March 21, 2011
I found it quite coincidental that the very week that The Citizen’s “Salute to Agriculture” supplement was going to be hitting the news stands, and your mail boxes, there happened to be an article in the March 21st edition of Maclean’s magazine regarding farmland investments and how it could affect farming and agriculture in the future.
The article states that due to rising food prices, the expanding global population and the worldwide lack of farmland means that Canadian farmland is one hot commodity. Some predict that one day farmland will be as precious as gold or even better because, unlike gold, farmland generates ongoing income. So investors are lining up to buy agricultural land in Canada, and in particular Saskatchewan, where farmland remains cheap compared to other parts of the world.
According to Statistics Canada, Alberta’s land prices nearly doubled from 2000 to 2009. While this could bode well for current land owners in Alberta and its neighboring provinces, too, it might ultimately impact on how farming is done and may even affect the world food supply.
There are already corporate farms such as the Assiniboia Capital Corporation which controls more than 110,000 acres in Saskatchewan and has approximately 500 investors. The corporation’s investors look at the dividend yield from the land rental and the predicted capital gain from a future land sale to be as worthy as blue-chip stock.
Not everyone is happy with this new trend. Critics contend that farmers will lose control if they don’t own their own land and this might mean that more profitable crops, such as those used to make biofuels, are prioritized over food production, which is currently the case in other parts of the globe. Also, farmers already have a hard enough time making a living and there is fear that the investors will take away more of their profits.
“Farm land is food land,” Says Kevin Wipf, executive director of the National Farmers’ Union, “to have it bought up to be rented back to those who grow our food is not ideal for the world’s food system.”
Throughout the world rich governments and corporations are buying up the rights to millions of acres of agricultural land in developing countries in an effort to secure their own long-term food supplies. The head of the Food and Agriculture Organization (FAO), Jacques Diouf, has warned that the controversial rise in land deals could create a form of "neocolonialism", with poor states producing food for the rich at the expense of their own hungry people.
The South Korean firm Daewoo Logistics has secured a large piece of farmland in Madagascar to grow maize and crops for biofuels. Libya has secured 250,000 hectares of Ukrainian farmland and China has begun to explore land deals in Southeast Asia. Oil-rich Arab investors are looking into land in Sudan, Ethiopia, Ukraine, Kazakhstan, Pakistan, Cambodia and Thailand.
In a world where approximately 852 million people are chronically hungry due to extreme poverty and 2 billion people lack food security intermittently, due to varying degrees of poverty, I am not wholly convinced that the world, with its already strained food supply, would be best served by placing a great deal of land and power into the hands of profit driven corporations and land starved countries.
“The fight to save family farms isn’t just about farmers. It’s about making sure that there is a safe and healthy food supply for all of us. It’s about jobs, from Main Street to Wall Street.”- Farm Aid President-Willie Nelson. Yes, THAT Willie Nelson.