The global rush to grab land and other resources

[The basic law of capitalism is “expand or die” — and quickly so, as the threat of being crushed or swallowed by competing exploiters also grows without a break.  Maximizing profits through ruthless exploitation of labor, manipulation of trade, and wholesale plunder of resources, all drive at immediate returns, and threaten and cause the destruction of the long-term survival of peoples across the planet. The article below details how the inherent malevolence of the capitalist-imperialist system, is driving billions of people in despair and into struggle against it.  — Frontlines ed.]

25 February 2013. A World to Win News Service. The planet is facing a serious food crisis. The unsustainable use of resources, from the land to the sea, due to the violent rush for profit, poses a great threat to humanity and the planet. But rivalry for control of food production and distribution under the profit-driven capitalist system is still sharpening, taking new forms and causing greater misery for the world’s people. The land-grab going on in Africa and other parts of the world is part of this trend.

Africa, whose people were kidnapped by the millions for the slave trade and ground down and bled under colonialism and since, a continent whose resources has been sacked for centuries and which has suffered so much from wars spurred by big-power rivalry, faces a new form of looting today. Corporations, private banks, pension funds and many multinational companies have grabbed fertile land all over the continent. With the connivance of corrupt and client governments dependent on foreign investment, they have secured long leases by paying as little as half a U.S. dollar per hectare per year.

Although this kind of land acquisition is far from new, there has been a spectacular jump since 2008. In the following year, investors bought or leased more than 56 million hectares in Asia, Latin America and especially Africa, roughly 15 times more land that the yearly average in the preceding half century. (Farah Stockman, Boston Globe, 24 February 2013)

Writing in the 11 July 2012 issue of the Web magazine Around Africa, Aniede Okure gives the following examples:

  • Ethiopia has leased or sold 3.6 million hectares of farmland to foreign companies from India, Saudi Arabia, Europe and Israel. The leases require them to pay $0.80 (U.S. dollars) per hectare per year. This deal has displaced 1.5 million people from their farmlands.
  • The U.S.-based SG Sustainable Oils in Cameroon obtained land rights for 99 year leases on 73,086 hectares of land at a rate of $0.50 to $1 per hectare per year.
  • Sime Darby Plantation, a Malaysian based company, signed a 63 year agreement with the Liberian government to lease 220,000 hectares.
  • 67 percent of farmland in Liberia, 15 percent in Sierra Leone, 7 percent in Tanzania, 10 percent in Ethiopia, 6 percent in the Democratic Republic of Congo, 8 percent in Gabon, 11 percent in Guinea and 6 percent in Mozambique are controlled by foreign investors who pay from $0.50-$7.10 per hectare per year.

What do these transactions mean for millions of poor farmers who are already struggling to feed their families? The land grab means that these farmers are stripped of their livelihood. It means that they are evicted forcefully from where they were born, lived and worked for generations. It means the destruction of their lives and the lives of their children. They are being driven into a situation where even those lucky enough to find jobs have no choice but to accept working under the harshest and most difficult conditions, with wages often not enough to feed themselves and their family. If they are hired by a foreign-owned plantation on what was once their land, they will now mainly produce food for export, not for their country’s people.

Compensation is almost nil in these evictions. In Liberia, Sime Darby Plantation, which wants to grow palm trees, paid $200 compensation to each evicted farmer for a 63-year lease, only $3 for every year. (The Guardian, 17 October 2012) According to a 2011 publication by NU Wire Investor, one hectare of land in the U.S. costs $32,000, but in the poorer countries of Africa it costs less than the price of a cup of coffee.

It is often argued that in many places farmers have been unable to make a living from their small plots, and jobs will bring them more income than farming. But in general in the third world, the shift to large-scale commercial farming is part of an unbalanced model of development in which people are robbed of their land and then basically cast aside. Whether the foreign investment comes from the imperialist powers or other reactionary states, it usually leads to greater dependency on the world market and submission to monopoly capital and its institutions such as the IMF, the World Bank, the UN and certain NGOs.

An ancient African saying no longer applies: “We who are alive now do not inherit the land from our ancestors; we borrow it from our children.” Sustainability, ecological impact and the consequences on people and nature may be touted in corporate brochures, but they are not and cannot be a real part of the “business model”, even if some investors feel pressured to claim otherwise in their sponsored ecological and developmental impact studies and other public relations propaganda. Instead, the inexorable capitalist logic of the extraction of the maximum profit in the shortest time and the rivalry between competing capitals takes command and is the primary driver of investment.

