Growing demand for food and fuel has put pressure on the world’s agricultural lands to produce more. Now, a trend in “land grabbing” has emerged, as wealthy countries lease or buy farms and agribusiness in poorer countries to ensure their own future supplies. The result may be further economic disparities and even “food wars.”
World grain and soybean prices more than doubled between 2007 and mid-2008. As food prices climbed everywhere, some exporting countries began to restrict grain shipments in an effort to limit food price inflation at home. Importing countries panicked. Some tried to negotiate long-term grain supply agreements with exporting countries, but in a seller’s market, few were successful. Seemingly overnight, importing countries realized that one of their few options was to find land in other countries on which to produce food for themselves.
And the land rush was on.
Looking for land abroad is not entirely new. Empires expanded through territorial acquisitions, colonial powers set up plantations, and agribusiness firms try to expand their reach. Agricultural analyst Derek Byerlee tracks market-driven investments in foreign land back to the mid-nineteenth century. During the last 150 years, large-scale agricultural investments from industrial countries concentrated primarily on tropical products such as sugarcane, tea, rubber, and bananas.
What is new now is the scramble to secure land abroad for more basic food and feed crops—including wheat, rice, corn, and soybeans—and for biofuels. These land acquisitions of the last several years, or “land grabs” as they are sometimes called, represent a new stage in the emerging geopolitics of food scarcity. They are occurring on a scale and at a pace not seen before.
The “Grabbers”: Searching for Stable Food Supplies
Saudi Arabia, South Korea, China, and India are among the countries that are leading the charge to buy or lease land abroad, either through government entities or through domestically based agribusiness firms. Saudi Arabia’s population has simply outrun its land and water resources. The country is fast losing its irrigation water and will soon be totally dependent on imports from the world market or overseas farming projects for its grain.
South Korea imports more than 70% of its grain, and it has become a major land investor in several countries. In an attempt to acquire 940,000 acres of farmland abroad by 2018 for corn, wheat, and soybean production, the Korean government will reportedly help domestic companies lease farmland or buy stakes in agribusiness firms in countries such as Cambodia, Indonesia, and Ukraine.
China is also nervous about its future food supply, as it faces aquifer depletion and the heavy loss of cropland to urbanization and industrial development. Although it was essentially self-sufficient in grain from 1995 onward, within the last few years China has become a leading grain importer. It is by far the top importer of soybeans, bringing in more than all other countries combined.
India has also become a major player in land acquisitions, with its huge and growing population to feed. Irrigation wells are starting to go dry, so with the projected addition of 450 million people by mid-century and the prospect of growing climate instability, India, too, is worried about future food security.
Among the other countries jumping in to secure land abroad are Egypt, Libya, Bahrain, Qatar, and the United Arab Emirates (UAE). For example, in early 2012 Al Ghurair Foods, a company based in the UAE, announced it would lease 250,000 acres in Sudan for 99 years on which to grow wheat, other grains, and soybeans. The plan is that the resulting harvests will go to the UAE and other Gulf countries.
Tracking the Trends
Accurate information has been difficult to find for those tracking this worldwide land-grab surge. Perhaps because of the politically sensitive nature of land grabs, separating rumor from reality remains a challenge.
At the outset, the increasing frequency of news reports mentioning deals seemed to indicate that the phenomenon was growing, but no one was systematically aggregating and verifying data on this major agricultural development. Many groups have relied on GRAIN (www.grain.org), a small nongovernmental organization with a shoestring budget, and its compilations of media reports on land grabs. A much-anticipated World Bank report, first released in September 2010 and updated in January 2011, used GRAIN’s online collection to aggregate land-grab information, noting that GRAIN’s was the only tracking effort that was global in scope.
In its report, the World Bank identified 464 land acquisitions that were in various stages of development between October 2008 and August 2009. It reported that production had begun on only one-fifth of the announced projects, partly because many deals were made by land speculators. The report offered several other reasons for the slow start, including “unrealistic objectives, price changes, and inadequate infrastructure, technology, and institutions.”
