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Land ‘Grabs’ Expand To Europe As Big Business Blocks Entry To Farming
Land rights not just issue for developing world as report shows public subsidies help a few firms ‘grab’ vast tracts of EU land John Vidal guardian.co.uk , Wednesday 17 April 2013 17.19 BST Farmers harvest grain in Chernigov. In Ukraine, 10 giant agro-holdings now control about 2.8m hectares. Photograph: Genia Savilov/AFP/Getty Images Vast tracts of land in Europe are being “grabbed” by large companies, speculators, wealthy foreign buyers and pension funds in a similar way to in developing countries, according to a major new report . Chinese corporations, Middle Eastern sovereign wealth and hedge funds, as well as Russian oligarchs and giant agribusiness have all stepped up land acquisitions in the past decade in a process that the report says is preventing ordinary people farming, and concentrating agriculture and land wealth in few hands. According to research by the Transnational Institute , Via Campesina and others, half of all farmland in the EU is now concentrated in the 3% of large farms that are more than 100 hectares (247 acres) in size. In some EU countries, land ownership is as unequal as it is in Brazil, Colombia and the Philippines. Although peasant farmers and smallholders have been moving off the land for decades, speculators and commodity crop farmers are taking over vast tracts of land, says the 200-page report. This is seen widely in former Soviet states, say the 25 authors in 11 countries. In Ukraine, 10 giant agro-holdings now control about 2.8m hectares. One oligarch alone controls more than 500,000 hectares. Chinese companies have moved into Bulgaria on a large scale and Middle Eastern companies are now major producers in Romania. The concentration of land ownership is speeding up. In Germany, 1.2m land holdings in 1966-67 shrank to just 299,100 farms by 2010. Of these, the land area covered by farms of less than two hectares shrank from 123,670 hectares in 1990 to just 20,110 in 2007. In Italy, 33,000 farms now cover 11m hectares, and in France more than 60,000 hectares of agricultural land are lost each year to make space for roads, supermarkets and urban growth. In Andalusia, Spain, the number of farms has dropped by more than two-thirds to under 1m in 2007. In 2010, 2% of landowners owned half of the land. None of the new research was done in Britain, which has some of the highest concentrations of land ownership anywhere in the world, with 70% of land reportedly owned by less than 1% of the population . “This is an unprecedented dynamic of land concentration and creeping land grabbing. It has worsened the existing situation where many young people want to stay in or take up farming but cannot maintain or gain access to land,” said Professor Dr Jan Douwe van der Ploeg of Wageningen University, a member of the research team. The authors argue that the “land grab” has been fuelled by the common agricultural policy (CAP), which distributes one-third of all EU subsidies to farmers each year, but the funds have been captured by large-scale farmers. “In Italy in 2011, 0.29% of farms accessed 18% of total CAP incentives, and 0.0001 of these, or 150 farms, cornered 6% of all subsidies. In Spain, 75% of all the subsidies were taken by just 16% of the largest farmers. In Hungary in 2009, 8.6% of farms cornered 72% of all agricultural subsidies,” said Van der Ploeg. “The three most pressing land issues in Europe today are land concentration, land grabbing and inability of young people to maintain or gain access to land to enter sustainable farming – interlinked, triangular land issues quite similar to the ones we see in Africa, Latin America and Asia today.” The report suggests that, as in many developing countries, there is strong opposition to land “grabbing” in Europe. There have been reports of communities occupying land. In Andalusia, landless farmers are occupying land collectively and cultivating it. In Vienna, young people are squatting on fertile urban land. “Land needs to be seen again as a public good. We must reduce the commodification of land and instead promote public management of this common resource on which we all depend,” said Jeanne Verlinden of the European Co-ordination Via Campesina. “Priority should be given to the use of land for smallholder and peasant agriculture and food production, rather than handing over land to those private property commercial interests.” Continue reading
Thai Stocks Worth A Look, But Be Cautious
