Why are Gulf States buying land in Africa?

africaWealthy Gulf countries and private companies alike have been buying up land in Africa for their own strategic purposes. The driving force behind this move is the need for “food security” in a world where competition for food is increasing as populations grow.

The Gulf imports 85 percent of its basic food requirements and accordingly, the region is particularly sensitive to fluctuations in the global market. If you ever wanted an illustration of the world’s interconnectedness, just look at how food started rapidly disappearing from supermarkets in the wake of the ash cloud disruptions in 2010 — a volcano erupts in Iceland and 24 hours later, dishes are taken off menus in Dubai restaurants.

Ash clouds are rare, but increasing global food prices and shortages are an ongoing trend. Between 2005 and 2008, the price of wheat and corn tripled, and the price of rice climbed fivefold, spurring food riots in nearly two dozen countries and pushing 75 million more people into poverty. So the practice of buying up arable land in other countries is becoming increasingly common.

A September 2010 report for the World Bank on global farmland buys estimates that 115 million acres of land worldwide have been sold or leased to foreign investors — an area bigger than the entire United Kingdom. In a research report published in 2011, Standard Chartered said Gulf nations are focusing their agricultural investment on seven countries: Sudan, Mozambique, Tanzania, Kenya, Mali, Senegal and Ethiopia.

It makes sense for them to buy agricultural land and water sources in Africa because their own supply is limited. And for poor African nations, it brings much needed investment, technical resources and the chance to boost agricultural productivity. But not everyone thinks it is a good idea. Michael Klare, author of The Race For What’s Left The Global Scramble for the World’s Last Resources wrote: “The leaders of some countries — particularly in the water-scarce Gulf area — have established special agencies to acquire farmland abroad. For the most part, these lands are being sought in poor and war-torn African countries, whose own leaders are desperate to attract fresh investment no matter how problematic the circumstances.”

About ten percent of the people who live in Ethiopia suffer from chronic food shortages, but the government is offering millions of hectares of its most fertile land to rich nations and private investors. Ethiopian labour is being employed on these farms that use high-tech, computerised irrigation systems to grow tomatoes, peppers, broccoli, melons and other fresh goods, with majority of it being shipped abroad.

There are also disputes over who owns the land. It’s often leased rather than sold, but leases are effectively sales because of long durations that may span over several generations. And some locals in Ethiopia say that land taken from them during the previous rule of a Communist dictatorship was never returned. Now it’s being sold off, creating tensions and social problems. “We are very concerned that the land deals will lead to increased violence at the local level, as we have seen already in several parts of Africa,” said Henk Hobbelink, coordinator of GRAIN, an international, non-profit organisation which supports small farmers.

According to GRAIN, one new plantation in Gambela, Ethiopia, owned by Saudi-based billionaire Mohammed al-Amoudi, is irrigated with water diverted from the Alwero River. Thousands of people depend on this river for their survival. In 2012, tensions spilled over when an armed group ambushed Al-Amoudi’s Saudi Star Development Company operations, leaving five people dead. But the rush for resources is likely to continue as demand increases. And the Gulf had another reminder of why it’s doing this when India temporarily banned exports of rice in 2008. The move was taken to protect its own domestic supplies, amid fears of a food crisis, but the this left the Gulf short of the commodity.

“When some governments stop exporting rice, it becomes a serious problem for people that don’t have full self-sufficiency,” Al Arabi Mohammed Hamdi, an economic adviser to the Arab Authority for Agricultural Investment and Development told the New York Times.

Agricultural productivity growth worldwide is only one to two percent a year and that is too low to meet global population growth and demand for food. For countries like Saudi Arabia (where the population is estimated to grow 77 percent by 2050) the scramble for food resources has already begun in earnest.

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