"In response to the global food crisis, wealthy countries — mostly in the Middle East and North Africa, but also China, India, and South Korea, among others — are buying or attempting to buy farmland in the developing world. In the eastern and financial presses, these sorts of stories have been coming at a steady drip for more than a year. But somehow, with the exception of a few brief reports — most casting it as a “win-win” scenario — the phenomenon has fallen beneath the radar of mainstream western press. That is now likely to change as the trend gathers momentum and the international community begins to respond. On April 6, at a specially convened Manhattan forum, UN food security expert Olivier de Schutter called for a “code of conduct” to regulate the purchase of international farmland. “States, all too often, are led to make such deals because they are attracted to immediate rewards, but they should also look at the long-term consequences,” he said. On Wednesday of this week, Joachim von Braun, Director General of the International Food Policy Research Institute, will deliver a press conference in Washington, DC, on the controversial issues surrounding this development.
It all started just 20 months ago, when some of the world’s largest grain exporters — notably Russia, Argentina, and Vietnam — dramatically curbed exports in an effort to bring down domestic food prices. The resultant supply crunch sent prices soaring and set off the alarm bells in nations whose major food pipelines had suddenly been stanched. Some initially sought out long-term bilateral trade agreements: The Philippines, for instance, negotiated a three-year deal with Vietnam for 1.5 million tons of rice per year. Such agreements, however, are often tenuous and difficult to broker for more than a handful of years. Sensing their vulnerability, government leaders from Libya to Japan began deciding that importing food and crops would no longer suffice; it is safer, cheaper, better to own the land. And so, throughout 2008, with the world’s attention fixed on elections and Olympics and economic implosion, high-level officials quietly crossed the globe in a diplomatic hunt for arable country."
These new wealthy "countries" were once malnourished (and still are) and now they repeating history albeit in a different way since now they become dominant. There are thousand ways to improve existing land by improving seed potency et al but they are opting to the old way of acquiring more lands except this time from other countries.
"Sheik Mohammed Al Amoudi, a Saudi Arabia-based oil-and-construction billionaire who was born in Ethiopia and maintains a close relationship with the Ethiopian Prime Minister Meles Zenawi’s autocratic regime. (Fear of both men led my guide to say he didn’t want to be identified by name.) Over time, Al Amoudi, one of the world’s 50 richest people, according to Forbes, has used his fortune and political ties to amass control over large portions of Ethiopia’s private sector, including mines, hotels and plantations on which he grows tea, coffee, rubber and japtropha, a plant that has enormous promise as a biofuel. Since the global price spike, he has been getting into the newly lucrative world food trade.
Ethiopia might seem an unlikely hotbed of agricultural investment. To most of the world, the country is defined by images of famine: about a million people died there during the drought of the mid-1980s, and today about four times that many depend on emergency food aid. But according to the World Bank, as much as three-quarters of Ethiopia’s arable land is not under cultivation, and agronomists say that with substantial capital expenditure, much of it could become bountiful. Since the world food crisis, Zenawi, a former Marxist rebel who has turned into a champion of private capital, has publicly said he is “very eager” to attract foreign farm investors by offering them what the government describes as “virgin land.” An Ethiopian agriculture ministry official recently told Reuters that he has identified more than seven million acres. The government plans to lease half of it before the next harvest, at the dirt-cheap annual rate of around 50 cents per acre. “We are associated with hunger, although we have enormous investment opportunities,” explained Abi Woldemeskel, director general of the Ethiopian Investment Agency. “So that negative perception has to be changed through promotion.”
The government’s pliant attitude, along with Ethiopia’s convenient location, has made it an ideal target for Middle Eastern investors like Mohammed Al Amoudi. Not long ago, a newly formed Al Amoudi company, Saudi Star Agricultural Development, announced its plans to obtain the rights to more than a million acres — a land mass the size of Delaware — in the apparent hope of capitalizing on the Saudi government’s initiative to subsidize overseas staple-crop production. At a pilot site in the west of the country, he’s already cultivating rice. Earlier this year, amid great fanfare marking the start of the program, Al Amoudi personally presented the first shipment from the farm to King Abdullah in Riyadh. Meanwhile, in the Rift Valley region, another subsidiary is starting to grow fruits and vegetables for export to the Persian Gulf.
Al Amoudi’s plans raise a recurring question surrounding investment in food production: who will reap the benefits? As we drove down to the waterside, through fields dotted with massive sycamores, a farm supervisor told me that the 2,000-acre enterprise currently produces food for the local market, but there were plans to irrigate with water from the lake, and to shift the focus to exports. In the distance, dozens of laborers were bent to the ground, planting corn and onions.
