Sunday, May 22, 2011

Food Security

The concerns about food security continue.  The food riots of 2007-2008 have created concerns import-dependent countries.  Some of these countries, the ones with cash-on-hand have been buying up farm land around the world.  Some of the South American countries are vulnerable because it is relatively easy to buy large tracts of land there.  The price for land in São Paulo, Brazil has doubled.
Food inflation, land grabs spur Latin America to restrict foreign ownership:  Brazil, Argentina, and Uruguay seek to control food security by rebuffing land-buyers from Europe and Asia. Already in Uruguay, an area the size of Denmark sits in foreign hands.
 Andrew Downie, Christian Scientist Monitor, 6  May 2011
São Paulo, Brazil
One of the first things passengers see when disembarking at Cuiaba airport in central Brazil is a real estate advertisement promoting arable land to foreigners…
Such advertisements may soon be preaching to an empty audience, however, as this and other South American nations that traditionally welcomed foreign investors are now changing land laws to restrict foreign ownership as arable areas worldwide become more sought after, a fact underlined by recent food crises. For lawmakers in Brazil, Argentina, and Uruguay, a nation where an estimated 25 percent of all land (an area the size of Denmark) already sits in foreign hands, it isn't a moment too soon to roll back the welcome mat…
Newly concerned over land grabs and eager to exercise more control over its food security, Argentinean Pres­ident Cristina Fernández de Kirch­ner said April 27 she would send a bill to Congress restricting how much land foreigners can buy or own. Uruguay fears that nations such as China and Saudi Arabia want to buy prime real estate and has promised to clamp down. Brazil, the world's biggest producer or exporter of beef, coffee, sugar cane, orange juice, and tobacco, last year blocked foreign companies based in Brazil from purchasing additional local real estate.
"What is happening more and more frequently is that countries ... are interested in buying in the parts of the world where the food, water, and energy are," says Jorge Saravia, an Uruguayan senator charged with helping pass new legislation.
But please continue on your way, and ignore the man behind the curtain.  The economy is improving and everything will be just fine.


PioneerPreppy said...

Good article!!

I am convinced nations like China are prepping and buying up arable land and other resources. Articles like this point that out. Thanks for posting it.

russell1200 said...

Thank you.

I have a related post coming up tomorrow morning on hedge funds jumping into the market as well.

The Chinese have a tendency to piss off the countries they invest with. I suspect that their strategy of resource stockpiling will only go so far before it runs into a wall. But I give them credit for trying.