Feed yourselves first

It was a matter of food security, according to Daewoo. In a time of rising food prices and street riots, countries that depend on food imports are seeking new ways to secure food. Last year, some food-exporting countries such as Argentina, Ukraine and Kazakhstan restricted exports to ensure local needs were met. The Food and Agricultural Organisation has referred to this trend as neo-colonialism.

South Korea could eventually grow enough maize in Madagascar to fulfil half of its requirements. But the people of Madagascar would hardly benefit from it. Daewoo will import farm labour from South Africa, roads will be built to and from the reserves and Madagascar’s ports will be a little busier. But the lion’s share of maize and palm oil will go to South Korea while 600,000 people in Madagascar rely on food aid from the UN.

Those who defend the plan say there is more than enough uncultivated fertile farmland in Africa, so this ‘food colonialism’ is not taking place at the expense of potential local food production. On the contrary, they say, Africans will learn a lot from it. On the other hand, large areas of rainforest will have to be cut down to make room for the plantations. And those trees are crucial to counteract the effects of climate change, which causes drought and crises in the agricultural sector, and so on.

Daewoo is only one example. The Arab Emirates, which import 85% of their food and build palm-tree shaped islands off their coasts, are investing in ‘strategic’ farmland in Pakistan. Saudi Arabia and Qatar are following suit. Somalia and Sudan, failing states where hunger is widespread, are also wooing Arab agro-investors with large areas of land.

The Arab countries have money but can grow almost nothing themselves, except in air-conditioned greenhouses, and the food crisis has made them nervous. The free market proved not to be so free when some countries closed their trade borders, so they have responded by making bilateral agreements with countries that have a surplus of land. Libya is scouting out the market in Ukraine and Thailand, Ethiopia is rolling out the red carpet for Saudi investors, China is turning its attention to the steppes of Mongolia and Kazakhstan. And Iran is exchanging oil for rice.

If there is enough water and artificial fertilizer available, even infertile land is becoming a strategic commodity. Food is a strategic asset. It is not only useful to have it yourself in times of price rises and hunger; if you build up extra stocks you export it again in times of scarcity – and that gives you power.

Next year, the effects of the financial crisis will also be felt, which will make things difficult for farmers and increase the pressure on export financing. Further off but more ominous is a study by David Battisti and Rosamond Naylor on climate change and its consequences, which Science featured in January. At the end of this century, rising temperatures will result in declining harvests, leading to severe food shortages which will affect three billion people – a third of the world’s population. Most of them will live in the tropics and subtropics but, because the scarcity will be worldwide, it will no longer be possible to relieve it through trade and a better distribution of surpluses and shortages. The message is that it will require farming methods that can deal with climatic changes. Researchers say that it is ‘highly likely (greater than a 90% chance) that growing season temperatures by the end of the 21st century will exceed even the most extreme seasonal temperatures recorded from 1900 to 2006 for most of the tropics and subtropics’. By way of illustration they refer to the effects of hot summers in France and Italy (2003), Ukraine (1972) and the Sahel (end of the last century). In 2003, the average temperature in France was 3.6° C higher than normal. Many harvests declined by more than a quarter to a third, and the heat caused 52,000 ‘summer deaths’ across the continent. The shrunken harvest in Ukraine led to a threefold increase in grain prices on the world market. The exceptional heat in Ukraine during that time ‘will likely be the norm in 2050 and well below the median of projected summer temperature by the end of the century’. According to Battisti and Naylor, more general harvest-temperature models predict that every degree increase in temperature leads to a fall in the grain yield of between 2.5 and 16%.

If countries are already preparing to compete for scarce farmland, the poorest three billion people in the world will be in a weak position. Will hungry people in Somalia and Madagascar stand by and watch while food from their plantations is shipped abroad?

Note from the Editor: As The Broker went to press, the Daewoo deal was cancelled following a coup in Madagascar.