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Rich countries buying Farm land in poor countries to feed Rich people, while poor starve.

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May 13, 2009 – Comments (2) | RELATED TICKERS: AGM , POT , MOS

FARMLAND is a constant increasing demand while the supply of FARMLAND is a constant decreasing supply. I would hate to live in the future where wars will be fought for Farmland not Oil fields.

First Published 2009-04-24

The Global Threat from Hunger

 
More and more countries invest in foreign agriculture to build 'food security' at home. Feeding the rich might end up starving the poor as foreign-owned farms threaten the livelihood of native farmers, says Patrick Seale.

 
Over one billion people go hungry every day -- that is to say, one sixth of the world’s population of 6.5 billion. They are not just hungry from time to time. They are chronicallyhungry. They can never find enough food to feed their children or meet their own needs. Their number is growing.

 

What is the world doing about it? The answer is: very little.

 

The problem is too big, too widespread and -- and also, in a sense, too slow moving -- for rich countries to give it the priority it deserves. World hunger did not feature among the top concerns of the G-20 at their recent summit meeting in London.

 

Yet, it is beginning to be realised that food insecurity poses a threat to global stability. Meeting in Italy last weekend, agriculture ministers of the G8 industrialised countries recognised the extent of the problem. They pledged to continue fighting hunger. But beyond calling for increased public and private investment in agriculture, the final communiqué was short on fresh proposals. The only good news was the announcement by the Obama Administration that it would double US aid to agriculture in poor countries to $1bn next year.

 

The ministers were given a report by the Italian presidency which warned that, if widespread starvation was to be avoided, global agricultural output had to double by 2050 -- when the world’s population would reach a staggering 9 billion. The report called for “immediate interventions.” But nothing immediate was suggested.

 

When prices of agricultural commodities surged in 2007-2008, some thirty countries -- from Haiti to Egypt to Bangladesh -- were shaken by food riots. Illegal migration to Europe increased from the Maghreb and sub-Saharan Africa. Piracy off the Somali coast captured the world’s attention, but few were prepared to recognise that its roots lay in poverty.

 

Many diverse factors lie behind the world-wide increase in hunger. They include a soaring world population, which is said to be increasing by 80 million a year; a shortage of water and arable land, notably in the dry Middle East; highly volatile food prices; financial constraints which prevent some governments from continuing to subsidise food prices at former levels; a flight of young people from the land; and -- that new and terrifying imponderable -- climate change.

 

The UN’s Food and Agricultural Organisation (FAO) estimates that an injection of 30 billion Euros a year into family farming across the world could hold hunger in check, and even reverse it. But the FAO appeal has largely fallen on deaf ears.

 

As collective action by world powers is unlikely, countries with the means to do so are outsourcing the problem of food security by buying or leasing vast tracts of arable land outside their borders.

 

Saudi Arabia, for example, has already secured 1.6 million hectares of agricultural land in Indonesia. As it is phasing out its own wheat production to conserve finite water resources, it is planning to invest heavily in agricultural projects abroad. A state-owned organisation -- the Saudi Company for Agricultural Investment and Animal Production, with an initial capital of $800m – is trying to interest private Saudi investors in foreign farm projects by providing credit and by negotiating deals with Australia and Argentina, as well as with countries in Africa, Asia and Eastern Europe.

 

Many such contracts have been concluded or are in prospect. Something like a world-wide scramble for land is taking place. The United Arab Emirates has secured 1.3 million hectares overseas, mainly in Sudan and Pakistan. Indeed Pakistan, according to a Reuters report this week, has offered to sell or lease large tracts of farmland to countries anxious to secure their food supplies. Qatar has land holdings in Indonesia; Kuwait has similar holdings in Burma; while Libya is about to sign a large contract for farmland in Ukraine. Jordan has set its sights on Sudan.

 

South Korea -- a resource-poor but heavily populated country -- has acquired over one million hectares in Sudan, Mongolia, Indonesia and Argentina. Just last week, the Financial Times reported that a South Korean company, Hyundai Heavy Industries, planned to lease 50,000 hectares of farmland in Russia’s far-east.

 

China, too, has long been interested in the undeveloped lands of Russia’s far-east. According to the French daily Le Monde, between 400,000 and 700,000 Chinese peasants have already settled permanently in that Russian region, which is geographically closer to Beijing than to Moscow. It is also estimated that a million Chinese peasants might find their way to Africa over the next year or two.

 

According to the US Department of Agriculture, China feeds 20 per cent of the world’s population with just 10 per cent of the world’s agricultural land and about six per cent of the world’s water resources.

 

One of the problems of these new semi-colonial plantations is that much of the food produced there will not be consumed on the spot but will be exported to the countries that put up the money -- to China, South Korea and the Arab world. This might actually increase food scarcity in the host countries. Foreign-owned farms could also threaten the lives of native farmers. Often without title to ownership, they face the threat of expulsion by the newcomers.