Further, once the “gold rush” is on, companies and states who don’t get in on the land grab now risk being excluded in the future, losing out to those who got there first.

Monopolizing water

Along with these land grabs, water resources are being diverted to meet foreign capital’s needs, squeezing other farmers dry.

The Alwero river in Ethiopia’s Gambela region is key for the indigenous people. A new plantation in that region, owned by the Saudi Arabian billionaire Mohammed al-Amoudi, is irrigated with water diverted from the Alwero. The company’s plans for industrial irrigation would undermine local people’s access to this life-giving stream. While Saudi Arabia was receiving its first shipment of rice from Ethiopian in 2009, over five million Ethiopians were hungry and relying on international charity food programmes to feed them.

Neil Crowder from the UK based Chayton Capital, an investment firm that has been acquiring farmlands in Zambia, says, “the value is not the land, the real value is in water. Grabbing of water resources for irrigating large-scale farming could rob millions of people of their access to water and risk the depletion of continent’s most precious fresh water resources. But still the message repeated at farmland investor conferences around the globe is that water is abundant in Africa. It is said that Africa’s water resources are vastly underutilized and ready to be harnessed for export-oriented agriculture projects.” (chaytoncapital.com)

To see what this could mean, let’s look at what has already happened in Pakistan. The country’s single biggest irrigated area was created by Britain when Pakistan was part of the British colony of India. Later it was expanded with funding from the World Bank. Some 90 percent of all crops grows on land irrigated by water from the Indus River. Although this irrigation system expanded cotton exports and increased the production of rice and wheat with the use of other plant varieties, there was a price to pay.

Even freshwater rivers carry salt. The Indus carries 22 million tonnes of salt each year, only half of which is discharged into the Arabian sea. The rest, almost a tonne of salt per year per every irrigated hectare of land, stays on the farmers’ fields. This kills crops. So far, a tenth of the fields in Pakistan have become usable for agriculture. A fifth are badly waterlogged, and a quarter produce only meagre crops. The water withdrawal from the Indus River is so intense that in most years it no longer flows all the way to the sea. Capitalist investment does not take this kind of damage into account because it is external to the cost of production. Societies and the planet suffer under these conditions, but capital thrives.

In India, pumped water from deep boreholes irrigates 30 crops that replaced the indigenous farming system, including new plant varieties that require more water than traditional crops. A quarter of India’s crops are grown using underground water that is not replenished by rainfall, and the water table is dropping dangerously.

Although the issue of sustainable agriculture is more acute in the dominated countries, it is a global problem. Water tables have fallen substantially in areas in large-scale farming areas in the American Midwest. Fruit plantations in California uses 15 percent more water than rain can replenish. This kind of agriculture cannot last.

The Aral Sea, once the fourth largest lake in the world, between the borders of Kazakhstan and Uzbekistan in Central Asia, has been completely destroyed, with unimaginable ecological and human consequences. The infant mortality rate in this area is now the highest in the world. The two main rivers feeding the lake were diverted to supply water for cotton farming in the 1960s, a decade after socialist planning principles were replaced by the criterion of profit under the rule of a new capitalist ruling class that had arisen within the Soviet Communist Party,

The situation is even more dramatic in the Middle East. Saudi Arabia has no rain or even rivers to speak of, but lying beneath the desert are vast fossil water aquifers (underground water bodies left over from earlier climate conditions). The Saudi government invested $40 billion in the 1980s to pump out this precious water to irrigate millions hectares of wheat. In the 90s, in order to provide feed for the growing industrial dairy farms, many farmers switched to growing alfalfa, a crop that needs even more water. The aquifers collapsed. Some 60 percent of the country’s fossil water was squandered in the process and lost forever.

According to the mega-NGO Oxfam, the land foreign investors have leased and bought from poor farmers in the poorer regions of the world is so vast that if it were farmed properly, it could feed a billion people. (Observer, 13 October 2012) But 60 percent of the crops grown on these lands are for biofuel (plants used as energy sources).

Capitalism cannot put sustainable development first, which, among other things, would mean drastically reducing the production of carbon dioxide and other greenhouse gases that is propelling global warming. Instead, the profitability of biofuels has triggered a “gold rush” mentality among investors seeking higher returns on their investment. Further, biofuel projects are often speculative and may turn out to be disastrous for a country, even in capitalist terms. In northern Mozambique, farmers lost their land to international companies that wanted to grow the jutropha plant for biofuel. This experiment failed, but the damage was already done.

