The Breadbasket of South Korea: Madagascar

farming was popular in rural America until the Dust Bowl years of the Depression, but the practice is making a comeback on an epic scale in much of Africa. This time, however, the "tenants" are not simply family farmers down on their luck and willing to work land they don't own; they're major international corporations and governments looking to compensate for shortages of arable land in their own countries by setting up massive industrial farms abroad. South Korea's Daewoo Logistics this week announced it had negotiated a 99-year lease on some 3.2 million acres of farmland on the dirt-poor tropical island of Madagascar, off southern Africa's Indian Ocean coast. That's nearly half of Madagascar's arable land, according to the U.N.'s Food and Agricultural Organization, and Daewoo plans to put about three quarters of it under corn. The remainder will be used to produce palm oil - a key commodity for the global biofuels market.

A Daewoo manager, Hong Jong-wan, told the Financial Times that the crops would "ensure our food security," and would use "totally undeveloped land which had been left untouched." Land is scarce and expensive in South Korea, which makes it the world's third-largest importer of corn. Daewoo says the Madagascar land will be leased for a price of around $12 an acre, which is a fraction of the price for farmland in the corporation's home country.

Not everyone is convinced that Daewoo's move is the most effective way of promoting food security. Riots have shaken dozens of countries across the world over the past year as poor people have found themselves unable to pay the rocketing prices for staples such as rice, corn and sugar. The U.N.'s World Food Program runs school-feeding schemes for children in Madagascar, where about 70% of the country's 20 million people live below the poverty line. The island's residents also rely on WFP emergency food relief programs because of the frequency with which they're struck by cyclones and droughts. Given those hardships, the prospect of a corporate giant growing hundreds of tons of food to be consumed by people and animals in Korea raises "ethical concerns," says David Hallam, head of the FAO'S Trade Policy Service in Rome. "If we have another world food crisis, and you have a poor country where food is produced by foreign investors, and then repatriated, that is ethically and political tricky," Hallam warns.

Those ethical quandaries have not prompted restraint on the part of other outside investors moving into Africa to exploit its agricultural potential. Several European companies have leased land during the past two years to grow crops for food and biofuels (although on a far smaller scale than Daewoo plans in Madagascar) including the British company Sun Biofuels, which is planting biofuel crops in Ethiopia, Mozambique and Tanzania.

Africa's fertile soil certainly appeals to the countries of the oil-rich Persian Gulf, whose vast deserts force them to import most of their food. "The Gulf states have an incredible surplus to invest and now that the old economies are facing recession they are looking at Africa," says Marie Bos, an analyst at the Gulf Research Center in Dubai. Although such wealthy countries as South Korea and the Gulf states are easily able to pay for food imports, this turmoil on global food markets may have increased the incentive for food-importing countries to secure their own sources of supply.

"[Food-importing countries] have lost trust in trade because of the price crisis this year," says Joachim von Braun, director of the International Policy Food Research Institute in Washington.

For African governments, the incentive to sign deals such as the one between Madagascar and Daewoo is equally clear. Millions of African farmers lack money for fertilizer, basic tools, fuel and transport infrastructure to efficiently grow crops get them to market. While international organizations have plowed billions into health and education, agriculture in Africa has lagged badly, hugely exacerbating the food crisis of the past year. "These governments are desperate to get capital into agriculture," says von Braun, who believes the drive by giant companies to lock up land deals could benefit poor African countries whose governments negotiate wisely. Although Daewoo plans to export the yield of the land it is leasing in Madagascar, it plans to invest about $6 billion over the next 20 years to build the port facilities, roads, power-plants and irrigation systems necessary to support its agribusiness there, and that will create jobs thousands of jobs for Madagascar's unemployed. Jobs will help the people of Madagascar earn the money to buy their own food - even if it is imported.

http://news.yahoo.com/s/time/20081123/wl_time/08599186114500

Hello Okie,

Have'nt heard from you in a while! Wow, very deep subject!!! I hope that the people of Madagascar can flourish w/ this proposal. Is the land allready cleared???? Are the developers clearing forest for this?? Is the African Government screwing up a sensitive island for their own gain??? Please give us your take on this! Sounds like a bad idea to me, everybody but the people and the island of Madagascar will prosper from this!!! I know i'm spewing the obvious!

This is an interesting subject. Where and how food is produced is definately a subject to watch in the world. As most tropical soils are pretty poor I would not imagine that the quality of soil is the major reason. But, with chemicals anything is possible. At least taking Brazil as an example.

dl

This is an interesting subject. Where and how food is produced is definately a subject to watch in the world. As most tropical soils are pretty poor I would not imagine that the quality of soil is the major reason. But, with chemicals anything is possible. At least taking Brazil as an example.

dl

Hmmm. Let's see, a couple million acres isolated on an island all to their own, and none of those pesky old environmental regulations.