The amount of land involved was known for only 203 of the 464 projects, yet it still came to some 140 million acres—more than is planted in corn and wheat combined in the United States. Particularly noteworthy is that, of the 405 projects for which commodity information was available, 21% were slated to produce biofuels and another 21% were for industrial or cash crops, such as rubber and timber. Only 37% of the projects involved food crops.
Nearly half of these land deals, and some two-thirds of the land area, were in sub-Saharan Africa—partly because land is so cheap there compared with land in Asia. In a careful evidence-based analysis of land grabs in sub-Saharan Africa between 2005 and 2011, George Schoneveld from the Center for International Forestry Research reported that two-thirds of the area acquired there was in just seven countries: Ethiopia, Ghana, Liberia, Madagascar, Mozambique, South Sudan, and Zambia. In Ethiopia, for example, an acre of land can be leased for less than $1 a year, whereas in land-scarce Asia it can easily cost $100 or more.
The second most-targeted region for land grabs was Southeast Asia, including Cambodia, Laos, the Philippines, and Indonesia. Countries have also sought land in Latin America, especially in Brazil and Argentina. The state-owned Chinese firm Chongqing Grain Group, for example, has reportedly begun harvesting soybeans on some 500,000 acres in Brazil’s Bahia state for export to China. The company announced in early 2011 that, as part of a multibillion-dollar investment package in Bahia, it would develop a soybean industrial park with facilities capable of crushing 1.5 million tons of soybeans a year.
Unfortunately, the countries selling or leasing their land for the production of agricultural commodities to be shipped abroad are typically poor and, more often than not, those where hunger is chronic, such as Ethiopia and South Sudan. Both of these countries are leading recipients of food from the UN World Food Programme. Some of these land acquisitions are outright purchases of land, but the overwhelming majority are long-term leases, typically 25 to 99 years.
Food and Fuel Compete for Agricultural Land
In response to rising oil prices and a growing sense of oil insecurity, energy policies encouraging the production and use of biofuels are also driving land acquisitions. This results in either clearing new cropland or making existing cropland unavailable for food production.
The European Union’s renewable energy law requires 10% of transport energy to come from renewable sources by 2020. This law is encouraging agribusiness firms to invest in land to produce biofuels for the European market. In sub-Saharan Africa, many investors have planted jatropha (an oilseed-bearing shrub) and oil palm trees, both sources for biodiesel.
One company, U.K.-based GEM BioFuels, has leased 1.1 million acres in 18 communities in Madagascar on which to grow jatropha. At the end of 2010 it had planted 140,000 acres with this shrub. But by April 2012 it was reevaluating its Madagascar operations due to poor project performance. Numerous other firms planning to produce biodiesel from jatropha have not fared much better. The initial enthusiasm for jatropha is fading as yields are lower than projected and the economics just do not work out.
Sime Darby, a Malaysia-based company that is a big player in the world palm oil economy, has leased 540,000 acres in Liberia to develop oil palm and rubber plantations. It planted its first oil palm seedling on the acquired land in May 2011, and the company plans to have it all in production by 2030.
Thus, we are witnessing an unprecedented scramble for land that crosses national boundaries. Driven by both food and energy insecurity, land acquisitions are now also seen as a lucrative investment opportunity. Fatou Mbaye of Action Aid in Senegal observes, “Land is quickly becoming the new gold and right now the rush is on.”
Investing—or Speculating—in Land
Investment capital is coming from many sources, including investment banks, pension funds, university endowments, and wealthy individuals. Many large investment funds are incorporating farmland into their portfolios. In addition, there are now many funds dedicated exclusively to farm investments. These farmland funds generated a rate of return from 1991 to 2010 that was roughly double that from investing in gold or the S&P 500 stock index and seven times that from investing in housing. Most of the rise in farmland earnings has come since 2003.
Many investors are planning to use the land acquired, but there is also a large group of investors speculating in land who have neither the intention nor the capacity to produce crops. They sense that the recent rises in food prices will likely continue, making land even more valuable over the longer term. Indeed, land prices are on the rise
Growing demand for food and fuel has put pressure on the world’s agricultural lands to produce more. Now, a trend in “land grabbing” has emerged, as wealthy countries lease or buy farms and agribusiness in poorer countries to ensure their own future supplies. The result may be further economic disparities and even “food wars.”
