Land Grab for the World's Farms

In a rush to secure food supplies, investors from around the world are snapping up agricultural land at soaring prices, especially in Africa

In Africa they are calling it the land grab, or the new colonialism. Countries hungry to secure their food supplies—including Saudi Arabia, the Emirates, South Korea (the world's third biggest importer of corn) China, India, Libya and Egypt—are at the forefront of a frantic rush to gobble up farmland all around the world, but mainly cash-starved Africa.

Over the past few months, Saudi Arabian investors have paid $100m for an Ethiopian farm where they hope to grow wheat and barley, adding to the millions of acres they already own in the war-ravaged country, as well as in neighbouring Sudan. The Saudis also have land in Indonesia and Thailand for growing rice. China owns vast tracts of overseas land, mainly in Algeria and Zimbabwe, and one estimate suggests that more than a million ethnic Chinese farm workers will be living on the continent this year. Kenya and Tanzania have leased land while the Ugandans have been big sellers, allocating two million acres of land to Egypt for wheat and corn.

Further afield, the Saudi government and other Gulf States are negotiating with Pakistan to buy another million acres. The deal includes the services of a 100,000-man private army to protect the food being exported. Buyers or lease-holders have have also been promised legal cover in case a future government in Islamabad is less welcoming.

Soaring wheat and rice prices over the past two years—which have caused riots in more than 30 countries from India to Haiti—were the catalyst for the latest dash for land. But the rush really took off at the end of last year when many big food-exporting nations introduced export controls.

Food scares hit Saudi, Kuwait, Bahrain and other Arab states the hardest, because they felt particulary vulnerable as their own efforts to grow crops in the desert have proved costly and inefficient. By far the most aggressive buyer is Saudi Arabia, where the government is now actively encouraging private investors and companies to buy farmland abroad after abandoning its attempt to be self-sufficient because of worries over water scarcity. It cut its wheat production by 12.5 per cent last year, prompting the search for new land.

Not every country is opening its arms to these new landlords with as much enthusiasm as Pakistan. In Madagascar, public anger over a plan to sell more than a million hectares to South Korea's Daewoo on a 99-year lease forced the government to drop the deal and was one of the reasons for the recent change in president.

But the issue is not a clear-cut case of neo-imperialism. At the African Union (AU), the agriculture commissioner, Rhoda Peace Tumusiime, is worried that many land buyers are ignoring the interests of local farmers and communities. But the AU also recognises that bringing new capital into Africa could be positive if it is directed in the right way. Instead of purchasing land, she says, buyers or lease-holders should invest through production and trade agreements with the host country.

Deals which increased overall food production should be encouraged, a move which would bring more food to the international markets, as well as to the poorest African households, Tumusiime said. Some of the AU's new guidelines on land sales, due to be ratified in July, include recommendations that new investors should promise to help with infrastructure, such as health facilities, agree to pay local taxation and look at ways to get more involved on the food-processing side which would create more local jobs.

David Hallam, the deputy director of the trade and markets division at the Food and Agriculture Organisation (FAO), part of the UN, also cautions about making over-hasty judgements on such a sensitive issue. "This could be a win-win situation or it could be a sort of neo-colonialism with disastrous consequences for some of the countries involved. I really do have an open mind to whether this new development is positive or not." On Tuesday, Hallam will be opening a conference at the Woodrow Wilson Center in Washington provocatively called "Land Grab: The Race for the World's Farmlands", at which some of the world's leading food experts will try to get a better grip of what is happening. Sovereignty over the land and food supplies is the biggest concern, says Hallam. "There is a danger that host countries, particularly the more politically sensitive and food-insecure, will lose control over their own food supplies when they need it most."

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