By Javier Blas
South Korea's Hyundai Heavy Industries yesterday announced it planned to lease 50,000 hectares of farmland in Russia's far east, in the latest sign of Seoul's push to increase its food security by outsourcing agricultural production overseas, writes Javier Blas.
A previous South Korean initiative - a plan to lease 1.3m ha of land in Madagascar by Daewoo Logistics - collapsed recently after Antananarivo's new government cancelled the project.
A heavily populated but resource-poor nation, South Korea is the fourth largest importer of maize and among the 10 largest buyers of soyabeans. Hyundai said it planned to grow corn and soyabeans on the Russian land "to help Korean livestock farms by freeing them up from sudden price changes and supply shortages".
Hyundai said as a first step it had acquired for $6.5m (€4.9m, £4.4m) a majority stake of 67.6 per cent in Khorol Zerno, a Russian agricultural company which farms 10,000 ha in the far east, adding it would invest a further $9m to expand the farm to 50,000 ha by 2012 and planned to manage it "directly by dispatching permanently stationed staff".The pursuit of foreign farm investments is a clear sign of how countries are seeking to boost their food security following last year's crisis, in which commodities such as wheat and rice reached record prices, and trade was restricted when leading exporters imposed export bans.