World grain and soybean prices more than doubled between 2007 and mid-2008. As food prices climbed everywhere, some exporting countries began to restrict grain shipments in an effort to limit food price inflation at home. Importing countries panicked. Some tried to negotiate long-term grain supply agreements with exporting countries, but in a seller’s market, few were successful. Seemingly overnight, importing countries realized that one of their few options was to find land in other countries on which to produce food for themselves.
And the land rush was on.
Looking for land abroad is not entirely new. Empires expanded through territorial acquisitions, colonial powers set up plantations, and agribusiness firms try to expand their reach. Agricultural analyst Derek Byerlee tracks market-driven investments in foreign land back to the mid-nineteenth century. During the last 150 years, large-scale agricultural investments from industrial countries concentrated primarily on tropical products such as sugarcane, tea, rubber, and bananas.
What is new now is the scramble to secure land abroad for more basic food and feed crops—including wheat, rice, corn, and soybeans—and for biofuels. These land acquisitions of the last several years, or “land grabs” as they are sometimes called, represent a new stage in the emerging geopolitics of food scarcity. They are occurring on a scale and at a pace not seen before.
The “Grabbers”: Searching for Stable Food Supplies
Saudi Arabia, South Korea, China, and India are among the countries that are leading the charge to buy or lease land abroad, either through government entities or through domestically based agribusiness firms. Saudi Arabia’s population has simply outrun its land and water resources. The country is fast losing its irrigation water and will soon be totally dependent on imports from the world market or overseas farming projects for its grain.
South Korea imports more than 70% of its grain, and it has become a major land investor in several countries. In an attempt to acquire 940,000 acres of farmland abroad by 2018 for corn, wheat, and soybean production, the Korean government will reportedly help domestic companies lease farmland or buy stakes in agribusiness firms in countries such as Cambodia, Indonesia, and Ukraine.
China is also nervous about its future food supply, as it faces aquifer depletion and the heavy loss of cropland to urbanization and industrial development. Although it was essentially self-sufficient in grain from 1995 onward, within the last few years China has become a leading grain importer. It is by far the top importer of soybeans, bringing in more than all other countries combined.
India has also become a major player in land acquisitions, with its huge and growing population to feed. Irrigation wells are starting to go dry, so with the projected addition of 450 million people by mid-century and the prospect of growing climate instability, India, too, is worried about future food security.
Among the other countries jumping in to secure land abroad are Egypt, Libya, Bahrain, Qatar, and the United Arab Emirates (UAE). For example, in early 2012 Al Ghurair Foods, a company based in the UAE, announced it would lease 250,000 acres in Sudan for 99 years on which to grow wheat, other grains, and soybeans. The plan is that the resulting harvests will go to the UAE and other Gulf countries.
Tracking the Trends
Accurate information has been difficult to find for those tracking this worldwide land-grab surge. Perhaps because of the politically sensitive nature of land grabs, separating rumor from reality remains a challenge.
At the outset, the increasing frequency of news reports mentioning deals seemed to indicate that the phenomenon was growing, but no one was systematically aggregating and verifying data on this major agricultural development. Many groups have relied on GRAIN (www.grain.org), a small nongovernmental organization with a shoestring budget, and its compilations of media reports on land grabs. A much-anticipated World Bank report, first released in September 2010 and updated in January 2011, used GRAIN’s online collection to aggregate land-grab information, noting that GRAIN’s was the only tracking effort that was global in scope.
In its report, the World Bank identified 464 land acquisitions that were in various stages of development between October 2008 and August 2009. It reported that production had begun on only one-fifth of the announced projects, partly because many deals were made by land speculators. The report offered several other reasons for the slow start, including “unrealistic objectives, price changes, and inadequate infrastructure, technology, and institutions.”
