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Countries On Sale
Gold Rush For The Lands In The Third World
The ‘Neo-Colonial’ Food Grab
In the 1800s, European colonial powers divided up the Third World in their quest for primary agricultural and mineral commodities. In post-colonial times, oil corporations have gained oil concessions in these nations through questionable dealings with local elites, enriching the elites and leaving the vast majority in these countries desperately poor. Recently, a new scramble has begun: the attempt by food-deficit countries, primarily in the Middle East, to buy or rent hundreds of thousands of hectares of prime agricultural land in the poor countries. In the meantime, millions in these countries are starving and are in desperate need of food aid.
What is spurring this attempt to secure agricultural land in other countries is the global food crisis and price volatility. Saudi Arabia and other oil exporting Middle Eastern countries have decided to use their oil wealth to buy land in poorer nations, including Ukraine, Kazakhstan, Pakistan, Uganda, Ethiopia and Sudan. China is also trying to buy lands abroad, but is concentrating on Kazakhstan.
In August, Andrew England reported in The Financial Times that “Saudi Arabia plans to set up large-scale projects overseas that will later involve the private sector in growing crops such as corn, wheat and rice. Once a country has been selected, each project could be in excess of 100,000 hectares – about ten times the size of Manhattan Island – and the majority of the crop would be exported directly to Saudi Arabia. This is not trade, but direct shipment of food crops to the land-owners.
“While Saudi Arabia’s plans are among the grandest, they reflect growing interest in such projects among capital-rich countries that import most of their food. The United Arab Emirates is looking into Kazakhstan and Sudan. Libya is hoping to lease farms in Ukraine, and South Korea has hinted at plans in Mongolia.”
Joachim von Braun, director of the International Food Policy Research Institute, says, “This is a new trend within the global food crisis. The dominant force today is security of food supplies.”
England wrote, “Alarmed by exporting countries’ trade restrictions – such as India’s curbs on exports of rice, Ukraine’s halt to wheat shipments, and Argentina’s imposition of heavy taxes on overseas sales of soya – importing countries have realized that their dependence on the international food market makes them vulnerable not only to an abrupt surge in prices but, more crucially, to an interruption in supplies. As a result, food security is at the top of the political agenda for the first time since the 1970s.”
For poor countries rich in cultivable land and water but short of capital, such plans could also make a lot of sense. Lennart Bage, of the UN’s International Fund for Agriculture Development in Rome, says that “land was long thought less important than oil or mineral deposits. But now fertile land with access to water has become a strategic asset.”
Sudan is seeking to attract at least one billion dollars of capital for its agricultural sector from Arab and Asian investment groups. The investment ministry is marketing 17 large-scale projects that would cover an area of 880,000 hectares.
Ethiopia’s Prime Minister Meles Zenawi is also enthusiastic. He welcomed the Saudi agriculture delegation with the following words: “We would be very eager to provide hundreds of thousands of hectares of agricultural land for investment.”
What is spurring this attempt to secure agricultural land in other countries is the global food crisis and price volatility. Saudi Arabia and other oil exporting Middle Eastern countries have decided to use their oil wealth to buy land in poorer nations, including Ukraine, Kazakhstan, Pakistan, Uganda, Ethiopia and Sudan. China is also trying to buy lands abroad, but is concentrating on Kazakhstan.
In August, Andrew England reported in The Financial Times that “Saudi Arabia plans to set up large-scale projects overseas that will later involve the private sector in growing crops such as corn, wheat and rice. Once a country has been selected, each project could be in excess of 100,000 hectares – about ten times the size of Manhattan Island – and the majority of the crop would be exported directly to Saudi Arabia. This is not trade, but direct shipment of food crops to the land-owners.
“While Saudi Arabia’s plans are among the grandest, they reflect growing interest in such projects among capital-rich countries that import most of their food. The United Arab Emirates is looking into Kazakhstan and Sudan. Libya is hoping to lease farms in Ukraine, and South Korea has hinted at plans in Mongolia.”
Joachim von Braun, director of the International Food Policy Research Institute, says, “This is a new trend within the global food crisis. The dominant force today is security of food supplies.”
England wrote, “Alarmed by exporting countries’ trade restrictions – such as India’s curbs on exports of rice, Ukraine’s halt to wheat shipments, and Argentina’s imposition of heavy taxes on overseas sales of soya – importing countries have realized that their dependence on the international food market makes them vulnerable not only to an abrupt surge in prices but, more crucially, to an interruption in supplies. As a result, food security is at the top of the political agenda for the first time since the 1970s.”
For poor countries rich in cultivable land and water but short of capital, such plans could also make a lot of sense. Lennart Bage, of the UN’s International Fund for Agriculture Development in Rome, says that “land was long thought less important than oil or mineral deposits. But now fertile land with access to water has become a strategic asset.”
