Middle Eastern countries flush with oil funds want to invest up to $1bn in Australian farmland as they extend a drive for food security to the world’s second-largest wheat exporter, a grains official said yesterday.

Stephen Marks looks at the latest rush by China and countries in the middle east to sign lease agreements in poor countries for agricultural production, and what this trend means in terms of food security and access to arable land for local populations.

Saudi-based investment firm Binladin Group is mulling at investing on agriculture projects here worth an estimated US$4.3 billion, which will be spent within the course of 15 years, says an official.

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Deputy for agriculture and fisheries to the coordinating minister for economic affairs Bayu Krisnamurthi earlier said that the government had given a priority to a regulation pertaining to the development of food estates to support Indonesia`s food security. According to him, the economic affairs coordinating ministry was drafting a regulation, 90 percent of which had been completed.

Some fear that the land grabs could worsen poverty because few benefits will flow to the poorer host countries, and small farmers could lose out. Although the UN Food and Agriculture Organisation (FAO) is drawing up guidelines to protect their interests, it is far from clear whether anyone will follow them.

Faced with high land values and falling milk prices at home, a growing number of New Zealand dairy farmers are investing in South America, the United States, eastern Europe and Russia.

"They [Daewoo] have prospected for land and now the central government is waiting for the prospecting reports,” the Malagasy land reform ministry told the FT. Critics said the welfare of Malagasy people and global food security would be better served by islanders being helped to manage their own farms. They stressed the trickle-down effect of Daewoo’s plan would be marginal and noted the company’s focus on exporting food from a country in which about 600,000 people rely on relief from the United Nations World Food Programme.

Saudi billionaire Mohammed Al Amoudi is finalizing plans for a $300 million sugar plantation in northwestern Ethiopia, the Walta Information Center reported.

Nomadic herders, rarely a priority for governments, are being dispossessed by bioethanol developments in Kenya, says Michael Taylor of the International Land Coalition (ILC), and they also depend on the “unused” land that Madagascar offered Daewoo.

The Kenyan President, Mwai Kibaki, returned from a visit to Qatar on Monday. His spokesman said the request for land in the Tana River delta, south of Lamu, was being seriously considered. “Nothing comes for free. If you want people to invest in your country then you have to make concessions,” the spokesman said.

Africa could be the breadbasket for the GCC, providing valuable water and food supplies to the entire region, a Bahraini expert claimed yesterday.