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

by Fred Pearce

  And gringos abhor a vacuum. The founder of the cable news network CNN, Ted Turner, has a sizable backyard at home in the United States. His two-million-acre land holding is spread across twelve states. He has ranches in Montana and the sandhills of Nebraska—home to fifty thousand bison, the biggest herd in the United States. And he has 2 percent of New Mexico, where you can join his $12,000-a-week elk-hunting safaris. But if he ever feels crowded at home, he also has a 135,000-acre ranch called La Primavera Argentina, with some of South America’s most exquisite trout fishing, in Argentine Patagonia’s Neuquen province.

  Some of these green grabbers try and get along with the locals. But others seem more divisive. The billionaire brothers Carlo and Luciano Benetton, the aging founders of Italy’s Benetton clothing group, have accumulated 2.2 million acres of sheep farms in Neuquen, Rio Black, Chubut, and Santa Cruz. Their interest is at least partly business. The biggest private landholders in Argentina, they have a quarter million sheep on their land, supplying some 6,000 tons of wool a year to the family firm, which is one of the world’s biggest buyers of wool. But they live back home in Treviso, Italy.

  The Benettons’ first and main purchase was the Argentine Southern Land Company. The British-owned ranch operator had been given a ten-ranch empire a century before by the government in Buenos Aires. The land was in settlement of debts incurred by the government to finance an invasion of the previously untamed Argentine Patagonia. The “conquest of the desert,” as they termed it, resulted in the final step in the European colonization of South America, taking the lands of indigenous groups.

  Locals that Paul Theroux met in The Old Patagonian Express thought the company belonged to “the Queen of England . . . lots of cattle—very nice.” But, shortly after his journey, in 1982, Argentina nationalized the company, and much of its land was abandoned. A decade later, it was bought by the Benetton brothers, through their Edizione Holdings. This annoyed some members of the largest surviving indigenous group, the Mapuche. Around 100,000 of them still live in Argentine Patagonia, mostly working as laborers on ranches or living in the slums of big cities. But in the 1980s, some began campaigning to reclaim their ancestral lands. In 2001, a group of them took on the Benettons by occupying a few hundred acres of Edizione land around the village of Leleque, 40 miles north of Esquel. “We went to the land without harming anyone,” says Atilio Curinanco, one of the returnees. “We didn’t cut a fence, we didn’t go at night, and we didn’t hide ourselves. We waited for someone to come to let us know if it bothered them . . . and no one showed up.”

  Eventually someone from Benetton did show up, and went to court. A judge ordered the eviction of Curinanco and his compatriots. After an intervention by Argentine pacifist and Nobel peace laureate Perez Esquivel, the Benettons offered alternative land elsewhere in Patagonia. But, with the backing of the provincial government, the Mapuche turned down the offer, saying the land at Leleque had spiritual meaning for them and contained an important cemetery, while anywhere else would not.

  Sadly, the Benettons—who at the time were famed in Europe for their offbeat advertising associating the brand with human rights and other liberal causes—dug in their heels. They refused to concede. The Mapuche note bitterly that the Benettons had created on their land a tourist museum about the history of the people of Patagonia. It represented them as relics from distant lands and distant times, rather than the rightful owners of the present estate.

  It seems that even in the vast wilderness of Patagonia, there is little land that isn’t claimed or owned by someone—little that is truly virgin, just awaiting a foreign claimant. For global nomads like the Benettons, the Tompkinses, and Turner, such blood ties to the land as those claimed by the Mapuche can have little meaning. It seems to me they are drawn to the wild land at the end of the Earth for its sense of otherness, because of its difference from their own homelands.

  So it was with Joe Lewis, an ultra-discreet British financier brought up in the East End of London. He made a killing with fellow land grabber George Soros on Black Wednesday in 1992. He spent some of the cash on a 35,000-acre estate that circles Lake Escondido on the Chilean border near Bariloche. He hasn’t come up against indigenous claimants. His antagonists might be wearing one of Tompkins’s packs on their backs. Under Argentine law, land owners must allow public access to riverbanks and lake shores, but an Argentine TV investigation accused Lewis of blocking access along a mountain trail across his land to Lake Escondido, causing intense local anger.

