The Land Grabbers: The New Fight over Who Owns the Earth

by Fred Pearce

  Bitterly, the elder related how, during the massacre, the army had destroyed the school and clinic in their old village. He laughed. Now the government required them to move so they could get back the services the army had previously destroyed. “The government propaganda says the people are moving willingly. But it’s not true,” he said. Worse, the government broke its promises. “They promised us a well, but it is not deep enough and it isn’t functioning anymore. They promised us food but they only came once, and then brought only wheat. They said we could keep our old farms, but then when we got here they said we couldn’t go back.”

  The conversation turned again to land, the touchstone of everything for the Anuak. “We have decided, each of us, that in the rainy season we will go back and cultivate our ancestral land,” he said. “It is only an hour away, and it is better land than here. If they try and stop us, conflict will start. We will fight for our land.” Maybe this was bravado, but there was no mistaking the gravity he intended when he concluded: “We are poor. If you are poor and a rich man comes and offers help, you will accept. But if he doesn’t keep his promise, he will become your enemy.”

  There is another side to the land grab. An environmental tragedy is unfolding in this remote corner of Africa, one I saw repeatedly in my journeys. While traditional land uses such as shifting cultivation and pastoralism can often coexist with wildlife, there is simply no room for wild animals when intensive mechanized farming moves in. And here in Gambella, the giant foreign-owned farms imperil the second-largest mammal migration on the African continent. Most of us know about Africa’s largest migration, the millions of wildebeest and their attendant predators that race across the Serengeti plains of East Africa in search of water each year. It is the stuff of hundreds of TV natural history programs. But how many have heard of the second-largest migration?

  As I drove through the bush beyond Karuturi’s base at Iliya, the track ahead was suddenly alive with large animals. It soon became clear they were antelope. As we drew closer, their numbers grew, and they began running. They numbered many thousands, with warthogs in among them, darting through the tall wet grass between a series of ponds and heading toward the Baro River. Mesmerized, I didn’t notice for a while that, not far away on the horizon, there were bulldozers and plumes of smoke. The Karuturi farm was advancing. Someone else wanted this rich grassland and its water. This bush would soon be transformed—and the future of the great migration in grave doubt.

  The antelope were white-eared kob. Most of them came from South Sudan, traveling across the open woodland bush at the end of the dry season in search of Gambella’s open water and wetlands. More than a million of them are estimated to come this way each year. Along with a scattering of elephants, another endangered antelope, the Nile lechwe, and the giant shoebill stork, they were the main reason for the announcement back in 1974 of the Gambella National Park.

  The park, which also hosts hundreds of baboons, bushbucks, duikers, hartebeest, water bucks, buffalo, reedbuck, and roan, is a huge region of swamp, woodland, and wet grassland stretching from the Baro River in the north to the Gilo in the south. It occupies much of central Gambella. But, while the park has a handful of rangers, it is little more than a mark on a map. It has no management plan and has never been formally declared. Its northern boundary includes much of the Karuturi concession. Within its borders too are the Alwero dam and the old state farm recently reallocated to Saudi Star, plus much of the land that the company anticipates taking over soon. Yet neither company has conducted so much as an assessment of the environmental impact of their activities in the park. I asked Karuturi’s Sekhon about the wildlife. Yes, he said, the animals on his land were a “problem.” But he said he knew of no rules that prevented Karuturi from cultivating its concession.

  Some eighteen thousand cattle and more than twenty-five thousand people live in the park, mostly along the riverbanks and roads. Park rangers sporadically chase Anuak hunters through the swamp grasses, which can grow up to 3 yards high. On the road to Nyininyang, near the South Sudan border, I spotted a small gang with dogs, rifles, and a couple of chestnut-colored kob slung over their shoulders. They had set a fire that sent dense smoke and flames across the road. Back in Gambella town in the evening, I spoke to a park official. He took note of my report on the hunters. He would send his people out in the morning to check if they were still there, he said. But on the subject of the land grabbers—the real threat to wildlife in the park—he could only shrug his shoulders. It wasn’t his business. As a spokesman for the Ethiopian Wildlife Conservation Authority, which oversees the parks, said: “We have a conflict with the agriculture department. We both want different things. We will see what happens.”