Hang on to those Tahinia seedling folks, they may go way up in value real soon.

It's the death of Madagascar. It will increase poverty. They will steal peoples land and fields, force them to work for expensive food that they could have grown for themselves cheaply. They'll bulldoze whole sections of primary and remnant forest for their profits. It's all about profits, not the good of humanity, and especially not for the good of the Madagascan people. The only ones to benefit will be a few wealthy foreigners behind the deal. Everyone else will suffer. Their will be no concern for the environment, sensitive flora and fauna and their habitats. They'll mostly all go. If Madagascar had troubles before, it now has laid down and died and the last nail has been put into it's coffin. Madagascar is now the other South Korea.

Tyrone

3.2 million acres of farmland on the dirt-poor tropical island of Madagascar

A Daewoo manager, Hong Jong-wan, told the Financial Times that the crops would "ensure our food security," and would use "totally undeveloped land which had been left untouched."

Hang on, 3.2 million acres ? untouched ? undeveloped ? I thought Madagascar was a mess because of all the damn touching and developing. Land is affected all over as we know. You might smash up a hectare or two in one spot but it's every hectare bordering/surrounding that are also affected. Take away the hill and the valley is lost, mess up the valley and the shore land is blighted, and so it goes, and so it goes. Corn will grow any place for goodness sake.

This is very bad news!!

3.2 million acres = 5000 square miles

That is roughly a square with sides of 70 miles x 70 miles

Two things in that article sound suspicious:

1) 3.2 million acres of farmland that is "totally undeveloped land which had been left untouched"

2) 75% for corn (given the demand for corn as a biofuel; it seems unlikely that South Korea would have that much demand for corn as a food, especially when you compare what else could be more profitably grown in that climate for food) &

'The remainder will be used to produce palm oil - a key commodity for the global biofuels market.' So suspiciously, the whole thing looks more like biofuel crops rather than food crops.

On the other hand, if this was done well, it could be beneficial, setting up an infrastructure of farmland and roads/storage facilities/etc. to get it to market. We see that the wealthier countries are better at not polluting their rivers and air (think former Eastern Europe & China for example, with gawdawful pollution)--good development could hopefully set up an environment where native palm environments, etc. could be better protected.

All depends on how well it is done! Done well, it would be beneficial; done badly--bad news!

Europe has done well with it's industry by moving its most polluting industry to places like China, where the regulations are very loose. It's moving pollution from one place to another, only it's the same darn planet.

I agree that it could be good if done correctly, but what government/commercial enterprise does anything correctly? At the end of the day the shareholders and stock market rule. It will only be very bad for Madagscar I fear.

Best regards

Tyrone

Yes sir, Tyrone, I believe you hit the nail on the head. GREED,GREED,GREED that seems to be the case with almost everything in this day and time. So sad to hear this about Madagascar.

Marvin

I would say it all depends on whether they are leasing desolate land, or forested land which they will turn desolate. I remember Gary saying that 89% of Madagascar's original rainforest has been eradicated. So, if they are truly going to lease wasteland that has already been chopped down, it will not be a detriment to the local flora and may improve the local economy. But then again, since when do large investment corporations look out for the good of a foreign country and it's people!?!?

JD

I would say it all depends on whether they are leasing desolate land, or forested land which they will turn desolate. I remember Gary saying that 89% of Madagascar's original rainforest has been eradicated. So, if they are truly going to lease wasteland that has already been chopped down, it will not be a detriment to the local flora and may improve the local economy. But then again, since when do large investment corporations look out for the good of a foreign country and it's people!?!?

JD

But you don't want the poor Koreans to starve do you?

What I remember from college about tropical soils is that they ARE NOT really all that fertile. If you take away the constant supply of falling vegitation from the forerst they quickly become poor soil to plant in. That's why "natives" in rain forests used to use the slash and burn method. They only farmed for a few years and then let the jungle reclaim and re-juvinate the land while they moved on to another plot.

Wai`anae Steve

They can pump in whatever chemicals are needed for the soil fertility, and for the bugs too. Especially if they happen to find themselves in an environment without regulations regarding run-off.

An interesting article here.

http://www.google.com/hostednews/ap/articl...q6qI1QD94IORUOA

Some background on Daewoo.

http://en.wikipedia.org/wiki/Daewoo

It appears that they are a huge company with fingers in everything that have been protected by the South Korean Government from inception. They have caused trouble in Burma enslaving the Burmese who have rioted and created civil unrest.

Correct me if I'm wrong, but don't the Koreans eat mainly rice??????? Most of Asia are predominantly rice consumers aren't they? Why corn then??????????