Later, when I asked a couple of workers how much they were paid, they said nine birr each day, or around 75 cents. It wasn’t much, but Al Amoudi’s defenders say that’s the going rate for farm labor in Ethiopia. They argue that his investments are creating jobs, improving the productivity of dormant land and bringing economic development to rural communities. “We have achieved what the government hasn’t done for how many years,” says Arega Worku, an Ethiopian who is an agriculture adviser to Al Amoudi. (Al Amoudi declined to be interviewed.) Ethiopian journalists and opposition figures, however, have questioned the economic benefits of the deals, as well as Al Amoudi’s cozy relationship with the ruling party."
The question comes what will happen when water runs out or after few cycles of massive droughts, the "investors" who have no "emotional bond" with the land might simply pack their bags and leave, since it would make little business sense to stay. This is not the kind of food production Norman Borlaug dreamt of for Africa. When it comes to food production, we need self-sustaning countries not hitch hikers. Not everything about this new trend is negative, there are some bright spots to (yes on the self-sustaining front).
"One focus of agricultural investment in Ethiopia is the region of Gambella, near the border with Sudan. The World Bank says it has more than four million acres of irrigable land. “It’s emerald green, the whole place is fertile and they have only 200,000 people down there,” says Sai Ramakrishna Karuturi, head of an Indian commercial farming company. Earlier this year, Karuturi signed an agreement with the government to lease close to 800,000 acres on which he will grow rice, wheat and sugar cane, among other crops. Karuturi told me he doesn’t have to export the food to make money; there’s plenty of profit potential in the East African market. He has flown in John Deere tractors, agricultural experts from Texas A&M and commercial farmers from Mississippi to help him get things going. He says he’s raising $100 million in capital from private equity firms for the first phase of the project, which he estimates will ultimately cost well over a billion dollars. “Recently, I saw a lot of articles . . . where they referred to me as a food pirate,” Karuturi says. “This whole thing is so elitist, it’s ridiculous. They want Africa to remain poor.”"
The current perspective is nothing worse can happen in Africa which already hasn't happen. So most are joining the bandwagon and its not right to blame them since African governments are mostly incompetent. At-least a selfish capitalist can quench their thirst and feed them for a while. This is only a short term solution. A crucial difference between say India 50 years ago and Africa today is India had knowledge capital to self-sustain with the technologies introduced to West long after they left. There is mammoth lack of knowledge capital in Africa (There is a scarcity of articles on Africa even on Wikipedia) has and the best thing this Agro-Imperialism can bring is improve the education standards of just one generation and that will be the only game changing catalyst. One thing we can be sure of is, for better or worse the consequences of this new trend is going to have big social and economic changes. Lets hope its for better.
The question comes what will happen when water runs out or after few cycles of massive droughts, the "investors" who have no "emotional bond" with the land might simply pack their bags and leave, since it would make little business sense to stay. This is not the kind of food production Norman Borlaug dreamt of for Africa. When it comes to food production, we need self-sustaning countries not hitch hikers. Not everything about this new trend is negative, there are some bright spots to (yes on the self-sustaining front).
"One focus of agricultural investment in Ethiopia is the region of Gambella, near the border with Sudan. The World Bank says it has more than four million acres of irrigable land. “It’s emerald green, the whole place is fertile and they have only 200,000 people down there,” says Sai Ramakrishna Karuturi, head of an Indian commercial farming company. Earlier this year, Karuturi signed an agreement with the government to lease close to 800,000 acres on which he will grow rice, wheat and sugar cane, among other crops. Karuturi told me he doesn’t have to export the food to make money; there’s plenty of profit potential in the East African market. He has flown in John Deere tractors, agricultural experts from Texas A&M and commercial farmers from Mississippi to help him get things going. He says he’s raising $100 million in capital from private equity firms for the first phase of the project, which he estimates will ultimately cost well over a billion dollars. “Recently, I saw a lot of articles . . . where they referred to me as a food pirate,” Karuturi says. “This whole thing is so elitist, it’s ridiculous. They want Africa to remain poor.”"
The current perspective is nothing worse can happen in Africa which already hasn't happen. So most are joining the bandwagon and its not right to blame them since African governments are mostly incompetent. At-least a selfish capitalist can quench their thirst and feed them for a while. This is only a short term solution. A crucial difference between say India 50 years ago and Africa today is India had knowledge capital to self-sustain with the technologies introduced to West long after they left. There is mammoth lack of knowledge capital in Africa (There is a scarcity of articles on Africa even on Wikipedia) has and the best thing this Agro-Imperialism can bring is improve the education standards of just one generation and that will be the only game changing catalyst. One thing we can be sure of is, for better or worse the consequences of this new trend is going to have big social and economic changes. Lets hope its for better.
No comments:
Post a Comment