Thursday, May 23, 2013

The Rise of Agricultural Imperialism

Humanity has thus far managed to keep increasing its food production and fend off the predictions of inevitable food scarcity and growing hunger. How much longer can that continue? Perhaps not long at all, according to a book by Lester R. Brown: Full Planet, Empty Plates: The New Geopolitics of Food Scarcity. Brown is the president of the Earth Policy Institute.

"We are entering a new era of rising food prices and spreading hunger. On the demand side of the food equation, population growth, rising affluence, and the conversion of food into fuel for cars are combining to raise consumption by record amounts. On the supply side, extreme soil erosion, growing water shortages, and the earth’s rising temperature are making it more difficult to expand production. Unless we can reverse such trends, food prices will continue to rise and hunger will continue to spread, eventually bringing down our social system."

If that last sentence seems a bit over-the-top to you, recall that many people believe that food supply insecurity was one of the major contributors to the revolutions that swept the Middle East. That topic was discussed in Climate Change, Food Security, and Revolution.

Brown discusses the issues associated with food production and consumption in considerable detail. Here the focus will be on just one of his topics: "The Global Land Rush."

The Food and Agriculture Organization of the United Nations (FAO) tallies a global food price index. A plot of that quantity over time is provided below.

Note the sharp rise over the last decade. The price has about doubled in that time. Those in the wealthier nations have been little affected by this increase, but in countries where food makes up the dominant component of a family’s budget, a doubling in price is a tragedy.

Note also the sharp spike in price that occurred in the 2007-2008 timeframe. Brown tells us that period was a shock to the major players and led to changes in strategy.

"As food prices climbed everywhere, some exporting countries began to restrict grain shipments in an effort to limit food price inflation at home. Importing countries panicked. Some tried to negotiate long-term grain supply agreements with exporting countries, but in a seller’s market, few were successful. Seemingly overnight, importing countries realized that one of their few options was to find land in other countries on which to produce food for themselves."

The largest area of land that could still be converted to modern agricultural use resides in sub-Saharan Africa. The idea of wealthy countries going into poorer countries and extracting produce for their own use is the traditional colonial approach. But this time, the wealthy countries are attempting to produce their basic food needs in areas where the native population is having a hard time feeding itself. This is something new.

The roster of countries that seem to need additional land in order to feed their people is rather scary. Middle Eastern countries like Saudi Arabia, along with South Korea, China, and India appear to be the major players.

Saudi Arabia is rapidly consuming its underground water supply while continuing to increase its population, making it ever more dependent on food imports. A politically volatile Middle East facing long-term food security issues is not a promising scenario. The fact that the two most populous countries on earth are unable to feed their own populations does not bode well.

"India, with a huge and growing population to feed, has also become a major player in land acquisitions. With irrigation wells starting to go dry, with the projected addition of 450 million people by mid-century, and with the prospect of growing climate instability, India too is worried about future food security."

Information on this quest for other counties’ land is difficult to obtain. Many sales or long-term leases are negotiated secretly.

Many of the targeted nations are poorly governed and do not have a well-established system of property rights. Often the land sought for "development" has long been used by local farmers who have no claim to the land other than tradition.

The World Bank has attempted to track these land deals and issued a report in 2011 in which 464 projects were identified.

"The amount of land was known for only 203 of the 463 projects, yet it still came to some 140 million acres—more than is planted in corn and wheat combined in the United States."

This land rush has attracted all sorts of bidders, including speculators. The quest for renewable energy has even led to land that could have produced food being diverted to producing biofuels.

"Particularly noteworthy is that of the 405 projects for which commodity information was available, 21 percent were slated to produce biofuels and another 21 percent were for industrial or cash crops, such as rubber and timber. Only 37 percent of the projects involved food crops."

Because land can be obtained most cheaply in sub-Saharan Africa, about two-thirds of the acquired land was from that region.

"George Schoneveld of the Center for international forestry Research reported that two-thirds of the area acquired there was in just seven countries: Ethiopia, Ghana, Liberia, Madagascar, Mozambique, South Sudan, and Zambia. In Ethiopia, for example, an acre of land can be leased for less than $1 per year, whereas in land-scarce Asia it can easily cost $100 or more."

The idea of removing arable land from use by the local population is not an obvious benefit to the targeted country.

"Unfortunately, the countries selling or leasing their land for the production of agricultural commodities to be shipped abroad are typically poor and, more often than not, those where hunger is chronic, such as Ethiopia and South Sudan. Both of these countries are leading recipients of food from the U.N. World Food Program. Some of these land acquisitions are outright purchases of land, but the overwhelming majority are long-term leases, typically 25 to 99 years."

Brown also points out that more intense agricultural activities in these areas will lead to increased water usage. That will have regional ramifications. Reducing the flow of water into the Nile basin is something that Egypt will certainly notice.

Those interested in using the acquired land for industrial scale agriculture will be required to invest in the necessary infrastructure to support those activities, and will be hiring some local workers as part of their activities. The argument is made that this will produce a net benefit to the host countries. Brown has serious doubts.

"Since productive land is not often idle in the countries where the land is being acquired, the agreements mean that many local farmers and herders will simply be displaced. Their land may be confiscated or it may be bought from them at a price over which they have little say, leading to the public hostility that often arises in host countries."

"The displaced villagers will be left without land or livelihoods in a situation where agriculture has become highly mechanized, employing few people. The principle social effect of these massive land acquisitions may well be an increase in the ranks of the world’s hungry."

Many of these targeted countries are not only poor, they are also politically unstable. A traditional means of fomenting political turmoil is by taking land away from a large number of small farmers. Evidence of such discontent is beginning to appear.

"In Ethiopia, local opposition to land grabs appears to be escalating from protest to violence. In late April 2012, gunmen in the Gambella region attacked workers on land acquired by Saudi billionaire Mohammed al-Amoudi for rice production. They reportedly killed five workers and wounded nine others."

Given that the sub-Saharan region is expected to see a dramatic increase in population in the coming decades, any activity that would constrain the ability of those nations to produce food for their own populations seems misguided at best. It would be far better to assist these countries in increasing their agricultural output and then let them sell any excess on the open market. The current activity appears to be yet another occasion where the rich take advantage of the poor.

Brown would seem to agree.

"When virtually all the inputs—the farm equipment, the fertilizer, the pesticides, the seeds—are brought in from abroad and all the output is shipped out of the country, this contributes little to the local economy and nothing to the local food supply. These land grabs are not only benefiting the rich, they are doing so at the expense of the poor."

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