Fears for the world's poor countries as the rich grab land to grow food

• UN sounds warning after 30m hectares bought up
• G8 leaders to discuss 'neo-colonialism'
John Vidal, guardian.co.uk 3 Jul 09;

The acquisition of farmland from the world's poor by rich countries and international corporations is accelerating at an alarming rate, with an area half the size of Europe's farmland targeted in the last six months, reports from UN officials and agriculture experts say.

New reports from the UN and analysts in India, Washington and London estimate that at least 30m hectares is being acquired to grow food for countries such as China and the Gulf states who cannot produce enough for their populations. According to the UN, the trend is accelerating and could severely impair the ability of poor countries to feed themselves.

Today it emerged that world leaders are to discuss what is being described as "land grabbing" or "neo-colonialism" at the G8 meeting next week. A spokesman for Japan's ministry of foreign affairs confirmed that it would raise the issue: "We feel there should be a code of conduct for investment in farmland that will be a win-win situation for both producing and consuming countries," he said.

Olivier De Schutter, special envoy for food at the UN Office of the High Commissioner for Human Rights, said: "[The trend] is accelerating quickly. All countries observe each other and when one sees others buying land it does the same."

The UN's food and agricultural organisation and other analysts estimate that nearly 20m hectares (50m acres) of farmland – an area roughly half the size of all arable land in Europe – has been sold or has been negotiated for sale or lease in the last six months. Around 10m hectares was bought last year. The land grab is being blamed on wealthy countries with concerns about food security.

Some of the largest deals include South Korea's acquisition of 700,000ha in Sudan, and Saudi Arabia's purchase of 500,000ha in Tanzania. The Democratic Republic of the Congo expects to shortly conclude an 8m-hectare deal with a group of South African businesses to grow maize and soya beans as well as poultry and dairy farming.

India has lent money to 80 companies to buy 350,000ha in Africa. At least six countries are known to have bought large landholdings in Sudan, one of the least food-secure countries in the world.

Other countries that have acquired land in the last year include the Gulf states, Sweden, China and Libya. Those targeted include not only fertile countries such as Brazil, Russia and Ukraine, but also poor countries like Cameroon, Ethiopia, Madagascar, and Zambia.

De Schutter said that after the food crisis of 2008, many countries found food imports hit their balance of payments, "so now they want to insure themselves".

"This is speculation, betting on future prices. What we see now is that countries have lost trust in the international market. We know volatility will increase in the next few years. Land prices will continue to rise. Many deals are even now being negotiated. Not all are complete yet."

He said that about one-fifth of the land deals were expected to grow biofuel crops. "But it is impossible to know with certainty because declarations are not made as to what crops will be grown," he said.

Some of the world's largest food, financial and car companies have invested in land.

Alpcot Agro of Sweden bought 120,000ha in Russia, South Korea's Hyundai has paid $6.5m (£4m) for a majority stake in Khorol Zerno, which owns 10,000ha in Eastern Siberia, while Morgan Stanley has bought 40,000ha in Ukraine. Last year South Korea's Daewoo signed a 99-year lease for 1.3m hectares of agricultural land in Madagascar.

Devinder Sharma, analyst with the Forum for Biotechnology and Food Security in India, predicted civil unrest.

"Outsourcing food production will ensure food security for investing countries but would leave behind a trail of hunger, starvation and food scarcities for local populations," he said. "The environmental tab of highly intensive farming – devastated soils, dry aquifer, and ruined ecology from chemical infestation – will be left for the host country to pick up."

In Madagascar, the Daewoo agreement was seen as a factor in the subsequent uprising that led to the ousting of the president, Marc Ravalomanana. His replacement, Andry Rajoelina, immediately moved to repeal the deal.

Concern is mounting because much of the land has been targeted for its good water supplies and proximity to ports. According to a report last month by the London-based International Institute for Environment and Development, the land deals "create risks and opportunities".

"Increased investment may bring benefits such as GDP growth and improved government revenues, and may create opportunities for economic development and livelihood improvement. But they may result in local people losing access to the resources on which they depend for their food security – particularly as some key recipient countries are themselves faced with food security challenges", said the authors.

According to a US-based thinktank, the International Food Policy Research Institute, nearly $20bn to $30bn a year is being spent by rich countries on land in developing countries.