The Madagascan officials seem to think that they can insulate themselves from world food crises by having Korea farming corn and palm oil on their land. That food is not for Madagascans, in fact I doubt it's meant to be food. It's for biofuel I believe. Daewoo is big into oil and gas exploration and biofuel is the next logical step to strengthen the South Korean economy and reliance on fossil fuels. The challenge is to get land cheap enough to be competitive in biofuel production in the world market, especially where oil prices are dropping now due to reduced demand. Maybe they are doing this now in anticipation of oil prices rising again, which they will of course do. I doubt any Malagasy will have any say what happens, and much less the flora and fauna. Big money will be offered to the Malagasy officials and it most likely will go ahead.

But what is most sickening about this problem is that it has been estimated that it would require only 50 billlion dollars US to cancel third world debt and protect ALL of the worlds rainforests (the best way to ensure carbon gets locked up in plant material and not the atmosphere) and we are more interested in spending 1 trillion US dollars on patching up a failed world economic system.

I've said enough now.

Best regards

Tyrone

Another link.

http://www.rjkoehler.com/2008/11/20/daewoo...buy-madagascar/

Beware of what journalists say!

I have had dinner last saturday with an englishman who is consultant for the World Bank in Madagascar, specility? Agriculture.

Of course i asked him about this information that was on the front page of some local newspapers;

It is not true.

What is true is that the malagasy government has asked Korea if they wanted to grow crops in Madagascar. It is for the moment on a program. But it is still a program! Nothing really being done. It will be the subject of a study.

So, please don't worry, Madagascar is not yet destroyed.

There are approximately 33 million hecatres of unused land that could be used for agriculture.

The financial times did not check that story to find out if it was true.

IT IS NOT TRUE

bruno

Phew, that was close. Thanks for keeping us informed Bruno.

Best regards

Tyrone

yup, thats how farms work, just throw a bunch of chemicals at the problem

They can pump in whatever chemicals are needed for the soil fertility, and for the bugs too. Especially if they happen to find themselves in an environment without regulations regarding run-off.

yeah, thats not really how it works, but go ahead and belive it if you must.

3.2 million acres = 5000 square miles

That is roughly a square with sides of 70 miles x 70 miles

If that's the case, it's just a drop in the bucket, with Madagascar being roughly 1,000 miles long and 350 wide.

Jeff

Bear in mind that we have about 1/2 million acres in Palm Beach County under sugar cane etc cultivation that flows into the Everglades-- It is simularly protected by the state and federal government-- how is this much different? Its an agricultural country they have to survive also.

Ed

Thinking of the Everglades, the State of Florida just released environmental documents for purhase of U.S. Sugar. The ring-bound volumes fill a substantial box. The project required all available resources of the Florida Department of Environmental Protection and several contractors.

Madagascar might have the potential to grow cash crops. Back as early as the 1960s, soil scientists at North Carolina State University realized that their state's soils were pretty similar to many soils in Brazil, so soybean-growing methods developed for North Carolina's notoriously infertile fields were readily adapted to Brazil. I need to check my facts, but I think the "Carolina gold" rice that made South Carolina a wealthy place (except for enslaved plantation workers) came from Madagascar.

Bear in mind that we have about 1/2 million acres in Palm Beach County under sugar cane etc cultivation that flows into the Everglades-- It is simularly protected by the state and federal government-- how is this much different? Its an agricultural country they have to survive also.

Ed

Great googly moogly I never thought ed3 and I would agree on much!!

let me explain my previous post a bit, when you farm your doing it to make a profit. and produce a crop. chemicals are insanely expensive, and so is fertilizer, add to the fact that you have no resources in madagascar (assumption on my part) I seriously doubt if helena, dow elanco, or uapa, has any warehousing there, from what I researched looks like its all pretty primitive. so lets compare apples to apples, your trying to grow corn to produce bio fuels, to replace fossil fuels. say for example it cost 2 dollars a gallon for fossil fuel on the open market, and it costs 3 dollars a gallon for bio fuel, well theres not much point in doing it right? so now ff(fossil fuels) have gone up in price and its viable to use bf(bio fuels) but if your growing your corn in a half ass spot and you have to dump tons of fertilizer, which is also tied price wise to ff, and your insect pressure is such that your constantly having to spray a 80 to 100 dollar an acre application some times 5 or more applications are needed), you have run your costs up beyond the cost of producing ff. so now not only have you had to pay for all these really expensive fertilizers and chemicals, you have also had to pay freight on top of them, some sort of government import tax is usually tied on as well, and you have had to bring in the right machinery to apply it as well so thats a whole nother set of costs that get spread out on top of your bottom line! the locals are inexperienced with these chems so you have to bring in an expert to show them how because in real life not even a big corporate farm wants to kill its labor force and deal with all the crap that folows. lots of misconceptions about the world of agriculture out there, but I promise you this, if the farmers ever decide to, they can make the oil situation seem like a cake walk! you can get buy with no car, but you cant get buy with out chow, so if you like to run your mouth about agriculture and how demonic and enslaving and horrible it is, dont talk with your mouthful!!!!!

