Farm Ireland

Saturday 17 March 2018

Food security fears drive global clamour for land

Millions of acres locked into long-term leases by wealthy nations

Daithi O hAnluain

THE FOOD price rise in 2008 has led to millions of hectares of farming land being locked up in long-term leases in a worldwide rush to secure fertile ground.

Global conglomerates and governments are urgently seeking to ensure long-term food and fuel security by acquiring vast tracts of fertile soil around the globe which they use to grow crops for the home market.

And Dr Colin Sage, a UCC senior lecturer in Environmental Geography, warned that land in Ireland could be acquired and exploited in the same way.

"We're not paying enough attention to the long-term value of this land, we have somehow become a little blasé about this. After all, this is the basis of our future food security and our survival. It is all based upon food, which we absolutely need," the sustainable agriculture expert said.

The sheer scale of some of the deals almost beggars belief. South African investors leased 2,000 square kilometres in the Democratic Republic of Congo for 30 years, with an option to extend.

According to some reports, there could be as much as 50m hectares bought and leased through completed and ongoing international deals for arable land. There is no sign the trend is set to decline; quite the contrary, it seems to be accelerating.

High food prices in 2008, a rapidly growing world population and the expectation among investors that energy prices will rise dramatically as peak oil begins to bite are the three primary factors pushing countries to secure land for food and biofuel production, according to Dr Sage, who studies sustainable agriculture systems.

Cash-rich countries, such as the Gulf states, and powerful eastern economies, such as China, India and Korea, are securing land anywhere they can.

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China has signed a contract with the Democratic Republic of Congo for 2.8m hectares, while the United Arab Emirates has about 1.3m hectares of land leased internationally, of which about 300,000ha is in Pakistan.

"And they are not acquiring land just where prices are cheap," Dr Sage emphasised. He said Dubai sought a 99-year lease on 28 farms on New Zealand's South Island, while China is involved in the potential purchase of 22 farms in the North Island, belonging to a single family who had acquired a significant debt burden of about $200m.

"The farms amount to about 20,000 head of milking stock and another 10,000 head of other stock," Dr Sage claimed.

In fact, the United Nations Sustainable Innovation bulletin noted earlier this year that strategic supply issues rather than pure profit drove many of the land investments.

"Importantly, the new investment strategy is more strongly driven by food, water and energy security than a notion of comparative advantage," notes the bulletin, turning capitalism's business-as-usual on its head.

And while agri-businesses have always traded land internationally, the UN briefing notes that the current scale is unprecedented, and has been accelerating since 2008. Another novelty is governments are now getting in on the act.


Previously it was primarily agri-businesses, hedge funds and other private investors, but governments in the Gulf and elsewhere are offering cash, loan guarantees, tax breaks and other direct and indirect subsidies to encourage investment in land abroad.

This positive investment regime has led to hugely ambitious plans throughout Africa, where land is cheapest. In the Sudan it is possible to lease land for as little as €1/ha/year.

In Ethiopia, Saudi investors are building vast greenhouses, up to 20ha in size, to grow tomatoes, peppers and other hothouse crops. Indian investors are leasing vast tracts of land to supply the cut-flower market.

But the sheer number and magnitude of the deals underway is causing a backlash. This week a poll by New Zealand TV found that 75pc of New Zealanders want tighter restrictions on land ownership for foreign investors, and Kiwi Prime Minister John Key told reporters that he is concerned that New Zealanders could become "tenants in their own land".

Last year a deal by Korean conglomerate Daewoo to secure 1.3m hectares in Madagascar -- 40pc of the island's arable land -- was scuppered after protests led to a coup. Daewoo had intended the land for palm oil and food production, hoping to replace more than half of the corn that South Korea, the world's third largest buyer, imports from the US and South America.

"The whole basis of this, of course, is to understand how food prices rose in 2008. That's the key to it, that's the driver of it. They led to the tortilla riots in Mexico and there was rioting and unrest from Mexico to the Philippines. There was major unrest in 28 countries. There were riots around food all through Africa and large parts of Asia, and there were serious concerns about what this meant for political stability in places where food prices went up," Dr Sage said.

"These are interesting developments but I think there is a deeper lesson and it is important to flag that. If we continue to provide low returns to farmers, then farmers, and especially the next generation, will see no future in it for them. Here are a bunch of agents for the Chinese state, or wherever, who are saying we're going to buy this townland or this bunch of farms, the owners are going to say 'why not?'

"Fertile land and access to water are going to be the two essential assets as peak oil and climate change start to undermine food security and energy production. Ireland needs to realise that."

Irish Independent