G8 backs Japan's farmland investment principle idea

Japan`s PM Aso smiles at the opening of a round table session at the G8 summit in L`Aquila

Reuters | 09/07/2009

Rome, July 8 - Japan's proposal to set up a set of common guidelines to promote smooth global investment in agriculture was endorsed by other leaders of the G8 at a summit on Wednesday, a Japanese government official said.

Competition to secure food production has gained momentum in the past few years as prices of grains have soared on expectations of greater demand from emerging countries. That has exposed nations with low food self-sufficiency, such as Japan, to the volatility of the commodities markets.

Against that background, Japan, the world's largest net food importer, wants to establish common rules and cite good practice to promote responsible international investments in agriculture in the face of growing farmland acquisition or "land grabs" in developing countries.

"There is a limit to what governments can do to promote private-sector investment in the long term, but it is important to prevent land grabs in order to foster long-term agriculture investments," said the official, who was involved in preparing the summit of leaders from Group of Eight (G8) in Italy.

"Prime Minister (Taro) Aso's proposal to create a set of principles to promote healthy and smooth international, private-sector investment in agriculture was supported by other leaders today," he told reporters.

The official added that Japan wants to chair a meeting of relevant countries and international organisations to work on guidelines on the sidelines of the United Nations General Assembly in September.

"It is not just about investors," he said. "The principle should ensure that those who receive foreign investments feel comfortable."

In the past Japanese officials have said that foreign land buyers should respect the rights of local people and that investment projects need to be compatible with development needs and the environment, so that all parties involved in agriculture deals benefit from them. China, South Korea and Middle Eastern countries have been aggressively buying farmland in poor countries in Africa. Japan, while declining to name names, hopes that new guidelines will prevent foreign land buyers from behaving in an abusive manner.

As part of diplomacy on food security, Japan is keen to reverse the overall decline of investment and aid in agriculture and thereby expand the potential of food production beyond the traditional boundaries.

Estimated global foreign direct investment in the agriculture-related sector stood at $7.6 billion in 2006, which is less than one percent of that in the mining and petroleum sector, according to the Japanese government.
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Source: Reuters 
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