May 28, 2017

Growing Food Trade, Shrinking Self-Sufficiency

Growing demand for food and fuel has put pressure on the world’s agricultural lands to produce more. Now, a trend in “land grabbing” has emerged, as wealthy countries lease or buy farms and agribusiness in poorer countries to ensure their own future supplies.

Posted on 03/14/15
By Jay Rover | Via ViewsWeek
A wheat field in Oklahoma. (Photo by Oklahoma Storm, CC license)

A wheat field in Oklahoma. (Photo by Oklahoma Storm, CC license)

As society reaches the limits of available farmland and accessible irrigation water, many countries have turned to international markets to help meet domestic food demand. Imports of grain worldwide have increased more than fivefold between 1960 and 2013. However, importing food as a response to resource scarcity creates dependence on global markets, writes Gary Gardner, director of publications at the Worldwatch Institute, in the Institute’s latest Vital Signs Online article (www.worldwatch.org).

 

“In 2013, more than a third of the world’s nations—77 in all—imported at least a quarter of the major grains they needed. This compares to just 49 countries in 1961,” writes Gardner. “Meanwhile, the number of grain-exporting countries expanded by just 6 between 1961 and 2013.”

 

Food import dependence has several roots, says a press release issued by Worldwatch Institute. “One problem is the steady loss of fertile land and fresh water. In 62 countries, the area of farmland is insufficient to meet domestic consumption needs, and in 22 countries, the consumption of agricultural products (not just grains) requires more fresh water than each country can extract.”

 

According to the US Department of Agriculture, corn is by far the largest component of global coarse-grain trade, accounting for about three-quarters of total volume in recent years. (Coarse grains make up a common trade category that includes corn, sorghum, barley, oats, and rye.) Most of the corn that is traded is used for feed; smaller amounts are traded for industrial and food uses. Processed-corn products and byproducts–including corn meal, flour, sweeteners, and corn gluten feed–are also traded, but are not included in this discussion of corn trade.

 

Despite the importance of farmland, land continues to be degraded or paved over. Farmland near cities is regularly converted to accommodate housing, industry, and other urban needs. The United States, for example, lost 9.3 million hectares of agricultural land to development—an area the size of the state of Indiana—between 1982 and 2007.

 

Pressure on water supplies for agriculture is also becoming widespread. A 2012 study in the journal Nature estimated that some 20 percent of the world’s aquifers are pumped faster than they are recharged by rainfall, often in key food-producing areas.

 

Another threat to national endowments of farmland has emerged in the practice of “land grabbing”—the purchase or leasing of land overseas by investment firms, biofuel producers, large-scale farming operations, and governments. Since 2000, agreements have been concluded for foreign entities to purchase or lease more than 42 million hectares, an area about the size of Japan. The bulk of the grabbed land is located in Africa, with Asia being the next most common region for acquisitions.

 

“The largest source of land grabbing is the United States, where investors see an opportunity to make money on an increasingly limited resource,” writes Gardner. However, “contracts often do not take into account the interests of smallholders, who may have been working the acquired land over a long period.”

 

Importing food as a response to resource scarcity has two clear dangers. First, not all countries can be net food importers; at some point the demand for imported food could exceed the capacity to supply it. Already, many major supplier regions are themselves experiencing resource constraints. Second, excessive dependence on imports leaves a country vulnerable to supply interruptions, whether for natural reasons (such as drought or pest infestation in supplier countries) or political manipulation.

 

An import strategy may be unavoidable for some nations, but it should be considered only reluctantly by countries that can meet their food needs in more conventional ways. It is crucial to conserve agricultural resources wherever possible.

 

According to Lester R. Brown, president of Earth Policy Institute (www.earth-policy.org) — a nonprofit, interdisciplinary research organization based in Washington, D.C. — Saudi Arabia, South Korea, China, and India are among the countries that are leading the charge to buy or lease land abroad, either through government entities or through domestically based agribusiness firms. “Saudi Arabia’s population has simply outrun its land and water resources. The country is fast losing its irrigation water and will soon be totally dependent on imports from the world market or overseas farming projects for its grain,” Brown wrote in an article in 2013.

 

Brown says South Korea imports more than 70% of its grain, and it has become a major land investor in several countries. “In an attempt to acquire 940,000 acres of farmland abroad by 2018 for corn, wheat, and soybean production, the Korean government will reportedly help domestic companies lease farmland or buy stakes in agribusiness firms in countries such as Cambodia, Indonesia, and Ukraine.”

 

China is also nervous about its future food supply, he says, adding it faces aquifer depletion and the heavy loss of cropland to urbanization and industrial development. “Although it was essentially self-sufficient in grain from 1995 onward, within the last few years China has become a leading grain importer. It is by far the top importer of soybeans, bringing in more than all other countries combined.”

 

Brown believes India has also become a major player in land acquisitions, with its huge and growing population to feed. “Irrigation wells are starting to go dry, so with the projected addition of 450 million people by mid-century and the prospect of growing climate instability, India, too, is worried about future food security.”

 

Among the other countries jumping in to secure land abroad are Egypt, Libya, Bahrain, Qatar, and the United Arab Emirates (UAE). For example, in early 2012 Al Ghurair Foods, a company based in the UAE, announced it would lease 250,000 acres in Sudan for 99 years on which to grow wheat, other grains, and soybeans. The plan is that the resulting harvests will go to the UAE and other Gulf countries, Brown said in his article that appeared on the website of World Future Society.


Filled under: Economy, Food Security, ViewsWeek Exclusive

Leave a Reply