  But, as one of Britain’s twenty richest people, Lewis has other hideaways. He divides his time between Patagonia, Florida, Britain, the Bahamas—where he has a home in one of the world’s most exclusive neighborhoods, a gated enclave known as Lyford Cay—and his 223–foot yacht, the Aviva, which sails complete with works by Picasso and Miro. His private investment company, the Tavistock Group, has its fingers in everything from real estate and biotechnology research to brewing and the Tottenham Hotspurs soccer club.

  Another part-time Patagonian resident is Harvard graduate Warren Adams, who made his fortune by inventing the first social networking site, PlanetAll, and selling it to Amazon for a reported $100 million. He says Amazon boss Jeff Bezos failed to develop it—and the rest is Facebook history. Like the others, Adams pocketed his fortune, went traveling, and ended up starstruck by Patagonia. Unlike the others, he is not content to be a custodian of the land. He thinks it should earn its keep.

  So in 2007, Adams founded Patagonia Sur, a “for profit” company that now has 60,000 acres in six blocks of southern Chile, from the mountain glaciers to the ocean. He is still buying. The company makes money by planting trees for carbon offsetting, and through real estate schemes. He formed an exclusive club in which would-be visitors put down $40,000 for membership, giving them the right to bring their families to one of his eco-lodges, at a bargain-basement $300 a night per person. These upmarket time-shares are going well with upmarket Chileans. Meanwhile his foresters, in collaboration with South American “sustainable” timber giant Arauco, are planting fast. “We are a business, not an activist company,” Adams says. He is still seeking new ways of squeezing a profit from Patagonia Sur. He would like to sell water, melted from his own glaciers, to Africa.

  Back in Argentina, another giant ranch, Estancia Alicura, has been bought by Ward Lay, son of Herman Lay, who founded the Frito-Lay potato chip company and became chairman of PepsiCo after the two companies merged. Ward Lay bought the 185,000-acre ranch in 1998 from the Benetton family. He converted it from sheep to a hunting and trout-fishing resort. He claims that it has one of the world’s largest herds of guanaco, the wild ancestors of domesticated llamas, as well as wild boar from Europe and red stag from New Zealand, corralled within a 17,000-acre fenced enclosure.

  Conventional environment groups have also been purchasing pieces of the end of the world, usually thanks to rich benefactors. Former U.S. treasury secretary Henry Paulson, a nature buff, found himself in charge of 640,000 acres of forest in the Chilean Tierra del Fuego. It happened because a U.S. logging company defaulted on a loan from Goldman Sachs, which Paulson chaired at the time. At a loss about what the masters of the universe could do with a Patagonian hardwood forest, Paulson donated it to the U.S.-based Wildlife Conservation Society in 2004.

  Britain’s World Land Trust—the low-profile conduit for green donations from the rich and unfamous that we saw at work in Paraguay—has enabled local partners to buy 15,000 acres of treeless Argentine steppe on the Atlantic coast. The steppe is rather like the windy wastelands of the nearby Falkland Islands, but with pumas and guanacos, and without the land mines left behind by the Falklands War. But the real spectacle of the Estancia La Esperanza lies just offshore, where killer whales come in search of their favorite food—sea lions.

  Patagonia is a truly wild land, in which the myths sometimes turn out to be true. But the biggest and most bizarre monsters here are the wild men from the ric
h world, determined to stake their claim to the last place on Earth. So far Sun Myung Moon, the South Korean head of the “Moonies” church, has not ventured this far south. Perhaps his 2 million acres of the blistering hot Paraguayan Chaco and fetid swamps of the Brazilian Pantanal are enough to slake his land-grabbing thirst. Or maybe it is just a matter of time before his search for “the best place to practice heavenly life on Earth” brings him to Patagonia.

  The pros and cons of “green grabs” would occupy me later when I returned to Africa.

  Chapter 14. Australia: Under the Shade of a Coolibah Tree

  The Aussies are in a tizzy over people buying their land. It’s understandable. A nation built on big sheep and cattle ranches—or stations, as Australians call them—is finding that its pastures are falling into foreign hands. Droughts that settled over Australia in the past decade have left big landowners bankrupt and selling out. With many eager foreign buyers, Australia is beginning to wonder if this fire sale of its heritage is altogether wise.

