May 08, 2008
Wilds Of World To Get Converted To Farm Land?

The Financial Times reports the Chinese government wants the Chinese to buy lots of farmland in other countries in order to boost production to feed China.

Chinese companies will be encouraged to buy farmland abroad, particularly in Africa and South America, to help guarantee food security under a plan being considered by Beijing.

A proposal drafted by the Ministry of Agriculture would make supporting offshore land acquisition by domestic agricultural companies a central government policy. Beijing already has similar policies to boost offshore investment by state-owned banks, manufacturers and oil companies, but offshore agricultural investment has so far been limited to a few small projects.

Industrialization causes higher demand for food which causes higher food prices which causes a flood of capital to go into agriculture. The result? Less land for animals. More pollution from agriculture.

But this plan only works if the target countries allow export of the increased production.

Argentina has banned beef exports, while Egypt and India have stopped shipments of rice.

Kazakhstan has prohibited wheat exports. Russia has slapped a 40pc export duty on shipments, and Pakistan a 35pc duty.

China, Cambodia, Malaysia, Philipines, Sri Lanka, and Vietnam have all imposed export controls or forms of rationing to ease the crisis.

Asian populations grow and become more affluent and as a result more land gets shifted into urban development.

Instead, Asia is increasingly transforming farmland into office parks and suburbs. In the Philippines, half of irrigated land has been transformed into urban development in the past two decades. While this fuels new economic engines such as services and industry, it also undercuts resources needed to grow food.

...

The population in the Philippines has grown by roughly 2 percent a year since 2000, one of the highest rates in Asia, leading to a corresponding leap in rice consumption. And across Asia, exploding middle classes with more money and bigger appetites are eating more rice – and more meat. Meat production requires huge amounts of water, labor, and grains to feed cattle, which in turn diverts resources away from rice production.

Paul Collier sees lots of undeveloped land in Africa and other areas that could be turned into farm land to allow the Chinese to eat higher on the food chain.

Why have food prices rocketed? Paradoxically, this squeeze on the poorest has come about as a result of the success of globalization in reducing world poverty. As China develops, helped by its massive exports to our markets, millions of Chinese households have started to eat better. Better means not just more food but more meat, the new luxury. But to produce a kilo of meat takes six kilos of grain. Livestock reared for meat to be consumed in Asia are now eating the grain that would previously have been eaten by the African poor. So what is the remedy?

The best solution to a problem is often not closely related to its cause (a proposition that might be recognized in the climate change debate). China’s long march to prosperity is something to celebrate. The remedy to high food prices is to increase food supply, something that is entirely feasible. The most realistic way to raise global supply is to replicate the Brazilian model of large, technologically sophisticated agro-companies supplying for the world market. To give one remarkable example, the time between harvesting one crop and planting the next, in effect the downtime for land, has been reduced an astounding thirty minutes. There are still many areas of the world that have good land which could be used far more productively if it was properly managed by large companies. For example, almost 90% of Mozambique’s land, an enormous area, is idle.

But to the wild animals in Africa and South America the land doesn't look undeveloped. It looks like where they get their food from.

Asian economic development translates into land development for farming in Africa. The more capital accumulates the more capital available to bring more land into production for human uses. Africa's problems have been an obstacle for Western and East Asian people to develop the place. But given high enough food prices the costs of dealing Africa's problems will become affordable for large farming businesses from outside of Africa. The money Bill Gates is spending to develop treatments for tropical diseases will bring treatments that let farmers work in areas which otherwise offer some protection to wildlife due to disease barriers.

Birth control offers a different way to solve the food problem which will save a lot of land from agricultural development.

Share |      Randall Parker, 2008 May 08 10:27 PM  Trends Agriculture


Comments
DN said at May 9, 2008 2:56 AM:

Hence the reason why the Chinese are selling arms to Mugabe. There is plenty of good land to be farmed in Zimbabwe, but no one who knows how. If the Chinese give him guns to stay in power, surely he'll let them feed his people and siphon of the surplus to China.

Brock said at May 9, 2008 9:10 AM:

DN, it's wrong to say that "no one [in Zimbabwe] knows how" to farm. Before Mugabe Zimbabwe was quite productive and wealthy (for Africa). But then Mugabe dispossessed/killed/drove off all the people who knew what thew were doing. You know, the typical Socialist thing that also brought famines to the USSR and China.

Also, I wouldn't trust Mugabe to be that cooperative. The only think that will secure his cooperation is a gun alright, but held right to his head.

