"This is where my family is and I won’t give up my lands. Where will I go if they take my lands?"

Imagine a land of 14 million hectares, bigger than Switzerland and Austria combined. Populated by millions of farming families that together practice shifting cultivation. Now imagine a foreign consultant saying that all of these are abandoned lands. Another foreign company saying it will come to farm all of it. Yet another foreign company saying it will ship everything produced out of there. And a president agreeing to all of this, selling this 14 million hectares for a dollar per hectare. Can’t be true? It’s happening in a part of Mozambique.

via farmlandgrab.org

learn more at http://www.grain.org/article/entries/4626-brazilian-megaproject-in-mozambique-set-to-displace-millions-of-peasants

By Tosin Sulaiman

JOHANNESBURG, July 7 (Reuters) - America’s wealthiest universities are venturing into Africa’s fast-growing frontier markets in search of outsized investment returns that will allow them to offer scholarships, lure star professors and fund research.

For Sub-Saharan Africa, recognition from these deep-pocketed U.S. institutions, who have often earned envy among fellow global investors for their strong returns, marks a significant shift.

American university endowments - permanent funds of educational institutions - pride themselves on spotting new investment opportunities early, such as venture capital, private equity and natural resources such as timber. Combined, they manage assets of over $400 billion.

A study of 831 endowments by the Commonfund Institute and the National Association of College and University Business Officers published this year showed their annual net returns in the 10 years to June 30, 2012, averaged 6.2 percent.

In the same 10-year period, returns for the U.S. S&P 500 stock index were 5.3 percent.

In Africa, they are seeing many of the trends that played out in emerging markets like China, India or Brazil - strong economic growth, an emerging middle class, greater political stability and improved government balance sheets.

These are just the attractions that U.S. President Barack Obama highlighted on his recent trip to the continent when he urged American and other investors to “c’mon down” to Africa.

"The growth, consumer spending, improved governance and disposable wealth, they’re all positive stories," said William McLean, who manages Northwestern University’s $7 billion endowment.

His team is investing in Nigeria and Kenya among other countries and recently doubled its exposure to Africa.

"Our motivations are making some money," he told Reuters in a telephone interview. "You have to look everywhere for growth."

It is difficult to know exactly how many U.S. university endowments have put money in Africa because most prefer not to discuss their investment strategy.

Wale Adeosun, founding partner at New York-based investment firm Kuramo Capital Management, said endowments’ interest in Africa began after the 2008-2009 financial crisis. He estimates that 10 to 15 percent of these institutions are already investing in Africa. Up to 30 percent may be seriously looking for deals there, he says.

"The larger pools of capital are here in the U.S. and you’re seeing the interest picking up about exploring opportunities in Africa," Adeosun added.

Many endowments are required or aim to channel about 5 percent of their market value to their school’s budget each year, to fund scholarships, research and new campus facilities.

The interest means that Africa is attracting a new class of investor - those with unlimited time horizons, in contrast to the speculative hot money that poured into the region before 2008 only to vanish when the global financial crisis hit.

"It’s a lot more patient capital and … the healthy thing about that interest is that it’s likely to withstand the short term noise around the tapering of QE (U.S. quantitative easing)," said Razia Khan, head of Africa research at Standard Chartered.

Besides offering the possibility of cheaper assets and higher returns that have been hard to come by since the global financial crisis, Africa along with other frontier markets also provides more diversification for the investors.

"NOT SUCH A SCARY PLACE"

U.S. endowments’ awakening appetite for Africa is another sign that the continent is shedding its past reputation for conflict, poverty and aid-dependency in favour of a more positive image of progress.

Lindel Eakman, managing director of private markets at the University of Texas Management Company (UTIMCO), told a private equity conference in Cape Town earlier this year that Africa’s reality is different to what is often reflected by media coverage.

"Contrary to the public television out there, it wasn’t such a big, dark, scary place … We are glad to be here," he said.

Eakman added that UTIMCO, which oversees investments for the University of Texas and Texas A&M Systems, with assets of around $25 billion, had made two commitments to Africa through the private equity firms Helios and Actis.

Besides Northwestern and the University of Texas, which rank among the ten biggest U.S. endowments, other large schools investing in Africa include the University of Michigan, the University of Notre Dame and the University of Wisconsin. Between them these institutions manage around $50 billion.

