The World Bank and the private sector: partners in land grabbing?

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The World Bank Group (WB-G) has been preparing the ground for the private investment in Africa by encouraging the commercialization of farmland through its investment and structural adjustment programs in Africa. Equally, the World Bank has been supervising land reforms in several African countries, with the aim to establish a western-styled property system. The Millennium Challenge Account (MCA) is building on this preparatory work and promotes private sector interest in African agriculture. In what follows we offer a brief overview of the World Bank’s role in the commercialization of farmland and then an introduction to the MCA.

Since the end of the nineties, agencies of the WB-G, mainly the International Finance Corporation (IFC), its private sector branch, and the Foreign Investment Advisory Service (FIAS) have worked as advisers offering technical assistance and advisory services to African governments. They have been imposing their strategies under the pretext of facilitating and attracting foreign investments to the country. African governments have accepted these conditionals to receive aid from the World Bank and other donors that channel their aid through it. The IFC has supported the creation of several Investment and Export Agencies (IEAs) and financed the establishment of National Access Leasing Companies in Africa. These structures focus principally on attracting foreign investors and urge them to take advantage of the opportunities linked to “unused” land; some IEAs even established a land bank to regroup such “idle” land suitable for investment.

Around the 80’s, the WB-G started promoting land reform policies, with an emphasis on western-styled land titling and registration, in African countries. The WB-G philosophy focused on privatizing land rights in order to make them compatible with the market economy and the western system of individual tradable property rights.[1] However, such a system is far away from the African reality; the African concept of “the land of the ancestors” that provides food and resources for the enlarged family stands in stark contrast with most business investors’ view of land as a profitable production factor in the short term.

Another threat to African farmers and their farmland is the Millennium Challenge Account (MCA). The MCA is a US government programme which manages US foreign assistance and the Millennium Challenge Corporation (MCC) is the agency that administers the MCA-programs. The difference with a regular development agency is that private sector officials take part in the leadership structure. The MCA shares many characteristics with structural adjustment policies, in particular its mechanism of conditionality. The beneficiaries can receive grants on the condition that the country is endorsing neo-liberal policies, like eliminating all barriers to trade, creating an attractive investment climate and access to secure land tenure through the creation of a private land market. There are two types of funding mechanisms, the Compact and Threshold programmes. The Compact is the full funding programme for countries that have implemented the most neo-liberal policies. The Threshold awards smaller grants and incentives governments to implement more neo-liberal policies. Many Sub-Saharan African countries are lining up for these funding programmes: 13 countries have Compact programmes and 6 more are in the Threshold programme. The African governments implement the programmes with the assistance of assigned consultants mainly from USAID and multinational companies. Currently, most of the compacts focus on agriculture, which is currently an important target sector for foreign investors. The primary objective of the MCC is the privatization of land in order to make it a tradable commodity. In several African countries, the local governments have delegated the elaboration of land policy/system reforms to multinational companies. [2] As such, there is a significant risk of corporate capture of African agriculture through these programmes.

Even when the population clearly rejects such a western-styled formal land reform promoted by international donors, as in Benin, the Millennium Challenge Account (MCA) continues to promote these reforms.[3] The main objective of the MCA-Benin is to facilitate investor access to land through private property laws with a focus on tradable title deeds, re-allotment of land and digitization of land data. In Benin, a multinational company is mapping the quality of the land, its resources and the availability of water and is compiling this data in a numerical database. The result of this mapping exercise will provide a digital tool allowing foreign land grabbers and speculators to buy land from behind their computers screens abroad. In Ghana, the compact of the MCC is focused on increasing pineapple production for export markets. For this purpose, Awutu Efutu Senya was designed as a pilot area and firstly consultants mapped the zone through satellite images. On the basis of this map, consultants started developing a land property system based on individual title deeds with a market value. Result: today local pineapples exporters have completely disappeared while in 2004 there were still 65 pineapple exporters. The export market is completely under the control of two multinational companies and three foreign subcontractors. Moreover,  the local population’s food production and access to land has diminished.[4] This foreign-promoted land reform is not suitable for the Africa; only a system that allows for collective registration of community lands that protect “customary” land rights is appropriate for Africa.

The WB-G strategy and the growing private sector involvement in African agriculture has increased foreign large-scale land grabs in Africa. These investments undermine the well-being of local communities, both in terms of land rights local food production, income and access to water and other resources. This perverse trend equally threatens global food security and livelihoods of family farmers. The EU has political weight in the WB-G structure through its close partnership with the WB-G and through the considerable voting rights of its member states. Therefore, we urgently call on the EU and its member states to change their stance and speak out at the World Bank to put a stop to WB policies and activities that promote land grabbing in Africa. Equally, private-public partnerships with detrimental effects should be avoided. In particular, the policy-makers of the G8’s New Alliance on Food Security and Nutrition should prevent the multinational companies and agribusiness from taking over African agriculture, because this harms family farmers.

Begoña Iñarra                                                                                                                                   Gino Brunswijck

Executive Secretary                                                                                                                       Policy Officer

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[1]              Ambreena Manji, “The Politics of Land Reform”, Zed Books, 2006.

[2]              GRAIN & CETIM, « Hold-Up sur l’alimentation : Comment les sociétés transnationales contrôlent l’alimentation du monde, font main basse sur les terres et détraquent le climat », GRAIN/CETIM, 2012.

[3]              Van der Meersche, “Reforme agraire au Bénin: Pourquoi l’échec?”, Libre Afrique, 2013, consulted at : www.libreafrique.org/VandenMeerssche_Benin_Foncier_150113

[4]              GRAIN & CETIM, « Hold-Up sur l’alimentation : Comment les sociétés transnationales contrôlent l’alimentation du monde, font main basse sur les terres et détraquent le climat », GRAIN/CETIM, 2012.

Nonfodji, “China’s Farmland Rush in Benin: Toward a Win-Win Economic Model of Cooperation?”, International Conference on Global Land Grabbing, University of Sussex, 6-8 April 2011.