Southeast Asia: The Global Land Rush’s Overlooked Ground Zero

by Michael Kugelman on April 24, 2013

Rice fields belonging to local hill tribes in Sapa, Vietnam (UN Photo/Kibae Park - www.unmultimedia.org/photo/)

Last year, over a period of nine months, Cambodian state security forces staged a brutal crackdown against protesting journalists, human rights activists, and monks. Many were harassed, some were jailed, and several were killed. These people were not protesting about politics. Rather, they were rallying against land takeovers by private investors. In Cambodia, a whopping 55 percent of all arable land has been acquired by agribusiness interests, both domestic and foreign.

Over the last few years, international media outlets and civil society have highlighted how private investors and capital-rich national governments are acquiring vast swaths of farmland overseas. Such narratives tend to focus on the frenzied fight for farmland in Africa—from the 1.3 million hectares that a South Korean corporation acquired in a short-lived deal with Madagascar in 2009, to the more recent farming investments of India’s Karuturi Group in the impoverished, conflict-riven state of Gambella in Ethiopia.

This attention is certainly warranted. The majority of land secured in these deals has been in Africa, and six of the ten largest announced deals (including a Brazilian scheme to farm 6 million hectares in Mozambique) are in this region.

Yet the story of Southeast Asia is often forgotten. Here, publicly reported deals encompass nearly 50 million hectares. Cambodia, Indonesia, and the Philippines have attracted particularly strong interest. Perhaps the most notorious example is the Binladen Group’s intention to farm 1.2 million hectares in the ethnic insurgency-ravaged Indonesian province of Papua. China and Hong Kong have pursued separate million-hectares deals in the Philippines. Investors eying this region—most of them hail from China and the Gulf—seek to produce staples like grains, but also cash crops like rubber.

Investors are attracted to Southeast Asia because, like Africa, it boasts ample amounts of arable land and water. They promise host governments a wealth of benefits—not just higher farm yields, better agricultural technologies, and more employment, but also new infrastructure. In efforts to win over governments in the Philippines and Indonesia, international financiers often cast their investments as a counter-terrorism tool. Given the acute need for capital investment in their deeply neglected agricultural sectors, Southeast Asian governments are happy to accommodate these investors.

Unfortunately, Southeast Asian smallholders and local communities—along with their natural environments—have been on the losing side on these deals. In Cambodia, land used previously for food crops and livestock grazing is being cleared without consulting locals—and communities claim they have lost their land without any compensation. In Malaysia, palm oil projects have eliminated 60 percent of a single bird species. Many land deals in Southeast Asia cause deforestation when forestland is cleared to produce biofuels—a particularly troubling development given that the region houses some of the world’s sole remaining rainforests.

Some Southeast Asian states have taken action to address such concerns. Thailand’s government, for example, has drafted legislation that punishes Thais who help foreigners profit from local farmland. In the Philippines, where activism is an old tradition for peasant groups, small farmers have staged protests that compelled China to abort attempts to set up farming schemes. Yet as demonstrated by Cambodia (where more than half the nation’s land has been ceded to agribusiness), other regional governments’ responses are taking a very different direction.

Ultimately, the best policy option is to craft alternatives to large-scale farmland acquisitions—in other words, to implement policies that eliminate the need for Southeast Asian governments to host large-scale farmland investments. One promising development lies in a regional rice reserve. Last year, after a long and protracted negotiation process, member states of the ASEAN regional organization finally agreed to this idea.

The existence of such stocks would help compensate for the insufficient supply now generated by local agriculture, buy time for Southeast Asian governments as they secure the national resources to revitalize their neglected farming sectors, and, in due course, allow the region to manage its own agricultural production without experiencing the deleterious impacts of large-scale, foreign-driven farming projects.

Still, an ASEAN rice reserve is a long way off (and, to be fair, it certainly would not fulfill the entire region’s demand). And so is the day when all of the region’s host governments—many of them corrupt and not accountable to public needs—will crack down on foreigners’ predatory investments, much less outlaw them altogether. In effect, these investments will likely continue in Southeast Asia for the foreseeable future.

In sum, it’s high time to stop referring to farmland deals exclusively as an “African land grab.” It’s an Asian story as well as an African one (and, for that matter, a Latin American one)—a global farms race that won’t be reaching a finish line anytime soon.

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