Rockefeller University, a biomedical research institute in New York with around $1.7 billion in assets, expects to make an allocation to Africa this calendar year and has identified outside managers, chief investment officer Amy Falls said.

For Indiana-based Notre Dame, Africa accounts for about 2 percent of the $8 billion endowment. This exposure could increase to 4 or 5 percent in the next five years, said chief investment officer Scott Malpass.

"We’ve done a lot in China, Brazil, India. As Africa continued to evolve it was just a natural area for us to spend time there," he said, adding that rising incomes and the improving quality of businesses in Africa were big draws.

Harvard University, whose $31 billion endowment is the biggest in the United States, has been exploring the investment landscape in Africa, according to a banking source who said his bank was approached by the university a few months ago.

"There has been some interest," he said. "They were looking to debt instruments and private equity." According to Harvard’s tax filings for the year ending June 30, 2012, the university had investments of about $198 million in sub-Saharan Africa, but this represented just 0.5 percent of its total investments.

CHASING 8 PCT RETURN

Those who have taken the plunge into Africa are treading cautiously, concerned about political risk, corruption and the relative immaturity of markets in the region.

"This is a long term process. We’re looking out 15, 20 years so we’re starting slow and proceed with caution," said Tom Olson, who oversees the University of Wisconsin Foundation’s $2.1 billion endowment, which has commitments with Actis.

Investors are also gaining comfort from the “slowly increasing” number of good quality managers handling deals in Africa, said a senior private equity executive who said at least five endowments had made commitments to his firm’s latest fund.

"They expect who they give money to be of the same quality as the teams they give money to in the U.S. and Asia," he said, asking not to be named.

The small size and illiquidity of the region’s capital markets are another worry, especially for the richest universities whose assets can dwarf the GDP of smaller African countries.

"If everybody goes in and starts trying to buy things it’s going to move the prices and grab the value away so you can’t go in and take a big position," said Bill Jarvis, managing director of the Commonfund Institute, the research arm of Commonfund, which manages over $24 billion for more than 1,500 institutions.

Kuramo Capital’s Adeosun said universities recognise the need to consider frontier markets like Africa if they want to meet their return objectives.

"You have to make 5 percent plus inflation plus expenses," said Adeosun. "They’re all chasing an 8 percent type return."

Grabbing Water From Future Generations: Many of the world’s aquifers are being pumped dry to support unsustainable agriculture:

Suresh Ponnusami sat back on his porch by the road south of the Indian textile town of Tirupur. He was not rich, but for the owner of a two-acre farm in the backwoods of a developing country he was doing rather well. He had a TV, a car, and a maid to bring him drinks and ensure his traditional white Indian robes were freshly laundered every morning.

The source of his wealth, he said, was a large water reservoir beside his house. And as we chatted, a tanker drew up on the road. The driver dropped a large pipe from his vehicle into the reservoir and began sucking up the contents.

Ponnusami explained: “I no longer grow crops, I farm water. The tankers come about ten times a day. I don’t have to do anything except keep my reservoir full.” To do that, he had drilled boreholes deep into the rocks beneath his fields, and inserted pumps that brought water to the surface 24 hours a day. He sold every tanker load for about four dollars. “It’s a good living, and it’s risk-free,” he said. “While the water lasts.”

read more at http://news.nationalgeographic.com/news/2012/12/121218-grabbing-water-from-future-generations/

This piece is part of Water Grabbers: A Global Rush on Freshwater, a special National Geographic Freshwater News series on how grabbing land—and water—from poor people, desperate governments, and future generations threatens global food security, environmental sustainability, and local cultures.

G8’s new alliance for food security and nutrition is a flawed project

Already, under the guise of helping to fight poor nutrition in Africa, genetically engineered bananas and cassava are being tested – despite concern about their impacts, and the existence of better conventional varieties.

Several countries have been asked to speed up the takeover of land by foreign investors. Ethiopia, for instance, will “Refine land law, if necessary, to encourage long-term land leasing” (pdf), while companies are already asking for up to 500,000 hectares (12.35m acres) of land in Ivory Coast under this scheme.

Countless studies, including one by the UN special rapporteur on the right to food (pdf), have shown that large-scale land acquisitions and leases destroy the livelihoods and food security of thousands of communities, and that access to land (pdf) is essential for the right to food. This lends more than a touch of irony to the commitment by David Cameron, the UK prime minister, to address land grabbing in this G8 through the much-criticised land transparency initiative.

