The war in Ukraine could trigger a land investment rush as happened during the 2008 financial crisis

Milan, 24 February 2023– One year after the start of the war in Ukraine, researchers Maria Cristina Rulli of the Politecnico di Milano, Jampel Dell’Angelo of Vrije Universiteit Amsterdam, and Paul D’Odorico of the University of California at Berkeley, publish in the prestigious Science journal an analysis the potential impact of the invasion on agriculture and rural livelihoods in developing countries.

In previous global food supply crises, spikes in food and energy prices were followed by new waves of transnational land investment and land grabbing.

The authors provide a detailed analysis of the factors that have been identified as drivers or precursors of the “land races” occurred in the 21st century – such as the food supply crisis in periods of increased demand for agricultural products, the demand for renewable energy or the need for diversification of financial investments – to draw a parallel with current conditions.

“After 2008, in the aftermath of the global financial and food crisis, there was a notable increase in land investments with large-scale land acquisitions (LSLAs) – explains Maria Cristina Rulli, Professor of Hydrology at the Politecnico di Milano and co-author of the paper – In the last 15 years, LSLAs have been at the centre of a heated debate between those who saw them as an opportunity for rural development and those who instead highlighted their negative social and environmental consequences, such as loss of livelihoods for local communities and environmental damage. The war in Ukraine could stimulate a new global land race that could affect the world’s agricultural system. Our previous studies on this topic have shown that large-scale land acquisitions often target forest land that is subsequently “developed” through logging, leading to habitat destruction, increased greenhouse gas emissions and loss of access to ancestral land by local people who historically relied on these forests for firewood, food or shelter.”

“We argue that the shortage of food supplies from the Black Sea region will have a major impact on rural development. Based on the trends seen since the recent food crises, we expect a new wave of large-scale land acquisitions (LSLAs) resulting in the dispossession of rural communities. These changes will occur through complex and interdependent interactions that will have cascading and long-lasting effects on multiple dimensions of rural development”, said Jampel Dell’Angelo.

Paolo D’Odorico explains that “this study identifies some of the possible responses to the crisis induced by the war and their impact on the global agricultural system, such as, for example, the expansion of agricultural production towards uncultivated land, which could occur at the expense soil conservation programmes and/or nature reserves; agricultural intensification on land acquired by agri-food investors after 2008, which could exacerbate conditions of water scarcity and land degradation; and a new wave of land investment”.

The analysis reflects on the policy implications of the agrarian transition associated with this new wave of land acquisitions, reminding us that the policy frameworks currently in place have historically been ineffective in preventing the previous land rush and its detrimental impacts on livelihoods and the environment.