Rent-A-Country: The End of Food Isolationism

Via Time, an interesting article on the growing phenomenon of countries seeking fertile land outside of their borders for food production.  As the article notes:

“…Take a moment to consider breakfast, the most important meal of the day. Maybe you grabbed a banana or ate a bowl of granola. Whatever it was, chances are that some — if not all — of your morning meal came from a country you don’t live in.

Food isolationism is dead. It collapsed in a messy, public heap last year when oil hit $100-plus per bbl. and the world’s crush on biofuels pushed food prices to unprecedented highs. Thirty-six nations needed food aid. Twenty-five imposed export bans or restrictions to keep staple crops like rice and wheat at home. As prices shot up 50%, food riots erupted in Haiti, killing at least five, and eventually brought down the government.

And then something else happened. A few diplomats and business leaders quietly boarded their jets and got to work. Countries like Saudi Arabia, Kuwait, Qatar and South Korea — well-off states without enough good land or water to feed their people — started to look outside their borders. “It’s economically not viable to grow food in the desert,” says David Hallam, deputy director of trade and markets for the U.N.’s Food and Agriculture Organization. “They said, ‘If we can’t grow our own food, we’ll grow it somewhere else.'”

Their words did not fall on deaf ears. In April, diplomatic relations between Cambodia and Qatar were officially established. In May, the Presidents of South Korea and Sudan discussed food cooperation at the launch of the Korea-Arab Society in Seoul. The Saudi Binladin Group penned nonbinding agreements with Indonesia to plant rice on some 1.5 million acres (607,000 hectares) of island paradise, and millions more have reportedly been earmarked, from Pakistan and Kazakhstan to Burma and the Philippines. Alwi Shihab, a special economic adviser on the Middle East to the President of Indonesia, sees this new investment as a boon to the nation’s agricultural sector. “We have large, sizable, fertile -land and good water,” says Shihab.

Growing crops for strangers, of course, is nothing new. The long, grim march of colonialism was driven by Europe’s penchant for sugar, tea, tobacco and other crops that don’t flourish in northern climes. But as climate change and growing populations put ever more pressure on the earth, state-backed searches for land and food contracts as part of a national food-security strategy strike many as fundamentally new. “We’re talking about a whole different logic,” says Renée Vellvé, a researcher for Grain, an organization that has been compiling media reports of these deals. Vellvé’s group sees a downside. When farmers in food-insecure countries like Laos and Cambodia are scrambling to feed their children, does it make sense to lease out vast tracts to grow rice for foreign governments? “These are not fallow fields,” says Paul Risley, a World Food Program spokesman based in Thailand. “These are villages where families have farmed for centuries.”

And for investors, moving into regions where so many depend so fiercely on the land can translate into risk. “You see a backlash,” says Rajesh Behal, a principal investment officer for International Finance Corp., which has just put $75 million into an emerging-market agribusiness fund. “People say, ‘Who are these people, and how long will they be there?'” In July, South Korea’s Daewoo Logistics signed contracts to lease more than 2.2 million acres (900,000 hectares) in Madagascar — more than a third of the island nation’s arable land — to grow corn and oil palms. A violent political dispute erupted in the capital soon after, complicating the deal. “Farming is a pretty dirty business,” says Behal. “You have to know the nuances and withstand the volatility.”

But in countries where governments can’t afford — or don’t prioritize — significant domestic agricultural investment, foreign money has the power to deliver better roads, irrigation, technology and training. “One thousand times we say yes on private and public agricultural investment, but done in a certain way,” says Jean-Philippe Audinet, acting director of the policy division at the U.N.’s International Fund for Agricultural Development. “It’s very important not to look negatively at this trend. We have to try to look at the win-win.”

After all, is there a choice? Some of these deals are probably doomed to fall under the ax of the global credit crunch, if they haven’t already. But for land-poor countries, the underlying problem of relying heavily on imports will remain. Encouraging a new generation of deals to come out of the diplomatic closet may be the best chance we have to make sure that people on both ends of the bargain end up with food on their plate.”

This entry was posted on Sunday, April 12th, 2009 at 7:46 pm and is filed under Uncategorized.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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About This Blog And Its Author
Seeds Of A Revolution is committed to defining the disruptive geopolitics of the global Farms Race.  Due to the convergence of a growing world population, increased water scarcity, and a decrease in arable land & nutrient-rich soil, a spike of international investment interest in agricultural is inevitable and apt to bring a heretofore domestic industry into a truly global realm.  Whether this transition involves global land leases or acquisitions, the fundamental need for food & the protectionist feelings this need can give rise to is highly likely to cause such transactions to move quickly into the geopolitical realm.  It is this disruptive change, and the potential for a global farms race, that Seeds Of A Revolution tracks, analyzes, and forecasts.

Educated at Yale University (Bachelor of Arts - History) and Harvard (Master in Public Policy - International Development), Monty Simus has long held a keen interest in natural resource policy and the geopolitical implications of anticipated stresses in the areas of freshwater scarcity, biodiversity reserves & parks, and farm land.  Monty has lived, worked, and traveled in more than forty countries spanning Africa, China, western Europe, the Middle East, South America, and Southeast & Central Asia, and his personal interests comprise economic development, policy, investment, technology, natural resources, and the environment, with a particular focus on globalization’s impact upon these subject areas.  Monty writes about freshwater scarcity issues at and frontier investment markets at