Preparing for an era that many experts presage to be one of acute food insecurity, finance houses have turned to putting their assets into massive agricultural investments in the world's breadbaskets.
Vietnam, Morocco, and the Ukraine have all sold off large chunks of their most arable land to outfits more known for their forays into the stock market--like the New York-based BlackRock Inc which has allocated $200 million to agricultural projects banking on emerging markets' growing food needs.
Other funds are seeing the agro investment niche opening and are fashioning themselves completely on a future of food insecurity; Sweden's Black Earth Farming has sprung up to solely invest in southwestern Russia's hyperfertile Black Earth region.
Bread basket buyouts inject sorely needed cash into national coffers in the Global South, provide local employment in the agricultural sector, and share farming methods many poor nations would never be able to access. And unlike loans or IMF-related assistance, buyouts are quick deals with few to no strings attached.
Still, private investment in foreign agriculture raises some concerns. Observers ask what will happen to smallholder farmers who are pushed off their land when the megafarms start; if poor countries, many of which already received food aid, should be auctioning off their fields; and if private investment should even be permitted in countries with poor human rights records like Sudan where Jarch Capital is currently investing millions.
In an private press conference this morning at the International Food Policy Research Institute Director General Joachim von Braun said that between 15 and 20 million hectares are under negotiation at the moment, representing $20 to $30 billion in capital.
He called for a code of conduct, the equivalent to government oversight of Wall Street, be enacted to ensure ecologically sustainable and socially equitable transactions.
Further Reading and Engagement:
Food Crisis and the Global Land Grab blogs the issue
Grain watches the food crisis from Barcelona
Vermont's Gund Institute monitors ecological economics