Through the development of an econometric model that takes into account the annual size of land grabbing in the African countries, the research aims to understand the main intrinsic factors, linked to the hosting countries, that guide the large-scale acquisition of land by foreign investors. Results show that the presence of a high debt towards foreign organisations, the high availability of virgin lands, the strong vocation of the hosting country for the cultivation of cereals, and the dependence on foreign markets for the supply of food commodities would be some drivers that guide foreign investors to grab land in African countries for the cultivation of agricultural and food crops. In light of the economic, social, and environmental consequences of the phenomenon, the study provides interesting managerial implications for foreign investors and useful political indications for governments and policy-makers, and it lays the groundwork for future research.
The population growth, the rise in consumption and income of people in emerging countries, the increase in food consumption in developed countries, and the need for more food and energy resources have caused, in recent decades, a significant increase in demand for primary food and commodities globally. According to the latest data published by the Global Footprint Network, natural resources are consumed at a speed equal to 1.75 times higher than the capacity that the Earth has to regenerate.
This condition assumes greater importance because of population growth which, according to the FAO projection, will increase by 34% in the next thirty years, reaching about 9 billion people in 2050, with a strong increase in the food and energy demand of the world population.
Faced with such a scenario, investments in agriculture play a key role in satisfying the growing demands for food and resources worldwide. In this regard, to meet the demand for food products expected by 2050, FAO estimates that about 83 billion dollars more per year should be invested in agriculture.
Despite this, the share of public spending that goes to agriculture in developing countries is small, especially in Africa, as well as loans, which are granted to the agricultural sector in developing countries by banks, remain modest.
To bridge this investment gap, many developing countries have launched a policy aimed at intercepting foreign direct investment in agriculture, aiming at potential benefits such as transfer of technology for innovation, creation of new jobs, development of an efficient infrastructural network, increase of internal production and improvement of product quality.
Nevertheless, the expected benefits have not always been positively reflected in the economies of developing countries. Some of the foreign direct investment in the agricultural sector of developing countries would prove to be of little benefit to host countries.
Investors operating largely at an international level, in fact, are mainly guided by a capitalist and neoliberal vision that focuses attention on the development of economic growth through the accumulation and exploitation of resources, setting aside in some cases the social and environmental repercussions of investments. In particular, such foreign direct investments in the land would appear to have greater negative effects in target countries, especially when investors come from countries, where there is strong internal pressure to achieve the government’s objectives of food and energy security.
Not surprisingly, large-scale land investments are mainly intended for the cultivation of food for export to international markets, for the production of biodiesel, or simply driven by speculative reasons.
Taking advantage of such a scenario, transnational companies, foreign governments, or private businesses have initiated a massive acquisition of land on which to cultivate and where exploit the natural resources to ensure an adequate food and energy supply to the developed and emerging countries of the world.
The governments of numerous countries rich in liquidity but poor in resources have encouraged investment campaigns in off-shore projects, through government agencies, sovereign wealth funds, public enterprises, and multinational corporations to guarantee long-term access to productive resources as part of a strategy aimed at food and energy security. This phenomenon, defined as land grabbing, concerns, therefore, large-scale and long-term land acquisitions of agricultural, fertile, and low-cost lands, mainly in the developing countries.
A Guest Editorial