Eventually all the arable land will be maximally put to use. I expect vertical urban farms and synthetic meat will be our future.

allan said at May 9, 2008 10:39 AM:

DN - Zimbawe no longer exports food. They import it ... thanks to the polices of Mugabe. So unless Mugabe is willing to starve his people (quite possible) in order to ship food to China, then Zimbawe is a no go for land for food.

bob said at May 9, 2008 1:37 PM:

There are more then a few problems with the plan. First of all the age of empire seems so passe in the 21st century. The Africans weren't particularly happy with Europeans controlling their economy why would they be anymore tolerant of Chinese overlords?

You need political stability to farm. Africa's problem has long been that the elite classes have looted the countries ie:Zimbabwe. Eastern africa could likely match the agricultural output of the North American plains if there was enough political stability to allow modernization of agriculture to occur. I don't see this happening anytime soon. China would have to be nuts to pour the trillions of dollars needed to modernize east Africa's infrastructure enough to handle increased food production without pretty good signs that you would get some benefit from your investment. When you look at the billions of dollars that the west has poured into Africa and watched it flow back out to numbered Swiss bank accounts the prospects of China having any more success aren't encouraging.

The major problem though isn't growing food, there never has been a problem growing enough grain, the problem is how do you grow it and more importantly transport it, at a price that the poor can afford. In the US alone corn production will likely rise by at least 25% over the next ten years just through improved genetics. Fertilizer use is expected to drop as new gmo varieties that require 40% less nitrogen come on the market. If you add 25% more corn you put millions of more semi loads of grain on the highways and need to ship nearly 2000 more panamax class cargos out of US ports. Fuel prices are still rising which means ocean shipping costs and other transportation costs are also still rising.

How do you grow low value products and ship them long distances if shipping costs are prohibitive? You can buy fresh bananas in the small towns scattered across Canada's high Arctic but they cost several dollar apiece. Tuktoyaktuk resident's current food prices could easily be our future.


aa2 said at May 9, 2008 7:59 PM:

bob good post, your post got me thinking... What if the West had not lost the will to keep their colonies. I don't think it would have been that hard to keep control in sub-saharan Africa. The Chinese also have another option and that is to move large numbers of Chinese to each country they want access to.

They can look at each African nation on a case by case basis. The ones with masses of farmland or resources they can start moving in Chinese. Even if they had to move 1 million Chinese into a country like Zimbabwe it would be no big deal imo. They could move 1 million people each into 20 different African nations and thats only 20 million people. Hardly anything compared to their total population.

aa2 said at May 9, 2008 8:13 PM:

Besides biofuels which should be stopped right now; the stupidest and most destructive idea I've seen. The best thing we could do for the environment is support a massive effort to provide birth control in the third world.

There are countless women in the third world who already have several children and do not want more. There is a little spiral wire that they implant into the cervix through the vagina that renders the recipient sterile within days. NO special skill needed, and its really just a piece of wire. Cheap easy and effective, that has the same effect as tying tubes. But far less surgery and cheaper to perform. I'd give any third world woman of child bearing age or even girls, 2 thousand dollars each to get this procedure done. And provide food and medicine for their family.

I would not give food to women who refused to get sterilized this way. Afterall if they have so many resources that they can be adding to the population, obviously they don't need assistance, someone else needs it more. I'd have thousands of teams of people going around the whole third world sterilizing women, and providing aid and money. 2,000 dollars being the equivilant of 6 years income for people making 1 dollar a day.

And if 2,000 dollars wasn't enough I'd keep raising the amount until rapidly falling population growth goals were met in each nation. And what a difference having 2 children makes versus 6. At 2 children the population is about stable. At 6 the population triples in one generation. If you can get it down to 1, the population halves for the next generation!

Randall Parker said at May 10, 2008 10:57 AM:

bob, aa2,

The Western nations lost their enthusiasm for colonialism mostly because the colonies became unprofitable. Some of Britain's later colonies in Africa were always a drain on the purse. Two world wars bankrupted Britain and rendered its colonial holdings unaffordable.

Whether the Chinese end up bringing neo-colonialism to parts of Africa will depend on costs and benefits. On the one hand rising Chinese affluence increases the demand for grain to feed livestock for meat. On the other hand, industrialized farming in Africa will just cause an African population explosion and eventually food exports will become difficult to sustain. Africa is, after all, in a Malthusian trap.

In relatively less messed up parts of the world (e.g. Brazil) Chinese capital is not needed in order to boost local farm output. Already American farmers are investing in Mexico and Brazil and moving down to Brazil. Also, the Brazilians can fund their own farm expansions with revenue from crop sales at today's prices.

Randall Parker said at May 10, 2008 10:58 AM:

aa2,

The Chinese ought to take a keen interest in funding birth control in Africa. If they could get population trending downward in a few African countries then it would become worth it for them to set up modern industrial farm operations in those targeted countries.

