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by Rob Bailey
International price spikes, 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 South America, the world's major export centres. Without changes in farming, as climate change becomes more and more pronounced, the production burden is likely to fall increasingly on temperate regions - in particular in North America and Europe, where in the medium term at least, climate change impacts will be less severe, possibly even benign. Building productive, adaptive and resilient agricultural sectors in developing countries, those on the front-lines of climate change, is fundamental to future food security.
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 Africa, the region with the biggest yield gaps, biggest climate challenges, most extreme food insecurity, and most pressing need for investment. Second is Asia, also with many countries vulnerable to looming climate and food security crunches.
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 China, where in fact much of the investment is private, and often local). The profit motive looms large, and there are very significant returns to be made. Indeed, the lack of development on the land acquired points to speculative motives: many investors are probably simply betting on land price rises rather than engaging in the risky and difficult business of growing food and developing infrastructure; others are acquiring land speculatively in the hope of gaining access to mineral resources, with farming a mere sideline.
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 Ethiopia are focused on marginalised areas, home to large pastoralist populations and numerous separatist movements. This appears to be part of a broader government strategy of political and economic integration, but one likely to exacerbate existing tensions in these areas.
Governments clearly face risks themselves. Narratives are emerging in various countries of "neo-colonialism" and "a new scramble for Africa" as populations become increasingly disgruntled. In other countries, active civil society movements are developing in opposition to "land-grabbing". In the most extreme cases public anger can pose an existential threat to an unpopular government: that of Madagascar fell in 2009 after national indignation at a large concession granted to the
More likely outcomes of public anger are populist policies and U-turns, such as nationalisation, which hold further political risks for investors. Governments in Brazil and Argentina are examining legislation to limit the ability of foreign investors to purchase farmland, while the government of Tanzania was forced into calling a freeze on its national biofuel strategy following protests from national civil society organizations and academia. Future food crises will test governments further. Is it feasible for governments, faced with rioting populations, to allow the export of locally grown food to investors' home countries?
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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"Who will Feed the Next 2 Billion?"