  The Australian Agricultural Company is Australia’s largest and oldest operator of cattle stations, founded by a British Act of Parliament almost two hundred years ago. It has almost 17 million acres—an area roughly the size of Scotland, most of it on the black soils of the giant Barkly Tableland in the subtropical Northern Territories. There, its giant stations, such as the 3-million-acre Brunette Downs, have some 600,000 head of beef cattle. But in 2009, to stay solvent after a long drought, the company’s board sold a controlling interest to a partnership of Dubai food giant IFFCO and the world’s largest plantation operator, Malaysia’s privatized state enterprise FELDA.

  Next to succumb to foreign investment was the second-largest rancher—but the biggest name in the business. Consolidated Pastures was once the proud property of Australia’s legendary buccaneering entrepreneur, Kerry Packer. The polo-playing Packer was an impulsive gambler (he once reportedly won $13 million during a three-day baccarat binge in Las Vegas, but lost a similar amount in London) and a media tycoon (he once bought most of the world’s best cricketers to put his World Series Cricket on his TV station, Channel Nine). He was also a winner. When he died in 2005, he was Australia’s wealthiest man. Yet five years later, his family’s 14 million acres of Northern Territories’ grassland disappeared for half a billion Aussie dollars into the back pocket of the British private equity firm Terra Firma, founded and chaired by ex–Goldman Sachs private-equity star Guy Hands.

  Hands said his purchase was “driven by a number of recognized global macroeconomic themes, in particular global population growth, a shift in Asian diet toward higher protein consumption, and limited supply of productive land.” Lots of Asians want beef, in other words. But for Australian farmers who once would have followed Kerry anywhere, this takeover looked more like the end of their world. And 2009 wasn’t over.

  Next, the low-profile British agribusiness company M.P. Evans, chaired by former rubber trader Peter Hadsley-Chaplin, bought a 75,000-acre cattle ranch in Queensland. Add that to his third share in 130-year-old North Australian Pastoral, which owns thirteen cattle stations covering almost 15 million acres of Queensland and Northern Territories, and Hadsley-Chaplin was, if anything, an even bigger rancher than his compatriot Hands. (M.P. Evans also has 100,000 acres of oil-palm plantations in Indonesia.)

  Iconic Aussie ranching families that have owned much of the country for a century and more seem to be losing heart. The cattle- and sheep-raising Kidmans are still just ahead of AAC as Australia’s top rural landowners, with an empire the size of Hungary scattered across the country. The jewel in the Kidman crown is Anna Creek. The world’s biggest working cattle station covers 6 million acres of South Australia, an area larger than Belgium, and takes five hours to drive across. Salivating over the distant link to Nicole Kidman, one British newspaper noted that Kidman Holdings was the eighth-largest private landowner on the planet. But the empire, founded by “Cattle King” Sir Sidney Kidman in the nineteenth century, is contracting. In 2011, it sold the 3-million-acre Quinyamble station, near Broken Hill in South Australia, to kangaroo farmers Mutooroo Pastoral.

  Then the 400,000-acre Bullo River cattle station in East Kimberley, made famous in bestselling books by its matriarch Sara Henderson, went up for sale. Likewise the 570,000 acres of Sterling Buntine’s Amburla station near Alice Springs. What then of other big ranching families, such as the sheep-raising MacLachlans at Jumbuck Pastoral? Would there be any work for the country’s wannabe jackaroos and jillaroos? This was cultural carnage.

  The list of sales must freeze the spirit of outback-loving Aussies from Woomara to Arnhem Land. Brazil’s JBS-Fribol, the world’s largest producer of beef, now owns 1.5 million head of cattle in feedlots in Queensland, through its purchase of Australia Meat Holdings. Nippon Meat Packers of Japan runs the country’s largest feedlot at Whyalla in South Australia. Cargill’s subsidiary Black River Asset Management owns another giant feedlot.

