Cargill vs. Oxfam: Valuable investment in Colombia or "divide and purchase"?

By Annie-Rose Harrison-Dunn

- Last updated on GMT

Cargill has responded to Oxfam's Colombia criticism saying it respectfully disagrees with Oxfam’s views about how to promote responsible farming there.
Cargill has responded to Oxfam's Colombia criticism saying it respectfully disagrees with Oxfam’s views about how to promote responsible farming there.

Related tags Agriculture Oxfam

Cargill has denied any wrong doing in its practices in Colombia after an Oxfam report accused the company of evading Colombian land laws through a method of fragmented purchases. 

In the paper – separate from the recent Oxfam land grabbing report ​- Oxfam singled out Cargill’s presence through the wholly owned subsidiary Black River Asset Management in Colombia as an example of a practice they dubbed “divide and purchase”​. Cargill says the two have fundamentally different approaches to responsible agricultural development.

Oxfam urged the Colombian government to close loopholes it says allowed Cargill to acquire over 124,000 acres of land in Colombia's Altillanura region through 36 shell companies between 2010 and 2012, exceeding the maximum size of such land permitted by law for a single owner by more than 30 times.

Cargill responded to the allegations saying: “We strongly refute the assertion in the report that the investments violated the law or the spirit of the law. All of the actions of Cargill subsidiary Black River Asset Management were aboveboard and fully within the laws of Colombia.”

Cargill said that Oxfam was able to find its information so easily because transactions were "public and above board"​. "This kind of structure is a standard way of doing business in the real estate industry around the world, because it provides the flexibility to sell off smaller parcels at a later date,"​ it said. 

Fundamental difference in approach

Oxfam suggested that such a concentration of ownership was not in the best interest of Colombian development.

“In a country where land ownership is already extremely concentrated, the further concentration of vast tracts in areas destined for small-scale agriculture only exacerbates inequality and social conflict,"​ said Chris Jochnick, director of private sector engagement with Oxfam America. “The case of Cargill’s investment in Colombia will test a government cornered between national protests over rural issues and large scale international investments.”

Cargill responded to this point saying: “The Oxfam report highlights a fundamental difference in approach between Cargill and Oxfam to responsible agricultural development in Colombia. Colombia, and the department (state) of Vichada in particular, have great agricultural potential but a long history of underinvestment. The land is there, but it is not suitable for growing crops on any scale without significant investment to correct the soils, prepare the land and build the necessary infrastructure.”

In the statement Cargill said that Black River Asset Management has bought “tangible​ benefits"​ to the local community in helping to reduce Colombia’s historic reliance on food imports, saying that Oxfam’s report failed to reflect this situation.

“About 22 million hectares of land in Colombia could be farmed, but only 5 million are cultivated today. Colombia is also a country that imports 80 percent of its staple food crops such as corn and soybeans,”​ Cargill said.

“Public investment in smallholder agriculture and ensuring land tenure of small holder producers is necessary in Colombia,”​ said Oxfam country director in Colombia, Aida Pesquera. “Private investment is also useful but this must respect existing rights and legislation relating to land use, and include comprehensive assessments of social and environmental impacts at local and national levels.”

Cargill said that it respectfully disagreed with Oxfam’s views about how to promote responsible farming in the country. 

Related topics Business Sustainability

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