Sudan is seeking to attract at least one billion dollars of capital for its agricultural sector from Arab and Asian investment groups. The investment ministry is marketing 17 large-scale projects that would cover an area of 880,000 hectares.
Ethiopia’s Prime Minister Meles Zenawi is also enthusiastic. He welcomed the Saudi agriculture delegation with the following words: “We would be very eager to provide hundreds of thousands of hectares of agricultural land for investment.”
Jacques Diouf, director general of the U.N. Food and Agriculture Organization, has warned that the headlong drive by rich food-importing countries to buy up vast tracts of farmland in the world's poorer states risks "creating a neo-colonial" agricultural system.
The food-producing countries need to be wary of these deals, warns England. “Through secretive bilateral agreements, the investors hope to be able to bypass any potential trade restriction that the host country might impose during a crisis.”
Maryknoll Father Ken Thesing, who is working with the Jesuit Refugee Service in Juba, Southern Sudan, offers further insight and caution, “In Southern Sudan we have vast tracts of land that can be very productive, without irrigation. But we need infrastructure, inputs, and expertise to positively ‘harvest’ the potential of the land. It is going to be a challenge to do that without Southern Sudan ending up either missing the opportunity to move ahead and use its natural advantage at this time of food shortage/crisis or ending up exploited by other ‘rich’ countries and entrepreneurs using the resources for their private benefit.”
For some policymakers this evokes the nightmare scenario of crops being transported out of fortified farms as hungry locals look on. Jacques Diouf, director general of the UN Food and Agriculture Organization (FAO), says he dreads “the emergence of a neocolonial pact for the supply of raw materials with no value added for the producer countries. We are deliberating on land policy tools that we can use to counsel the governments involved. The idea is not to renounce such a potential godsend, but to avoid expropriations of small producers and speculation.”
Maryknoll Father Ken Thesing, who is working with the Jesuit Refugee Service in Juba, Southern Sudan, offers further insight and caution, “In Southern Sudan we have vast tracts of land that can be very productive, without irrigation. But we need infrastructure, inputs, and expertise to positively ‘harvest’ the potential of the land. It is going to be a challenge to do that without Southern Sudan ending up either missing the opportunity to move ahead and use its natural advantage at this time of food shortage/crisis or ending up exploited by other ‘rich’ countries and entrepreneurs using the resources for their private benefit.”
For some policymakers this evokes the nightmare scenario of crops being transported out of fortified farms as hungry locals look on. Jacques Diouf, director general of the UN Food and Agriculture Organization (FAO), says he dreads “the emergence of a neocolonial pact for the supply of raw materials with no value added for the producer countries. We are deliberating on land policy tools that we can use to counsel the governments involved. The idea is not to renounce such a potential godsend, but to avoid expropriations of small producers and speculation.”
Lennart Bage, president of the U.N. International Fund for Agriculture Development in Rome, says that land was long considered less important than oil or mineral resources.
But now, with food prices having doubled on average from a year ago, "fertile land with access to water has become a strategic asset."
But many of the countries whose farmland is being snapped up are already unable to feed their own people, and it may be just a matter of time before that triggers anti-government unrest and the resource wars that many fear will erupt in the coming decades.
Alain Karsenty, a researcher in agronomics, claims that there will be another devastating impact of the headlong rush into these agricultural schemes – deforestation. “As the price of agricultural land increases, land with forest values will lose profitability. Maintaining forests, whether for environmental purposes or for economic purposes, will be abandoned as a national objective.”
In his new book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy, Michael T. Klare writes that we are now seeing the resurrection of a mercantilist form of global economy, similar to the colonial era of the 19th century, when national states took control of resources in colonial territories. As essential to the global economy as are corporations, the effort to lock in foreign sources of energy and strategic resources is now “statist,” rather than corporate. Examples in the energy sector are President Bush’s two trips to Saudi Arabia to plead for increased oil production in order to stabilize prices, and China’s dealings with Sudan (also Congo and Zimbabwe).
These state efforts to insure that energy, strategic metals and food will go to rich countries is further marginalizing the poor countries, where many of these resources are found. To sum up his analysis: the first quarter of the 21st century is characterized by a statist effort to lock in foreign sources of strategic resources, in a planet now running out of these resources, increasing the possibility of military confrontations between nuclear powers.
George Monbiot of the Guardian concludes with this harsh outlook. “None of this is to suggest that the poor nations should not sell food to the rich. To escape from famine, countries must enhance their purchasing power. This often means selling farm products and increasing their value by processing them locally. But there is nothing fair about the deals described above. Where once they used gunboats and sepoys, the rich nations now use checkbooks and lawyers to seize food from the hungry. The scramble for resources has begun, but in the short term, at any rate, we will hardly notice. The rich world’s governments will protect themselves from the political cost of shortages, even if it means that other people must starve.”