Tue Apr 16, 2013 3:24pm EDT (The author is a Reuters columnist and the opinions expressed are his own. For more from John Wasik see link.reuters.com/syk97s ) By John Wasik (Reuters) – Most emerging market talk focuses on BRICS – Brazil , Russia , India, China and South Africa – or maybe even TIMPs – Turkey , Indonesia, Mexico and the Philippines. But one sizzling emerging market that has not been adopted into an investing acronym is Thailand . Thailand has been growing rapidly relative to sluggish Western economies. Like its Southeast Asian cousins Indonesia , Singapore and Vietnam, Thailand has a relatively young population and a growing middle class, and it is building infrastructure along with a commodities trade. Thailand has had its political problems, including a coup, in recent years, but now it is focused on an export economy, driven by demand from China and India. Global investors are attracted to the country’s cornucopia of natural resources such as alumina, cocoa, gas, oil and sugar. Some 60 percent of the Thai gross domestic product is export-driven, which also consists of autos, rice and electronics. Thailand’s GDP rose by almost 20 percent in the fourth quarter of 2012 over that same period the year before, bringing growth for the full year to 6.4 percent, according to the Bank of Thailand , which on Friday raised its projected estimate of this year’s growth to 5.1 percent from 4.9 percent. Domestically, the Thai government is applying a Keynesian stimulus to the economy through large infrastructure projects, paying above-market prices to farmers and raising the minimum wage, according to Patricia Oey, an analyst for Morningstar . The country is a major agricultural supplier and manufacturer for the world’s most populous region. It’s not well known to most individual investors that Thailand has had one of the best-performing stock markets in the world during the past decade. Two closed-end funds that invest in Thailand offer the opportunity to get in on that growth: Thai Fund Inc and Thai Capital Fund. But I don’t recommend them because of their high annual expenses of 1.46 percent and 2.1 percent, respectively. Only one exchange-traded fund concentrates exclusively on Thailand: the iShares MSCI Thailand Capped Investible Market ETF, which has returned an annualized 27 percent in the three years through April 15. That compares to 5 percent for an Asia-Pacific (ex- Japan ) index. The fund’s annual expense ratio is 0.60 percent of assets. Some of the fund’s gains have been extraordinary: 81 percent in 2009, 57 percent in 2010 and 40 percent last year. It lost 4 percent in 2011, a sour year in general for U.S. stocks as well. That compares to a roughly 5 percent annualized gain during the past five years for the SPDR S&P 500 fund – an ETF representing the largest U.S. companies – and almost an 8 percent annualized gain over the decade through April 15. As a mostly passive vehicle tracking an index of Thai companies, the iShares fund employs a method for capturing 99 percent of the total value of the Thai stock market. The 90 stocks within the index include banks such as Siam Commercial Bank PCL, technology companies like Advanced Info Service PCL and energy companies such as PTT Exploration and Production PCL. While the fund is probably the most diversified and least expensive way to invest in Thailand, it has drawbacks. For one thing, investors have been pouring money into it. It has gone from $600 million in assets in November to more than $1 billion, says Todd Rosenbluth, director of ETF fund research for S&P Capital IQ in New York. That means you run the risk of picking a market that’s already too hot. The fund is also top-heavy in financial services stocks, representing some 40 percent of the portfolio. Overconcentration in any one sector always elevates portfolio risk. Indeed, the fund is so volatile that it has double the risk of the Standard & Poor’s 500-stock index – not unusual for a developing market but a consideration when you are making your investment choices. For instance, the fund may decline if China’s growth eases because all commodities producers will see lower demand for their output. Any reverberations will also sting. Remember the “Asian contagion” some 20 years ago? That sank Asian currencies – including the Thai baht – and stocks in short order, burning myriad investors. Beyond just volatility, there’s diversification to consider. It’s best to invest in a country like Thailand as part of a larger investment in all emerging markets, since any market can quickly turn south in today’s hyper-connected world. (Follow us @ReutersMoney or here Editing by Beth Pinsker, Lauren Young and Douglas Royalty) Continue reading
Northern Agricultural Dream Would Turn Into An Expensive Nightmare
LYNDON SCHNEIDERS From: The Australian April 17, 2013 THE rapidly growing Asian middle class provides the Australian agricultural sector with an opportunity for new markets, but these opportunities will be illusionary unless we get smart about how to improve the sustainability and productivity of Australian agriculture. The existing agricultural sector is in decline and in need of a massive dose of investment and innovation. This should be the real priority in the race to revive the sector and build new, lucrative markets. Yet once again too many otherwise intelligent people are talking up the prospects of throwing billions of public and private dollars into the money trap that is the northern Australia food-bowl mirage. This will be a mistake of epic proportions and will mean the ongoing neglect of the existing