  This is tragic. Properly managed, the wildlife could provide economic development for Gambella through tourism, while allowing the people to maintain their ways of life. Sanne van Aarst of the Horn of Africa Regional Environment Center at Addis Ababa University says that, as the home of the second-largest wildlife migration in Africa, Gambella has the same tourist potential as the Serengeti. But mechanized agriculture is the only item on the government’s development agenda.

  The government has asked the conservation authority to “re-demarcate” the park’s boundaries to make way for the new farms. There are three options, according to the conservation authority’s Cherie Enawgaw. Each involves moving the park boundaries south and west by several dozen miles. But his own maps of wildlife sightings, produced to help with the demarcation, show that all three options will block migration paths and allow “wildlife core areas” to be plowed up.

  After my visit, Ethiopia’s prime minister was dining with his Indian counterpart in Addis. Lauding the Karuturi investment, he said: “I am often accused of being too pro-India. My answer is: guilty as charged.” He went on: “We want to develop our land to feed ourselves rather than admire the beauty of fallow fields while we starve.” His UK ambassador Berhanu Kebede wrote within days in the Guardian newspaper in London that Karuturi and the other new farms “bring huge benefits. Not just the jobs, houses, schools, clinics and other infrastructure, but knowledge transfer, skills training, tax revenue and other benefits to the workers and to the country as a whole.”

  I saw none of these benefits. But, even if they happen, the questions raised are huge. Is it ethical for a country such as Ethiopia, repeatedly hit by famine, to give up thousands of square miles of its best farmland to foreigners, with the promise that they can take the produce back home or sell it around the world? Is the concentration of land in fewer hands an essential part of the economic development that the poor world so desperately needs? Or will it create a new underclass of pauperized landless peasants?

  Arriving home in London, I noticed on my bookshelf a book about the Irish famine of the 1840s. It was about a time when absentee British landlords annexed a country to grow food for their own nation’s needs—and continued to export that food while a million of the Irish starved. They told themselves all the while that the market would deliver food for the famished. It did not.

  Chapter 2. Chicago, U.S.A.: The Price of Food

  In the visitors’ center of the Chicago Board of Trade, you can play the markets. Nominate yourself as a trader, and for two minutes you buy and sell a commodity. Mine was timber, but it could as well have been corn, pork bellies, or soy. The idea is to make your trades, as a moving graph on the display in front of you rolls out price changes, in response to news headlines broadcast from a speaker.

  I was mesmerized. I didn’t give a thought to the logged landscapes and dislocated lives I was causing as I bought and sold. I didn’t even listen much to the news of bumper harvests, consumer booms, or natural disasters. I only knew dimly how these events might influence prices. It was the chase I loved. I just looked at the price graph. I bought as prices bounced off a bottom and looked like they were recovering. I sold as they came off a peak. It worked. After my two minutes of trading, t
he screen said I had come out $180 up. I felt like a successful speculator.

  The Chicago Board of Trade’s 600-foot-tall art deco building at the foot of LaSalle Street, with its marble floors and gleaming mirrors, is a monument to markets and what they can achieve. Before playing the trading game, I had been reading the PR. Since its establishment in 1848 to serve the prairies of the American Midwest, the institution has been the world’s premier trading house for corn and the other grains that feed the world. This is where they invented the futures market. In 1851, the first “forward contract” for 3,000 bushels of corn was made. The idea was to allow farmers to sell their crops ahead of time, ensuring their income whatever the weather. The forward contracts also gave them collateral to invest in seeds, fertilizer, or equipment.

