FT August 20.

The race by food-importing countries to secure farmland overseas to improve their food security risks creating a “neo-colonial” system, the United Nations’ top agriculture official has cautioned.

The warning by Jacques Diouf, director-general of the Food and Agriculture Organisation, comes as countries from Saudi Arabia to China plan to lease vast tracts of land in Africa and Asia to grow crops and ship them back to their markets.

 “The risk is of creating a neo-colonial pact for the provision of non-value-added raw materials in the producing countries and unacceptable work conditions for agricultural workers,” Mr Diouf said.

Financial investors and food companies were also looking to invest in overseas farmland, raising some concerns, officials said.

The pursuit of foreign farm investments is the latest sign of how the global food crisis, which has seen record prices for commodities such as wheat and rice, is reshaping the politics of agriculture.

This year big providers of agriculture commodities – including India, Russia, Argentina and Vietnam – have restricted exports to keep local markets supplied.

Joachim von Braun, director of the International Food Policy Research Institute, said importing nations realised that dependence on the international market made them vulnerable – not only to surging prices but, crucially, also to an interruption in supplies. “They want to secure the supply lines of food,” he said.

The recent drop in agricultural commodity prices had not altered this view, as food prices remained well above historical levels, analysts said.

Middle Eastern and North African countries, which import most of their food, are leading the race to invest overseas. Countries such as Sudan, Ethiopia and Ukraine are opening their doors. Meles Zenawi, prime minister of Ethiopia, said recently its government was “very eager” to provide hundreds of thousands of hectares of agricultural land for investment.

Referring to recent investment, Mr Diouf said: “Some negotiations have led to unequal international relations and short-term mercantilist agriculture.” His warning is important as he has been a strong supporter of joint ventures between countries with money to invest and those with land and water resources. It reflects unease among diplomats about the race to lock in land and food supplies overseas.

The upward trend in leasing such farmland has also caused alarm among western agriculture officials, who worry about countries such as Sudan and Zimbabwe gaining more geopolitical leverage following investment in their agriculture.

The FAO has launched a task force to analyse potential problems connected to this, including land rights and the question of how much food would be left for the host country. Behind closed doors, UN officials are discussing whether a scheme similar to the Extractive Industries Transparency Initiative – the programme that helped the oil and minerals industry to tackle corruption and improve governance – could be useful.

 

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