In 2008, the Saudi Binladin Group — does this name ring a bell?? — started negotiations with the Indonesian government to invest $4.3 billion in 1.6 million hectares in Papua Province, primarily to grow basmati rice for export back to Saudi Arabia. In the same year, China negotiated to lease more than 1 million hectares of rice land in the Philippines. These were two of the largest of a host of similar plans put forward by interests from economically powerful nations that faced serious agricultural challenges in their respective countries and, in the wake of the 2007/ 08 food crisis, had lost faith in international food markets. The deals have not been restricted to rice. Also in 2008, Korea’s Daewoo Logistics Corporation brokered a deal for a 99-year lease on 1.3 million hectares in Madagascar (around half the country’s arable land) to grow maize and oil palm. There was so much protest from all sides that in 2009 the deal was cancelled. At first sight it looks and sounds like good business and potentially a win-win situation. Wealthy governments or companies buy land and set up large-scale agricultural operations in poorer countries, which have land and water, but not the resources, infrastructure, or technologies to do it themselves. With improved tools, the local farmers increase their productivity and get paid (relatively) well for their efforts. However, here

is the catch: sometimes the foreign entities take the profits and food back home.

On the other hand, the modern technologies and expertise remain in the host country, eventually trickling down to other farmers across the land, resulting in better production. All in all, the level of support for public agricultural research remains well below that required to make a real and lasting difference. The UN FAO has calculated that, to achieve the Millennium Development Goal (www. fao. org) of halving the world’s hungry by 2015, funding of at least $30 billion is needed every year above the current levels of support for the agricultural sector in developing countries. With the share of international aid directed to agriculture trending downward in recent years (now below 5%) official development assistance offers a supplement at best. On the other hand, some economically better-off countries are physically unable to sufficiently increase their domestic production. Countries such as China and several of the Gulf States — burdened variously by large populations, rapidly growing industrial and domestic sectors that put pressure on natural resources, or lack of water (along with a lack of confidence in international markets) — have both the need and the money to invest in rice production beyond their own borders.

The idea of one country growing food in another in order to export it back home is nothing new. However, according to the International Food Policy Research Institute (IFPRI; www. ifpri. org), it is a phenomenon that has accelerated amid the aftershocks of the 2007/08 food crisis. The UN FAO estimates that foreign interests acquired up to 20 million hectares in Africa alone in 2007-2009. The Gulf States, which already import more than half their food and whose populations are projected to increase by 50% in the next 20 years, are the major investors at this stage, with China and South Korea also involved in significant deals. Southeast Asia and South America have also seen investor interest. Recent investments have involved government-to — government, private sector-to-government, and private sector-to-private sector deals, along with agricultural investment funds that offer finance to private investors. Ironically, the desire to ensure food security and stable domestic prices was in itself a major reason behind the price rises, as major exporters restricted or banned exports and major importers scrambled to secure rice at almost any cost. The resulting problems — rising domestic prices (despite, or possibly because of, the attempts to avoid this) and civil unrest in several countries — reinforced in the minds of politi­cians the importance of ensuring adequate domestic supplies.

The potential for such projects to bring agricultural investment to countries that sorely need to increase their own production is undeniable. However, if things are done poorly, poor farmers in target countries can lose control over and even access to the land on which they depend for their livelihood. Further, it does not take too much to imagine a situation in which local communities dependent on rain-fed agriculture struggle to produce sufficient food, while foreign interests export food grown on well-resourced, irrigated farm compounds. It is not a scenario likely to be accepted gracefully by the hungry. Sure enough, the three land deals mentioned earlier — in Indonesia, the Philippines, and Madagascar — were all scrapped or postponed after public outrage and resistance from local communities. The Madagascar deal reportedly influenced the political unrest that engulfed the country and led to a change of government in 2009.

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