Land prices in Africa

India and Brazil recently signed an agreement giving India the opportunity to invest in Brazilian land for the development of energy plantations which should result in a large flow of ethanol and biodiesel feedstock. The news reminded us that we have some comparative data on land prices and energy crops in Africa in our database. We thought the information might be useful for comparative purposes.

But a word of caution first: even though land will become a very valuable resource in the future global bio-economy, the biofuels opportunity can not result in 'land grabs' for a series of very clear reasons:

• virtually all governments in the global South have designed strong policies aimed at land reform. This is a major social issue in the developing world with a lot of political clout, and the trend is towards more social justice and towards land redistribution
• rural communities in the developing world are increasingly becoming aware of the value of their land and of that of publicly owned hectarages; their dealings with outside forces (both the state and the private sector) are now highly organised; both the media and civil society are very active when it comes to the land question
• investing in land means investing in people; investments in land in Africa are absolutely crucial in order to boost agricultural production, and governments in the South now generally welcome foreign investments because they bring badly needed expertise and capital; but at the same time the law and civil society is now strong enough to remind the private sector of its obligations towards the communities they are working with
• virtually all governments in the South have clear mechanisms to combat land speculation
  
• more fundamentally, all social sustainability studies analysing large-scale agricultural projects (or any other activity in the 'extractive industries') clearly indicate that only mutually beneficial relations between small landholders/local communities and the private sector withstand the test of time; quick land grabs always result in failure; the creation of such durable and equitable relations is absolutely crucial to the very survival of any company willing to engage in the agricultural sector in the South; the risk of social conflicts arising over land issues is simply too great; companies taking themselves seriously are now well aware of this fact and have experienced first hand that 'social sustainability' is not an empty concept
• the cultural complexities of the local traditions and customary laws surrounding land ownership, land titles, land inheritance and land as a social good, must firmly be understood first by anyone attempting to invest in Africa or anywhere else in the South; land is a 'social construct' first, and only a material and private good second. Those who do not understand this, will experience failure. It would therefor not be unwise to hire a social anthropologist or two to study these deeply rooted local cultural and social constructions and their meanings before any investment is actually made; again the cost of understanding these cultural values is negligeable compared to those potentially resulting from social conflict

Below we present a series of data we compiled, indicating estimated land prices, the total amount of arable land available, the land base per agricapita (hectares), and the most suitable energy crops for the country as a whole, in order of suitability.
It should be stressed that the development of an international index of comparative land costs is something many people demand, but that so far has not been undertaken. Indeed, the literature search undertaken as part of our analysis discovered only one study that has attempted to estimate average land prices in the past. It is on this study - the World Bank Global Approach to Environmental Analyses (GAEA) - that we based the land price estimates. The GAEA study attempts to build on earlier World Bank work that suggested that national land prices would be roughly equal to a multiple of per capita income. Estimates of land value calculated in this way were then adjusted to incorporate broader factors, such as proportions of pasture, cropland, forestland and arid land in the total land area, to arrive at indicative national land prices. In short, the land price data are very rough and only useful for broad comparative purposes. The tables do include data for all Sub-Saharan African countries though:
biomass :: bioenergy :: biofuels :: energy :: social sustainability :: land :: land reform :: plantations :: Africa

It should be noted that the values presented in the tables are likely to bear little relationship to current commercial market prices for land in any particular year. Rather, the values are presented mainly for comparative purposes. Countries shown to have very high land values in GAEA would also be expected to have very high commercial land values. Similarly, countries estimated to have mid-range and low land values in GAEA would also be expected to have lower commercial land values.

The prices below can be compared with those in Northern Europe and the United States, where, on average, one hectare of land approximately costs €22,000 / US$30,000.

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The sources for the data we used to compile our database:
On land availability
- The FAO's TerraStat database.
On land prices
- World Bank: Global approach to environmental analyses (GAEA), World Bank, 1999
- The GAEA data on land prices can also be found here: FAO Forestry Policy and Planning Division, Rome: Christopher Brown, Forestry Officer (Plantations), The global outlook for future wood supply from forest plantations, Chapter III: Rates of return and profitability - Working Paper No: GFPOS/WP/03, February 2000
On energy crops
-The FAO Land and Water Development Division's database of Land Suitability Maps for Rainfed Cropping.
-The Global Agro-Ecological Zones databases on land resources.
-The proprietary interactive and global Biofuels Atlas, under development by a consultancy firm one of our members has access to.