  CBOT prospered. It had the largest trading floor in the world, covering 60,000 square feet. Ticker tape was invented here to speed news of price changes around the world. The first skyscrapers were built in Chicago in the 1880s, and ticker-tape parades were held in the LaSalle Street “canyon.” Overseeing it all today is a 30-foot aluminum statue of Ceres, the Roman goddess of grain crops, perched on the roof of the CBOT building, waving a sheaf of wheat and a bag of corn.

  Some trades, like rye and potato futures, have disappeared. Others, like soybeans and ethanol, have replaced them. CBOT has a derivatives exchange, where they even buy and sell weather futures. On the trading floor, boards with chalked-up prices have been replaced by electronic flashing numbers in red and yellow and green. The traditional hand signals of the traders (palms out for sellers and palms in for buyers) are augmented, but not replaced, by headsets and microphones.

  The exchange retains its noble ambitions. “The CBOT is committed to operating a global marketplace for risk management and price discovery,” its mission statement says. Or as the display boards in the visitors’ center put it, “to bringing buyers and sellers together to ensure a fair price, create a more stable market, and ultimately a better price for your morning bowl of corn flakes.” Books in the foyer have titles like My Word Is My Bond—Voices from inside the Chicago Board of Trade.

  A more stable market? A lower price for consumers? Was that what I was creating as I played the trading game? Did my buying and selling bring down prices, reduce risk, and keep a box of cornflakes cheap? Placing my bets in the visitors’ center felt the way it looked on the trading floor—like speculating in a market to make a profit. It also felt more like what has been going on in the real world in the past five years, as market prices for corn and rice, vegetable oil and coffee, wheat and sugar have yo-yoed like the stakes in some demented game. Perhaps I had misunderstood the hidden hand of the market, and my own hidden altruism? I hoped to find out more in the displays about the illustrious history of CBOT. But, strange to say, the timeline stopped just before some of the biggest events in this place’s history—the 2008 food price spike, the subsequent crash following the credit crunch, and the new surge in prices that was roaring as I toured the exchange in late 2010.

  I left confused and decided to go for a McDonald’s. I figured that, even more than the bowl of corn flakes, a Big Mac was now the ultimate modern consumer expression of the trading I had just watched. But, outside the exchange, my eye was caught by Harper’s magazine on a newsstand. The cover story was titled “The Food Bubble—How Goldman Sachs and Wall Street Starved Millions and Got Away with It.” I read it over my burger. This was food for the brain. I was filled with a sense of recognition. This, perhaps, was what I had really been doing when I played the commodities game.

  They first noticed the food price bubble in early 2007 in Mexico. The price of tortillas, the staple food of the Mexican poor, quadrupled in two months. Around seventy thousand Mexicans marched through the capital in protest, waving the corn flatbreads as they went. Angry mobs of housewives besieged President Felipe Calderón.

  In subsequent months, there were food riots across North and West Africa—in Cameroon, where forty people died; in Burkina Faso, Senegal, Guinea, Mozambique, Mauritania, Morocco, and Ivory Coast. For the world’s poorest people in the poorest countries, food is by far the biggest household expense, taking up to 80 percent of income. Those who ate rice, or bread made from wheat, or tortillas made from corn, seemed equally affected. They were hungry, and angry.

  In Egypt, the world’s largest wheat importer, bread prices tripled. There were all-night queues outside bakeries. As we shall see later, some Arab analysts say this was the beginning of the anger that brought down Hosni Mubarak three years later. In the Philippines, the world’s largest rice importer, rice prices doubled. In Bangladesh, hundreds of thousands of women working for a dollar a day in the garment sweatshops of Dhaka put aside their sewing machines to protest.

  In those panicky months, fears of long-term food shortages returned for the first time in almost half a century. It was the moment when people realized that markets might not always deliver their daily bread. In the Gulf, the authorities began hoarding food. Oman bought up two years’ rice reserves and put them into warehouses. Even rich European countries began to wonder whether they would always be able to buy the food their people needed. British food secretary Hilary Benn said that “with rising prices and increasing demand across the globe, we cannot take our food supply for granted.” In a call for food self-sufficiency not seen since the Second World War, when besieged Britons were urged to “dig for victory,” his government proposed encouraging consumption of more homegrown food.

