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Cashing in on global food crisis

The intensification of the global food crisis is bringing misery to millions but profits for investors and entrepreneurs as a massive land grab takes place at the expense of local people.

Just to underline the point, it was revealed this week that China’s Jin Hui Mining Corporation has changed its name to Natural Dairy (NZ) Holdings after buying a bankrupt family-owned New Zealand business using a mixture of cash and convertible bonds. The Crafar family’s empire has land, 30,000 animals, a milk powder production plant, 200 staff and around $200 million of debt.

It was also reported that 1,000 Cambodian villagers rose up against a local business tycoon and politician trying to force them to sell their land to him at a rock-bottom price. It is only the latest in a series of protests as politicians and landowners profit from the Phnom Penh government’s policy of giving concessions to foreign companies. These are mainly from China, Vietnam and South Korea, and are running mines, power plants and farms.

Under capitalism’s business-as-usual vision, rubber-stamped at Copenhagen, demand for food will rise by 50% by 2050 whilst water shortages, rising seawater and desertification, caused by uncontrolled global warming, reduce the amount of arable land.

This nightmare vision makes land look like one of the few safe bets for investors. It is, as they say, a no brainer – increased demand + shrinking supply + rising prices = big profits. New investment funds spring up almost daily, bringing private investors into an area previously dominated by farming corporations and sovereign wealth funds of China, Saudi Arabia and the other Gulf States.

They are buying up thousands of acres of land and turning them over to industrial forms of agriculture. The long-term result will be the same as elsewhere – soil structure destroyed, yields falling, loss of species diversity and increased greenhouse gas emissions as virgin land and forest are broken up, releasing stored CO2.

But investors pay about one tenth of the price per hectare for land in Africa as they would in Argentina or the United States. When the soil fails? Buy elsewhere and move on.

You might think that as the world faces unprecedented famine, governments would be rushing to take control. But the G8 summit in L’Aquila in 2008 failed to get even a commitment on the issue. Now the World Bank is drafting a “code of practice” – which will undoubtedly be ignored.

The terrible contradiction is that while profits from food and land are increasing, agriculture itself – the actual foundation of human society – is going backwards. In six of the last eight years, world grain production has fallen short of consumption. In 2008 grain prices climbed to the highest level ever and though they have fallen a little, they remain extremely high.

Historically, the enclosure and privatisation of land was the foundation for capitalist development – it is time to reverse the process, with new forms of common ownership. Preventing famine means overcoming the alienation of human beings from the soil that, in the final analysis, is the source of all our lives. Holding land in common, with farmers’ rights protected, we can use our knowledge to solve organically the problems that herbicides and nitrates have intensified.

Instead of boosting the capitalist market in land, we can revitalise the soil by composting waste on a huge scale and ending the global drive towards grain-fed meat based diets, with a return to more natural, balanced diets. We should advocate a policy of no more land sales to investment banks and sovereign funds and fight to socialise the agri-businesses that dominate the food chain for profit.

Penny Cole
Environment editor
26 March 2010

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