G8 backs farmland code of conduct, details sketchy

By Silvia Aloisi

ROME (Reuters) - A call by G8 leaders for a code of conduct in international agricultural investments reflects a growing international debate over foreign land purchases in poor countries, but it is not clear how such a code might work.

Group of Eight countries said in a statement at a summit in Italy they would "work with partner countries and international organisations to develop a joint proposal on principles and best practices" in the face of rising investments in foreign land.

The issue is likely to come up again at talks on Friday, when the G8 and other countries will discuss a new food security initiative that could result in up to $15 billion being pledged to boost agriculture in poorer nations.

Middle Eastern countries flush with oil cash but also Asian nations worried about their food security -- notably China and South Korea -- have been snapping up farmland abroad after a supply scare drove the price of most food items to record highs last year.

The International Food Policy Research Institute, a Washington-based think-tank, says that since 2006 15-20 million hectares of land in poor countries were sold or were under negotiations for sale to foreign buyers.

Supporters of such deals say the provide new seeds, technology and money for agriculture in economies that have suffered from huge underinvestment for decades.

But the land-buying spree, particularly in Africa, has drawn criticism from aid groups fearing poor countries, and their farmers, are not getting a fair deal.

LACK OF INFORMATION

"The G8 statement is pretty weak," said Sarah Gillam of anti-poverty group ActionAid, which is calling for an independent United Nations commission to establish an enforcible code of conduct for foreign land purchases.

She said such a code should be based on prior informed consent by developing countries, an adequate compensation of the communities affected and an assessment of the impact of land deals on local food security and rural livelihoods.

"No deal should be approved if it does not fit the bill," she added.

Others caution that lack of information about such deals and their fallout in recipient countries make drawing up such a code difficult.

"We don't know enough yet in practice to formulate a very strong code of conduct," David Hallam, deputy director for trade and markets at the U.N.'s Food and Agriculture Organisation, told Reuters.

"The question is how can we turn these deals into something positive and eliminate some of the risks. But we need some serious information and I am not convinced another international regulatory body would be either feasible or reasonable."

Within the G8, the idea of a non-binding set of principles for agricultural investments is being championed by Japan -- the world's largest net food importer.

Tokyo wants to chair an international meeting on guidelines on the sidelines of the U.N. General Assembly in September, but Japanese Prime Minister Taro Aso says a regulatory approach is not desirable as it may deter "benign investment".

"Japan is historically a big investor in agriculture in Brazil and Australia among others. But it is concerned about the adverse press coverage of so-called land-grabs in Africa, with accusations of neo-colonialism," said Hallam.

"That kind of coverage has already led some investors to reconsider and pull back, and Japan is quite sensitive to this."
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