Farmland grabbing in the EU A call to reform European land governance

1. Farmland grabbing in the EU A call to reform European land governance Sylvia Kay and Jonathan Peuch Transnational Institute Presentation for the Committee on Agriculture and Rural Development

2. Structure of the Presentation • Farmland grabbing in the EU • Key drivers of farmland grabbing in the EU • The state of the land in Europe today • Reforming European land governance: options for change Presentation for the Committee on Agriculture and Rural Development

3. 1. Farmland grabbing in the EU A. Methodological challenges • Contested definitions of ‘land grabbing’ • Lack of transparency and other data-gathering issues around land deals • An excessive focus on the ‘foreignisation’ of land • An assumption that Europe is situated outside of the ‘global land grab’ B. In the context of the study, land grabbing is associated with land deals which: • Are out of standard European proportions • Involve the capturing of decision-making power over land • Imply an “extra-economic” force • Represent a deep rupture with the European model of family farming and the structural goal of a diversified and multifunctional agricultural system. Presentation for the Committee on Agriculture and Rural Development

4. C. Preliminary findings: • The Land Matrix database has recorded large-scale land deals involving foreign capital in the EU totaling 166,359 ha as of March 2015. This is however likely to be a vast underestimation. • Supplementary evidence from the Factor Markets research series and the 13 country case studies collected in the book published by TNI for the “Hands Off the Land” alliance indicates that significant tracts of land, beyond those recorded in official databases, are controlled by foreign investors e.g. through ‘pocket contracts’ in Hungary and ‘dummy buyers’ in Poland. Presentation for the Committee on Agriculture and Rural Development

5. Farmland grabbing in the EU is uneven and is particularly, though not exclusively, concentrated in Eastern European MS. • Many of these deals involve new sets of actors e.g. from the financial sector as well as a rising class of “land deal brokers” such as the ‘arendatori’ in Bulgaria. • The new deals may involve the construction of large agro-holdings, some of them of an unprecedented scale. • In global terms, farmland grabbing in the EU is a limited but creeping phenomenon, particularly as it may interact with land grabs skirting the EU‘s borders. • There is also a danger that farmland grabbing will lock forces with ongoing process of land concentration in the EU. This suggests that the ongoing (generic) trend of farmland concentration is just as problematic and deserving of policy attention as farmland grabbing. C. Preliminary findings: Presentation for the Committee on Agriculture and Rural Development

6. 2. Key drivers of farmland grabbing in the EU • Common Agricultural Policy (CAP) • The CAP has an important effect on the EU land structure because land is one factor of production of the agricultural sector. • The distribution of direct payments, before the last reform, has encouraged the concentration of subsidies and of lands. Presentation for the Committee on Agriculture and Rural Development

7. Variation between 2003-2005 and 2005-2010, in % of farm size class Source: Agrosynergie (2013) • The CAP has created a dualistic model of farming: smaller farms exit the market whilst larger farms grow. • In general, it has encouraged an industrial model of farming which, in key aspects, weakens the socio-economic sustainability and bio-material foundations of EU agriculture and the rural sector as well as possible resistance to processes of farmland grabbing. Presentation for the Committee on Agriculture and Rural Development

8. B. The commodification of lands through the internal market • The internal market is based on the principle of free movement of goods, services, persons and capital. • It aims at removing restrictions on economic transactions, including land transactions. • Land is considered by the ECJ as an immobile good which requires the free movement of capital to be bought and sold. • The allocation of resources is thus supposed to be optimal. Presentation for the Committee on Agriculture and Rural Development

9. 3. The state of the land in Europe today Presentation for the Committee on Agriculture and Rural Development

10. A model which poses latent, if not direct, threats: • Fragility of large, corporate agricultural enterprises • Increasing financialisation of European agriculture • Problems of ‘entry denial’; loss of employment opportunities and economic vitality in rural areas; soil erosion, land and resource degradation as well as loss of biodiversity. • Erosion of European food sovereignty Europe without defences: • No early warning system in place e.g. a European Land Observatory • Still limited and underdeveloped restrictions to the principle of the free movement of capital. Presentation for the Committee on Agriculture and Rural Development

11. 4. Reforming European land governance: options for change • Using the Tenure Guidelines (TGs) in Europe . • The Tenure Guidelines are the first international legal instrument to apply a human rights based approach to the governance of tenure. • The EU has approved the TGs, it must now implement them, also at home. This can be done e.g. through an EC Recommendation on Land, to be implemented by MS through a series of EU Directives based on the four horizontal frameworks through which the EC can act depending on how land is considered: as farmland (CAP), as an economic asset (Internal Market), a living space (Territorial Cohesion) or an environmental public good (Land as a Resource). Presentation for the Committee on Agriculture and Rural Development

12. B. CAP: A best-case scenario Presentation for the Committee on Agriculture and Rural Development

13. C. Restrictions to the principle of the free movement of capital • A land market based only on the four freedoms is not comprehensive enough to tackle the risk of discrimination and marginalisation related to farmland grabbing. • We recommend allowing MS to regulate farmland investments, and call on the ECJ to show greater flexibility in its interpretation of national measures that can be undertaken to restrict the free movement of capital according to justifiable political objectives. • A number of MS have already adopted a number of positive measures in this direction e.g. ‘SAFER’ system in France. • The EC has also recognised that (farm)land is much more than just a commodity/factor of production through its Territorial Cohesion policy and the ongoing Land as a Resource process. • All these elements should be further developed and strengthened to stop farmland grabbing in the EU and to realise the democratic, sustainable and smart land governance that European farmers and citizens deserve. Presentation for the Committee on Agriculture and Rural Development

14. Thank you! Transnational Institute (TNI) www.tni.org Presentation for the Committee on Agriculture and Rural Development