With rich governments and corporations buying the rights to millions of hectares of agricultural land in developing countries in an effort to secure their own long-term food supplies, the head of the UN Food and Agriculture Organization, Jacques Diouf, has warned that the controversial rise in land deals could create a form of “neo-colonialism”, with poor states producing food for the rich at the expense of their own hungry people.
Last week, the South Korean firm Daewoo Logistics announced plans to buy a 99-year lease on a million hectares in Madagascar. Daewoo aims to grow five million tons of corn a year by 2023, relying on a largely South African workforce and sending most of the production home to South Korea, which wants to lessen dependence on imports.
‘These deals can be purely commercial ventures on one level, but sitting behind it is often a food security imperative backed by a government,’ said Carl Atkin, a consultant at Bidwells Agribusiness, a Cambridge firm helping to arrange some of the big international land deals.
The massive lease under discussion in Madagascar is the largest so far in an increasing number of land deals that have been arranged since the surge in food prices late last year. ‘In the context of arable land sales, this is unprecedented,’ Atkin said. ‘We’re used to seeing 100,000-hectare sales. This is more than ten times as much.’
Many investments are in discussion or have been settled: Saudi Binladin Group is planning an investment in Indonesia to grow basmati rice; tens of thousands of hectares in Pakistan have been sold to Abu Dhabi investors; Laos has signed away around 15 percent of its viable farmland; Libya has secured 250,000 hectares of Ukrainian farmland, and Egypt is believed to want similar access.
Keen buyers are generally being enthusiastically received by developing world governments in recession who are desperate to sell in order to have some capital. Madagascar’s land reform minister said revenue would go to infrastructure and development in flood-prone areas.
‘If this was a negotiation between equals, it could be a good thing. It could bring investment, stable prices and predictability to the market,’ said Duncan Green, Oxfam’s head of research. ‘But the problem is, [in] this scramble for soil I don’t see any place for the small farmers.’
Alex Evans, at the Center on International Cooperation, at New York University, said: ‘The small farmers are losing out already. People without solid title are likely to be turfed off the land’.
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