Bear in mind that we have about 1/2 million acres in Palm Beach County under sugar cane etc cultivation that flows into the Everglades-- It is simularly protected by the state and federal government-- how is this much different? Its an agricultural country they have to survive also.

Ed

Great googly moogly I never thought ed3 and I would agree on much!!

let me explain my previous post a bit, when you farm your doing it to make a profit. and produce a crop. chemicals are insanely expensive, and so is fertilizer, add to the fact that you have no resources in madagascar (assumption on my part) I seriously doubt if helena, dow elanco, or uapa, has any warehousing there, from what I researched looks like its all pretty primitive. so lets compare apples to apples, your trying to grow corn to produce bio fuels, to replace fossil fuels. say for example it cost 2 dollars a gallon for fossil fuel on the open market, and it costs 3 dollars a gallon for bio fuel, well theres not much point in doing it right? so now ff(fossil fuels) have gone up in price and its viable to use bf(bio fuels) but if your growing your corn in a half ass spot and you have to dump tons of fertilizer, which is also tied price wise to ff, and your insect pressure is such that your constantly having to spray a 80 to 100 dollar an acre application some times 5 or more applications are needed), you have run your costs up beyond the cost of producing ff. so now not only have you had to pay for all these really expensive fertilizers and chemicals, you have also had to pay freight on top of them, some sort of government import tax is usually tied on as well, and you have had to bring in the right machinery to apply it as well so thats a whole nother set of costs that get spread out on top of your bottom line! the locals are inexperienced with these chems so you have to bring in an expert to show them how because in real life not even a big corporate farm wants to kill its labor force and deal with all the crap that folows. lots of misconceptions about the world of agriculture out there, but I promise you this, if the farmers ever decide to, they can make the oil situation seem like a cake walk! you can get buy with no car, but you cant get buy with out chow, so if you like to run your mouth about agriculture and how demonic and enslaving and horrible it is, dont talk with your mouthful!!!!!

Thanks for the explanation Tad. And, in today's world credit is also an issue. A lot of farming is done on credit. And, with money tight today this directly impacts the ability to finance the operation. This has been impacting Brazil recently as I imagine it has most of the world.

dk

good point Don, it takes a lot of money to start a farm from scratch, I get people all the time tell me they are going to start a palm farm on their land they want to grow 5000 palms and how much will it cost them to get 5000 one gallon liners? well at 2 dollars each its 10,000.00 that doesnt include the labor to plant, or maintain.....lots of people then decide thats not such a good plan! and if your trying to borrow money to do it, in an unprooven region, HA, thats a laugh, oh and did you tell the banker that resources are mighty limited, because EVERYTHING HAS TO BE BROUGHT IN BY BOAT OR PLANE???

I also have to laugh at the mindset of all these fine folks who think its ok for them to live where they live and how they live but when someone wants to upgrade and live better in madagascar its a holy sin and how dare they even think about pursuing a better life? I mean really how dare those folks in madagascar get an uppitty idea and try and make a go of farming, to better themselves and their familys, lousy rats!! they should live in primitive squalor like animals, dying of various diseaes and half ass starving to death so that the rest of the world can feel good about themselves!!

Nicely said Tad!

good point Don, it takes a lot of money to start a farm from scratch, I get people all the time tell me they are going to start a palm farm on their land they want to grow 5000 palms and how much will it cost them to get 5000 one gallon liners? well at 2 dollars each its 10,000.00 that doesnt include the labor to plant, or maintain.....lots of people then decide thats not such a good plan! and if your trying to borrow money to do it, in an unprooven region, HA, thats a laugh, oh and did you tell the banker that resources are mighty limited, because EVERYTHING HAS TO BE BROUGHT IN BY BOAT OR PLANE???

I also have to laugh at the mindset of all these fine folks who think its ok for them to live where they live and how they live but when someone wants to upgrade and live better in madagascar its a holy sin and how dare they even think about pursuing a better life? I mean really how dare those folks in madagascar get an uppitty idea and try and make a go of farming, to better themselves and their familys, lousy rats!! they should live in primitive squalor like animals, dying of various diseaes and half ass starving to death so that the rest of the world can feel good about themselves!!

I think these little old folks might be up to the challenge of starting a farm. http://wrightreports.ecnext.com/coms2/repo...MPANY_C410WH300

Keith, i dont think its the same daewoo, daewoo logistics is a natural resource development company with big doings in indonesia, regardless the market is tight and the margins are thin, plus as I said before oil has to be at a certain price for bio fuels to be practical.

it is a big investment maybe they are willing and maybe they are not time will tell.