Food security or global land grab?
June 22, 2012 1:30 PM
Want to invest in a soybean farm in Mozambique? Maybe you’ve never considered such a thing, but agribusiness investment in developing countries is a hot trend. With food prices on the rise and the outlook for future food demand practically off the charts, governments, companies and private investors have been buying or leasing land in remote corners of the world for agricultural development, a practice that draws praise from some and derision from others.
According to a new report from Worldwatch Institute, these land acquisitions have dropped off somewhat after peaking in 2009, but remain above pre-2005 levels. The report estimates 70.2 million hectares of agricultural land worldwide have been sold or leased to foreign private and public investors since 2000.
The bulk of these acquisitions have taken place in Africa, with 34.3 million hectares sold or leased since 2000 according to the report, and East Africa accounts 16.8 million hectares of the total. Investors also have secured large tracts of farmland in parts of Asia, South America and Eastern Europe. In some cases, foreign corporations purchase the land, and in other cases they secure long-term leases on government-owned land.
Bringing large, modern and efficient farming enterprises into areas dominated by small-scale subsistence farming has benefits in terms of employment and total food production, but the operations can have negative impacts as well, to the environment and to local communities.
Last week, National Public Radio (NPR) ran a two-part series outlining the upsides and downsides to the trend.
The ways in which foreign entities go about developing their farms and interacting with local communities seems to make the biggest difference in their ultimate acceptance. The NPR report quotes Jes Tarp, CEO of a company called Aslan Global Management, which owns tens of thousands of acres of farmland in Ukraine and Africa. Investors in the company, Tarp says, expect returns based on growing demand for agricultural products, but also want their investments to benefit society. "The one thing that they have in common is, they are looking for an investment where their investment will make a difference," he says. Tarp says the company’s established farms in Ukraine are generating positive returns, and newer farms in Africa eventually will yield "solid returns" of 15 to 20 percent each year. At the same time, he stresses that the company intends to be a good neighbor in countries where it develops farms. "We are there not to extract wealth from the community, but to build wealth in the community," he says.