The New Colonialism

The German magazine Spiegel reports that governments and investment funds are buying up farmland in Africa and Asia to grow food -- a profitable business, with a growing global population and rapidly rising prices, a high-stakes game of real-life Monopoly leading to a modern colonialism to which many poor countries submit out of necessity.

According to most prognoses, there could be 9.1 billion people living on earth in 2050, about two billion more than today. In the coming 20 years alone, worldwide demand for food is expected to rise by 50 percent.
"These are pessimistic prospects," says the Organization for Economic Cooperation and Development spokesman.
But for the audience in the Stuyvesant Room, mostly men and a handful of women, all of this is good news and the mood is buoyant. How could it be any different? After all, hunger is their business. The combination of more people and less land makes food a safe investment, with annual returns of 20 to 30 percent, rare in the current economic climate.
These were extremely conservative investors who buy or lease land to grow wheat or raise cattle. But land is scarce and expensive in Europe and the United States. Solving the problem means developing new land, which is only available in Africa, Asia and South America. This combination of factors has triggered a high-stakes game of real-life Monopoly, in which investment funds, banks and governments are engaged in a race for access to the world's arable land.

A great deal of capital is currently available. It is the second year of the global economic crisis, and investors are seeking sound and safe investments, which is why the audience in New York includes not only hedge fund managers and agriculture industry executives, but also the representatives of large pension funds and the chief financial officers of five universities, including Harvard.Olivier De Schutter, the UN Special Rapporteur on the right to food, warns: "Because the countries in Africa are competing for investors, they are undercutting each other." Some contracts, says De Schutter, are barely three pages long -- for hundreds of thousands of hectares of land. These types of agreements stipulate what products are to be cultivated, the location and the purchase or lease price, but they include no environmental standards. They also lack the necessary investment regulations and the stipulation that jobs must be created, says De Schutter
Thousands of investment funds, from small to large, have recently begun applying the most basic formula in the world: Man must eat .

It is not just bankers and speculators, but also governments that are acquiring land in other countries, seeking to reduce their dependence on the world market and imports. China is home to 20 percent of the world's population, but it has only 9 percent of the world's arable land. Japan is the world's largest corn importer, and South Korea is the second-largest. The Persian Gulf States import 60 percent of their food, while their natural water reserves are sufficient to support only another 30 years of agriculture.

The Ethiopian prime minister said that his government is "eager" to provide access to hundreds of thousands of hectares of farmland. The Turkish agriculture minister announced: "Choose and take what you want." In the midst of a war against the Taliban, the Pakistani government staged a road show in Dubai, seeking to entice sheikhs with tax breaks and exemptions from labor laws. Pakistan has already announced plans to deploy 100,000 members of its security forces to protect foreign-owned fields.
In Mozambique foreign demand is more than double the existing cultivated farmland, and the government has already allocated four million hectares to investors, half of them from abroad.
•The Sudanese government has leased 1.5 million hectares of prime farmland to the Gulf States, Egypt and South Korea for 99 years. Paradoxically, Sudan is also the world's largest recipient of foreign aid, with 5.6 million of its citizens dependent on food deliveries.
•Kuwait has leased 130,000 hectares of rice fields in Cambodia.
•Egypt plans to grow wheat and corn on 840,000 hectares in Uganda.
•The president of the Democratic Republic of Congo has offered to lease 10 million hectares to the South Africans.

Saudi Arabia is one of the biggest and most aggressive buyers of land. Saudi Arabia spends $800 million a year promoting foreign companies that cultivate "strategic field crops" like rice, wheat, barley and corn, which it then imports. Ironically, the country was the world's sixth-largest wheat exporter in the 1990s.


"When food becomes scarce, the investor needs a weak state that does not force him to abide by any rules," says Philippe Heilberg, an American businessman. A state that permits grain exports despite famines at home, that is consumed by corruption or deeply in debt, ruled by a dictatorship, racked by civil war, or sends millions of workers abroad and is dependent on these workers receiving visas and jobs.
Heilberg has found such a nation: South Sudan, which is in fact a pre-nation, autonomous but not independent. The 44-year-old American, son of a coffee merchant and the founder of the investment firm Jarch Capital, is now the largest land leaseholder in South Sudan, where he leases 400,000 hectares of prime farmland in Mayom County.

Jean-Philippe Audinet of the International Fund for Agricultural Development (IFAD)says "The way these agreements are structured can harm the country and the farmers in the long term, robbing them of their most important asset: land."

During the early days of socialism it is likely that the organisation of world co-operation would need to take place through a world council. Because the things we need now are produced and distributed through a world structure of production, and because its present capitalist nature has brought about immense problems, action to solve them would be required on a world scale . For example,the countless millions of people suffering from hunger and desperate poverty would need a considerable increase in food production. For this work the Food and Agricultural Organisation of the UN would at last he able to use its expertise and knowledge of world conditions to help with solving the problems of malnutrition. In place of national governments, the UN could be democratised as a World Council which could become a centre for co-ordinating a world-wide war on hunger. The FAO could also achieve its potential as a key organisation at last able to achieve real results. To devolve the work, agricultural committees could be set up in every country and these could be further de-centralised through county and district committees, (or equivalent bodies in all countries). At every level throughout this structure, the FAO could provide skilled staffs able to draw on its store of world data and technical information to advise and assist the work. This network could be extended to local farms with an ability to adapt to every local condition.

Common ownership would give all communities immediate access to land. In the short term, people in the areas of greatest need could concentrate their local efforts using the best means available. At the same time the regions most able to do so could assist with increased supplies. There can be no doubt that throughout the world, within a season, the plight of the seriously undernourished would be greatly improved.