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May 10, 2009

African land grab will not succeed

by Gwynne Dyer

In the past two years, various non-African countries--China, India, South Korea, Britain and the Arab Gulf states lead the pack--have been taking over huge tracts of farmland in Africa by lease or purchase. This is to produce food or biofuels for their own use. Critics call them "neocolonialists," but they will not be as successful as the old ones.

The scale of the land grab is truly impressive. In Sudan, South Korea has acquired 690,00 hectares of land to grow wheat. The United Arab Emirates, which already has 30,000 hectares in Sudan, is investing in another 378,000 hectares to grow corn, alfalfa, wheat, potatoes and beans. In Tanzania, Saudi Arabia is seeking 500,000 hectares.

Even bigger chunks of land are being leased to produce biofuels. China has acquired 2.8 million hectares in the Democratic Republic of Congo to create the world's largest oil-palm plantation (replacing all that messy rain-forest and useless wildlife with tidy lines of palm trees), and is negotiating for two million hectares in Zambia to grow jatropha. British firms have secured big tracts of land in Angola, Ethiopia, Mozambique, Nigeria and Tanzania.

Only rarely is there protest from local people. One striking exception is in Madagascar, where the announcement of a 99-year contract to lease 1.3 million hectares to South Korea's Daewoo corporation to grow corn helped to trigger the recent revolution.

"Madagascar's land is neither for sale nor for rent," said the new leader, Andry Rajoelina, who cancelled the deal.

After the revolution, it turned out that another 465,000 hectares of land in Madagascar had been leased to an Indian company, Varun International, to grow rice for consumption in India. That deal is also being cancelled by the new government--but elsewhere, the acquisition of huge tracts of African land by Asian and European governments and companies goes ahead almost unopposed.

Why Africa? Because that's the last place where there are large areas of good agricultural land that aren't already completely occupied by local farmers. There are usually some peasants scratching a living from the land, but they are few and poor, and they can easily be bought or driven out.

For the foreigners, the lure is profit, or food security, or both. For those who are investing in biofuels, there are real profits to be made, at least in the short term. But for those seeking food security, the new African food resources will probably become unavailable just when they are needed most.

The surge in grain prices in 2007-2008 drove many countries that depend heavily on imported food to start acquiring African farmland. The immediate reason for a doubling or tripling of the price of wheat, rice and corn (maize) was a couple of local crop failures and the diversion of large amounts of American corn into biofuel production, but the underlying cause was that the global food supply is falling further and further behind demand.

Since 1945 the world's population has tripled, and so has its food production, growing at an average of about three percent annually through the '50s, '60s, '70s, '80s, and most of the '90s. But for most of the past decade, grain production has essentially flat-lined, while the global population has gone on growing.

By 2006, just before the prices soared, the world grain reserve--the amount that is left in the storage bins each year just before the new harvest comes in--had shrunk from 116 days of food for everybody in the world in 1999 to only 57 days.

Last year's generally good harvests brought prices back down, but the outlook for this year is dire, with drought in about half of the world's main grain-growing areas.

So wouldn't it be nice if you didn't have to compete for scarce stocks of grain at inflated prices on the international grain market when prices soar?

Wouldn't it be great if you could rely instead on your own food supply, even if it isn't located in your own country?

That's why it's mostly countries that depend heavily on food imports that are involved in the current land-rush in Africa, but they are forgetting two things.

The first is that sovereignty trumps contractual obligations every time. If the African countries that are leasing their land fall into difficulties in feeding their own populations, as they are likely to do if world grain prices rise sharply, the first resource they will turn to is the foreign plantations on their territory.

Governments that cannot feed their populations face overthrow, and will break contracts without the slightest hesitation.

The second is that when things really get tough--when climate change starts to bite, grain yields are falling in most places, and what remains of the international grain market cannot meet demand at any price--Africa is not the place to be sourcing your emergency supply of grain. Almost the entire continent lies in the tropics or the sub-tropics, which is where food production will be hit worst.

The neocolonialists will make some money in the short term, and they may even enjoy a false sense of security for a while, but they will not get much for their investment in the long run. Trouble is, Africans will not get much out of it either, although some of their leaders certainly will.

Straight

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