Tag Archive | FDI

Toeing a Thin Line

When does one draw the line between foreign direct investment (FDI) in agribusiness and large-scale land acquisitions? The case of Australia is particularly perplexing to me: this is a highly developed country with a healthy economy, an educated population, a theoretically functioning justice system and strong civil society. And yet, Australia’s lands have become privy to so much foreign investment that the government last year felt compelled to launch a national investigation on large agribusiness investments…because they no longer knew how much of their land was still in the hands of Australians.

As John Cobb, the Australian Shadow Minister for Agriculture and Food Security, said in April 2011:

“While foreign investment has been vital for the development of agriculture in Australia, in the last three years we have seen a ten fold increase. There has been a marked change in the activity by foreign companies from investment in agriculture to ownership and control of supply lines.”

It is precisely this control of supply lines that will make the difference between FDI, which has helped to boost agriculture and R&D worldwide when the public funding just hasn’t been there, and land acquisitions that directly threaten food security and food sovereignty.

Frankly, after having run a model analyzing food supply to 2050, I am surprised that Australia is taking such leisure to sell off its most productive lands. It has already faced serious droughts in recent years, with the wheat crop—its largest agricultural export—suffering heavily due to rising temperatures (wheat’s optimal growth occurs below 26 Celsius.) This trend of decreased yields will continue to accelerate, and a greater shift toward barley, sugar, and fruits (its other main agricultural exports) will only get Australia so far if the aquifers become even more depleted due to increased reliance on large-scale irrigation and are not recharged at sustainable rates due to decreased rainfall.

Unfortunately, instead of incentivizing Australian politicians to limit foreign agricultural land purchases, this pressure from decreasing yields has begun to make Australians, like Prof. Robin Batterham, consider pushing this fate onto others:

”Other countries are investing in Australia … so that the produce of the land can go to their countries… As an investment, why aren’t some of our larger farms – that is the companies that own them – also investing in places where the soil is a bloody sight better than Australia’s?”

Hence why a headline like “Western Australia to release 15,200 hectares of new farm land” makes me so upset. Since when is this land “new,” undeveloped, unowned? Aside from the obvious lack of concern for any ecosystems that may have once existed on this “new” land, there is likewise a blatant disregard for farmers that were already on this land, the native peoples that have been on the land for centuries, and the children who would have inherited the land tomorrow. When does the cost of economic growth finally become high enough to make politicians question their decision-making?