One of Colombia’s five engines of growth as stipulated by the government is the underdeveloped agricultural sector. But can Colombia develop this sector while maintaining full control over its resources?
Bogota considers the agricultural sector as one of the five engines that will drive the country’s economic development. The agricultural sector is certainly needing bold reforms. After all, there are 21.5 million hectares (53 million acres) of land suitable for agriculture, but only 4,9 million are serving this purpose. This contrasts with 5,8 million hectares dedicated to mining and 31,6 million to livestock.
Nevertheless, there are two main problems that hinder agricultural development. The first concerns land grabs by illegal armed groups. The government estimates land usurped lands by the paramilitaries, guerrillas and other armed groups, or abandoned due to violence to be around 6 million hectares – NGO estimates are much higher. This phenomenon has claimed the livelihood of about 3,4 million people, largely peasants, afro-descendants and indigenous groups, who make up the second largest internally displaced population in the world after (formerly) Sudan.
The second problem concerns land without legal titles. According to the Ministry of Agriculture, of the 3.7 million land properties in the country, 40 percent present land title related problems. This impedes owners from realizing the economic value of the land. For instance, small farmers could borrow money from banks against land titles to acquire machinery and increase efficiency and profitability; lack of titles also restricts the government’s taxes intake; untitled lands increase violent actions by groups seeking to appropriate the land. Thus, land titles are a necessary precursor for peace and economic growth.
These realities contribute to Colombia’s extreme land inequality. According to a report by the United Nations Development Programme, 1.15 percent of Colombia’s population owns 52 percent of the country’s land. This regressive land redistribution has in effect raised Colombia’s Gini coefficient of land inequality to 0.85; with 1 being the most unequal, where one person owns all the land.
Paradoxically these internal problems have to some extent benefited Colombia by hindering the phenomenon of foreign land grab, whereby land is acquired to the detriment of the local population.
According to a report by Oxfam International, as many as 227 million hectares (the size of Western Europe) have been sold, leased or licensed in large-scale land deals since 2001, with most during the last two years. Factors contributing to land grabs are population and economic growth, climate change, water depletion, and biofuel production.
Bogota’s efforts to solve the aforementioned problems, however, may be fomenting potential land grab scenarios. Santos is proposing, as part of his National Plan of Development, to change a law to lease government land that is vacant to big businesses including foreign companies, even though that type of land was legally reserved for landless and poor peasants. The rationale, that it is necessary to import knowledge and resources to more effectively develop this neglected natural resource, may seem at first reasonable, but it creates enormous dangers.
Expertise and economic resources is what foreign governments-linked companies claim to have. This is why on August 2011, China effectively leased 330,000 hectares of land in Argentina on the promise of investing $1.5 billion to recondition the land. With the deal the state-owned company Heilongjiang Beidahuang Group gains exclusive rights to buy the produce over a 20 year period to export to China. Despite heavy public criticism for environmental issues and food sovereignty, the deal was signed, albeit the Argentinian government did introduce a bill to limit the sale of land to foreigners.
The coming years will be noted for China’s interest on securing food sources. This year the government launched a policy specifically supporting, financially and politically, companies in the agriculture business. This is reminiscent to the successful “going-out policy” implemented in 2003 that supported companies, most state-owned, to secure natural resources to maintain its rapid development.
It is very important, therefore, that the Colombian government takes actions to sustainably develop Colombia’s agricultural sector, without endangering its sovereign control over this sector. First, prohibit foreigners from buying and leasing vast areas of potential agricultural land. Second, set aside a percentage of the taxes (or increase the very low taxes) received from the booming mining industry to invest in the agriculture sector. Thus, developing this sector for the collective good, rather than allowing a company/government to exploit the land for its self-serving benefit that does not necessarily coincides with Colombia’s interests.
Depending of the government’s policies in the coming months and years, Colombia may potentially move from local farm grabs to foreign land grabs.