No, they don’t. But can large-scale land acquisitions?

“…we cannot rely on public resources alone, and as such, must leverage responsible investment by the private sector. When property rights systems are strong, large investments can be done in ways that benefit smallholder farmers.” ~Gregory Myers, Chief of the USAID’s land tenure and property rights Division

These days being accused of land grabbing is like being accused of corruption – never a good thing. We’ve built a lot global awareness on the issue over the last few years, thanks to the hard work of organizations around the world, large and small, especially those on the front lines whose lives and livelihoods have been disrupted (or worse) as a result.

But as USAID and others have increasingly been promoting large-scale private sector investment in agriculture, the question arises: can private investors who acquire large tracts of land, but invest responsibly, help improve food security?

Oxfam set out to find a good example of large-scale land acquisition and so we went to Paraguay, one of the poorest countries in South America whose economy relies on agriculture. Paraguay is in the grip of a soy boom, becoming the world’s fourth largest exporter. Soybean monoculture now covers 80 percent of the country’s cropland – nearly double that of a decade ago, with projections for further expansion. This has further exacerbated the concentration of land in Paraguay, where land distribution is more unequal than anywhere in the region.

To see if small-scale farmers could reap some benefit from large-scale investment in soy expansion, Oxfam commissioned research in Paraguay on land and soy. We focused on one company, Desarrollo Agrícola del Paraguay (DAP), which was reported to be making efforts to benefit small-scale farmers. The research, entitled The Soy Mirage, found that DAP had taken a different approach than most soy producers, including initiatives to avoid harm to communities and help small-scale farmers. But DAP’s good efforts could not compensate for the problems caused by the soy business model which tends to:

• deepen the concentration of wealth and land,
• contaminate the surroundings,
• harm the health of the local population,
• compete for limited resources, and
• put at risk the traditional livelihoods of small-scale farmers and indigenous communities.

Soy production is highly dependent on expensive external inputs like pesticides and capital for mechanization, and thus is not a viable option for small-scale farmers in Paraguay. They don’t have access to credit or the minimum land area to achieve the scale needed for mechanized production. DAP invested to give small-scale farmers a leg up to get started, but farmers assumed all the risk and lacked capital, so they found themselves mired in debt after one bad harvest.

Even DAP itself has now concluded that organic production would be the best alternative for family farmers, because it doesn’t rely on external inputs. Yet there is no evidence that Paraguay’s dominant production model will turn organic any time soon. In fact, 95 percent of soy cultivated in Paraguay is genetically-modified “Roundup Ready,” making it challenging to produce organically.

Oxfam’s research revealed reports of serious health problems resulting from the intensive use of agrochemicals required by Roundup Ready soy (including some banned in Europe), estimated at 30 million liters per soy crop cycle. These health problems range from respiratory conditions, allergies, and cancer, to the death of small livestock and worsening pest infestations. The Paraguayan government has weakened legislation regulating agrochemical use due to pressure from the soy industry. Civil servants have lamented their inability to address the health and environmental problems that result.

Small-scale farmers in Paraguay face huge challenges and injustices linked to our broken global food system. Two models of production coexist uncomfortably in Paraguayan agriculture: the small-scale family farm that mostly produces food, and large-scale monoculture for export to meet international demand for meat and biofuels. Public policy is biased toward the latter, helping to spur investors to buy up large tracts of land to expand soy monoculture, displacing cattle ranches and small-scale farmers.

The cold truth is that soy expansion has been a curse rather than a blessing for small farmers in Paraguay. As Mr. Myers of USAID says, “…more investment will be needed to ensure that all people achieve food security.” Certainly, both public and private sector investment must be part of the solution. But there is no evidence that large-scale land investments, even if done “responsibly,” can benefit small farmers and food security. At least not in Paraguay.