Own a Singapore farm in Africa?

Singapore's plan to invest in farms overseas draws mixed reactions
Ho Lian-Yi, The New Paper 3 Aug 09;

FOOD produced abroad in operations owned by Singaporeans and aimed at Singaporean dining tables?

On Friday, National Development Minister Mah Bow Tan said Singapore needs to look at investing in overseas food zones.

The purpose: To produce food for Singaporeans and the host country.

The rationale: To ensure that when food supplies are threatened, Singapore can depend on alternative sources.

Mr Lim Hongzhuang, 25, a Singaporean who runs a farm in Negri Sembilan in Malaysia, sees the plan by the Ministry of National Development as a good one.

But any attempt to procure foreign farmland must be executed very carefully. 'It has to be under the radar and tactful,' he said.

Political risk

There is a 'political risk', he added. Even if a foreign government is willing to lease or sell the land, the locals may ask: 'Why are you giving our land away?'

The object must be very clear - that you are not interested in owning the land, just the produce, he said.

Currently, he said he exports only 10 to 15 per cent of his produce (mostly vegetables like eggplants and ladyfingers) to Singapore.

Singapore imports a wide range of food produce, he said, adding: 'I have to compete with all these people. So for my security, I have to make sure I have a strong local market in Malaysia.'

But he added that while the Government could ensure supply stability, a private farmer like him has to think about price stability as well.

'No one will sell (something for) $1 because the government tells you to, when the market price is $2,' he said.

Mrs Ivy Singh-Lim, who runs the Bollywood Veggies organic farm in Singapore, said she was pleased that the Government is seriously looking at food sources at home.

But she doesn't believe that going overseas to secure food sources is going to work.

'A contract is only a piece of paper. Don't forget, when China starts buying everything they'll sell to China, they won't sell to you.'

Instead of looking overseas, she suggested growing local herbs and produce like papayas, bananas and coconuts in our HDB estates.

Singapore Management University law lecturer Eugene Tan said securing farmland overseas is not a new thing.

He said the priority should go to basic needs, which has already been pointed out - like chicken, pork, fish, eggs, leafy vegetables and rice.

'We don't need farmland for venison, right?' he said.

The big question mark, he said, is when there's a food crisis, which is when countries may decide to be nationalistic and protectionalistic.

'My personal view is that having farmland closer to Singapore is desirable, but you don't want to put all your eggs in one basket, so you want a variety of sources.

'The benefit of Malaysia and Indonesia is that they are close, but when relations get a bit tense you never know what may happen.

'But if you look at other South-east Asian countries like Thailand, Vietnam, Philippines, they are a bit farther, but not as far as Australia,' he said.

More rich countries eyeing farmlands in Third World

POORER countries in Africa and Asia are more open to investments by rich countries in farmland.

Africa is especially popular. Land there is cheap and, in some regions of the mostly impoverished continent, extremely fertile, ABC News reported on Friday.

US investment management company BlackRock has set up a US$200 million ($289m) agriculture fund and set aside US$30m to buy farmland.

Renaissance Capital, a Russian investment company, has bought more than 100,000 hectares in Ukraine.

Deutsche Bank and Goldman Sachs have pumped money into pig breeding operations and chicken farms in China. These investments include the legal rights to the farmland.

South Korean conglomerate Daewoo plans to lease land half the size of Belgium in Madagascar to grow five million tonnes of corn a year by 2023, the BBC reported.

The company will also grow palm oil on another 120,000ha of leased land on the island off the African coast.

With food becoming scarce, it is turning into the new oil - the commodity du jour.

Worldwide grain reserves have dropped to a historic low since the beginning of last year, resulting in a price explosion.

But this has not stopped poorer countries from wanting to be bought over.

Ethiopia's prime minister has said that his government is 'eager' to provide access to hundreds of thousands of hectares of farmland.

Turkey's agriculture minister has told foreign investors: 'Choose and take what you want.'

Even Pakistan, which is waging a war against the Taliban, is jumping on the bandwagon. The government has staged a road show in Dubai to attract sheikhs with tax breaks and exemptions from labour laws.

What do these countries hope to get out of this deal? The development and modernisation of their ailing agricultural sectors. They expect rich countries to inject technology, capital and knowledge, modern seed and fertiliser - all the things that poor countries lack.

Feed the world

Then there is the bigger hope that foreign investments in Africa and Asia can eventually produce enough food for a planet soon to be populated by nine billion people.

But there can be problems. Because of the political sensitivity of modern-day land grab, it is often only the country's head of state who knows the details of the deal.

In some cases, provincial governors have already auctioned off land to the highest bidder. For instance, in Laos and Cambodia, even the governments no longer know how much of the territory they still own.

Over-fertilising, deforestation, over-consumption of water, reduction of ecological diversity and the loss of local species are real problems.

And when the soil becomes depleted after a few years, many investors simply move on. Land is so cheap that they are not forced to value sustainable farming practices.