Land Grabbing is not new. Companies from wealthy countries have always sought low-cost land for agricultural production. Today, governments allocate funds to domestic companies that wish to invest in land overseas. Governments did not provide this type of financial support for much of the last century, but are doing so now in manner reminiscent of colonial practices.
In 2007, after the subprime crisis, capital moved to food commodity markets and prices increased. The price rally coincided with a decrease in exports from some food producing countries. Countries that historically have been vulnerable to these fluctuations sought new food security strategies. The Arab states were the first to move, followed closely by others seeking new and profitable business ventures.
The financial risk to the companies involved in Land Grabbing is almost nonexistent. Governments, motivated by food security concerns, allocate the initial funds to be invested overseas. The EU provides funding to other companies that will produce materials overseas that make it possible to comply with EU “green policies” for biofuel production. The World Bank and the IMF also provide companies with funding, and it is possible to purchase insurance against loss that may result from stability issues in the country where the funds are invested.
These land use decisions are made far away from the land itself, and even further from the people whose lives and livelihoods are rooted in the land. To investigate these issues in Ethiopia was a natural choice because it is a country where more than six million people survive because of UN food aid, while it exports agricultural products cultivated on land leased to foreign investors.