The fluctuating prices of food in the past year have led investors from rich countries (Arab states like Saudi Arabia, UAE, Egypt, Libya, S.Korea, Taiwan, Japan) scrambling to safeguard their food interests by acquiring and developing farmland on other territories. Food prices fluctuate with imported food due to see-sawing exchange rates and times of drought or natural disasters that hurt harvests. Last year, food prices rose due to over-speculation, increased demand from developing nations, high oil prices and the increasing use of biofuels. According to Jacques Diouf, director-general of UN's Food and Agriculture Organization based in Rome, 105 million more people, as compared to last year, are undernourished. He attributes this to the current economic crisis and overwhelming increments in food prices.
In November last year, Daewoo Logistics, a South Korean firm, reached an agreement to cultivate 1.3million hectares of farmland in Madagascar for nothing - only promising employment for the citizens of the impoverished island in exchange for the untouched land. Daewoo would develop the infrastructure- roads, irrigation and grain storage facilities. This was a move to ensure that South Korea could fall back on the corn harvested in Madagascar in the event of a food crisis.
Alas, it was not to be! The then-President, in part due to disagreements with the country's citizens about the deal, resigned in May. People had protested to leasing half of Madagascar's arable land to Daewoo, condemning it to be a form of "neo-colonialism". (read more here: Madagascar Axes Land Deal with Daewoo)
"If we have another world food crisis, and you have a poor country where food is produced by foreign investors and then repatriated, that is ethically and political tricky"
- David Hallam, head of the UN's Food and Agriculture Organization's Trade Policy Service in TIME.
In Singapore, land is painfully scarce, with more than 4 million people living on 274 sq.miles. Less than 1% of the land is arable, so farming of about 5% of Singapore's vegetable supply, is done on high tech farms, such as hydroponics or agrotechnology farms. Most of its fresh food supply is imported from its neighbors, Malaysia and Indonesia. When food prices rose last year, due to the food crisis and inflation, it hit lower-income families the hardest. With limited land for farming, Singapore has no way to ensure its food security, or does it?
Earlier this month, a Singapore-based firm, Vita Grain, signed a deal with the government of Mauritius to produce a hybrid variety of low GI rice on leased land in Mozambique. Mauritius believes that it will help them to boost their food security.... while Vita Grain had also said, "its priority will be to support stock-piling of rice in Singapore – which imports about 330,000 tonnes of rice a year – if the need arises." (The article did not mention what Mozambique stands to gain in this agreement)
The cultivating of land by foreign corporations is highly controversial for many reasons. Its benefits for both parties- the country whose land is cultivated (mostly poor, in the case of Madagascar, 600,000 people are fed by the World Food Programme) and the corporations, which much of the time are backed by the government of the country where they are based- are highly debatable. Fairness, ethics and politics come into play- who gets to control the food supplies-its citizens or rich foreign corporations? Who gets fed during a food crisis? Is the arable land being depleted with such leases?
As of now, Japan is looking to draw up a set of "investor principles" to guide such deals.
Today's news:
Here's more information if you are interested in the topic:
Blog by GRAIN, an NGO, on the leasing of farmland abroad-- georgi p.
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