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Food Crisis Triggers Land Grab in Developing Countries

While much attention is being paid to the global economic crisis, the food crisis continues. However, the high food prices and shortages have now prompted a land grab in many developing countries.

The International Food Policy Research Institute (IFPRI) says countries such as China, Korea and the United Arab Emirates are buying or leasing agricultural land to help meet their own food needs. However, the implications of these land purchases are unclear. IFPRI Director-General Joachim von Braun outlines the reasons for the land grab.

"Long-term under-investment in agriculture, especially research and development and small farmer growth-oriented investment, was too small. Food stocks were too low. Bio-fuels were eating into food availability. Speculation came on top of this and out of that came the food price bubble of 2008. Trade failed and even rich countries could not access food. And out of that came the new motivation for large-scale foreign direct investment by countries with capital, but short in land and water," he says.

Von Braun says many details of the land deals are unknown because of a lack of transparency. But he estimates the amount of land and money involved.

"It adds up to 15 to 20 million hectares currently under negotiation…. So it's fairly large. How much money is involved? If we add up the deals negotiated and the investments planned, it adds up to $20 to $30 billion of investment," he says.

He compares that to the new $2 billion dollar World Bank emergency package for agriculture or the Obama administration's new $1.2 billion investment in food security. He says the deals present both "opportunities and threats."

"The opportunities are to have increased capital flowing into agriculture and facilitate growth. The threats relate to problems around small farmer agriculture and ecological sustainability and potentially reactivation of banana republic syndromes, where the foreign direct investors get involved in national policies, as experienced in the 1970s in Latin America," he says.

Recommendations to deal with the land issue include a strong code of conduct for respecting local land rights, the sharing of agricultural benefits, environmental sustainability and adherence to national trade policies to ensure that national self-sufficiency takes priority.