industry. Over the past decade the Australian government has committed $10 billion to return our existing food bowl, the Murray-Darling system, to economic and ecological sustainability. The key to the success of this approach, now enshrined in the Basin Plan, is to use water more effectively and competitively to deliver the highest-yielding and most sustainable products. The scope for improvement is enormous, with a 2008 CSIRO report estimating that up to half of the water used in irrigated farming may be lost from inefficiencies in irrigation systems, on-farm distribution channels and over-watering. The latest Murray-Darling plan may address some of these problems, but there is still much to do. A recent ANZ report said that Australia needed to invest $1 trillion in our existing agricultural sector if we wanted to make the gains in productivity we need to capitalise on Asian markets, $600bn in investment and a further $400bn to support farm turnover, as ageing farmers make way for the next generation, and smaller farms are consolidated for possible sale to foreign interests. Even then this investment may reap as little as $390bn, but as much as $1.7 trillion. These are big figures for possibly questionable returns, so we need to be smart. Agricultural productivity has stagnated in the past decade as farmers have battled drought, ever-mounting debt and a lack of capitalisation in supply chains and infrastructure, especially in relation to our rundown rail networks and port bottlenecks. Fixing our existing food bowls may not be as sexy as jumping in the covered wagon and heading north, but it would be foolhardy of any government to shift its focus to grandiose visions that so far have been monumentally expensive failures. Yet both sides of politics seem once again obsessed by the northern myth. Northern Australia will never be the food bowl of the world, Asia or even Australia. The federal government’s Northern Land and Water Taskforce found that only 60,000ha was suitable for irrigated agriculture — less than the size of some individual farms in Australia. All large-scale irrigation projects in northern Australia have been expensive failures, including Humpty Doo in the Northern Territory and Camballin and the Ord in Western Australia. The Ord scheme was probably the best located. The poster boy for the northern food bowl, the Ord has had more than $1.3bn ploughed into it, yet all attempts at large-scale cropping have failed, including rice, sugar and cotton. The most recent rice crop, hailed far and wide in the late 2000s as the rebirth of the Ord scheme, was destroyed by rice blast, a fungus never found before in Australia and which now threatens every rice crop across the country. Apparently Chinese investment is now going to save the Ord. A few years earlier it was South Korea’s biggest food company, before that the Americans and so the story goes on and on. The cargo cult has a name and that is the northern food bowl. Almost half the Ord is planted with sandalwood for incense and perfume — hardly useful for feeding Asia. Camballin on the Western Australia’s Fitzroy River had 30 years of government and private funding pumped into it, yet its 23,000ha was eventually washed away in floods in 1983, leaving nothing. We shouldn’t attempt to dam any more rivers in northern Australia when we have already had such spectacular failures. Northern Australia has some of the last pristine rivers on the planet and they need to be treasured. The freshwater flowing into northern Australia’s estuaries is critical for biodiversity as well as a commercial fishery worth $232 million. That’s almost four times the economic output of the Ord and there is potential for growth. Why squander such opportunities with high-risk, unproven development models? The Coalition has suggested building 100 dams at a cost of $30bn, yet how realistic is this when the Ord has now cost $1.3bn? Even so, all mega projects in Australia are running late and over budget because of labour shortages and wages. Chevron’s Gorgon gas project blew out by 40 per cent from $37bn to $52bn. Where is this money going to come from when governments are scrambling to find $7bn to finish the long-promised duplication of the Pacific Highway or find $10bn for the West Connex project that may not even reach the Sydney CBD or Port Botany? Businesses are increasingly wary of public-private partnerships. Over the past 25 years $8bn of investment in PPP has gone belly up, including spectacular failures such as Airport Connections in Brisbane. Where would the investment come from for projects in the most remote parts of our country with a proven track record of failure when infrastructure projects in cities of four million people struggle to succeed? The Australian people and our economy deserve better than pie-in-the-sky stuff. We need fiscally responsible development in our proven food bowls if we are going to take part in the Asian century. Fix what we have, don’t bugger up any more. Lyndon Schneiders is national director of the Wilderness Society. Continue reading
