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November 24, 2008

Food crisis spurs global land rush

by Tom Phillips

With an area of farmland more than 16 times the size of the UK, Brazil has become one of the most attractive options for countries seeking agricultural acreage overseas. On its 388m hectares of agricultural land, the country produces more sugar, coffee, beef and poultry than anywhere else. It is also the world's leading soy exporter.

To date most of the investment in Brazilian land has been from the private sector, but a growing number of foreign governments are expressing interest in joining the rush to buy.

Saudi Arabia is among the countries that view Brazilian land as a "solution." In a recent interview with the Brazil-Arab news agency ANBA, the incoming Saudi ambassador in Brazil, Mohamad Amin Kurdi, said that the country was one of those to which Saudi Arabia was looking "in search of possibilities." Kurdi said he planned to introduce representatives of Saudi Arabia's trade and agriculture ministries to possible investment sites, while the ambassador recently visited the state of Tocantins, an agricultural boom area in Brazil. Iranian diplomats have also been exploring, with a view to ensuring the supply of products such as beef, soy, sugar and corn.

In an editorial published in the Chinese press this year, Charles Tang, head of the Brazil-China chamber of commerce, wrote: "Unlike China, most of Brazil's territory consists of fertile land that can be cultivated and is being under-utilised. Chinese companies who wish to make long-term investment commitments to buy land ... can obtain healthy financial returns."

Last year the Brazilian grain trader Multigrain, which is partly owned by the Japanese Mitsui conglomerate, bought 100,000 hectares of farmland in Brazil.

Growing signs of a foreign scramble for Brazilian land have sent prices soaring. In some parts of the southern agricultural state of ParanĂ¡ the price of farmland has soared to about R$30,000 (£8,238) a hectare. Nationwide prices are estimated to have risen by about 20% over the past year.

But the rush for land has raised some eyebrows in the nation's capital, stirring fears of a "foreign invasion."

"Rules have to be set down quickly because everybody is fighting for Brazilian land," said Rolf Hackbart, the president of Brazil's Land Reform agency, Incra.

The Guardian

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