U.S. colleges accused of African "land grabs"

A pygmy woman and her daughter are carrying a heavy load of beans from the fields into her village in January, 2011, in the Congo.

/ iStockphoto

The questionable, unchecked, speculative practices of large financial institutions that sent the world into a near-calamitous economic recession recently are being repeated in Africa through land-grabbing deals, The Oakland Institute, a California-based think tank, said in a recent report.

Hedge funds are partaking in "largely unregulated land purchases" throughout the continent that essentially amount to "the conversion of African small farms and forests into a natural-asset-based, high-return investment strategy" and are often nothing more than "land grabs," the report states.

Additionally, several American universities, including Harvard, Vanderbilt, Spellman, and Iowa universities, are also taking part in or providing funds for the practice that "is resulting in the displacement of small farmers, environmental devastation, water loss and further political instability such as the food riots that preceded the Tunisian and Egyptian revolutions," the reports states.

While the report does not claim the deals break any laws per se, it does strongly insinuate the local population does not reap anything near the promised benefits, whereas the mostly foreign investors in some cases can expect to get up to 25 percent returns.

Much of the money is reportedly funneled through London-based Emergent asset management, which runs one of Africa's largest land acquisition funds, The Guardian reports. A spokesman for Emergent defended the practice to the Guardian, saying: "Yes, university endowment funds and pension funds are long-term investors. We are investing in African agriculture and setting up businesses and employing people. We are doing it in a responsible way ... The amounts are large. They can be hundreds of millions of dollars. This is not landgrabbing. We want to make the land more valuable. Being big makes an impact, economies of scale can be more productive."

Chinese and Middle Eastern outfits have long been accused of similar practices, but the Oakland Institute report claims the European and American funds are behind many of the biggest deals.

Ethiopia, Mali, Sierra Leone, Mozambique, Tanzania and South Sudan are among the countries most affected by the deals, and they often come with incentives for speculators ranging from unlimited water, oil and timber rights to tax waivers.

In 2009 alone, these largely non-transparent purchases gobbled up nearly 60 million hectares - an area the size of France, the report claims.

"No one should believe that these investors are there to feed starving Africans, create jobs or improve food security," said Obang Metho with the Solidarity Movement for New Ethiopia, in the report. "These land grab agreements - many of which could be in place for 99 years - do not mean progress for local people and will not lead to food in their stomachs. These deals lead only to dollars in the pockets of corrupt leaders and foreign investors."

[T Boone Picknose]

I read that one hedge fund bought 600,000 hectacres in South Sudan for just 25,000 USD. They plan to harvest timber and start bio algae oil production. Well, let me see, 600,000 hectacres is about 1.5 million acres. It has been reported you can produce 5,000 to 20,000 gallons of bio diesel per acre per year with microalgae farm. That is only 7.5 billion gallons to 30 billion gallons per year of biodiesel with $25,000 worth of land! Since South Sudan is near the equator and has very little cloud cover, they could get closer to the upper limit of biodiesel production. With very cheap labor, sounds like a deal to me!

[random_radar]

Liberals looting and enslaving Africa? Who woulda thought...

[euge005]

Since it is done for profit, I believe that it is called capitalism.

[cattiej]

Our government allows companies and people from other countries to buy land and our manufacturing plants and in some cases built a manfacturing plant of their own right here in our country. Meanwhile, it cost 1 million per soldier per year for our government to keep our soldiers in Iraq, Afghanstan. Karzi should not receive one dime and neither should Pakistan. We are sending these countries billions of dollars while our road system, bridges are falling apart. Our road structure in America was built many years ago and has not be maitained. Soon a bridge will fall down from rust and cars will fall down with the bridge. I almost happened last year in Pittsburgh and they had to shut down I-95 We need a bill that passes that states that foreign people and foreign countries cannot buy up American land, factories, businesses and homes.

[KPeters_from_UK]

150 million dollars to a creationist theme park in Kentucky but cut financial help for the poor or cut from the country's infrastructure.

[jthibs]

I don't get the connection that you are postulating between the roads in your state being crappy and foreign countries buying things in America..... ????

[askagain]

Who started our public libraries, our public schools, and our museums? The wealthy gave money to start these things. The wealthy support many charities and setup foundations to help fund scientific research. Many of our hospitals were funded by wealthy contributors. You read one article and take sides. Now what great deeds have you performed?

[curse914]

There is not an economist so arrogant as to remove the laborer from the equation. Then again, there is you.

[KPeters_from_UK]

Proportionally the middle class give away most to charity. Most rich donors give to high visible charity groups that promise to bare their family names prominently. Ego trips for the rich, nothing more.

[curse914]

"While the report does not claim the deals break any laws per se"

When it is unregulated, how could it break any laws? Disgusting...it will all crumble soon.

[AZOkie]

A we wonder why other countries hate America. We did it to the native Americans and now we're doing it in Africa. Sometimes I am ashamed of our culture because it teaches us that our identity is based on what you have. It teaches us that we should want more and it leads to unchecked greed. The wealthy people in the world don't care about our children's children 75 years from now. They won't be here so who cares right? We're destroying ourselves, that's very obvious.

[curse914]

1.5 billion privileged consume 75 percent of all extracted resources leaving the reaming 5 billion to fight for the gristle. Once the gist is up, you get a Tunisia, Egypt, Syria etc. The state is failed and upheaval will follow. Americans are only a couple years of sustained drought, flooding away from upheaval.