The New Colonialism: Foreign Investors Snap Up African Farmland

Expected population growth coupled with stable to dwindling agricultural land supply has led many an analyst to forecast an optimistic picture for agricultural investment for many years to come. The world needs more food. Throw in the high grain and food prices in 2008 with the resulting occasional food riot and both governments and investment funds catch a glimpse of what the future could look like. Governments with limited arable land fear food shortages for their population while investors hope for outsized returns. Hence, both these actors have sought to purchase or lease land in developing countries, particularly Africa. The governments with land on offer have generally welcomed the trend. And there is some reason to believe that the private sector may accomplish what the government aid could not: modernizing their agricultural sectors and increasing food supplies. But risks remain. Developing countries have sold or leased the land based frequently on flimsy agreements with limited recourse. Then there is the coincidence that many of the countries offering land also happen to be the largest recipients of food aid or have corrupt governments. Moreover, commercial farming techniques often require fewer workers, adding little to the local economy. And the environment may also suffer. Many deals leave out environmental standards, and many farming techniques employed don’t focus on keeping the land healthy. While the ultimate consequence of this trend remains unknown, it is safe to surmise that like oil food could become the next scarce resource. – YaleGlobal