Friday, July 31, 2009

Foreign investment in land: New colonialism?

From Das Spiegel:

...It is not just bankers and speculators, but also governments that are acquiring land in other countries, seeking to reduce their dependence on the world market and imports. China is home to 20 percent of the world's population, but it has only 9 percent of the world's arable land. Japan is the world's largest corn importer, and South Korea is the second-largest. The Persian Gulf States import 60 percent of their food, while their natural water reserves are sufficient to support only another 30 years of agriculture....

Klaus Deininger, an economist specializing in land policy at the World Bank, estimates that 10 to 30 percent of available arable land could be up for grabs, although only a fraction of the potential number of lease and sale agreements have been signed. "There was a huge jump in 2008, when plans and applications in many countries more than doubled, in some cases tripled." In Mozambique, says Deininger, foreign demand is more than double the existing cultivated farmland, and the government has already allocated four million hectares to investors, half of them from abroad....

The most spectacular deals are not being made by private investors, however, but by governments and the funds and conglomerates they promote:

  • The Sudanese government has leased 1.5 million hectares of prime farmland to the Gulf States, Egypt and South Korea for 99 years. Paradoxically, Sudan is also the world's largest recipient of foreign aid, with 5.6 million of its citizens dependent on food deliveries.
  • Kuwait has leased 130,000 hectares of rice fields in Cambodia.
  • Egypt plans to grow wheat and corn on 840,000 hectares in Uganda.
  • The president of the Democratic Republic of Congo has offered to lease 10 million hectares to the South Africans...
I am ambivalent about this.

If the poor are to eat, one needs to use modern agricultural techniques, which cost money for specialized seed, fertilizer, and insecticide (not to mention roads to and from the farms, decent ports to export via ship, and of course a fairly honest government that doesn't steal too much of the farm equipment or insist on too many bribes.

On the other hand, it might mean that small farmers are left behind as landless labourers instead of independent small farmers who could, with some money and backing by the government, actually make the land productive and make a living for their own family.

On the other hand, the main result of land reform in this area is that the farmers have educated their kids with their wealth, and now live in concrete (no termite) houses with electricity and TV, while their kids migrate to the city to work, or else work overseas. Those who work here often go back to help the family with their land in the busy season on the farm (e.g. planting and harvest season) while working in town. But those whose kids work in Saudi or Canada end up selling their land, either to businessmen like our family or to rich people from Manila to build a "country home" for them to spend weekends.

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