Rattled by last year's food price crisis, governments and corporations have signed a slew of deals to lease or buy arable land in cash-strapped nations, mainly in Africa and Southeast Asia.
The Ernst & Young office in Addis is currently advising several investors from the Middle East, especially Saudi Arabia, who are investing tens of millions of dollars in the agro industry in Ethiopia.
The Philippines has offered to become a major source of agricultural products to Saudi Arabia ahead of a planned visit by the kingdom’s agricultural minister Fahd Balghunaim, Arab News reported on Wednesday.
“African countries have not been in a reasonable bargaining position,” AU Agriculture Commissioner Rhoda Peace Tumusiime told Reuters in an interview at AU headquarters in Addis Ababa. “The pace of the trend was very fast and they didn’t envisage that there should be benefits to the community.”
Saudi officials I have spoken to seem to be aware of the minefields their schemes could ignite.
Saudi Arabia's desire to secure its sources of food for its citizens by establishing overseas joint ventures in food production has received a positive response from a Philippine trade delegation.
The issue of food security is getting higher on Riyadh’s priority list.
The Federal Minister of Investment in Pakistan, Waqar Ahmed Khan, said this week that the government plans to sell or lease 1 million acres of farmland to foreign investors, primarily from Saudi Arabia and other Gulf countries. Although the news has yet to gain much coverage, if carried out it could punctuate growing unrest and frustration, given Pakistan’s limited amount of arable land and population of more than 170 million.
GCC countries' initiatives to safeguard food security by investing in agricultural projects abroad had stalled, illustrated by the Saudi Bin Laden Group's decision to postpone a planned $4.3-billion investment in Indonesian rice production.
Food-importing nations from South Korea to Saudi Arabia may step up purchases or leases of overseas farmland to lock in supplies amid concern prices may again surge. “We’re going to see more of this, especially from countries that are quite dependent on imports,” Brady Sidwell, head of advisory at Rabobank Groep NV’s Northeast Asia Food & Agribusiness Research and Advisory Group, said in a Bloomberg Television interview broadcast today.
The issue of land ownership in Africa is very sacred and foreign investors need to be aware of the local sensitivities.
The problem of food security poses a real threat to global stability. Meeting in Italy last weekend, agriculture ministers of the G8 industrialized countries recognized the extent of the problem. They pledged to continue fighting hunger. But beyond calling for increased public and private investment in agriculture, the final communiqué of the ministerial meeting was short on fresh proposals.