Food prices have gone down on the world market since their historical peak in 2008, but not by much. According to the UN Food and Agriculture Organization (FAO), they are now approximately twice as high as a decade ago. (Almost one and a half times as high if adjusted for inflation.) Burgeoning financial speculation on agricultural products and the large-scale land grabs interact to drive up food prices.

Those who live in the imperialist countries spend only a small part of their income for food (nine percent in the U.S. on average), but in the countries dominated by imperialism overcoming hunger is a serious challenge. No matter how much they work, many people are forced to spend 50-70 percent of their income  (and sometimes more) just to buy food, often of low quality, so that even if their stomachs are full they may be malnourished. This gap between the extreme ends on the scale of rich and poor is getting bigger. Drought and floods due to climate change have dramatically increased the problem.

When rich countries import food it is like also importing water from the countries they dominate, because the water needed to grow these crops is used to create exported agricultural commodities and not to feed the local people. The imperialist countries and their associates import vast amounts of what has been called “virtual water” from the countries under the domination of their capital. They have situated themselves in such a way that they can even benefit from climate change and drought by increasing their control over real and “virtual” water and food sources in general.

The world needs 200 billion litres of water a second to grow its food, the equivalent of all the water in the Amazon River every day. About 62 percent of the water used to grow crops consumed in the UK is “imported” in this sense, amounting to some 58 bath-tubs full per person per day. (Guardian, 20 August 2008) These sets of activities – capital’s indirect import of water as well as direct access to water and the diversion of its natural flow for irrigated industrial farming, along with the heavy use of fertilizers and pesticides, is a recipe for disaster for the countries where small farmers are being evicted and for the world as a whole.

In the past few years, many grain suppliers have bought each other out, creating an ever-growing monopoly in which a shrinking number of firms control the global food markets. Six huge companies (ADM, Bunge, Cargill, Louis Dreyfus, Glencore and Marubeni) control more than 75 percent of the food market, and this process of monopolization is continuing. This trend favours further increases in prices all along the food chain.

This consolidation is also a threat to producers, because farmers are faced with fewer buyers and may have to accept lower prices for their crops. At the same time, farmers are basically dependent on grain trading companies and chemical monopolies for their seeds and fertilisers, and have to pay more to be able to produce. The entire food chain from top to bottom is increasingly under the direct control of monopoly capital. These monopolies are in the position of deciding who will farm and who will not, who will eat and who will not, and also who farms what!

Then there is the problem of wasted food that is created by the way the capitalist distribution system works, driven by the same need for the biggest and quickest profits as capitalist food production. According to Tim Fox, Head of Energy and Environment at the Institute of Mechanical Engineers in the UK,  wrong storage methods, improper expiry dates, the constant encouragement of customers to buy more than needed (buy one get one free offers) and too much attention to the appearance of products are some of the major causes of this waste. Thirty percent of the vegetables grown in the UK are not even picked because they don’t “look good”. Half of the food purchased in Europe and the U.S. ends up in the rubbish bin. In the third world, the waste takes place in the start of the food chain due to the lack of adequate agricultural technology, storage facilities and transport. Roughly half of the 400 billion tonnes of food produced on this planet every year are wasted.

However the most criminal waste is the waste of human beings. Millions of people are dying from hunger and other causes related to poverty (such as lack of medical care). At the same time, the productive power and intellectual abilities of many millions are wasted because they cannot find work or are kept on the margin of society.

Are we doomed to live like this forever?

It is not true that our planet cannot feed its current population. Despite capitalism and other exploitative relations, the Earth now produces more than humanity needs, and it has the capacity to produce much more. The problem is that the capitalist mode of production and its distribution system cannot put the needs of the people and the planet first.

Capitalism proclaims that it represents the final point in human development. But it maintains tremendous impoverishment and is an obstacle to the kind of development the world really needs. This is the reason why getting enough to eat, let alone being able to eat healthy food, is so hard for so much of the world’s population. Capitalism cannot give people the most basic right: the right to eat. At the same time, it is not illegal to lay people off, it is not illegal to violently evict millions of people, grab their livelihood and force them into hunger, because all this is crucial for the dynamics of capitalist accumulation. That is the reality of “fair trade”.

This system, capitalism and the domination of the world by a handful of monopoly capitalist countries, is not humanity’s final destination but a barrier to its advancement to a better world. In order to get rid of hunger and injustice, we must do away with this system and nothing less.

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