Stock up for the future

  Take control of foreign land – The “land war” centered on developing countries is accelerating. The reason is the world’s sense of crisis that the population explosion and climate change will trigger water and food shortages.
  In June 2010, the Hokkaido Council of Japan decided to introduce foreign investment with 57 hectares of forest in Kutchan Town. This is rare in Japan. However, who is the buyer? What is its purpose?
  According to an official in Hokkaido, “Foreign capital is targeting mountains and forests all over Japan. Do they also want to control Japan’s water resources?” Some people say that “foreigners come to look for mountains”, this kind of thing has also become a topic of various related forums, and experts who pay attention to these issues have also written books to express their opinions.
  In addition to Kutchan Town, there are also rumors of foreign capital buying land in other parts of Hokkaido. The main buyers are said to be from a number of countries including New Zealand, the UK and Singapore. The purchases took the form of private and corporate purchases, and one company even bought a large area of ​​forest, including the mountains near the base of the Japanese Self-Defense Forces.
  The reason why people concerned are sensitive to such rumors is the phenomenon of “land grabbing” that has appeared around the world in recent years. This phenomenon became very prominent around the 2007-2008 price boom. With the global population increasing, urbanization and living standards rising, there are fears that “water shortages and food crises may occur in the future”.
  Rajendra Kumar Pachauri, chairman of the United Nations Intergovernmental Panel of Experts on Climate Change (IPCC), said that buying land from other countries to ensure the supply of agricultural products will not fundamentally solve the global food crisis. To solve this problem, in addition to changing the balance of food supply and demand, there are several other ways.
  One of the most likely moves is to improve traditional agriculture. More than 1 billion farmers in the world rely on rainwater for agricultural production, but they have not enjoyed the benefits of science and technology, and there is still room for improving production efficiency and stabilizing income.
  The IPCC’s fourth report published in 2007 predicted that global food production would be affected by rising temperatures caused by global warming. An increase in the average temperature of a region by 1 to 3 degrees Celsius can increase agricultural production, while exceeding this range has the opposite effect. This climate change will affect traditional agriculture, which relies on rainwater for production, necessitating large-scale research and development. For example, controlling evaporation of water through proper water storage and irrigation, and using science and technology to improve wasteland and desert soils, etc. In addition, it is necessary to control the increase in meat consumption with economic development, and to equip poor countries with infrastructure such as cold storage so that agricultural products are not discarded.
  Large-scale overseas investment is causing international concern. But in fact, outbound investment has a positive side. For example, a sugar project in Mali invested by the German Technical Cooperation Corporation, although it required 1,600 farmers to give up farming, has provided 5,000 local jobs and is expected to indirectly employ up to 20,000 people. It is also speculated that German investments in Ghana created 180,000 jobs from 2001 to 2008, and flower cultivation in Uganda has also introduced more environmentally friendly production methods.
  Since 2008, Korean companies have begun to develop agriculture abroad. According to the Korea Rural Economic Research Institute, in 2009, 28 private enterprises and groups joined overseas agricultural development, including shipbuilding giant Hyundai Heavy Industries. Private enterprises have invested in more than 10 countries including Indonesia, Ukraine and Brazil.
  The South Korean government is preparing to treat this kind of private investment as a “national policy”. South Korea’s food self-sufficiency rate is 51%, but the grain self-sufficiency rate is about 27%. Although the supply of rice is sufficient, wheat and corn need to be imported. Already feeling that the era of food insufficiency is coming, the Korean government formulated the “10-year plan for overseas agricultural development” in 2009.
  According to Kim Yong-taek, director of the International Agricultural Development Cooperation Center of the Korea Rural Economic Research Institute, “This crisis is increasingly felt amid soaring grain prices and export restrictions in various countries. To ensure a stable supply channel that is not controlled by the market, develop agriculture abroad. It’s the way to go.”
