As a growing population stresses the world's food and water supplies, corporations and investors in wealthy countries are buying up foreign farmland and the freshwater perks that come with it.
From Sudan to Indonesia, most of the land lies in poverty-stricken regions, so experts warn that this widespread purchasing could expand the gap between developed and developing countries.
The “water grabbing” by corporations amounts to 454 billion cubic meters per year globally, according to a new study by environmental scientists. That’s about 5 percent of the water the world uses annually.
Investors from seven countries – the United States, United Arab Emirates, India, United Kingdom, Egypt, China and Israel – accounted for 60 percent of the water acquired under these deals.
Most purchasers are agricultural, biofuel and timber investors. Some of the more active buyers in the United States, which leads the pack in number of deals, include multinational investors Nile Trading and Development, BHP Billiton, Unitech and media magnate Ted Turner, according to the study published last month.
Wendy Wolford, a professor at Cornell University who studies political and social impacts of international land deals, said while it is difficult to tease out investor motives, they “don’t grab land in places without access to water.” Some countries – including Indonesia, the Philippines and the Democratic Republic of Congo – had large amounts of water rights grabbed because they’re countries with a lot of rainfall.
Since 2000, 1,217 deals have taken place, which transferred over 205 million acres of land, according to the public database Land Matrix. About 62 percent of these deals were in Africa – totaling about 138 million acres, roughly the size of two Arizonas.
For countries reliant on farming and already suffering from poverty, the potential impacts are huge, said Paolo D’Odorico, a University of Virginia professor and co-author of the new report that estimates the water supplies at stake. About 66 percent of the total deals are in countries with high hunger rates.
“In many of these countries, the sum of the water being grabbed would be enough to eliminate malnourishment,” said D’Odorico, who collaborated with scientists from Italy’s Polytechnic University of Milan.
Wolford said there is danger that local people – especially in places like sub-Saharan Africa – are not aware of land purchases and how it could affect their way of life.
“That’s probably the biggest problem – people could have gathered timber from the woods or lived downstream of the land grabbed,” Wolford said. “These things could be taken away without them knowing what happened.”
Food crisis, biofuels spur “grabbing”
Such land deals are often derisively dubbed “land grabbing,” which D’Odorico defines as a deal for about 500 acres or more that converts an environmentally important area currently used by local people to commercial production.
Land grabbing surged from 2005 to 2009 in response to a food price crisis, according to a 2012 report from Land Matrix, which is run by a group of organizations that advocate for land rights for the poor. Prior to 2008, international agriculture land deals totaled about 9 million acres purchased a year, according to the World Bank. In 2009, that shot up to 138 million.
And while that sharp spike has leveled off, the amount of deals still remains much higher than before 2005.
Jennifer Franco, a researcher at the Transnational Institute, an international think tank in the Netherlands that advocates for social justice, said land grabbing has been going on for a long time and some of the increase is due to more awareness and reporting of it. But experts say there have been global causes driving its growth in the past decade.
“One big driver is biofuels and new biofuel policy. It has really increased the demand for agricultural land,” D’Odorico said.
The 2007 Energy and Independence Security Act in the United States mandated a fourfold increase of the amount of biofuels by 2022. A 2009 European Union directive had a similar goal. Biofuels are fuels made from different types of plants and crops. The most popular examples from crops are turning corn or sugarcane into ethanol, or turning palm oil into biodiesel.
Wolford said that droughts in key grain-producing countries – such as the United States, Argentina and Australia – in recent years play a role as well. With dwindling yields, these richer nations buy up land in other places to secure their own food supply, she said.
She also pointed to the industrialization of agriculture over the past few decades. This type of farming needs a lot of land, which can be found cheaply overseas.