The Political Economy of Large-Scale Agricultural Land Acquisitions

01 Jan 2012


Although the acquisition of large tracts of farmland in developing countries is not a new phenomenon, the scale, speed and drivers behind the recent increase in demand do merit attention. Compared to an average annual expansion of global agricultural land of 1.9 million hectares (ha) between 1990 and 2007, large-scale investments totaling approximately 56 million ha were announced by the end of 2009, for that year alone.

The expansion of cultivated area is predicted to continue, and as much as two-thirds of this expansion is estimated to take place in sub-Saharan Africa an d Latin America.The recent increased interest in farmland coincided with a spike in world food prices, which in 2008 led to protests in many countries and the introduction of export restrictions on food by some governments. Food importing countries felt the impact of these events on their food security situation, which motivated some to search for farmland abroad. Simultaneously, the world confronted the most severe financial recession since the Great Depression, which led investors to shift focus from financial products to other sectors, including agriculture.The growing world population and the global development achievements over the past decades have led to unprecedented demands for food, water and energy. With increasing global oil prices, many countries have opted to invest in alternative energy sources, including biofuels.

The shift to biofules is estimated to have contributed to at least 20-30 % of
the food price increases. During the food price spike in 2008, some 125 million tonnes of cereals were diverted into biofuel production. Further aggravating the situation are the current and future consequences of climate change, which present severe challenges to agricultural production, especially in developing countries.

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