Food Security Concerns Fueling Global Farms Race

Via The Financial Times, another look at how international food security concerns are fueling a global farms race.  As the article notes:

“…Only a short time ago, African farmland seemed of little interest to outsiders. But last year’s food crisis and water scarcity in many countries has changed foreigners’ appetite with the result being that fertile soil in Africa is now sought by international investors to the tune of hundreds of thousands of hectares.

The first big report on the trend – branded by some as “farmland grab”, but seen by others as a huge development opportunity – concludes that food security, rather than commercial enterprise, is behind most of the deals sealed or negotiated.

“Governments concerned about stability of food supplies are promoting acquisition of farmland in foreign countries as an alternative to purchasing food from international markets,” the report says. “The food price hikes of 2007 and 2008 shook the assumption that the world will continue to experience low food prices.”

Alarmed by exporters’ trade restrictions, food importing countries have realised that their dependence on the agricultural market makes them vulnerable not only to a surge in prices but, more crucially, to an interruption in supplies.

“Land grab or development opportunity? Agricultural investments and international land deals in Africa” by the UN and a London-based think-thank, is the first attempt to study the new trend.
“This is rightly a hot issue because land is so central to identity, livelihoods and food security,” it states.

Investing countries’ desire to repatriate the crops to feed their own population in the name of self-sufficiency changes significantly the nature of such investment. In the 1950s and 1960s, international companies focused on making money by growing food for a global market.

Kanayo Nwanze, president of the International Fund for Agricultural Development, a UN agency that fights rural poverty, says the world is witnessing an emerging trend. “The issue of food security is back on the political agenda and that is driving investment in agriculture,” he says.

Lorenzo Cotula, one of the report’s authors and senior researcher at the International Institute for Environment and Development, adds: “The trend of farmland investment is real and gaining ground.”

The trend to outsource the provision of food security and to pursue self-sufficiency at home is hotly contested by agricultural companies and trade officials.

Carl Hausmann, chief executive of Bunge North America, one of the world’s largest agricultural trading companies, echoed a view widely held among other executives and government officials at the World Agricultural Forum last week in St Louis.

“Many governments are rethinking their approach to food security and are saying we need more domestic production, we need to be domestically independent,” he said. “I would argue the exact opposite approach is better. Without the free flow of trade in agricultural commodities and food products the health of any given country in any given year is at risk.”

Pascal Lamy, head of the World Trade Organisation, warned this month, that more trade rather than less was the solution to food security.

“If anything, international trade has reduced the price of food over the years,” he told a conference at the International Food and Agricultural Trade Policy Council in Salzburg, Austria.

Such concerns are, however, unlikely to stop the trend. With agricultural commodities prices on the rise again and some of the export restrictions imposed a year ago still in place, most experts argue that the impact in Africa and elsewhere is likely to be long-lasting.

“Decisions taken today will have major repercussions for the livelihoods and food security of many, for decades to come” warns the report.

This entry was posted on Monday, May 25th, 2009 at 10:27 am 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