Rich Nations Buying Overseas Farmland
16 December 2008 Under a proposed agreement with Kiev, reports the Chicago Tribune, Libya could lease 247,000 acres of Ukrainian cropland to grow wheat, which would be shipped back to Libya. Ukraine would benefit from the deal by gaining access to Libyan oil fields, helping free it from dependence on Russia for its energy needs.
The Tribune reports that wealthy nations around the world were spooked by last season’s high food prices, and are “racing to snap up rights to farmland in developing countries and breadbasket nations.” Among these nations are South Korea – whose Daewoo Logistics signed a 99-year lease on 3.2 million acres of land in Madagascar for corn and palm oil production – and China, which is buying or leasing acreage in the Philippines, Laos, Kazakhstan, Myanmar, Cameroon, and Uganda. China already farms more than 100,000 acres of land in Australia. Middle Eastern nations such as Saudi Arabia, the United Arab Emirates, Bahrain, and others have locked up millions of acres in Indonesia, Pakistan, Sudan, and Egypt.
The land grab was partially instigated by low world grain stocks and by a lack of trust in world grain markets. Within the last year, India, Vietnam, and Indonesia “cut off exports of key crops such as rice and wheat to ensure supplies at home, boosting prices worldwide and raising concerns about potential shortages,” reports the Tribune. Countries like Saudi Arabia can reduce costs by 20% or more by cutting out the middleman, while fast-developing countries like China, want to ensure supplies for growing food demand at home.
However, crop experts warn that past efforts to create huge-scale corporate grain farming – such as the Soviet Union’s disastrous collective farms and the collapse of a variety of large-scale colonial farming efforts in Africa – have regularly failed, which is one reason family-owned farms continue to predominate in, one of the world’s biggest grain producers, the United States.
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