  The UN began to talk about a new kind of famine—urban famine. In the past, it was people in the countryside who died when their crops failed. Now, in the cities, “we are seeing more urban hunger than ever before. We are seeing food on the shelves but people unable to afford it,” said Josette Sheeran, the director of the World Food Programme. When rural people starve, they head for relief stations. But when urban people starve, they start riots. In April 2008, UN peacekeepers in Haiti fired at people looting shops in Port au Prince. Four died. Days later, the prime minister was toppled. The UN’s emergency relief coordinator John Holmes warned that rising food prices threatened global security.

  What had happened? What had caused the simultaneous surges in prices of corn, wheat, and rice, the world’s three major grains? Some said the population bomb was finally exploding. In the 1960s, with world population doubling in a generation, mega-famines seemed inevitable. “The battle to feed the world is over,” said Paul Ehrlich in his book The Population Bomb. “Billions will die in the 1980s.” This Malthusian nightmare was prevented by the green revolution. A major investment in new high-yield varieties of all the major grain crops doubled food production even faster than human numbers. But that led to complacency. As granaries filled, world grain prices slumped for a generation, agricultural research slackened, and foreign aid spent on agriculture slumped from a fifth of total aid to less than 3 percent. The price spike looked like the reckoning.

  There were other long-term drivers, as well, such as the growing diversion of grain to feed livestock and supply the rising demand for meat in developing countries like China. A cow needs to consume eight calories of grain to produce one calorie of meat. By the start of the twenty-first century, more than a third of the world’s grain was feeding livestock rather than people. Rising demand, low prices, and slackening investment eventually brought down world grain reserves. Rice stores were emptier than at any time since 1976. Wheat stocks were the lowest in twenty years—and half of the world’s wheat stocks turned out to be in China.

  But these long-term trends were accentuated by more immediate market influences. Corn stocks were being consumed by a boom in biofuels. In 2007, the United States earmarked more than a third of its corn harvest to making ethanol for the nation’s automobiles, diverting surpluses from export markets. Wheat was hit by droughts. Maybe this was climate change kicking in. In any event, poor rains hit two major wheat-exporting countries. Shipments from Australia fell by 60 percen
t, from Ukraine by 75 percent, pushing up demand for U.S. wheat in particular.

  What of rice? Its prices rose more than either corn or wheat. Rice production around the world had flatlined for a decade, but so had consumption, because many Asians had been eating less rice and more bread and meat. However, when bread prices surged at the end of 2007, many Asians switched back to rice, pushing up demand in a tight market. Then oil prices soared to almost $150 a barrel during mid-2008, feeding into food prices through the cost of everything from chemical fertilizer to fueling tractors to getting food to market.

  The world food summit met in June 2008 at the UN Food and Agriculture Organization’s Rome headquarters. By then, the International Monetary Fund had recorded an 80 percent rise in the world’s food prices since the start of 2007. Nations agreed with the World Bank that biofuels were mostly to blame, that the disruption it caused to the corn market had spilled over into the wider grain market. But there were doubts. For while biofuels certainly pushed up international demand for grains, overall the global harvest for the big three grains also broke records in 2007. At 2.1 billion tons, it was 5 percent up on the previous year.

  It didn’t seem obvious that supply and demand in the grain markets could have caused the price surge. So did something else trigger it, by amplifying modest price signals into a full-blown crisis?

  World Bank president Robert Zoellick pointed the finger at old-fashioned protectionism. As prices rose, major food-exporting countries such as Brazil, Thailand, Vietnam, Pakistan, and India had been understandably anxious to keep feeding their own people, and to maintain low prices at home. So they shut their ports and banned some food exports—pushing international prices yet higher. This was the worst possible response, Zoellick said. What was needed was freer markets.