James Bowery said at May 10, 2008 11:23 AM:

industrialized farming in Africa will just cause an African population explosion

I think you're missing aa2's point: Europeans could have turned the carrying capacity they created in Africa into population, the way they did in the New World and Australia -- but for some strange reason they failed to do so. The Chinese have so much just sitting in China that they don't even need to approach the fertility rates of new world pioneers -- all the need to do is move Chinese there while they keep the "leadership" of the African nations in luxury.

aa2 said at May 10, 2008 12:02 PM:

Ya James that is what I meant say 1 million Chinese in Zimbabwe who in reality would control the country completely, but have a group of Africans living in luxury who would be the face to the public as the leaders.

Randall you are right they'd have to limit Africa's birth rate to make a go of it. One thing that I find interesting is that South Africa if anything encouraged massive growth in population of blacks in their country. The Chinese I don't think will make that mistake. I already read one article that was saying the Chinese were telling their citizens who wanted more then one child to go to Africa and work for their corporations there.

The financial side has got to be a big factor in why the Europeans gave up colonies.. But now there is huge economic interest with the resources in this global commodities boom. Which is why the Chinese are going in. On the bright side for Africans where the Chinese go you see them building infrastructure, creating jobs, sources of revenue to tax, like the Europeans before them. Imo if there weren't so many Africans they could share the resource royalties and live pretty well.

Van Zynte said at May 10, 2008 12:52 PM:

Are you thinking that Chinese breeding with Africans will alter the population IQ? Interesting concept. Perhaps a combination of lebensraum for the Chinese and a more civilized life for the Africans? You may have hit on something there.

Bob said at May 10, 2008 3:21 PM:

Bob,

Even if the Chinese could set up large modern farms in east Africa, which I don't think would be possible due to African reticence, the problem still remains of a dearth of infrastructure to transport it. Beyond that though it still doesn't deal with the massive cost of getting it to port and then getting it from African ports to China with forecast $150 - $200 dollar per barrel oil.

China currently grows all of its own corn, wheat, rice and rapeseed oil. Most years they even have enough extra to export. They import soybeans, soybean oil and soybean meal for their livestock feed. China also produces most of their own meat.
When they need to purchase extra agricultural products it is much simpler and in some cases closer for them to trade manufactured goods to purchase agricultural production from the central Asian plains, Brazil and North America. There are one million acre farms in Kazakhstan now, 100,000 acre farms in Brazil and 40,000 acre farms in North America and Australia. These countries already have varying amounts of infrastructure and farming expertise as well as access to state of the art crop genetics. It is far easier and faster for farmers in these countries to double their agriculture production given the right financial incentive to do so than it is to increase production out of basket case areas like Africa.

However once again I ask how do you transport it?

Randall Parker said at May 10, 2008 3:59 PM:

Bob,

Could you differentiate yourself from bob by referring to him as bob rather than as Bob? It is confusing. Otherwise I'm going to end up saying thing like "Bob is wrong and I agree with Bob instead".

Of course an initial or something else to make a name more distinctive than Bob or bob would help even more.

Randall Parker said at May 10, 2008 8:36 PM:

Bob,

Train lines can get built if the ROI is there.

Shipping bulk products on water is actually very cheap because it is extremely efficient in terms of energy used per amount of mass moved

Tj Green said at May 13, 2008 2:56 PM:

Climate change does not look good for Asia, but looks good for West Africa. It is our species adapting to a changing environment.

Tim Singleton said at July 24, 2008 9:12 AM:

***would not give food to women who refused to get sterilized this way. Afterall if they have so many resources that they can be adding to the population, obviously they don't need assistance, someone else needs it more. I'd have thousands of teams of people going around the whole third world sterilizing women, and providing aid and money. 2,000 dollars being the equivilant of 6 years income for people making 1 dollar a day.***

Well, there you have it. Another a$$hole who wants to sterilize humanity.

What we need is to weed out the gene pool that believes in the Divine Right of Kings or has a drive to rule others and instead use the natural instinct of humans to have kids to drive the colonization of other places. If you want sterization done, you do it to YOUR wife and YOUR daughters.

I plan to have 9 to 12 kids of mixed American and Filipina blood and teach them to be productive and do the same. I figure I can live to see maybe four or five hundred of my own descendants walk the earth before I get called to the next level.

Tim Singleton said at July 24, 2008 9:17 AM:

...and the only thing keeping Africa in poverty is human greed and hatred for other ethnic groups they share borders with.

Africa can carry its current population and more if the people were trying to build their economies instead of exterminating each other over old grudges and cultural ethnic rivalries.

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