Already, multinational GM seed, fertiliser and grain companies such as Yara International, Monsanto and Cargill have signed up to benefit from the new alliance, and six African countries – Burkina Faso, Ivory Coast, Ethiopia, Ghana, Mozambique and Tanzania – have signed co-operation agreements. Most of these have barely been subject to democratic scrutiny, and undermine African-led democratic initiatives to tackle hunger such as the Maputo declaration (pdf) to raise public spending on agriculture and regional agriculture policies in west Africa.

No wonder the runup to this weekend’s summit has been greeted by an outcry. Networks of smallholder farmers, pastoralists, indigenous peoples and environmentalists from across Africa have called the scheme “a new wave of colonialism" designed to secure profits and royalty flows out of Africa. Global civil society agrees.

It’s not as if there is a dearth of opportunities for G8 countries to reduce hunger. They could scrap targets for crop-based biofuels, which are linked to hunger by a growing list of bodies including the World Bank. They could follow the advice of the UK parliament to address overconsumption of meat and support services to smallholders. They could regulate investors to stop land grabbing. And they could fund the legitimate and democratic global governance space on hunger – the committee on world food security – instead of competing with it.

But the new alliance marches on under the banner of “investment”.

read more at http://www.guardian.co.uk/global-development/poverty-matters/2013/jun/07/g8-new-alliance-flawed-project

2

The G8′s great land-grab

On Saturday David Cameron was celebrating the historic commitments to ending under-nutrition that had been secured under the UK’s G8 presidency. But another less visible development was also being celebrated, namely the decision of Malawi, Nigeria and Benin to join Tanzania, Ghana, Ethiopia, Mozambique, Cote d’Ivoire and Burkina Faso as guinea pigs for the G8′s ‘New Alliance for Food Security and Nutrition’.

The New Alliance, launched a year ago by President Obama, is a partnership of G8 countries, African governments and private companies (including Monsanto, Syngenta, Cargill and Yara) aimed at lifting 50 million people out of poverty over the next 10 years.

It intends to do so not only through development aid, but by encouraging African leaders ‘to refine policies in order to improve investment opportunities’, thus ‘catalysing private sector investment in African agriculture’. The policies in question concern seeds, pesticides, fertilizers, land tenure, water resources, and any other domain where local practices, if ‘unreformed’, may constrain the investment potential for agribusiness.

Mozambique’s Cooperation Framework, drawn up with private sector partners in exchange for their commitment to invest, provides an insight into how far the New Alliance is already redrawing the regulatory map in partner countries.

A role is envisaged for smallholders, to whom production would be contracted out by agribusiness. However, the meat of the agreement is on the regulatory front, where the Mozambican government promises ‘incentives for the private sector, especially in developing and implementing domestic input and seed policies’ which is fleshed out to mean ‘ceasing the distribution of free and unimproved seeds’. This comes alongside commitments to reform land rights to facilitate major investments, and to promote free trade.

Colonial undertones

What is striking is how brazen and unapologetic the New Alliance is in its quest to open up African farmland – memorably described by the World Bank as the ‘last frontier’ for multinationals – to an unprecedented wave of industrial-scale investment.

In a recent paper on the New Alliance, CIDSE, a development NGO, points out that the Beira Agricultural Growth Corridor designated by the New Alliance in Mozambique corresponds almost exactly to the area that was contracted out to The Mozambique Company in the colonial era.

Taking a more recent example, the NGO calls the scheme “the new face of structural adjustment”, highlighting the continuity between the conditionalities of the New Alliance (regulatory reform for aid) and those imposed on developing countries in the 1980s and 1990s (privatisation and trade liberalisation in exchange for World Bank/IMF support).

This continuity should come as no surprise. The New Alliance is merely the latest incarnation of a dominant foreign investment-led vision for African development. It is intellectually akin to the Alliance for a Green Revolution in Africa (AGRA), which has leveraged the likes of Kofi Annan in favour of an investment-driven, input-heavy productivity drive in Africa. Meanwhile it ties in with the ‘Grow Africa’ platform set up to prime countries for private investment under the New Partnership for Africa’s Development that the African Union established in 2003.

