the company showed up in Ruasse several years ago with a proposal. They explained that Quifel Natural Resources, through a subsidiary called Hoyo-Hoyo Agribusiness, hoped to grow cash crops — sunflower, sesame and soybeans — on the land across the road from the village. (There's expanding demand for those crops in Mozambique, both for oil and for animal feed.)

The company wanted 25,000 acres — almost 40 square miles.

Most of the people in Ruasse were already growing crops on that land. It's some of the most desirable land for miles around. It's fertile and flat. Decades ago, a state-run company cleared that land and grew soybeans for a few years, but that farm fell apart during Mozambique's civil war in the 1980s.

Alberto says Quifel Natural Resources made a lot of promises: that it would pay local farmers for any land that they might lose; that it would clear new land for them somewhere else; that it would drill a well for the village, and improve the school and clinic.

So the people of Ruasse said yes. And the national government gave Quifel Natural Resources rights to the land in December 2009.

The company never followed through on its promises, she says. "As soon as they got here, with all their gear, they just went ahead and started their work. They went into the places where people had already planted corn, banana trees and sugar cane."

In fact, she says, the company plowed up crops that farmers were almost ready to harvest. She lost about 10 acres. None of the farmers got any money or new land.

It's still happening. Two men showed me the spot. One of them, Francisco Muine Penaciaia, is trembling with anger. The other, Vitorino Munalile, a very old man, shows no emotion at all. He's barefoot and has trouble walking across the rough, freshly plowed ground.

Penaciaia shows me the land where both farmers' crops once stood. He says they were growing sorghum, corn and cassava, both to feed themselves and to sell, so they would have money to buy food later.

Munalile says now he has only a little food to get through the coming winter.

The farmers say the company never paid them any money for the crops it destroyed. "They always say that they'll pay, but they never do," says Munalile.

Hoyo-Hoyo Agribusiness hasn't yet drilled the well that the village wanted. People here still carry their water from a nearby stream, and on the day I was in Ruasse, the company's small fleet of John Deere tractors was hauling big tanks of water from that stream to some newly planted potato fields. Alberto says that's another big problem.

"This whole community has just one river; this one here," she says, gesturing toward the stream. By the month of August, this river will be all dry. That's why the population is complaining. So you see the situation we're in."

She says that villagers have complained to local government officials, but the government hasn't done anything to help them.

This conflict, however, is now getting increasing attention. It was the subject of a presentation at a high-profile conference on land issues at the World Bank in April.

I reached the CEO of Quifel Natural Resources, Rui Laurentino, in his office in Lisbon. Laurentino says that the company will soon start what he calls the "social component" of its project. That plan, he says, includes improving Ruasse's medical services and school. He also says that the company plans to pay farmers for land that they've lost. Those payments, he says, "are imminent." And he says that since my visit in May, the company has started to clear new land for those farmers.

Not Just An Isolated Incident

According to many observers at farmer advocacy organizations and at the World Bank, such conflicts are a common feature of large land deals in Africa. It's not just in Mozambique; it's in Tanzania, Ethiopia and Sierra Leone, too.

In many cases, poor villagers who use the land don't have formal control over it and don't have a voice in decisions to lease or sell the land to big investors. Those decisions are typically made by village chiefs or political leaders in national capitals.

Joao Muthombene, executive director of Mozambique's Christian Association for Community Development, says local communities in his country do have legal protection — on paper. "There's a law that says you have to negotiate with communities. But what we have seen is that no company is taking it seriously."

Yet Muthombene doesn't think it has to be this way. The fact that companies are interested in Africa's farmland shouldn't be a threat, he says. It's a good thing. The deals just have to be fair for local people.

I heard much the same thing in the village of Ruasse. Small farmers told me that they felt that there was enough land for everyone — as long as there was equipment available to clear it. They had no objection to big investor-owned farms, if those investors keep their promises.

In fact, they said, there's another big investor-owned farm just 10 miles away, and that one's fine. That one's been a good neighbor, the farmers say. Stay tuned for that story on Friday.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

Maybe you've noticed food has gotten more expensive in recent years. It's certainly caught the attention of big investors. Some are betting that farming is going to pay off big. That's why they're buying up farmland, especially in places where it's cheap, like Africa. In doing so, they're often pushing aside subsistence farmers who had been using the land. Critics call it a global land grab. So, this week, we go to Africa to Mozambique and take a close look at some of those big investor-owned farms.

NPR's Dan Charles has the first of two reports.

DAN CHARLES, BYLINE: In 2008, as stock prices collapsed and food prices soared, the phones started ringing at the offices of HighQuest Partners, a consulting firm in St. Louis that specializes in agriculture.

Philippe de Laparouse, managing director at HighQuest Partners, says pension funds and university endowments were calling.

PHILIPPE DE LAPAROUSE: I think at that time the interest on the part of investors was, you know, capital preservation.

CHARLES: They wanted to park their money someplace safe and they were interested in farmland. But then, some of them also realized growing food might actually be really profitable. Demand for food keeps rising and climate change might play havoc with supply.

LAPAROUSE: That makes people concerned about where, you know, food is going to come from.

CHARLES: One person who got in early on the trend is Jes Tarp. He's CEO of a company called Aslan Global Management. Almost a decade ago, he picked up 30,000 acres of farmland in Ukraine.

JES TARP: Our investors have received in excess of 10 percent returns ever since the project started. And those numbers are going up.

CHARLES: But what you can do in Europe, he says, is dwarfed by the potential opportunities in Africa.

