Geopolitics: Is Food The New Oil?

Via The Financial Times, some further thoughts regarding food & farming as emerging geopolitical flashpoints.  As the article notes:

“…Food commodity prices remain near historic highs. Food riots destablised countries around the world last year – more than the financial crisis – and may well return. If food was ever a soft policy issue before, it now rivals oil as a basis of power and economic security.

Like all commodities on which power depends, food is dealt in with hardening self-interest. Fearing political trouble at home, countries with surplus food have imposed export restrictions. Food-importing nations have in reaction entered large farmland leases with African states. Most of the deals are murky, many are inequitable and some are rightly denounced as land grabs.

Importers worried about food security may not care. But if, geopolitically, food is the new oil, countries contemplating agricultural land deals – as investors or as hosts – should heed history’s lessons on natural resource exploitation.

Resource nationalists who shriek about all foreign investment in natural resource development are wrong-headed. For agriculture, just as for oil, poorer countries can benefit from outside know-how and capital. Agricultural productivity in most of Africa is vastly lower than that achieved by the kinds of companies involved in the land deals. In principle, therefore, cultivating African land with outside involvement could benefit all parties.

But such an outcome requires, first and foremost, a truly equitable sharing of the benefits – favouring the host country. Some oil-rich governments succeed in capturing more than 80 per cent of the profit produced by oil extraction, a much riskier and more capital-intensive business than agriculture. States renting out arable land in high demand should manage no worse.

Second, skill and technology must be transferred to the local population. Deals with foreign agribusiness should be used to raise the host nation’s own agricultural productivity. For that, it must demand, and investors must accept, a programme for using and training local labour and promoting research and technological development locally.

Third, agreements must be made with public scrutiny. Madagascar’s coup d’état shows secrecy risks not just economic loss but also political disaster. Transparency on contracts must be matched by openness to markets: a well-functioning global food market is safer for all than the tangled politics of bilateral deals.

African governments, understaffed and cash-strapped, should not shoulder the burden alone. In a helpful first step, Japan will bring the issue to a Group of Eight summit. On food, the G8’s interests are deeply entwined with Africa’s.

This entry was posted on Wednesday, May 27th, 2009 at 3:20 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