Saturday, July 11, 2015

The European Land-Grab

Called land grabbing, the steady concentration of land and its profits into the hands of an ever decreasing number of land owners is a growing problem in the European Union (EU). In 2010, the top 3% of farms controlled a half of the EU's Usable Agricultural Area (UAA), while 80% of farms, all with fewer than 10 hectares of land, were in control of only 12% in 2012.

A recent report from the Transnational Institute: 'Extent of Farmland Grabbing in the EU' is a sharp critique of unregulated capitalism and the growing monopolisation of arable land by large, corporate agricultural enterprises. The report suggest that this process reflects a more general shift towards an agricultural sector that is increasingly driven by markets and capital: little wonder then that inequality rears its uglyhead.

Europe is still a continent whose model of farming is based on small, family enterprises: 84% of farms rely on the use of family labour, and farms of fewer than 2 hectares of land comprised nearly half (49%) of agricultural holdings in 2012. However in a 30 year period more than half the farming population of the original six countries of the European Economic Community have disappeared, from 10.4 million in 1960 to 4.8 million in 1990. This trend has continued and in the past eight years alone, around three million farms (20% of the total) have been lost in the EU. Small and family-run businesses, often one and the same, are being squeezed out of the market at an alarming rate, along with young and aspiring farmers - and the process is more often than not reversible. In their place, farms of a size never before seen and employing comparatively fewer workers are cropping up across Europe, with the greatest concentration in Eastern European countries. The biggest farm to be found in Romania, run by the Lebanese-owned Maria Group, stretches across 65,000 hectares.

The effect of the entry into the market of these large agri-business corporations is to drive down farmgate prices. For many small farmers the reality of ever-decreasing returns renders their business model untenable, forcing them to close down production and sell up. It is fundamentally altering how land is used and for what purposes. Larger, corporate agricultural enterprises tend to favour a more industrial way of farming - one based on monocultures, the intensive use of agro-chemicals and a greater reliance on preventive medicines. Not only do such practices have worrying implications for biodiversity, ecosystems and animal welfare, they also compromise the richness and variety that has until now characterised European food cultures.

The cultivation of produce that can be used for multiple purposes including food, feed and fuel is also a deep concern for food production in the EU. The end use of these "flex crops" is ultimately determined by their stock market value and the profits that they generate and their mass production is edging smaller and organic farmers out of the landscape. The reasons behind this drastic restructuring of European farming are complex and numerous, however it is possible to point to several major push factors. First, a new generation of investors not traditionally involved in the agricultural sector - including individual traders, investment funds and private equity companies - are finding that the relatively cheap land in Eastern European countries is an increasingly attractive and lucrative prospect. Lucrative because speculators are no longer bound by rules dictating what land can and cannot be used for. In a process known as 'artificialisation', prime agricultural land can be bought and converted quickly to urban sprawl, real estate, tourist sites and other commercial projects, where there is big money to be made. Traders can typically multiply their returns by one hundred when re-selling land converted in this way, a process that is causing France to haemorrhage more than 60,000 hectares of mostly fertile farmland per year.

The Common Agricultural Policy, or CAP, was established in the early 1950s and 1960s as Europe emerged from a prolonged period of food shortages. The CAP's intended purpose in its current incarnation is to guarantee viable food production, to encourage the sustainable management of natural resources and stimulate climate action and to develop the balanced development of land. However throughout its history the CAP has been marred by conflicts of interest and controversy: its most recent version (2014-20) is no different. A main pillar of the CAP aims to boost the viability, productivity, competitiveness and sustainability of EU agriculture by providing subsidies, or Direct Payments, to EU farmers. Decoupling of production from payments, which are now linked to the amount of land possessed, was a necessary and welcome step as it discouraged farmers from producing ever more food for almost unlimited subsidies - a provision that historically led to infamous mountains of butter or lakes of milk. It has, however, distorted the distribution of direct payments - allowing the top 1% of agricultural businesses to benefit disproportionately from the CAP. In Italy, 0.8% of beneficiaries took home a huge 26.3% of the country's Direct Payments.

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