Oakland's Mittal on Big Banks' Land Grab in Africa

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Institutions like JPMorgan and Goldman Sachs are snapping up fertile land in Africa by the millions of hectares. We spoke with Anuradha Mittal, founder and director of the Oakland Institute, to get the details on this phenomenon.

“It is the most fertile land – close to transport, close to infrastructure, close to water – that is in demand. And the deals are amazing. You'll see a 99-year lease for $1.50 per hectare, with full water rights,” Mittal reports. The land may be fertile, but farming has historically provided returns of only 5-6%, so crop-growing potential alone doesn't explain the interest big money has taken in its acquisition. According to Mittal, the banks anticipate a property bubble in Africa that will allow them to sell off their recent acquisitions in a few years' time for large gains.

At first look, that may not seem like a particularly sinister plan. But as Mittal explains, the land purchases are displacing significant sections of the local population. And since it is primarily farmland that foreign investors are interested in, countries like Mali, Sierra Leone and Ethiopia are losing their food security as they sell land tracts. Corrupt government officials are more than willing to look the other way, but will the displaced populace act on its own when faced with the loss of homes, land, and food sovereignty? “People are not just packing up and moving – they're fighting back,” Mittal says.

If a population loses its food security to a high enough degree, it will invariably revolt rather than starve. Investors will have to decide whether they think foreign firms can squeeze enough profitability out of the arable African land while ensuring social conditions remain good enough to fend off revolution.

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