Millions of smallholder farmers worldwide have been left homeless and hungry because of private investment promoted by policies such as tax breaks and cheap loans, says report

Aid donors and international institutions including the World Bank and World Economic Forum (WEF) have been accused of promoting an environment that fuels land grabs through policies and initiatives that pave the way for large-scale private investment.

In a report published on Tuesday, the NGO ActionAid says public money and policy incentives such as tax breaks and cut-price loans are facilitating land deals that threaten the lives and livelihoods of small-scale farmers in poor countries.

ActionAid warns that the consequences of such deals, which are too often happening behind closed doors and with little or no consultation with local communities, include "forced evictions, human rights violations, lost livelihoods, divided communities … rising food insecurity and, ultimately, increased poverty".

A spokesman for the World Bank said it was also concerned about the risks of large-scale land deals and stressed that it did not support investments that took advantage of weak institutions in developing countries.

ActionAid's report says weak governance and regulation of land use and agricultural investments have left millions of smallholder farmers and indigenous people in vulnerable situations "lack[ing] recognition over their land rights, even if they have resided in or used the area for generations".

ActionAid's campaign manager, Antoine Bouhey, said a "nexus of different policies" at the global level, which encourage private investment as a route to development, were also to blame.

"Governments are turning to private capital to fill the massive shortfall in public spending but too often this blind rush for investment is leading to land grabs which are leaving communities landless, homeless and hungry. Growth cannot be achieved at the expense of the poorest and most vulnerable," he said.

The NGO's report points to the G8's New Alliance for Food Security and Nutrition as one of the international initiatives "via which taxpayer money and public policies are fuelling land grabs" and failing to ensure strong safeguards to protect the poorest.

The New Alliance was condemned as a new form of colonialism this year, after African governments agreed to change seed, land and tax laws to encourage private investment.

Last month, World Development Movement, the anti-poverty group, said the New Alliance was in effect carving up Africa in the interests of big business.

ActionAid's report also looks at how governments of developing countries are facilitating large-scale land deals through direct intervention in sales and lease agreements, and by introducing public policy incentives such as tax holidays for agribusiness investors.

It says such deals, often justified on the basis of attracting increased investment into food and farming, have come at great human cost.

Public and private investment should be redirected towards supporting sustainable agricultural practices suited to the needs of smallholder farmers, particularly women, says ActionAid. A "zero-tolerance approach" must be taken by governments over land grabs and the incentives that fuel them.

Most of the 1.4 billion people worldwide who live on less than $1.25 a day reside in rural areas and depend largely on agriculture for their livelihoods. Globally, an estimated 2.5 billion people are involved in small-scale agriculture.

A World Bank spokesman said the organisation provided roughly a third of all aid to support countries in improving governance of land tenure. "Securing access to land is critical for millions of poor people. Modern, efficient, and transparent policies on land rights are vital to reducing poverty and promoting growth, agriculture production, better nutrition, and sustainable development," he said. "Our role is to be a leader in assisting countries to improve land governance and the behaviour of private investors."

Lisa Dreier, a senior director working on food security and development at the WEF, said its New Vision for Agriculture helped found the Grow Africa initiative, which created 33,000 jobs and gave 2.6 million small farmers in Africa access to technology, financing and new markets.

"Smallholder farmers are key to the future success of Africa's agriculture and governments can support them by implementing clear rules on land ownership that protect smallholder rights and encourage investment," she added.

What is a land grab?

"Many land deals are, in fact, land grabs carried out without proper consultation, consent and compensation," says ActionAid.

The NGO uses a definition of land grabs that draws on the Tirana declaration, agreed at a 2011 international conference. The declaration defines land grabs as deals that are "in violation of human rights, particularly the equal rights of women, not based on principles of free, prior and informed consent, or are in disregard or fail to thoroughly assess social, economic and environmental impacts, not based on transparent contracts … " or are not based on "effective democratic planning, independent oversight and meaningful participation".

Conclusive, independent data on the scale of land grabs worldwide is hard to come by. ActionAid's report looks at data from the international Land Matrix project, which suggests that the vast majority of large-scale deals have been struck in sub-Saharan Africa (41%), south-east Asia (32%), and the Americas and Caribbean (19%).