Wednesday, February 11, 2009

Korea's Food in Africa's Passport blog has a good explanation of how South Korea's Daewoo company has gotten itself wrapped up in an ongoing power struggle in Madagascar. In short, Daewoo leased a huge amount of land (said to be about the size of Qatar) for nothing: the only benefit for Madagascar would be the employment that it would provide.

Many people involved in climate change have been pointing to this and other similar deals whereby richer, mostly East Asian or Middle Eastern, countries set up bilateral deals, in the name of food security. A big fear is that, in a warmer world, patterns of agricultural growth will necessarily change, causing countries to scramble in order to feed their population.

On first glance it is understandable for countries to seek long-term stability for their necessary food imports. However, each deal like this only serves to further segment the world into competing blocks. Moreover, if countries prevent their farmers from seeking the high prices in the global marketplace, they will only reduce the long-term incentives to farm in their country.

A better option for Madagascar in a warmer world is to upgrade agricultural productivity so that it can sell its food on the open market to the highest bidder. Maintaining a free and open market for vital commodities like food will be critical to global adaptation to climate change. While it will always be tempting for wealthier countries like South Korea to monopolize a source, they should resist the temptation. Such a one-sided, neo-mercantalist policy will only serve to antagonize the locals, who must become stakeholders in such a system. However, it is a shame that Madagascar -- a desperately poor and underdeveloped nation (ranked 143 by the UNDP) -- will be deprived of desperately needed foreign investment for upgrading its agricultural sector.

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