Via The Financial Times, some further thoughts regarding food & farming as emerging geopolitical flashpoints. As the article notes:
“…Food commodity prices remain near historic highs. Food riots destablised countries around the world last year – more than the financial crisis – and may well return. If food was ever a soft policy issue before, it now rivals oil as a basis of power and economic security.
Like all commodities on which power depends, food is dealt in with hardening self-interest. Fearing political trouble at home, countries with surplus food have imposed export restrictions. Food-importing nations have in reaction entered large farmland leases with African states. Most of the deals are murky, many are inequitable and some are rightly denounced as land grabs.
Importers worried about food security may not care. But if, geopolitically, food is the new oil, countries contemplating agricultural land deals – as investors or as hosts – should heed history’s lessons on natural resource exploitation.
Resource nationalists who shriek about all foreign investment in natural resource development are wrong-headed. For agriculture, just as for oil, poorer countries can benefit from outside know-how and capital. Agricultural productivity in most of Africa is vastly lower than that achieved by the kinds of companies involved in the land deals. In principle, therefore, cultivating African land with outside involvement could benefit all parties.
But such an outcome requires, first and foremost, a truly equitable sharing of the benefits – favouring the host country. Some oil-rich governments succeed in capturing more than 80 per cent of the profit produced by oil extraction, a much riskier and more capital-intensive business than agriculture. States renting out arable land in high demand should manage no worse.
Second, skill and technology must be transferred to the local population. Deals with foreign agribusiness should be used to raise the host nation’s own agricultural productivity. For that, it must demand, and investors must accept, a programme for using and training local labour and promoting research and technological development locally.
Third, agreements must be made with public scrutiny. Madagascar’s coup d’état shows secrecy risks not just economic loss but also political disaster. Transparency on contracts must be matched by openness to markets: a well-functioning global food market is safer for all than the tangled politics of bilateral deals.
African governments, understaffed and cash-strapped, should not shoulder the burden alone. In a helpful first step, Japan will bring the issue to a Group of Eight summit. On food, the G8’s interests are deeply entwined with Africa’s.“
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