Since 2008 there has been a rapid increase in the level of Foreign Direct Investment (FDI) in agricultural land in Sub Saharan Africa and South East Asia. In 2008-2009 land acquisitions were estimated to be approximately 56 million hectares, 70-75% of which were in Africa (although it is likely that many leases are still pending or not yet executed). Large scale land acquisitions are primarily for agricultural development (circa 80%). The remaining 20% are dominated by extractives and infrastructure. Both agricultural development and extractives are potentially water intensive and water-polluting but high-quality research and understanding of these impacts is limited.
Analysis of the location of land acquisitions for the purposes of agricultural development and the types of crops that are grown strongly suggest that access to water is a primary rationale for acquiring land. The land is predominantly located close to access to blue water resources, which suggests an intention to irrigate the land. The UK, the US and China have acquired the most land but the picture in terms of water resources is different, with the US, the United Arab Emirates and India having acquired the most. However, data on the amount of water appropriated under land deals is highly uncertain and disputed more than data on the area of land acquired.
Despite this evidence, consideration of water in current debates on the impact of foreign investment in agricultural land has been peripheral and international guidelines and principles that seek to prevent damaging land acquisitions have not, until very recently, dealt with the risks land acquisitions pose to existing water resources and the risk water resources (or their scarcity) poses to successful investments in land.
Quick, T.; Woodhouse, P. The impact of large scale land acquisitions on water resources &#8211; a background note. Evidence on Demand, UK (2014) 20 pp. [DOI: 10.12774/eod_hd.october2014.quicketal]