UK: August 15, 2008
LONDON - A race to grab land in developing countries and exploit food supply
fears and payments to conserve forests could spark conflicts in areas of
land disputes, development and civil rights groups say.
Investors say higher land valuations are just what's needed to settle claims
which may have festered since colonial days.
But much marginal and forested land is common property, which in the past
has given poor local communities little benefit from logging, mining and oil
concessions.
"No-man's land and hinterland is suddenly valuable," said Andy White,
coordinator for the Washington-based Rights and Resources Initiative, a
development NGO.
"Communities had been told the land was theirs. Now it's contested," he
said, explaining that a community in Liberia had told him that in one week
they had separate visits from a mining company, a logging company and a
biofuel company. "They were told by the government -- 'go out and
prospect'."
Spiralling commodity prices have driven speculative interest in farms and
forests in emerging markets where productive land can cost one 10th of the
price in industrialised countries.
"There are still very good prospects," said George Lee, manager of hedge
fund firm Eclectica's agriculture fund, which invests in companies which buy
land, comparing grazing land prices in Uruguay at US$3,000 per hectare with
US$20,000 in Britain.
Benchmark wheat prices have dipped by a third since a peak last September
but remain 50 percent above a 2007 low.
Land and food prices are expected to remain high as a growing, richer world
demands more land for settlement and food, while climate change threatens
more droughts.
CONFLICT
Steps to fight climate change and secure energy supplies are partly to blame
for stoking land prices, by fuelling interest in alternative energy
including biofuels produced from food crops such as palm oil, soy, sugar and
grains.
Added to that, payments to preserve vast tracts of tropical forests could be
the next big environmental market, winning broad support in UN-led climate
talks as a way to lock up in trees the greenhouse gas carbon dioxide.
Scrupulous investors say they follow ethical principles on land purchases:
"You don't want to be a hostile element in the environment ... it's an
investor choice, you see a lot of abuse," said Kimberly Tara, chief
executive of FourWinds Capital Management, an investor in water, biofuels
and farms.
"In places like Ghana you can do all sorts of things. You can take a logging
concession, you can strip the land and destroy it, give nothing back to
local communities."
In Ghana, the constitution details how to split rents for logging
concessions between government agencies and local communities, but that is
routinely flouted as the Forestry Commission takes a 60 percent fee first,
say NGOs.
"There's been very little effort to make sure that any of that money
actually gets down to communities as opposed to being captured by local
elites," said Kyeretwie Opoku, coordinator of Ghana-based NGO, Civic
Response.
The Rights and Resources Initiative cites research showing ongoing foreign
investments in biofuel production in Africa, including a 3-million-hectare
investment by a Chinese company in the Democratic Republic of Congo.
CARBON
Now investors are circling a possible new market meant to help preserve
tropical forests.
Heavily forested, tropical nations are lobbying UN climate talks to be
allowed to sell lucrative carbon offsets in exchange for protecting millions
of hectares of rainforest.
Rich countries accept that they must bear the burden of global targets to
curb greenhouse gases, and some are keen to achieve such targets by buying
carbon offsets -- funding forest conservation is considered a cheap way to
do that.
Rights to forested lands can be hotly disputed between indigenous peoples,
local communities and central government, raising doubts over who will get
the carbon cash.
"Carbon markets could be the match that sets it all off," said Andy White of
the Rights and Resources Initiative.
Without their involvement, local communities which depend on the forests for
their livelihood will collude in illegal logging to make money another way,
NGOs say.
Carbon market investors say the prospect of returns will help disentangle
conflicts.
"It will encourage the resolution of disputed land claims, a lot of these
are not being resolved simply out of inertia," said Eric Bettelheim,
executive chairman of UK-based Sustainable Forestry Management (SFM).
"Even in the diamond business, consumers and producers found out that people
get angry, won't buy from conflict areas. The oil and gas industry are
dealing in commodities which are very hard to trace ... by and large carbon
offsets are much more exposed to public scrutiny, subject of legislation."
SFM is paying authorities for a share of hoped-for avoided deforestation
carbon offsets on a 500,000-hectare tract of rainforest in Peru and will
share any profits with local people.
Rules for such investments in carbon sinks are not set yet, under UN talks
expected to agree a climate treaty next year.
"There's no point in blaming bankers wanting to make profits," said Barry
Gardiner, British Prime Minister Gordon Brown's special envoy for forests.
"Our job as an international community is to make sure these markets work
effectively to deliver carbon sequestration, protect indigenous people's
rights and deliver ecosystem services."
(Reporting by Gerard Wynn; editing by Christopher Johnson)
Story by Gerard Wynn
REUTERS NEWS SERVICE
