1308 - 1307 The Role of European Development Finance Institutions in Land Grabs

Large-scale land transactions have increased dramatically recently in developing countries and, in particular, Africa: about 80 million hectares of farmland has already been transferred to foreign investors. Aprodev found that European Development Finance Institutions (DFIs) are involved in land grabs and that there is a significant risk that they will be involved in such deals in the future.

The Aprodev report analyses the involvement of nine European DFIs in land grabbing, such DFIs are usually majority owned by national governments. The nine surveyed DFIs invest in agriculture through equity investment in companies and agricultural funds. They have several clients in the agribusiness, representing each aspect of the chain and investment totals over 1 billion euro.

The Aprodev report concludes “Some of the European DFIs are involved in projects which either have been shown to involve, or strongly appear to involve, land grabs where there have been adverse impacts on local populations.” It then gives examples of six concrete cases, mainly involving land grabs in Mozambique and Tanzania (one case in Sierra Leone).

In addition, European DFIs also fund projects for which little information is available and which risk amounting to land grabbing. Aprodev calls on European DFIs to establish sufficient guidelines. The organisation also believes that investments in smallholder family farmers are better tools to enhance productivity in African agriculture.

Source: Aprodev