The rush to buy farmland, which is set to maintain its strong pace, is being driven largely by speculators who buy farms at cut price and renege on investment promises, a draft report by the World Bank says.

The land grab - which has prompted global political concerns, and in countries such as Madagascar contributed to the overthrow of governments � is providing potentially healthy gains for investors, who often pay little or nothing for plots.

"The level of formal payments required was low," the report, which was leaked to the Financial Times, says, noting the focus by investors on countries with weak land laws.

"Payments for land are often waived ... and large investors often pay lower taxes than smallholders ... or none at all."

Broken promises

However, the gains for the countries being invested are unclear, with investors often reneging on promises to create jobs and improve infrastructure.

Some buyers "failed to follow through on their investments plans, in some cases after inflicting serious damage on the local resource base", the report says.

"Conflicts were common, usually over land rights."

Nonetheless, demand for farmland is unlikely to slow given the growing demand for commodities, and food prices remain high by historic standards. Wheat prices, indeed, have surged by more than 20% this month.

President toppled 

The report, which is set to be released in final form in August, follows mounting concerns over the interest by many countries, such as China and Saudi Arabia, seeking foreign farms to improve food security.

While many deals have created little fuss, with the World Bank citing examples in Latin America and Tanzania, a deal between Daewoo Logistics and Madagascar's government last year - in which the South Korean company got half the island's arable land rent-free, and export all the food produced � fuelled a coup, and made waves worldwide.

The World Bank told Agrimoney.com it had undertaken its research into land deals "at the request of developing countries, and to help ensure that their citizens, including the poor and farmers, benefit from foreign investments in this area".

"The report is currently being completed with revisions continuing," the bank added.