TARP: Africa has a tremendous future in terms of agriculture. Africa could feed much of the world.

CHARLES: According to land surveys, of all the land in Africa where crops could grow, only a small part is being farmed right now. And the land that is growing crops isn't producing very much - by many estimates, only a quarter of its potential. In theory this is a huge opportunity for investors and also for the Africans who own that land.

In practice it's really complicated.

(SOUNDBITE OF GOATS)

CHARLES: One hot spot in this global land rush is Mozambique, a country in southern Africa with beautiful beaches and also extreme poverty. It's the kind of place where if you want to cook chicken you go to the market and pick up a live one.

Nobody can actually buy land in Mozambique. The government owns it all. But the government will give companies exclusive rights to land for 50 or a hundred years and it's really cheap. Dozens of companies, foreign and local, have lined up to seize the opportunity, setting up mega-farms that cover thousands of acres.

One of these farms has landed right beside the village of Ruasse, in northern Mozambique. Getting there takes work - in my case, it meant bouncing along 60 miles of dirt road past a steady stream of people walking down that road carrying wood for cooking and bags of corn.

(SOUNDBITE OF GOAT)

CHARLES: Ruasse is collection of one-room brick houses with thatched roofs scattered across hard-packed dirt. People here live from the crops they can grow on the land nearby, or the goats that are wandering through the village right now.

Caterina Alberto, one of the most prosperous farmers here, says the arrival of that huge farming enterprise next door was a shock.

CATERINA ALBERTO: (Through Translator) It was said that the company was coming in here but no one told us that the company was coming to destroy us.

CHARLES: The company, in this case, is Quifel Natural Resources based in Portugal. Here's what she says happened. Representatives from the company showed up in Ruasse several years ago with a proposal. We want to grow cash crops on the land across the road from your village, they said. We'll grow sunflower, sesame, and soybeans. We'd like 25,000 acres. That's almost 40 square miles.

Now, most of the people here were already growing crops on that land. It's great farmland; it's fertile and all the trees were cleared away decades ago. That's why the company wanted it.

ALBERTO: (Foreign language spoken)

CHARLES: Caterina Alberto says the people from Quifel National Resources made a lot of promises. They said they'd pay local farmers for any land the farmers might lose; and they'd clear new land somewhere else for them. The company promised to drill a well, which the village really needs. Also, improvements for the school and the clinic, jobs.

So the people of Ruasse said yes. And the national government gave Quifel National Resources the land in December of 2009.

ALBERTO: (Through Translator) As soon as they got here with all their gear, they just went ahead and started their work. They went into the place where people had already planted corn, banana trees and sugar cane.

CHARLES: In fact, she says the company plowed up crops that farmers were almost ready to harvest. She lost about 10 acres. None of the farmers got any money or new land.

It's still going on. About two months ago, the company plowed up more fields. Two men from the village take me to see the spot. Francisco Muine Penaciaia is young and almost shaking with anger. Vitorino Munalile is an old man and shows no emotion at all. He's barefoot and has trouble walking across the rough, plowed ground.

MUINE PENACIAIA: (Foreign language spoken)

CHARLES: Here, says Penaciaia, this is where we were growing sorghum, corn, and cassava. We were counting on these crops for food or to sell, so we'd have some money to buy food later.

PENACIAIA: (Foreign language spoken)

CHARLES: Do you have food to eat for the wintertime?

VITORINO MUNALILE: (Foreign language spoken)

CHARLES: Only a little, says Munalile.

I ask if the company paid them any money for the crops they destroyed.

MUNALILE: (Foreign language spoken)

PENACIAIA: They always say they'll pay something. They're always saying that but they never pay.

(SOUNDBITE OF CONSTRUCTION)

CHARLES: The company hasn't drilled the well that the village wanted. People here still carry their water from a nearby stream. And on the day I was in Ruasse, the company's small fleet of John Deere tractors was hauling big tanks of water from that stream to some newly planted potato fields. Caterina Alberto says that's another big problem.

ALBERTO: (Through Translator) This whole community has just one river. This one here. And by the month of August, this river will be dry. That's why the population is complaining. So you see the situation we're in.

CHARLES: She says villagers have complained to local government officials but the government hasn't done anything to help them.

The CEO of Quifel Natural Resources, Rui Laurentino, declined to speak on tape. In a phone interview, he said his company plans to start what he calls the social component of its project this year. The plan, he says, includes improving Ruasse's medical services and school.

He also says the company will pay farmers very soon for land that they've lost. And he says, since my visit in May, the company has started clearing new land for those farmers.

According to many observers at farmer advocacy organizations and at the World Bank, this experience with big land investments is common, even typical. In Mozambique and across Africa, there are complaints about broken promises and subsistence farmers getting pushed aside.

Joao Muthombene, executive director of Mozambique's Christian Association for Community Development, says local communities in Mozambique do have legal protection on paper.

JOAO MUTHOMBENE: There's a law which says that you have to negotiate with the communities. But what we have seen is that no company is taking it seriously.

CHARLES: Yet, he says, it doesn't have to be this way. The fact that companies are interested in Africa's farmland shouldn't be a threat, he says. It's a good thing. The deals just have to be fair for local people.

And in the village of Ruasse, I heard pretty much the same thing. Small farmers there told me there's enough land here for everybody. We don't mind if big farms come here if they keep their promises. In fact, they said there's another big investor-owned farm not far away and that one's fine. That one has been a good neighbor.

I'll have the story of that farm tomorrow.

Dan Charles, NPR News. Transcript provided by NPR, Copyright NPR.