In 2008, the South Korean multinational Daewoo Logistics secured 1.3 million hectares of farmland in Madagascar, half the size of Belgium, to grow maize and crops for biofuels. Roughly half of the country’s arable land, as well as rainforests of rich and unique biodiversity, were to be converted into palm and corn monocultures, producing food for export from a country where a third of the population and 50 percent of children under 5 are malnourished, using workers imported from South Africa instead of locals. Those living on the land were never consulted or informed, despite being dependent on the land for food and income. The controversial deal played a major part in prolonged anti-government protests on the island that resulted in over a hundred deaths. Shortly after the Madagascar deal, Tanzania announced that South Korea was in talks to develop 100,000 hectares for food production and processing for 700 to 800 billion won. Scheduled to be completed in 2010, it will be the largest single piece of agricultural infrastructure South Korea has ever built overseas.
In 2009, Hyundai Heavy Industries acquired a majority stake in a company cultivating 10,000 hectares of farmland in the Russian Far East and a wealthy South Korean provincial government secured 95,000 hectares of farmland in Oriental Mindoro, central Philippines, to grow corn. The South Jeolla province became the first provincial government to benefit from a newly created central government fund to develop farmland overseas, receiving a cheap loan of $1.9 million for the Mindoro project. The feedstock is expected to produce 10,000 tonnes of feed in the first year for South Korea. South Korean multinationals and provincial governments have also purchased land in Sulawesi, Indonesia, Cambodia and Bulgan, Mongolia. The South Korean government itself announced its intention to invest 30 billion won in land in Paraguay and Uruguay. Discussions with Laos, Myanmar and Senegal are also currently underway.
(Source: NewsNotes, November-December 2008)
In his new book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy, Michael T. Klare writes that we are now seeing the resurrection of a mercantilist form of global economy, similar to the colonial era of the 19th century, when national states took control of resources in colonial territories. As essential to the global economy as are corporations, the effort to lock in foreign sources of energy and strategic resources is now “statist,” rather than corporate. Examples in the energy sector are President Bush’s two trips to Saudi Arabia to plead for increased oil production in order to stabilize prices, and China’s dealings with Sudan (also Congo and Zimbabwe).
These state efforts to insure that energy, strategic metals and food will go to rich countries is further marginalizing the poor countries, where many of these resources are found. To sum up his analysis: the first quarter of the 21st century is characterized by a statist effort to lock in foreign sources of strategic resources, in a planet now running out of these resources, increasing the possibility of military confrontations between nuclear powers.
George Monbiot of the Guardian concludes with this harsh outlook. “None of this is to suggest that the poor nations should not sell food to the rich. To escape from famine, countries must enhance their purchasing power. This often means selling farm products and increasing their value by processing them locally. But there is nothing fair about the deals described above. Where once they used gunboats and sepoys, the rich nations now use checkbooks and lawyers to seize food from the hungry. The scramble for resources has begun, but in the short term, at any rate, we will hardly notice. The rich world’s governments will protect themselves from the political cost of shortages, even if it means that other people must starve.”
In 2008, the South Korean multinational Daewoo Logistics secured 1.3 million hectares of farmland in Madagascar, half the size of Belgium, to grow maize and crops for biofuels. Roughly half of the country’s arable land, as well as rainforests of rich and unique biodiversity, were to be converted into palm and corn monocultures, producing food for export from a country where a third of the population and 50 percent of children under 5 are malnourished, using workers imported from South Africa instead of locals. Those living on the land were never consulted or informed, despite being dependent on the land for food and income. The controversial deal played a major part in prolonged anti-government protests on the island that resulted in over a hundred deaths. Shortly after the Madagascar deal, Tanzania announced that South Korea was in talks to develop 100,000 hectares for food production and processing for 700 to 800 billion won. Scheduled to be completed in 2010, it will be the largest single piece of agricultural infrastructure South Korea has ever built overseas.
In 2009, Hyundai Heavy Industries acquired a majority stake in a company cultivating 10,000 hectares of farmland in the Russian Far East and a wealthy South Korean provincial government secured 95,000 hectares of farmland in Oriental Mindoro, central Philippines, to grow corn. The South Jeolla province became the first provincial government to benefit from a newly created central government fund to develop farmland overseas, receiving a cheap loan of $1.9 million for the Mindoro project. The feedstock is expected to produce 10,000 tonnes of feed in the first year for South Korea. South Korean multinationals and provincial governments have also purchased land in Sulawesi, Indonesia, Cambodia and Bulgan, Mongolia. The South Korean government itself announced its intention to invest 30 billion won in land in Paraguay and Uruguay. Discussions with Laos, Myanmar and Senegal are also currently underway.
(Source: NewsNotes, November-December 2008)
