Land grabbing and share of the value added in agricultural processes. A new look at the distribution of land revenues

By H. Cochet and M. Merlet

This article discusses one aspect of the land grabbing phenomenon that has been little addressed in the past: the economic dimension. The supposed economic efficiency of largescale land investments is yet to be challenged.

During the second half of the 20th century, small-scale family based production systems became the rule on all continents in detriment of large-scale production. However, nowadays, we can witness the rapid development of new institutionalized forms of agricultural production (e.g. contract farming, agribusiness) that are characterized by an increased separation between capital and labour.

Based on a review of case studies from Eastern Europe and Latin America, the authors show that the abovementioned developments are leading to a growing gap between return on capital and remuneration for labour. Labour compensation is often well below labour productivity levels. Moreover, capitalist investors manage to negotiate very cheap access to land (whether sale or rent based) and there are currently no land taxes in place to compensate for this situation. Therefore, most of the value added goes to pay return on capital, disregarding both compensation for fair labour and the land rights holders (whether individual or collective).