The amount of land involved was known for only 203 of the 464 projects, yet it still came to some 140 million acres—more than is planted in corn and wheat combined in the United States. Particularly noteworthy is that, of the 405 projects for which commodity information was available, 21% were slated to produce biofuels and another 21% were for industrial or cash crops, such as rubber and timber. Only 37% of the projects involved food crops.
Nearly half of these land deals, and some two-thirds of the land area, were in sub-Saharan Africa—partly because land is so cheap there compared with land in Asia. In a careful evidence-based analysis of land grabs in sub-Saharan Africa between 2005 and 2011, George Schoneveld from the Center for International Forestry Research reported that two-thirds of the area acquired there was in just seven countries: Ethiopia, Ghana, Liberia, Madagascar, Mozambique, South Sudan, and Zambia. In Ethiopia, for example, an acre of land can be leased for less than $1 a year, whereas in land-scarce Asia it can easily cost $100 or more.
The second most-targeted region for land grabs was Southeast Asia, including Cambodia, Laos, the Philippines, and Indonesia. Countries have also sought land in Latin America, especially in Brazil and Argentina. The state-owned Chinese firm Chongqing Grain Group, for example, has reportedly begun harvesting soybeans on some 500,000 acres in Brazil’s Bahia state for export to China. The company announced in early 2011 that, as part of a multibillion-dollar investment package in Bahia, it would develop a soybean industrial park with facilities capable of crushing 1.5 million tons of soybeans a year.
Unfortunately, the countries selling or leasing their land for the production of agricultural commodities to be shipped abroad are typically poor and, more often than not, those where hunger is chronic, such as Ethiopia and South Sudan. Both of these countries are leading recipients of food from the UN World Food Programme. Some of these land acquisitions are outright purchases of land, but the overwhelming majority are long-term leases, typically 25 to 99 years.
Food and Fuel Compete for Agricultural Land
In response to rising oil prices and a growing sense of oil insecurity, energy policies encouraging the production and use of biofuels are also driving land acquisitions. This results in either clearing new cropland or making existing cropland unavailable for food production.
The European Union’s renewable energy law requires 10% of transport energy to come from renewable sources by 2020. This law is encouraging agribusiness firms to invest in land to produce biofuels for the European market. In sub-Saharan Africa, many investors have planted jatropha (an oilseed-bearing shrub) and oil palm trees, both sources for biodiesel.
One company, U.K.-based GEM BioFuels, has leased 1.1 million acres in 18 communities in Madagascar on which to grow jatropha. At the end of 2010 it had planted 140,000 acres with this shrub. But by April 2012 it was reevaluating its Madagascar operations due to poor project performance. Numerous other firms planning to produce biodiesel from jatropha have not fared much better. The initial enthusiasm for jatropha is fading as yields are lower than projected and the economics just do not work out.
Sime Darby, a Malaysia-based company that is a big player in the world palm oil economy, has leased 540,000 acres in Liberia to develop oil palm and rubber plantations. It planted its first oil palm seedling on the acquired land in May 2011, and the company plans to have it all in production by 2030.
Thus, we are witnessing an unprecedented scramble for land that crosses national boundaries. Driven by both food and energy insecurity, land acquisitions are now also seen as a lucrative investment opportunity. Fatou Mbaye of Action Aid in Senegal observes, “Land is quickly becoming the new gold and right now the rush is on.”
Investing—or Speculating—in Land
Investment capital is coming from many sources, including investment banks, pension funds, university endowments, and wealthy individuals. Many large investment funds are incorporating farmland into their portfolios. In addition, there are now many funds dedicated exclusively to farm investments. These farmland funds generated a rate of return from 1991 to 2010 that was roughly double that from investing in gold or the S&P 500 stock index and seven times that from investing in housing. Most of the rise in farmland earnings has come since 2003.
Many investors are planning to use the land acquired, but there is also a large group of investors speculating in land who have neither the intention nor the capacity to produce crops. They sense that the recent rises in food prices will likely continue, making land even more valuable over the longer term. Indeed, land prices are on the rise
การแปล กรุณารอสักครู่..