  However, the South Korean government has not disclosed the specifics of the plan for fear of opposition from farmers. According to researchers and business leaders, the goal of the 10-year plan is to reduce South Korea’s annual grain imports (about 14 million tons) by 10 percent by developing agriculture abroad. The government provides 24 billion won in loans each year to support companies investing in equipment and surveys.
  However, this kind of financial support from the Korean government is conditional. Private companies that receive government loans must follow the rule that “in the event of a food crisis, food exports to South Korea must be given priority.”
  However, in South Korea, they are deeply skeptical, thinking, “Can such insurance work in the event of a contingency?” In the event of a global food crisis, if the country receiving the investment restricts exports, it will definitely be difficult for agricultural products to arrive. South Korea. However, companies investing in foreign agriculture said: “It will become more and more difficult to secure agricultural land in the future, and we have to do so now.”
  Another concern is the friction between investors and the people in the places where they invest. South Korea, in particular, has sparked a political battle over plans by its own companies to develop in Madagascar, culminating in an uproar calling for the president’s resignation, with the ouster of former president Marc Ravalomanana still fresh in memory .
  Saudi Arabia is also looking abroad. From 2008 to 2009, the Saudi government delegation visited Sudan, Egypt, the Philippines, Cambodia and Ukraine and other African and Southeast Asian countries, the purpose of which was to find countries and cooperative enterprises that would accept investment in agricultural development.
  When asked about the government’s reasons for investing in foreign agriculture, Abdullah al-Obeid, Saudi Deputy Agriculture Minister, made it clear: “The fundamental problem is groundwater. Because it is not allowed to use groundwater for food production in the country.” Free distribution and huge subsidies to achieve food self-sufficiency. In 1985, Saudi Arabia became self-sufficient in wheat, and the surplus was used for export. Eggs and milk are also self-sufficient, and vegetables and fruits are also self-sufficient. However, as most of Saudi Arabia’s territory is covered by desert, water resources are scarce. With the population growing at an average annual rate of 2 percent, the government fears that groundwater resources will eventually be depleted if wheat production continues to increase.
  In 2006, the Saudi government announced “abandoning wheat self-sufficiency” and changed its policy, stipulating that by 2016 it would reduce wheat production subsidies and instead encourage companies to invest in farms abroad and import wheat from investing countries. With global grain prices rising, the Saudi government has stepped up the pace of companies investing in agriculture abroad. If there is a food shortage in the world, it may be difficult to ensure a sufficient supply of agricultural products simply by relying on imports. From the perspective of food security, the Saudi government’s goal is to have independent farms abroad.
  Although some people think that the Saudi government wants to take the lead in securing foreign land, Obeid emphasized: “Let companies choose the investment location.” The government’s behavior will be after the private enterprise signs the contract with the invested country, and the two countries are ready to sign a cooperation agreement. when implemented. This is to avoid the risk of the investee country suddenly changing its policy to reclaim the land.
  Although no country has actually signed a cooperation agreement, the Saudi government has been in talks with more than 20 countries, Obaid said. The Saudi financial community is preparing to set up an “International Agriculture and Food Investment Company”, with investors and the government to raise more than 500 million US dollars of funds, half of which will be used for foreign agricultural development, and the other half plans to invest in the domestic food field.
  This plan of the Saudi government has been positively responded by Indonesia. In June 2010, Indonesian Minister of Agriculture Suswono said when he visited Saudi Arabia that “my country has amended the law to attract foreign investment” and called on Saudi Arabia to invest in Indonesia. He said the Indonesian government has agreed that foreign investment in major crop farms can take up to 40 percent of the ownership.
  Indonesia was preparing to attract Saudi capital to the nearly 2 million hectares of agricultural land bordering Papua New Guinea for agricultural development, but the plan was forced to stop due to strong opposition from local people. The Indonesian government plans to achieve a 7% economic growth target by 2014, and attracting foreign investment to develop agricultural land and create employment is the first step to achieve this goal. “There are 7.7 million hectares of uncultivated land in our country,” said Susvorno, who handed out an olive branch to foreign investors.