Food firms investing in Africa run risk of protracted land battles costing millions
FOOD companies doing business in Africa risk becoming bogged down in decades-long legal disputes over land that could cost tens of millions of dollars, says a report released yesterday.
From sugar to coffee and palm oil, agribusiness firms could find that the land they are using is already claimed or occupied by local people.
Such disputes, already common, can tie up businesses for years and halt trade – and could cause up to $101 million (R1.3 billion) in losses over the next 25 years, said the report from the Overseas Development Institute (ODI), a think tank, and TMP Systems, a UK-based consultancy.
“All over, communities want to benefit from investment,” said Joseph Feyertag, ODI research fellow. “But communities need to know exactly what they’re letting themselves into.”
The report, which collected data from nearly 80 firms, is part of a wider initiative to encourage responsible investment in African agriculture and develop trust between companies and communities.
“The purpose of this is to quantify the costs of doing it wrong,” said Feyertag of ODI, which with TMP Systems developed a free modelling tool that assesses those risks.
Almost half of all land disputes between sugar companies and local communities in Africa lasted more than 10 years, the report found. Such protracted disputes also caused significant harm and economic stress to local people.
“It’s hard to see how to make these projects win-win when both the investors and the communities want the same land for very different purposes,” said Renee Vellve, co-founder of Grain, an international charity that supports social movements in their bid for food self-sufficiency.
“For the companies, the land is a resource. For the communities, the land is their livelihood source.”
For Vellve, clashes are common and are often resolved at the expense of communities, with villagers unable to access fields to make a living.
Recent years have seen several high-profile land dispute cases in Africa. “Large-scale agri-business activities are a source of much-needed revenue for many countries in Africa, but too often poor smallholder farmers hardly see any fruit,” said David Barissa, campaign manager for the Oxfam in Africa. “There is an urgent need to find a model that truly includes and respects the rights of farmers.”