Land ownership problems are mostly local issues

With the issue of land grabbing catching the public’s attention recently, action should be taken to enable farmers to prosper as land ownership changes.

The focus of the land ownership debate should not be a racial issue against foreigners or strangers taking over local properties; it should be seen as a challenge on how to strengthen farmers’ bargaining power and improving coordination to ensure good land governance that benefits whole communities. 

The claim that foreigners had control over a vast amount of land in Thailand made the headlines here last month when Ombudsman Siracha Charoenpanij asserted during a seminar that foreigners owned up to a third of land in Thailand, via nominees or by exploiting loopholes in the land ownership law.

Most of the land in question is in coastal areas and used for property development. But there are also a number of land plots used for agriculture that are reportedly owned by foreign investors. 

Other Southeast Asian countries face similar questions. Investors have entered developing countries such as Cambodia, Laos and Thailand to invest in agricultural commodities and contract farming, due to the rising demand for farm produce worldwide, coupled with the supportive demography in the region.

Land grabbing comes with large-scale investment and the global goal to secure food supplies. Big foreign investors have previously focused on acquiring land in Africa for agri-business ventures. The Southeast Asian region has now become a new centre in the rush for agricultural land. 

According to an International Institute for the Environment and Development (IIED) report, between 2000 and 2010, foreign direct investment grew more than five-fold in Cambodia, from US$149 million to $783million. Neighbouring Laos saw even bigger growth – from $31 million in 2000 to $350 million in 2010.

Only a fraction of this money is aimed at agriculture, but investment in that sector has also seen rapid growth. Investment flowing to agriculture, forestry and fishing across the region increased by 66 per cent between 2000 and 2005, according to the IIED.

The rising demand for commodities that serve various purposes has propelled the investment in agriculture. The IIED notes that there are reports of substantial joint ventures for biofuel in the pipeline in the Philippines. In a number of countries, China is among the top three investors. China accounts for half of all foreign investment in agriculture in Laos, and Chinese nationals account for about half of all foreign-owned land concessions in Cambodia. Thai companies have also spread out their investments in agricultural commodities to Cambodia and Laos.

The regional agri-business sector is booming in line with the rising global demand for food and crop-derived commodities. This is a surging new business environment that cannot now be turned around as countries become more closely connected and populations increase at a dramatic rate. However, companies investing abroad are sometimes poorly regulated and badly governed, and their operations directly affect the livelihood of the communities they are investing in.

But this is not to suggest that all, or any, local authorities are racially prejudiced. It is almost impossible to resist the trend of foreign investment in agriculture and the rewards it can bring. But the challenge is how to ensure that local people also prosper in a sustainable manner.  Agricultural models need to be based on local people’s interests. Farming methods should not lead to the destruction of the environment. Local people should be given the opportunity to hold shares in local property in order to create a real sense of ownership. Local food security must not be undermined. Local farmers must be clearly informed of the farming methods and their consequences.

Meanwhile, land reform in Thailand must be accelerated to ensure fairness for the original owners of land and property. The ancestral lands of indigenous peoples must be recognised. Otherwise, investors will continue to exploit loopholes in the law to claim ownership of such lands. 

It is not only foreign investors who can pose a threat to farmers and local communities; there are plenty of selfish Thai investors who do not have good governance, economic and environmental sustainabilty or fairness in mind.