  It’s not just meat businesses that are coming under the auctioneers’ hammer. The United States’s Westchester Group, a vehicle for pension funds, owns 180,000 acres of Australian cropland. A Canadian company, Agrium, owns the Australian Wheat Board. More Canadians have the Barley Board. Both the Chinese government and Singapore’s Wilmar are buying into Queensland sugar. Another Singapore conglomerate, Olam, has 22,000 acres of orchards, which among other things deliver half Australia’s almond harvest. In 2007, at the height of the drought, Olam also bought Queensland Cotton, giving it what it calls a “dominant position” in another quintessential Aussie industry. Water is key. And that is all some grabbers want. In 2009, Summit Global Management, a San Diego–based investment firm specializing in “hydrofinance,” spent $20 million buying up water licenses in the Murray-Darling river basin, where Australia grows 60 percent of its crops. Many years, the rivers run dry.

  In 2011, Qatar’s voracious state-owned Hassad Foods bought 20,000 acres of Victoria, and 30,000 acres of sheep stud farms and cattle ranches in New South Wales, to go with its 310,000 acres of sheep grazing in Queensand’s Clover Downs. Other state-owned Gulf companies have snapped up 250,000 acres in Western Australia. Then, most bizarrely, came a South Korean whose previous main claim to fame was to have cornered a third of the world’s manufacture of baseball caps. But Baik Sung-hak switched to a cowboy hat and bought 440,000 acres of cattle, sheep, and goat pastures in New South Wales. The new proprietor of newly named Ho Myoung Farm grew up as an orphan during the Korean War of the 1950s. He learned English from GIs and ate food he pilfered from U.S. military garbage trucks, before getting a job as a janitor in a cap factory and rising to become the owner of the Young An Group, which also makes buses and forklift trucks. Now he’s a cow-puncher, too.

  And let’s not forget the Chinese. In mid-2011, Western Australia’s farmers reported that representatives from an unnamed Chinese company were touring their homesteads looking to buy a total of 200,000 acres of grain fields. The aim was to “import all their fertilisers and chemicals and export the grain straight out through the ports.” And a Chinese textile producer from Shandong, Yu Yi Huagong, looked set to outbid Bahrain entrepreneur Ahsan Ali Syed for the Cubbie Station in Queensland, a former ranch turned cotton farm covering 200,000 acres.

  “The truth,” wrote the Australian in late 2010, “is that many farmers are broke after years of drought.” But farms were shutting down because of the reluctance of local banks to keep credit lines open till the rains returned. During the first decade of the twenty-first century some 110 million acres of Australian land, mostly pastures, ceased production. That’s an area almost the size of France. It looked like only foreigners appreciated the value of Aussie land.

  Whatever the financial risks and benefits, and whether farms shut down or sold out, the anger against foreign land grabs was growing. “Australians are in danger of becoming servants and not masters of their own food resources,” said the Sydney Morning Herald. A Senate inquiry c
alled for an audit of foreign ownership. The Green Party demanded a ban.

  There were similar sentiments two hours east in New Zealand, when the Shanghai Pengxin Group, owned by billionaire Jiang Zhaobai, wanted to buy sixteen farms on the North Island owned by the bankrupt Crafar farms company. It made headlines for weeks. With another big purchase in the wings for the country’s biggest milk supplier, Dairy Holdings, which has 35,000 acres on the South Island, the prime minister was forced to plead for an end to the “xenophobia against the Chinese.” The sense of siege was not helped by the discovery that German companies had purchased five farms in Southland, at the bottom of South Island, and two more in Canterbury. And it turned out that a Malaysian named Tiong Hiew King, reputedly the world’s largest logger, also had some 125,000 acres of forest, via a Liberia-registered subsidiary. We return to him in chapter 16.

  None of this was quite the end for farming down under, of course. New Zealand’s dairy cooperative Fonterra went from strength to strength, grabbing milky assets for itself in China. Cotton planting in Australia picked up in 2011. Ron Greentree in New South Wales, reputedly the world’s largest wheat grower with 232,000 acres under the plow, was hanging in there. As was John Nicoletti with more than 170,000 acres in Western Australia. And Australia’s Macquarie Agricultural Fund continued aggressively to fund foreign land grabs on Australia’s account, notably in Brazil. But farmers are gloomy folk. And the bad news left many seeing no future on their land. Where would it end, they asked. Maybe, a few began to suggest, there was another use for the land, beyond stocking it with cows and sheep and the odd kangaroo.