Hedge Funds Create Volatility in Global
Food Supply with Land Grabs Across Africa
Financial backers - including U.S universities and pension funds
- are lured by high returns and turn a blind eye to theft of land, displacement
NEWS EMBARGOED UNTIL 11 A.M. EDT JUNE 8, 2011
Liam O'Donoghue, firstname.lastname@example.org, (415) 901-0111
Brad Tucker, email@example.com, (212) 584-5000
Oakland, CA - Hedge funds and other foreign speculators are increasing
price volatility and supply insecurity in the global food system, according
to a series of investigative reports released today by the Oakland Institute.
The reports are based on the actual materials from these land deals
and include investigation of investors, purchase contracts, business
plans and maps never released before now.
The "Understanding Land Investment Deals in Africa"
reports also reveal that these largely unregulated land purchases are
resulting in virtually none of the promised benefits for native populations,
but instead are forcing millions of small farmers off ancestral lands
and small, local food farms in order to make room for export commodities,
including biofuels and cut flowers.
"The same financial firms that drove us into a global recession
by inflating the real estate bubble through risky financial maneuvers
are now doing the same with the world's food supply," said Anuradha
Mittal, executive director of the Oakland Institute. "In Africa
this 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."
Mittal added that for people living in developed countries, the conversion
of African small farms and forests into a natural-asset-based, high-return
investment strategy can drive up food prices and increase the risks
of climate change.
"The research exposed investors who said it's easy to make a land
deal - that they could usually get what they want in exchange for giving
a poor, tribal chief a bottle of Johnny Walker," Mittal said. "When
these investors promise progress and jobs to local chiefs, it sounds
great - but they don't deliver, which means no progress and relocating
people from their homes."
New reports and materials on these deals examine on-the-ground implications
in several African nations including Ethiopia,
Mali, Sierra Leone, Mozambique,
Tanzania and South Sudan - and expose contracts that connect land grabs
back to institutional investors in these nations and others. In addition
to publicly sharing - for the first time -- the paperwork behind these
deals, the reports demonstrate how common land grabs are and how quickly
this phenomenon is taking place. Investors in these deals include not
only alternative investment firms like Emergent Asset Management - that
works to attract speculators, but also universities including Harvard,
Spellman and Vanderbilt.
Contracts also reveal a bonanza of incentives for speculators ranging
from unlimited water rights to tax waivers.
"No one should believe that these investors are there to feed starving
Africans, create jobs or improve food security, Obang Metho of Solidarity
Movement for New Ethiopia said. "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."
In 2009 alone nearly 60 million hectares - an area the size of France - was purchased
or leased in these land grabs. Most of these deals are characterized
by a lack of transparency, despite the profound implications posed by
the consolidation of control over global food markets and agricultural
resources by financial firms.
"We have seen cases of speculators taking over agricultural land
while small farmers, viewed as "squatters" are forcibly removed
with no compensation," said Frederic Mousseau, policy director
at the Oakland Institute. "This is creating insecurity in the global
food system that could be a much bigger threat to global security than
terrorism. More than one billion people around the world are living
with hunger. The majority of the world's poor still depend on small
farms for their livelihoods, and speculators are taking these away while
promising progress that never happens."
These reports, as well as briefs on other aspects of land grabs, are
available at http://oaklandinstitute.org.
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