Yesterday I did a post linking to a piece by Javier Blas in the FT, who had learned that Madagascar had agreed to lease half of its arable land – an area half the size of Belgium – to Daewoo, the South Korean conglomerate, for palm oil and corn production.
A few hours later, a truly astonishing new angle on the story emerged. Guess how much South Korea had paid for its 99 year lease? Answer: Zip. Zero. Nada. Not a cent. The sum total of the benefts for Madagascar, according to a Daewoo spokesman? “We will provide jobs for them by farming it, which is good for Madagascar.” This in a country where 3.5% of people are on WFP food aid…
The benefits for South Korea, on the other hand:
“We want to plant corn there to ensure our food security. Food can be a weapon in this world,” said Hong Jong-wan, a manager at Daewoo. “We can either export the harvests to other countries or ship them back to Korea in case of a food crisis.”
Read the full piece from this morning’s paper here, plus an additional background brief from Javier Blas here. But if you really want a sense of the dimensions of this story, check out the language in the FT’s leader article (entitled “Food security deal should not stand”):
Pirates are not the only source of concern off the African coast. The deal South Korea’s Daewoo Logistics is negotiating with the Madagascan government looks rapacious … Any agreement must ultimately be in the interest of the local population. The Madagascan case looks positively neo-colonial.
What’s more, as the leader rightly observes, it’s not even as though South Korea could really rely on the deal in conditions of a massive price spike: Madagascar would have every incentive to nationalise the investment in conditions of acute crisis. But for now, the early losers look to be small farmers and the climate:
The Madagascan state may officially own the land in question, but small-scale farmers who have worked it for generations stand to lose their livelihoods. Much of the land, moreover, is currently forest. This potentially valuable resource in the fight against climate change would be destroyed for good.