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Insecurity drives farm purchases abroad

Wealthy countries seek land in Cambodia, Madagascar, and Brazil.

By David MonteroCorrespondent of The Christian Science Monitor / December 22, 2008

PHNOM PENH, Cambodia

The farm fields of this country once fed the legendary civilization of Angkor, the world's largest empire in the 9th century. Tomorrow they may feed the megacities of the United Arab Emirates, Kuwait, and Qatar.

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Reeling from food prices that have doubled on average from a year ago, several Gulf countries are pursuing land deals worth billions of dollars in Cambodia, according to recent statements by Cambodia's government. Those countries would lease land, grow rice and corn, and then ship it home – potentially saving millions by bypassing world markets.

The race for farmland in Cambodia underscores how countries desperate to boost farming amid an ongoing food crisis are turning to global outsourcing, hoping to grow their own food on land abroad. Japan has bought up plots in Brazil, South Korea large tracts in Madagascar, in a trend poised to change global land ownership and agricultural production.

While it may bring succor to countries squeezed by high prices, it may also incite conflict and poverty, some experts warn. In August, Jacques Diouf, director-general of the UN's Food and Agricultural Organization, warned against creating a kind of food "neocolonialism," with rich countries securing food supplies at the expense of poor farmers.

From his office in Dubai, Mohammed Raouf can see the global food crisis closing in on the Gulf states. Growing food at home is not viable – in Saudi Arabia, Mr. Raouf points out, farmers have tried for 15 years, unsuccessfully, to grow wheat in the desert.

As a result, Gulf nations must import about 80 percent of staple foods. And the price of those imports has ballooned from $16 billion in 2006 to $20 billion in 2007, according to the Arab Organization for Agricultural Development.

Land acquisitions abroad are the only viable response, Raouf and others say. "For the Gulf countries ... under current technology, it is impossible to guarantee their food security internally, because they lack water resources and arable lands," Raouf, program manager of environment research at the Gulf Research Center, a Dubai think tank, writes in an e-mail. "So this [is] the best policy option now to follow…"

In recent months, Cambodia has positioned itself as a solution: of 6 million hectares (about 15 million acres) available for cultivation, only 2.5 million are currently used, the government says. It's been wooing the Gulf, hosting delegations of Arab leaders, and hopes to finalize concessions worth up to $3 billion with Kuwait and Qatar. As Prime Minister Hun Sen said in a recent radio address, "Those countries have oil but no rice. I think the Gulf can become our rice market."

The marriage of rich countries seeking land and poor countries seeking cash has accelerated since 2007, goaded by troubling statistics: as populations rise globally by 1 to 2 percent, agricultural production is not keeping pace. Investment has slumped, and farmland is disappearing as nations transform countrysides into urban centers.