By Mona Sukkarieh.
With the dramatic increase in food prices since 2008, domestic policies for building food security begun to mark a strategic shift. A number of countries, including Gulf countries, are seeking to ensure food security by securing a stable supply of food, not through self-sufficiency but through the acquisition of farmlands in foreign countries.
For a long time, food self-sufficiency represented the cornerstone of agricultural policies in most Arab countries. And for a long time, many of them were able to reach that objective, despite obvious limitations, not least of which is having the lowest ratio of usable land to total land area in the world. To complicate things further, the Arab region is also the most water-scarce region in the world with less than 1% of the world’s total water resources. The region also faces the prospect of further desertification, deterioration of agricultural land and water scarcity. It is not a surprise then that Arab countries are increasingly relying on food imports to ensure food security.
Unsurprisingly, a sharp surge in food prices has a strong impact on poverty and directly affects household’s purchasing power. In 2008, middle and lower classes were the hardest hit by price hikes, which resulted in violent riots in dozens of countries. Global price increase was reflected at the national level with rising social instability, putting countries and governments at the mercy of global food price volatility. Gulf countries in particular import up to 90% of their food, according to the Economist Intelligence Unit, making them particularly vulnerable to price hikes.
To counter the prospect of social and political instability due to food insecurity, GCC countries, backed by the financial strength provided by some of their national institutions such as sovereign wealth funds, embarked on a land acquisition “campaign” abroad. Particularly fertile land, in particularly deprived countries or regions, constituted their chief target. Rice, wheat, barley, sugar, corn but also livestock and poultry meat etc. would be produced abroad and shipped back home for local consumption. Just over the past few years, hundreds of thousands of hectares of agricultural lands were leased or purchased by gulf countries in Sudan, Egypt, Kenya, Cambodia, Vietnam, Pakistan, India, Philippines, Turkey and other countries in Africa and South-East Asia and even in Latin America.
[quote]Local populations’ grievances echo those of gulf countries’ native population at the beginning of the XXth century when foreign oil companies started drilling for oil essentially meant for foreign consumption.[/quote]
As with any large-scale project in foreign lands, it wasn’t long before such plans were described as “land grabs”. Jacques Diouf, the head of the UN’s Food and Agriculture Organization (FAO) equated it with neo-colonialism. Investing countries may scrap these accusations and, justifiably, assert that they have legally acquired the right to use these lands through leases and concessions. But in order to preserve the sustainability of such projects, which is the goal of investing countries looking to ensure an uninterrupted supply of food, and as is the case with any deal, all sides must find their interest. Local populations’ grievances echo those of gulf countries’ native population at the beginning of the XXth century when foreign oil companies started drilling for oil essentially meant for foreign consumption, and must rightly be addressed. This will further highlight the positive aspects of these projects: foreign investment in the often neglected agriculture sector, development of often missing local infrastructure and the creation of new jobs in host countries.
[quote]rising discontent towards foreign oil companies led to violent regime change in a number of middle-eastern countries and the nationalization of the petroleum sector that followed resulted in enormous losses for foreign companies. This should serve as a reminder that the cost of managing farmlands abroad could quickly skyrocket.[/quote]
Failing to do that might mean that the acquired farmlands will have to be guarded from hostile acts. It might even become necessary at some point to protect local governments from mounting opposition and local anger. A decision to lease 1.3 million hectares in Madagascar (half the arable land in the country) to a South-Korean company was among the reasons that led to the overthrow of the President in 2009. For its part, Pakistan mentioned it would be ready to assign a 100,000 strong security force to protect farmlands managed by foreign investors from hostile attacks.
A few decades ago, rising discontent towards foreign oil companies led to violent regime change in a number of middle-eastern countries and the nationalization of the petroleum sector that followed resulted in enormous losses for foreign companies. This should serve as a reminder that the cost of managing farmlands abroad could quickly skyrocket, cancelling the initial advantage they were acquired for.
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