Food security deal should not stand

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Financial Times | editorial | November 19 2008

Pirates are not the only source of concern off the African coast. The deal South Korea’s Daewoo Logistics is negotiating with the Madagascan government looks rapacious. Alas, it is but the latest brazen example of a wider phenomenon. In the name of food or energy security, cash-rich states are seeking to buy up natural resources in poor countries. While foreign capital and technology should be welcomed by countries with surplus resources, the terms and scale of the present deal raise serious questions.

Any agreement must ultimately be in the interest of the local population. The Madagascan case looks positively neo-colonial. If the deal is sealed with the vague promises by Daewoo Logistics being mooted, the Madagascan people stand to lose half of their arable land.

Instead of a commitment to share the benefits of higher productivity from foreign investment in agricultural technology and infrastructure in return for a fair lease value for the land, the South Korean firm looks set to get the land for a notional amount and mere talk of creating jobs. The Madagascan state may officially own the land in question, but small-scale farmers who have worked it for generations stand to lose their livelihoods. Much of the land, moreover, is currently forest. This potentially valuable resource in the fight against climate change would be destroyed for good.

Far from being a win-win deal, the benefits are also not clear for South Korea. One day, the Madagascan fields may produce up to half its corn imports. But consider what might happen in times of food scarcity. Madagascans would hardly stand by and watch as food is shipped from their ports. China has learnt this lesson. While happily exploiting mineral resources in Africa, China has backtracked from agricultural endeavours there.

Despite the easing of food prices, the issue of food security continues to haunt grain importers in the Middle East, North Africa and Asia. The price of food is often not the prime concern. Instead, the curb on agricultural exports by countries such as Argentina during the recent food shortage scare raised the spectre of importers not being able to lay their hands on produce at all.

Solutions to these problems exist that would benefit both exporters and importers while not reeking of neo-colonialism. Helping local farmers to raise productivity and sell surplus on world markets through loans from development banks would be one. But competing with them for scarce food is bound to fail unless old-style colonialism is resurrected. That day must not come.

Original source: Financial Times
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