China

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.

Some Gulf countries may now be realising the importance of offering direct loans to African countries as a means to increase Arab investment.

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.

China has said it will not join the growing trend of outsourcing food production by investing in overseas farmland, particularly in Africa, expressing doubts that such deals could improve its food security.

Officiellement, les terres arables louées à la Chine n’existent pas. C’est que les autorités kazakhes craignent la réaction de la population rurale devant la “concurrence déloyale” représentée par l’arrivée en masse de paysans chinois, dont l’équipement agricole est supérieur au vieux matériel soviétique encore utilisé sur la plupart des exploitations kazakhes.

Not a day goes by without new acreage being signed over. "For Sale" ads for agricultural property are now featured in the international financial press. And there's no dearth of clients.

"Je crois que les tensions seront inévitables où que ce soit, faisant des enclaves agricoles étrangères de véritables forteresses assiégées."

Increasingly, the land deals are coming under the scrutiny of the UN and watchdog groups such as Grain, the International Land Coalition and the IFPRI. That's because it is not obvious that they are win-win situations.

The deal would be the biggest lease of land in the country, which faces food shortages following severe flooding and drought during last year’s growing season.

Are there any answers to this looming crisis? Some countries are buying land. There is vague talk about governments introducing “water management reforms”. Even more opaquely, there are calls for “multi-country discussions on trans-boundary issues, international trade and investment flows”.