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Hunger Grains: Are EU Policies undermining Progress on Development?

Submitted by on 25 Nov 2013 – 12:35

By Dr Duncan Green, Oxfam GB’s Senior Strategic Adviser

In recent years, there has been much to celebrate in terms of the role of agriculture in development. An intellectual turning of the tide has recognised that improving small farmer production is often the most effective way to turn growth into poverty reduction, and more research brainpower has been invested in how to ensure that farming lifts people out of poverty (rather than traps them in it). A useful synthesis of a recent Oxfam-hosted online debate can be found on Oxfam’s website at http://policy-practice.oxfam.org.uk/publications/the-future-of-agriculture-synthesis-of-an-online-debate-296522.

That intellectual shift has been mirrored in public policy, with initiatives such as the Comprehensive Africa Agriculture Development Programme (CAADP), and aid from traditional donors rising from $2.3 in 2002 to $5.3bn in 2011 (and that does not include a rising amount of agricultural aid from new donors like China and Brazil).

But another aspect of public policy is proving much more problematic, and this is the lack of coherence between this renewed focus on agriculture, and some misguided economic policies in more powerful economies, especially in Europe and North America. Two examples stand out: land grabs and biofuels.

Land grabs, more neutrally known as ‘large scale land acquisitions’ (or at least those that go wrong), are big business. ‘Buy land. They’re not making it any more,’ joked Mark Twain, and around the world, a lot of investors are taking his advice to heart. In the past decade an area the size of Italy has been sold off (33m hectares from 2000-2013). More than 30 per cent of Liberia’s land has been handed out.

That might be a good thing if the investment went to small farmers, and boosted food production. Oxfam estimates this land could feed a billion people, equivalent to the number of people who go to bed hungry each night. But currently, that is not happening. From around the world come stories of small farmers being expelled, often at dead of night, to make way for foreign investors in what are often decidedly dodgy deals: land grabs and bad governance go hand in hand.

Instead of food, land is either left idle as a speculative investment (a particularly criminal waste), or, in two thirds of cases, turned over to export crops.

The growing evidence and some effective campaigning have overcome initial denials of the problem. In April, World Bank president Dr Jim Yong Kim acknowledged that “The World Bank Group shares concerns about the risks associated with large-scale land acquisitions”. In June, the G8 followed suit with the Lough Erne declaration, saying “land transactions should be transparent, respecting the property rights of local communities”.

But such good intentions face significant obstacles. A new era of high food prices has pushed up land values. That means big returns for speculators, and money talks, in politics as well as in economics. But so do public protest, champions inside the corridors of power and clear research evidence of the negative impacts of the land grab tsunami. With so much at stake, the struggle for land is likely to be a hot issue for the foreseeable future.

Closely linked to land grabs is biofuel policy. In 2009 EU governments agreed that by 2020 all ground transport fuel sold in the EU would contain about 10% biofuel. That prompted a surge in investment, much of it via land grabs: new data from ActionAid show that in sub-Saharan Africa six million hectares of land are now under the control of European companies planning to cash in on the policy windfall.

But as evidence piles up, it is becoming increasingly clear that what may have started as a well-intentioned policy to try to make our transport fuels greener has turned out to be disastrous for global hunger. By 2020, EU biofuel targets could push up the price of vegetable oils by up to 36%, maize by 22%, wheat by 13% and oilseeds by up to 20%. It also turns out that many biofuels are harmful to the environment – leading to deforestation and greenhouse gas release.

As with land grabs, there is some recognition of the need for reform, but progress is slow. In October last year, the European Commission proposed amending the EU’s Renewable Energy Directive by introducing a 5% limit for counting food crop-based biofuels towards the 10% renewable energy target, improving sustainability criteria and promoting the use of advanced biofuels. In July, the European Parliament’s Environment Committee (ENVI) adopted a report proposing to limit the share of biofuels made from food crops to 5.5% of the EU’s energy demand in transport by 2020. In September, the European Parliament will take its final vote, triggering negotiations with the 28 European governments on a final deal on the reform of Europe’s biofuels policy.

These are timid steps that fail to measure up to the scale of the problem. Using food for fuel should no longer be an option. The EU should ensure that the use of food crops to produce fuel is completely phased out by 2020. But with the vested interests in the biofuels industry pouring their resources into a major lobbying effort, support for reform by the EU’s member states hangs in the balance. Not for the first time this is a straight fight between special interests in Europe and the rights of millions in developing countries, but it’s also worth noting that food multinationals like Unilever and Nestle have joined the protests. In the coming months, European leaders will show which side they are on.

Duncan Green is Oxfam GB’s Senior Strategic Adviser and author of a daily blog on development, From Poverty to Power.