Financial Times | July 5 2009
By Taro Aso
Food security will be the highlight of the discussion when the heads of 27 countries and 11 organisations meet on Friday at the Group of Eight summit in L’Aquila. I expect substantial progress to be made, particularly on aid to countries affected by the food crisis. I will also make a new proposal to promote responsible foreign investment in agriculture, in the face of so-called “land grabs” – the growing trend for large-scale investment in farmland across the developing world.
A year has passed since this phenomenon first gained attention, and new deals continue to hit the headlines. The United Nations special rapporteur called for a set of principles, and the African Union discussed the issue at its summit last week. What is needed now is for concerned parties to frame a co-ordinated global response. Japan, as the world’s largest net food importer and a major donor in agricultural development, believes it has a role to play.
For decades, food supply has been taken for granted in countries of the north thanks to the stable market, whereas for large swathes of the developing world, food shortages are chronic.
Uncertainties about supply were brought home by the recent price spike and ensuing social unrest around the world. Export restrictions raised fears among importing countries that they could not rely on markets, and provoked a rush to grab land. At the same time, the size of the price surge poses a grave threat to human security; globally, the undernourished will soon surpass 1bn.
Is the current food crisis just another market vagary? Evidence suggests not; we are undergoing a transition to a new equilibrium, reflecting a new economic, climatic, demographic and ecological reality. If that is the case, food security can no longer be just a matter of famine relief. The question must be how we can expand food production beyond traditional economic and geographical boundaries in order to live sustainably.
It is in this context that we should be assessing farmland investments in the developing world. We should see this not as a zero-sum but as a win-win situation. Japan’s co-operation with Brazil over the past three decades to transform Cerrado, an arid semi-tropical region of Brazil, into one of the world’s most productive farmland areas is a prescient milestone.
We think a regulatory approach is not desirable, as it may suppress benign investment. Lasting investment is the only viable solution for a sustainable future, and we must work to restore confidence in the market, particularly among food-importing countries concerned by the proliferation of export restrictions. Charity alone cannot be a lasting solution. President Abdoulaye Wade of Senegal called for “help to stand up policy, a help for self-assistance”.
Responsible agricultural investment, which Japan champions, is based on the same philosophy of self-help, supporting recipient countries to develop growth strategies with renovated agro-industries.
We believe non-binding principles would promote responsible investment and sustainable farmland management. They should include, among other things:
? International agricultural investments, particularly sovereign interventions, must be transparent and accountable. Investors should ensure that key stakeholders, including local communities, are properly informed. Agreements should be disclosed.
? Investors must respect the rights of local people affected by investments, in particular land rights. They should also ensure the benefits are shared with local communities in the form of employment, infrastructure, skills and technology transfer.
? Investment projects need to be integrated into recipient countries’ development strategies and environmental policies.
? Investors must take into account the food supply and demand situation in recipient countries. Foreign investment must not aggravate local food insecurity.
? Deals for land and products should adequately reflect market values. Trade arrangements must adhere to World Trade Organisation rules.
Japan will work with key partners to develop a global platform to agree on principles and compile good practices. We call on interested parties to meet in September. We need a grand coalition with a common vision, for our interests are all entwined.The writer is Japan’s prime minister