Tuesday, February 3, 2009
The farms race
Wealthy countries short of fertile land are gazing hungrily at Canada's prairies
Globe and Mail: 'Offshore farms' are a quiet, though burgeoning, form of neo-colonialism. And they have the potential to unleash a new food crisis. The Saudis are not alone in the global land grab. Any country that worries about long-term food security because of a shortage of fertile land, and has the wealth to do something about it, is on the hunt: United Arab Emirates, Jordan, Libya, India, China, Japan, plus a number of investment and private-equity funds...
At first, the UN and the World Bank either ignored or cautiously supported the trend. Food prices were rising and foreign investment in raising crop productivity in poor countries seemed like a fine idea. They changed their minds when they realized offshore farms were all about locking up food supplies, not boosting them for the markets...
Watchdog groups such as Grain and the International Land Coalition also fear that poor farmers are being forced off productive land as the men with the cheques arrive. The authors of a recent Grain report said that some offshore farm deals amount to 'the siphoning of fertile and probably contested agricultural lands to rich foreigners.'... Imagine how suddenly hungry people would reach if they knew a good portion of their country's crops were being funnelled to rich countries. Rioters might seize foreign-owned farms. To prevent chaos, the government would probably nationalize the operations.
Which brings us to Canada. This country has far more farmland than it needs to keep us fed. The land is in a politically stable jurisdiction and is incredibly cheap by developed-country standards...
Agcapita partner Stephen Johnston says he's approached all the time by foreign interests seeking Canadian agricultural land. Foreign ownership restrictions on prairie farmland have blocked them so far, but that doesn't mean they're out of the picture. Foreigners might be able to lease farms or use loans or local partnerships to gain interests in the land. It's hard to imagine that Canada will not play a role as the global farmland rush gains momentum. Johnston is convinced it's just a matter of time.
Would it be in Canada's interest to turn big chunks of Saskatchewan or Manitoba into offshore farms for the UAE or China? In a country that believes in free trade, probably not. Farmers, food processors and politicians need to devise a policy before Canada becomes a target.