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For lease= half a African country

Is this modern day colonialism? From the Financial Times-

Daewoo Logistics of South Korea has secured farmland in Madagascar to grow food crops for Seoul, in a deal that diplomats and consultants said was the largest of its kind.

The company said it had leased 1.3m hectares of farmland - about half the size of Belgium - from Madagascar's government for 99 years. It plans to ship the maize and palm oil harvests back to South Korea. Terms of the deal were not disclosed.

The pursuit of foreign farm investments is a clear sign of how countries are seeking food security following this year's crisis - which saw record prices for commodities such as wheat and rice and food riots in countries from Egypt to Haiti.

Prices for agricultural commodities have tumbled by about half from such levels but countries remain concerned about long-term supplies.

The United Nations' Food and Agriculture Organisation warned this year that the race by some countries to secure farmland overseas risked creating a "neo-colonial" system. Those fears could be increased by the fact that Daewoo's farm in Madagascar represents about half the African country's arable land, according to estimates by the US government.

Shin Dong-hyun, a senior manager at Daewoo Logistics in Seoul, said the company would develop the arable land for farming over the next 15 years, using labour from South Africa, and intended to replace about half South Korea's maize imports.

South Korea, a heavily populated but resource-poor nation, is the fourth-largest importer of maize and among the 10 largest buyers of soyabeans.

This deal with leave Daewoo farming almost half of Madagascar's arable. land.(I read that in another article that I've lost the link to. Half the area of Belgium is pretty sizable) Foreign corporations have entered into agreements with countries where they mine natural resources. Is food any different than gold, silver, platinum? Of course it is, because you don't eat those minerals. The deals though seem similar to me.

Update- I forgot to hat tip Robert Koehler at Marmot's Hole


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Comments (5)

Almost as good as the plot ... (Below threshold)

Almost as good as the plot from "Bombardiers" where the bonds traders from Atlantic Pacific (not so thinly disguised First Boston) attempt at buying out all of the public debt of Dominican Republic and turn the country into a Delaware holding company call New Lincoln Ltd. The bond trader are floating a convertible bond to fund the process.

My prediction, some little ... (Below threshold)

My prediction, some little time after the farms are up and running the folks in Madagascar rediscover their "National Identity" and send Daewoo packing.

That's a big 10-4, glenn. ... (Below threshold)
Baron Von Ottomatic:

That's a big 10-4, glenn. Hell, with global governance and a World Court Daewoo will probably end up paying $billions in damages for investing in and developing the farms...

How much is the rent for "h... (Below threshold)

How much is the rent for "half a African country"? Fifty cent?

In this house, we follow the rules of indefinite articles, mister.

Glen is right. Just as whi... (Below threshold)

Glen is right. Just as white farmers were given the boot in Zimbabwe (Rhodesia for those as old as me), Asian colonialists in Africa will get the same treatment eventually.

There is simply no rule of law in these countries. Mobutu promised white farmers they could keep their farms. After all they were the reason Zimbabwe was a major exporter of food. No more, and since they were run off their farms, Zimbabwe can't even feed themselves.

The Chinese were asked to replace the whites by Mobutu. They were smart enough to turn them down. Daewoo will find this out once their farms become productive. Hopefully the Korean overlords will live to tell about it.






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