By Jean Paul Arouff
PORT LOUIS, Aug 15 (Reuters) - Mauritius plans to buy 20,000 hectares (49,420 acres) of prime farmland in Mozambique to alleviate mounting worries about food security on the import-dependent island.
Global food prices have eased from their record levels of 2007 and 2008. But they remain volatile and still higher than ever before, prompting wealthier governments to look at securing future supplies by buying or leasing African farmland.
Surging food and energy prices have shaken Mauritius's economy, one of Africa's most stable, and pushed up inflation.
Foreign Affairs Minister Arvin Boolell said a successful project in Mozambique would be a stepping stone towards similar ventures in other parts of the continent.
"In theory, we can secure a reliable supply of food, mitigate price shocks and reduce speculative commodity trade," he said in briefing notes seen by Reuters on Saturday.
Boolell said 5,000 hectares in Mozambique's Central Province were earmarked for Mauritius and that another 10,000 hectares in Marracuene, some 70 km (45 miles) from Maputo, were now available.
A further 5,000 hectares were under negotiation, he said.
The Mauritius government, which set aside 1 billion rupees ($31.75 million) for the creation of a food security fund in its 2008/2009 budget, plans to take ownership of the leases before sub-leasing them out to investors.
Two lead investors have already come forward, Boolell said.
Vita Grain Ltd -- a Singaporean firm registered in Mauritius that is developing hybrid rice varieties on the island -- has submitted a $43.5 million proposal for the 10,000 hectare site.
Swaziland-based Ning Group, best known for cattle-rearing and fast food chains, has also shown interest, Boolell said.
Gulf states including Saudi Arabia, Kuwait and the United Arab Emirates have bought farmland in recent years in Sudan, the biggest recipient of food aid from the U.N.'s World Food Programme (WFP). The United Nations says it is concerned that the rights of farmers in poorer countries are being compromised.
On Wednesday, the international investment bank Rothschild warned that farmland deals, often criticised as land grabs, risked damaging the reputation of Gulf states.
Boolell acknowledged that such deals were distained by opponents as a form of neo-colonialism. But he said that bilateral farmland agreements could be mutually beneficial.
"This is not the time for us to put our proposed mega-project on the backburner. We need to become alert and take a more serious attitude," he said.
About half palm-fringed Mauritius's cultivated land is covered in sugar cane. Supermarket shelves are loaded with foodstuffs from Madagascar, South Africa, France and Australia.
Foreign investors have bought some 15-20 million hectares of farmland in developing countries to date, the Institute of Food Policy Research says.(Writing by Richard Lough; Editing by Daniel Wallis)