In essence there is nothing new about the ‘New Partnership’ or the ‘New Alliance’, although this latest project is perhaps novel in how ambitiously it bundles together development aid and corporate investment opportunities.


read more at http://blogs.euobserver.com/jacobs/2013/06/11/the-g8s-great-land-grab/

Vanderbilt University Divests from “Land Grab” in Africa
— 

Vanderbilt University Divests from “Land Grab” in Africa | oaklandinstitute.org

Vanderbilt University has taken steps to withdraw its $26 million investment in EMVest, formerly Emergent Asset Management, an agricultural corporation with farms in five sub-Saharan African countries, including Mozambique, South Africa, Swaziland, Zambia, and Zimbabwe and whose investors included Harvard University. EMVest was accused of “land grabbing,” or taking over agricultural land used by local communities through exploitative practices and using it for large-scale commercial export farming, by the Oakland Institute, a policy think-tank based in Oakland, California, in a June 2011 report publicized in the Guardian (UK). This historic divestment marks the first full divestment made by Vanderbilt in response to student pressure, a first in university history after its refusal to fully divest itself of funds operating in Apartheid-era South Africa.

Through its investment of tens of millions of dollars, Vanderbilt was one of the major investors in EMVest’s agricultural operations. The Oakland Institute’s report, based on firsthand field research and interviews and documents obtained from Emergent Asset Management itself, showed that villagers at one of the farms directly operated by EMVest did not consent to the land transfer or receive any legal written notice of the transfer from the community to the corporation, as well as that villagers were having more difficulty feeding themselves since the large-scale agriculture venture had taken over their lands and farms. The Mozambican farmers organization UNAC also reported that the people working for EMVest had issues with the payment of their wages. Furthermore, the Oakland Institute reported that contrary to promises of job development, EMVest created very few jobs, which were seasonal and low-paid in nature.

Following these allegations, students at Vanderbilt met with university administrators. Administrators refused to seriously discuss the matter with students, stating that  it was not “appropriate” for students to be concerned with endowment issues. Students then organized demonstrations, including a sit-in at the main administration building on February 8, 2012. The student pressure for reform culminated in a nearly two-month long “tent city” in front of the administration building from March to May 2012.

An anonymous source in the Vanderbilt administration reports that university officials internally discussed the fact that the university has terminated its investment contract with EMVest and withdrawn all invested funds. However, the university has not publicly acknowledged its divestment. “Vanderbilt’s divestment from Emergent Asset Management/Emvest is a testimony to the power of informed students who, despite the lies and stall tactics of the administration, have prevailed. Their leadership is an example to all that educational institutions, pension funds, and other investors who see smallholder farmers as dispensable and feel entitled to profit from the theft of developing countries’ resources can be stopped by the power of truth,” said Anuradha Mittal, the Executive Director of the Oakland Institute.

Vanderbilt University has a $3.4 billion endowment, the 23rd largest of any university in the United States. Its divestment from EMVest marks the second time that the university has taken action in recent history in response to student concerns about investment ethics. The previous case involved HEI Hotels and Resorts, a private equity company that faced unfair labor practice charges, fines, and legal action for violations of labor law; Matthew Wright, the outgoing investment officer at Vanderbilt, made a written statement in January 2012, after students pressed administrators over the issue, that the university had no plans to reinvest in HEI.

"We are glad that Vanderbilt has done the right thing in this case and we hope that Vanderbilt will include students and other community stakeholders in further considerations of the ethical investment of our university’s endowment," said senior Ben Wibking.

###

The Vanderbilt Responsible Endowment Campaign was started in February 2012 in order to end investments in ‘land grabs’ and bring Vanderbilt University’s investments in line with its stated values of honesty, accountability, and caring. Vanderbilt Students of Nonviolence, founded in 2007, is dedicated to social justice through raising consciousness, organizing our community, and developing a sustained activist infrastructure capable of responding to injustice on Vanderbilt’s campus and in the greater Nashville community.

The Responsible Endowments Coalition works to build and unify the college and university-based responsible investment movement, both by educating and empowering a diverse network of individuals to act on their campuses, and by fostering a national network for collective action. www.endowmentethics.org

For questions regarding the Oakland Institute’s research, contact:

Anuradha Mittal, Executive Director, The Oakland Institute

amittal@oaklandinstitute.org / (510) 469-5228

The Oakland Institute is an independent policy think tank, bringing fresh ideas and bold action to the most pressing social, economic, and environmental issues of our time. www.oaklandinstitute.org

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