The international price spikes of 2008 and 2011, and the political, economic and social disruptions which followed, have thrown into sharp relief the challenges faced by the global food system. The previous decades of low and stable food prices are gone. Production now struggles to keep pace with rising demand. By 2050, demand will have increased somewhere in the region of 70 to 100 per cent and the global population will have exceeded 9 billion people.
It is certainly right to raise investment in the developing world. By 2050, the world will have more than 2 billion more mouths to feed, with much of this growth concentrated in the poorest and most food insecure countries. It also makes sense from a global perspective: yields in many poor countries are a fraction of what can be achieved with access to the right technologies, practices and infrastructure. Investing to close this yield gap will not only improve national food security in poor countries, but will also diversify food production.
Global food security is already heavily dependent upon production in a number of key regions, not least North and
Against this background, the current investment surge into developing country agriculture looks like just what is needed. Recent research from the
It looks like investment is flowing to the right destinations. A total of 134 million hectares - more than half the total - are in
But the good news stops here. On the ground, things look less promising. Deals are often murky and mired in corruption. Rather than receiving jobs and opportunities, poor people are too often being displaced, or having their access to land, water or other natural resources diminished. These are not the conclusions of a handful of anti-globalisation campaign groups; they have been documented by multilateral organisations, research institutes and international NGOs. As well as threatening the food security of local populations, it seems that many deals offer little, if anything, to global food security. Research from the
So what is going on? On the demand side of the equation, there are different types of investor with different motives. Some private investors are responding to demand for land created by policy initiatives in home countries - for example biofuel targets or carbon offset schemes. Others are genuinely seeking new opportunities to develop agricultural production. Some governments, alarmed at the political instability that food price spikes can trigger, are investing overseas to lock-in production and reduce reliance on international markets (though the ILC's research suggests that the media have focused disproportionately on state-backed investments from the Gulf and
On the supply side, many governments are eager to attract investment, hoping it will create jobs, deliver infrastructure and enhance food security. But in countries with weak institutions, archaic land laws and arcane investment processes, the spur for these deals is too often corruption, resource-capture and rent-seeking.
Recent history shows that speculative investors, weak institutions and poor transparency generate risk. If land accumulates to powerful companies and elites to the exclusion of local communities, the chance of conflict will grow. This poses clear risks for investors, yet few seem to be taking it seriously, as deals continue to take place with poor transparency, little if any community consultation and empty promises of jobs. In some cases, investors may well be exacerbating conflict risks in the name of risk management. Evidence suggests that some are demanding primary user rights over water as part of deals, enhancing their private water security, but placing them on a collision course with local communities and farmers who depend on the water for their livelihoods.
Where investment is taking place in the context of pre-existing social and political fault lines or distributional politics, conflict risk is also high. Recent research for Chatham House finds that land deals in
Governments clearly face risks themselves. Narratives are emerging in various countries of "neo-colonialism" and "a new scramble for
More likely outcomes of public anger are populist policies and U-turns, such as nationalisation, which hold further political risks for investors. Governments in
To sum up, investment in land creates winners and losers whether real or perceived, and can play into existing social and political tensions. This raises the risk of conflict, particularly where investments do not deliver clear benefits or appear tainted by corruption. Responsible investment can reduce (though not eliminate) these risks: ensuring transparency, consulting with local communities, creating jobs and livelihood opportunities, developing infrastructure, conserving natural resources and so on. Precisely the kind of investment needed if we are to meet the global food security challenge.
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