A Global Grain Drain?

The Woodrow Wilson Center recently published a balanced examination of the increasing frequency with which food-importing countries and private investors are acquiring farmland across the developing world.  We recommend the full report but, for those short of time, here is the conclusion of this look at the future of overseas land investment:

“…Today’s international land acquisitions are often linked to some broader chain of events. IFPRI’s director has described the hunt for land abroad as a new phase of the 2008 world food crisis. The Economist has depicted the phenomenon as “outsourcing’s third wave,” following manufacturing in the 1980s and information technology in the 1990s.

Similarly, some discern the trend as part of an evolving quest for resources. Nineteenth century gold rushes became 20th century oil rushes, which have yielded to 21st century land rushes—and now, perhaps, power rushes. August 2009 marked the launch of two “hugely ambitious power-generating schemes.” One aims to harness sunlight in North Africa and export 15 percent of Europe’s power needs to southern Europe as solar energy. The other plans to dam the Congo River and convey 40,000 megawatts of hydel energy to South Africa.20

Still, when one narrows the lens and studies the trajectory of land deals on a country-by-country basis, the image that emerges is not of a monolithic juggernaut, inexorably gobbling up the world’s land—it is instead an inconsistent and contradictory picture. Thailand is now cracking down on international investments in the country’s agriculture and drafting legislation that would punish Thais who help foreigners “take advantage” of local farmland.21 Conversely, Pakistan, despite opposition from media, civil society, farmers’ groups, and even some government agencies, is intensifying its calls for Gulf investment in its farmland.

Nonetheless, transcending this muddled picture is one crystal-clear point, one that shines through in all seven essays: The developing world needs more investment in agriculture. Farm yields are stagnant and millions are hungry. Investment in the world’s farming is necessary to invigorate agriculture and alleviate global food insecurity.

Foreign land deals, if planned and executed correctly, could conceivably help bring about this outcome. Yet as stated in one of the above recommendations, foreign investors cannot be held uniquely responsible for agricultural development in nation-states; such a burden ultimately rests with governments. After all, to use Montemayor’s words, foreign investors can always “pack up and leave if things go bad.”

Indeed, there is no guarantee that developing-world countries will be swelling with deep-pocketed agribusiness investors several decades hence. Therefore, host governments and local communities should treat any benefits resulting from land deals as a mere down payment toward a more long-term investment in government-led national agricultural revitalization programs—programs that assist the poor rural smallholders and landless laborers who will definitely be around for the long haul.”

This entry was posted on Thursday, January 14th, 2010 at 4:42 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 www.waterpolitics.com and frontier investment markets at www.wildcatsandblacksheep.com.