Rich governments and
corporations are triggering alarm for the poor as they buy up the
rights to millions of hectares of agricultural land in developing
countries in an effort to secure their own long-term food supplies.

The
head of the UN Food and Agriculture Organisation, Jacques Diouf, has
warned that the controversial rise in land deals could create a form of
“neo-colonialism”, with poor states producing food for the rich at the
expense of their own hungry people.

“These deals can be purely
commercial ventures on one level, but sitting behind it is often a food
security imperative backed by a government,” said Carl Atkin, a
consultant at Bidwells Agribusiness, a Cambridge firm helping to
arrange some of the big international land deals.

Madagascars
government said that an environmental impact assessment would have to
be carried out before the Daewoo deal could be approved, but it
welcomed the investment. The massive lease is the largest so far in an
accelerating number of land deals that have been arranged since the
surge in food prices late last year.

“In the context of arable
land sales, this is unprecedented,” Atkin said. “We’re used to seeing
100,000-hectare sales. This is more than 10 times as much.”

At a
food security summit in Rome, in June, there was agreement to channel
more investment and development aid to African farmers to help them
respond to higher prices by producing more. But governments and
corporations in some cash-rich but land-poor states, mostly in the
Middle East, have opted not to wait for world markets to respond and
are trying to guarantee their own long-term access to food by buying up
land in poorer countries.

According to diplomats, the Saudi
Binladin Group is planning an investment in Indonesia to grow basmati
rice, while tens of thousands of hectares in Pakistan have been sold to
Abu Dhabi investors.

Arab investors, including the Abu Dhabi
Fund for Development, have also bought direct stakes in Sudanese
agriculture. The president of the UEA, Khalifa bin Zayed, has said his
country was considering large-scale agricultural projects in Kazakhstan
to ensure a stable food supply.

Even China, which has plenty of
land but is now getting short of water as it pursues breakneck
industrialisation, has begun to explore land deals in south-east Asia.
Laos, meanwhile, has signed away between 2m-3m hectares, or 15% of its
viable farmland. Libya has secured 250,000 hectares of Ukrainian
farmland, and Egypt is believed to want similar access. Kuwait and
Qatar have been chasing deals for prime tracts of Cambodia rice fields.

Eager
buyers generally have been welcomed by sellers in developing world
governments desperate for capital in a recession. Madagascars land
reform minister said revenue would go to infrastructure and development
in flood-prone areas.

Sudan is trying to attract investors for
almost 900,000 hectares of its land, and the Ethiopian prime minister,
Meles Zenawi, has been courting would-be Saudi investors.

“If
this was a negotiation between equals, it could be a good thing. It
could bring investment, stable prices and predictability to the
market,” said Duncan Green, Oxfams head of research. “But the problem
is, [in] this scramble for soil I don’t see any place for the small
farmers.”

Alex Evans, at the Centre on International
Cooperation, at New York University, said: “The small farmers are
losing out already. People without solid title are likely to be turfed
off the land.”

Details of land deals have been kept secret so it is unknown whether they have built-in safeguards for local populations.

Steve
Wiggins, a rural development expert at the Overseas Development
Institute, said: “There are very few economies of scale in most
agriculture above the level of family farm because managing [the]
labour is extremely difficult.” Investors might also have to contend
with hostility. “If I was a political-risk adviser to [investors] I’d
say ‘you are taking a very big risk’. Land is an extremely sensitive
thing. This could go horribly wrong if you don’t learn the lessons of
history.”