 

Feeding the rich might end up starving the poor.

 

 

Patrick Seale is a leading British writer on the Middle East, and the author of The Struggle for Syria; also, Asad of Syria: The Struggle for the Middle East; and Abu Nidal: A Gun for Hire.

 

Copyright © 2009 Patrick Seale

(Distributed by Agence Global)

 

2 Comments – Post Your Own

#1) On May 13, 2009 at 9:15 AM, IBDvalueinvestin (99.66) wrote:

Now the good news from today's retail #'s

We are not getting Deflation which would have delayed an economic recovery,  and Farm Exports Rose:

U.S. export prices increased 0.5 percent in April, after falling 0.7 percent a month earlier. Prices of farm exports rose 3.6 percent and those of non-farm exports rose 0.3 percent.

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U.S. April Import Prices Rise 1.6% on Higher Oil Cost (Update1)

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=abrzpTkvdrd0

By Bob Willis

May 13 (Bloomberg) -- Prices of goods imported into the U.S. increased in April for the second straight month, as oil costs rose.

The import-price index increased 1.6 percent, more than three times as much as forecast, after a revised 0.2 percent gain in March, the Labor Department said today in Washington. Excluding oil, prices fell 0.4 percent.

Rising prices for oil and other commodities are helping to allay concerns that deflation, an extended drop in prices, may take hold and delay an economic recovery. Still, the worst global downturn in the postwar era is choking demand for goods and services, keeping inflation tame and allowing the Federal Reserve to focus on thawing credit markets and boosting growth.

“Import prices will have some upside pressure in the near term” as energy costs rebound, Jeffrey Roach, chief economist at Horizon Investments in Charlotte, North Carolina, said before the report. Still, “the global recession will keep inflation pressures at bay in the near term.”

Compared with a year earlier, import prices plummeted 16.3 percent, the biggest such decline since record-keeping began in September 1982.

Retail sales in the U.S. unexpectedly dropped in April for a second month, indicating rising unemployment is prompting consumers to boost savings. The 0.4 percent decrease followed a revised 1.3 percent drop in March that was larger than previously estimated, the Commerce Department said today in Washington.

Forecasts of Imports

Economists forecast import prices would rise 0.6 percent in April from the prior month, according to the median of 46 projections in a Bloomberg News survey. Estimates ranged from a 2.2 percent gain to a drop of 0.4 percent.

The price of imported petroleum and petroleum products increased 15.4 percent in April, after a 7.9 percent gain a month earlier. Still, prices were down 50 percent from a year earlier.

Natural gas import prices, meanwhile, plunged 14 percent from the previous month, the ninth straight decline.

Food import prices dropped 0.1 percent last month after declining 0.7 percent in March. Compared with a year earlier, these prices were down 4.9 percent.

Prices of imported capital goods such as electrical generators rose 0.1 percent after falling 0.7 percent the month before. Automobile import prices fell 0.1 percent after dropping 0.2 percent.

Prices of goods imported from China fell 0.5 percent, for an eighth consecutive decrease, while imports from the European Union fell 0.2 percent. Import prices from Canada rose 0.2 percent and the cost of goods from Mexico rose 1 percent.

Farm Exports

U.S. export prices increased 0.5 percent in April, after falling 0.7 percent a month earlier. Prices of farm exports rose 3.6 percent and those of non-farm exports rose 0.3 percent.

The Federal Reserve’s Open Market Committee said on April 29 that inflation remained below optimal levels, while saying it was ready to buy more securities to lower market rates.

“In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued,” the Fed said. Policy makers said they saw “some risks that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.”

The import-price index is the first of three monthly price gauges from the Labor Department. An index of wholesale prices is due tomorrow, and the consumer price gauge will be released on May 15. Consumer prices are forecast to stay unchanged from the month before, while wholesale costs probably rose 0.2 percent, according to economists surveyed by Bloomberg.

Cutting Prices

Automobile makers are among companies cutting prices or increasing incentives to keep up with plunging demand.

Toyota Motor Corp., the world’s largest automaker, last month cut the base price of its Prius hybrid by $1,000 to help beat back competition from Honda Motor Co.’s gasoline-electric Insight.

Honda started selling the new Insight on March 24 with a sticker price starting at $19,800, less than the $22,000 for the current base-model Prius. Toyota will offer a 2010 Prius for $21,000 later this year, after higher-priced versions debut in late May, according to a Toyota statement last month.

To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

Last Updated: May 13, 2009 08:49 EDT

 

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#2) On May 13, 2009 at 9:55 AM, kaskoosek (66.54) wrote:

Very good post.

 

I was  recently thinking of buying arable land in my country.

 

 

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