World Grain - June 2009 - 33

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FEATURE: FOREIGN CROPLAND DEALS

government pact that did not go through was Kuwait's attempt to secure supposedly unused rice land in Cambodia,
whose government estimated that only 2.5 million of 6 million hectares of arable land in the country is under cultivation. A series of ministerial visits brought a quick agreement.
But NGOs (non-governmental organizations) like Amnesty
International have voiced concerns that small farmers would
be forced off their land illegally to make way for the Kuwaiti
project. Now some Cambodian political leaders are saying
that their country is willing to produce and sell as much rice
as Kuwait requires, but not to sell or lease any land.
Proponents of the deal point out that since rice yields in
Cambodia are only about half of those in Thailand and Vietnam, the country could genuinely benefit from investments in
technology and inputs.
In another rice production pact involving Gulf State and
Southeast Asian partners, Saudi Arabia's Bin Laden Group
has withdrawn from the deal mentioned above to invest in Indonesia's Papua province.
WILL THIS TREND CONTINUE?
Will this new trend toward the globalization of cropland
continue, or is the failure of many of the biggest of these
murky land deals a sign that this type of investment is not
politically or economically feasible most of the time? The
world has changed since the big push for international farmland acquisition began last year. The sudden end of high
food commodity prices and easy credit combined with local
opposition may have changed the thinking of many wouldbe investors for now. But the shock felt last year by big food
importing countries of not being able to procure staple products at seemingly any price from some traditional suppliers
will not fade away soon.
These countries understand that putting more money into
agriculture around the world, especially into poor developing countries, could do a lot to avert future food price crises
like the one that now seems to be receding. And this investment can help the poorest countries disproportionately, because the crisis hit hardest in the least developed countries
where people spend the highest proportion of their income
on food.
So the fact that many of the less grandiose and less publicized
foreign cropland investments are still proceeding can only be
viewed as a positive, provided that certain rules to avoid abuse
are followed. To this end, the United Nations and other international organizations are discussing adoption of an international
code of conduct governing these transactions.

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David McKee is a grain industry consultant providing market research and
other services to companies seeking to initiate business in new markets.
He can be reached at davidmckee59@msn.com.
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