Healthy soil and sustainable growing

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In Corrupt Global Food System, Farmland Is the New Gold
http://www.globalpolicy.org/home/217-hunger/49686-in-corrupt-global-food-system-farmland-is-the-new-gold-.html

High food prices are caused by market speculation in a corrupt global food 
system. Growing concern over access to food creates a new geopolitics around 
food security, with many countries buying farmland and banning food exports. 
One billion people cannot afford to buy enough to feed themselves and their 
families. Seventy percent of those hungry people are farmers, herders and 
other food producers who could feed themselves if they had access to land and 
markets.  In recent months the world's largest agricultural commodities 
trader, Cargill (based in the US), announced a tripling of profits.

By Stephen Leahy January 13, 2010 IPS
http://ipsnews.net/

Famine-hollowed farmers watch trucks loaded with grain grown on their 
ancestral lands heading for the nearest port, destined to fill richer bellies 
in foreign lands. This scene has become all too common since the 2008 food 
crisis.

Food prices are even higher now in many countries, sparking another cycle of 
hunger riots in the Middle East and South Asia last weekend. While bad 
weather gets the blame for rising prices, the instant price hikes of recent 
times are largely due to market speculation in a corrupt global food system.

The 2008 food crisis awoke much of the world's investment community to the 
profitable reality that hungry people will do almost anything, even sell 
their own children, in order to eat. And with the global financial crisis, 
food and farmland became the "new gold" for some of the biggest investors, 
experts agree.

In 2010, wheat futures rose 47 percent, U.S. corn was up more than 50 
percent, and soybeans rose 34 percent.

On Wednesday, U.S.-based Cargill, the world's largest agricultural 
commodities trader, announced a tripling of profits. The firm generated 1.49 
billion dollars in three months between September and November 2010.

Meanwhile, U.S. Treasury Bills pay a return of less than one percent.

"We have set up a global food system that supports speculation. And with 
[such] markets, we can't get speculators out of the food business," said 
Lester Brown, an agricultural policy expert and founder of the Washington- 
based Earth Policy Institute.

"Farmland is better gold than gold for speculators," Brown told IPS.

Growing concern over access to food is also creating a new geopolitics around 
food security, with many countries buying up farmland and banning the export 
of food, he said.

World leaders have utterly failed to address the simple fact that while there 
is enough food, a billion people, living in every country in the world, 
simply can't afford to buy it, said Anuradha Mittal of the Oakland Institute, 
a U.S.-based policy think tank on social, economic and environmental issues.

"Why were a billion hungry with a record wheat harvest in 2008?" Mittal told 
IPS.

And how is it there are one billion people who are overweight, with 300 
million of those considered medically obese?

The global food system is designed to generate profits not feed people, and 
nothing has changed since 2008, she said. "There has been no focus on how to 
achieve food security or on regulating the food trade," Mittal noted.

Instead, the World Bank, World Trade Organisation and other multilateral 
organisations are pushing for more production and more trade liberalisation, 
she said. That approach is exactly how Africa became unable to feed itself 
after being previously food secure.

"Africans have become share-croppers, exporting coffee, cotton, flowers and 
now food while going hungry," Mittal said.

Under the guise of investing in agriculture, huge amounts of money are being 
offered to debt-ridden countries in exchange for long-term leases to their 
foodlands. "Our research shows that the most fertile lands are being secured. 
There are huge issues around governance and corruption in this land 
grabbing," said Mittal.

More than 100 billion dollars has been invested in buying farmland since 
2008, mainly in Africa by foreign companies and foreign-state owned 
industries, according to GRAIN, a small international non-profit organisation 
that works to support small farmers.

This massive investment hasn't yet translated into more food availability, 
says Lester Brown. Often times, buying land is just the first step. Major 
investments are also needed in farming infrastructure like roads, vehicles, 
storage capacity, mechanical services for equipment, irrigation and so on.

"I haven't seen a big increase in grain production anywhere. Right now it 
looks like a lot of land speculation," he said.

Brown has long documented the fact that yields of rice, wheat and other 
grains have not been increasing in many countries while demand has escalated. 
China, he notes, now imports 70 percent of its soy and is expected to begin 
to use its plentiful cash reserves to buy large quantities of wheat and corn 
in the near future.

And with the U.S. converting 30 percent of its corn crop into ethanol to 
'feed' its cars and trucks, food supplies will be tight for some years, he 
predicts.

With the decline in traditional equity stocks along with collapse of housing 
and commercial real estate markets, billions of investment dollars are being 
mobilised to buy farmland and food commodities. It's not just Wall Street 
looking for big returns, it's also private and public pension funds in Europe 
and North America as well, said Devlin Kuyek of GRAIN.

Investors from Saudi Arabia have leased large tracts in land in Ethiopia, 
Senegal, Mali and other African countries amounting to several hundred 
thousand hectares. "How can African countries hope to have food security by 
signing long-term leases to foreign interests?" Kuyek told IPS.

When South Korea's Daewoo Logistics tried to buy 1.3 million hectares, or 
one-third, of Madagascar's farmland in 2008, violent protests erupted and the 
government was toppled. South Korea still has at least a million hectares in 
long- term leases elsewhere and China 2.1 million ha, mainly in Southeast 
Asia.

Some of the leases are for 99 years at a one dollar a hectare, but local 
people "are not eligible for the deals being promoted in countries where 
millions of people remain dependent on food aid", said Howard Buffett, a U.S. 
farmer and philanthropist whose father is Warren Buffett, the well- known 
billionaire investor.

Howard Buffet reports being offered land deals where African governments 
promise to provide 70 percent of the financing, all utilities, and a 98-year 
lease requiring no payments for four years.

The last thing Africa needs are policies that "enable foreign investors to 
grow and export food for their own people to the detriment of the local 
population" writes Buffet in the introduction to the 2010 Oakland Institute 
report, "(Mis)investment in Agriculture".

Buffet's foundation has a research farm in South Africa and says investments 
are needed, but in terms of seeds, inputs, improved extension services, 
education on conservation techniques and generally assisting local farmers. 
Investing in land grabs will simply fuel conflict over land and water, he 
concluded.

Shockingly, about 70 percent of the billion hungry people in the world are 
farmers, herders and other food producers who could feed themselves if they 
had access to land, markets and a little bit of credit, said GRAIN's Kuyek.

"That well-understood reality has been ignored for years," he said. "These 
land grabs are just wrong: morally and socially wrong."