Farms Beckon Investors to South Asia

While the term "energy security" has been in vogue for many years, the term "food security" seems to be competing with it for an equal or higher ranking on the world agenda. Food Security is particularly high on the list for countries such as China with the world's largest population to feed and the Middle East nations such as Saudi Arabia and Libya who depend on imported food.

So what are these countries doing? They are acquiring farmland in the nations considered world's breadbaskets. Countries in Africa, Latin America, and Eastern Europe who have plenty of farmland but not a lot of money. While these efforts will help increase food production, a downside of an aggressive policy for more farmland is that it will accelerate deforestation and hurt the environment.

The Chinese agriculture ministry has drafted a proposal to support the acquisition of farmland, especially in Africa and South America, to help guarantee China's food security, the Financial Times reports. Beijing already promotes aggressive foreign acquisition by Chinese oil, banking and manufacturing firms -- to mixed receptions abroad at a time of heightened suspicion surrounding sovereign-wealth investments. A Chinese official tells the FT that there shouldn't be any problem getting the policy approved, but that Beijing worries that foreign governments may be "unwilling to give up large areas of land."

And at a time of relative food shortages and soaring prices for cereals and other nutritive commodities, China will already have some competition, says the Wall Street Journal. In the Middle East, the region most dependent on imported food, Saudi Arabia has said it plans to invest in farm and livestock projects overseas to get a handle on its commodity prices and ensure supply, while Libya has been talking to Ukraine about the possibility of growing its own wheat there. Any shift of economic power from the Middle East to the likes of poorer Ukraine, one of the world's biggest wheat producers, could revive the Heartland Theory of 19th-century and 20th-century geographer Sir Halford John Mackinder, who argued control of the natural resources of the East European breadbasket region was key to controlling the "World Island" of Europe and Asia, and thus the world.

This developing new dynamic creates an opportunity for Pakistan to form partnerships with the Chinese and the Saudis aimed at dramatic improvement in the productivity of its farmland in Sind and Punjab without actually selling the land to foreigners. Farm modernization to realize the full potential of its farmland is a goal Pakistan must set for itself for this decade. If pursued with a clear plan and strategy, Pakistan can not only feed its own population well but it could also become the breadbasket for the world and improve the living standards of Pakistan's rural population.

Prior efforts beginning in 2000 toward corporate farming have met significant opposition. For example, an official of Pakistan's Ministry of Food and Agriculture said in July 2000, "We are working to finalize a policy for introducing corporate agriculture in the country where large farm holdings will be allowed to companies which would seek listing in the stock exchange," said an official of the Ministry of Food and Agriculture.

Under the proposal, foreign companies were to be granted a 30-year lease on government-owned land that could be extended for another 20 years. However, food rights campaigners expressed the fear that profit-driven agribusiness transnational companies (TNCs) would use Pakistan as a base for exporting cash crops which would replace staple cereals on the country's farms.

Since the failure of the effort in 2000,Pakistan has again already initiated efforts in 2007 to build serious agribusiness using modern techniques as part of a mega project sponsored by the Ministry of Food, Agriculture and Livestock, with the technical and financial assistance of Asian Development Bank. The executing agencies include Ministry of Food, Agriculture and Livestock (MINFAL), Department of Agricultural & Livestock Products Marketing & Grading, State Bank of Pakistan, Provincial Agriculture, Livestock and marketing Departments, and the Agriculture and Livestock Departments of FATA, FANA and AJK. The Project has its headquarters in Islamabad and implementation offices in Punjab, Sindh, NWFP, Balochistan, Federally Administered Tribal & Northern Areas and Azad Jammu and Kashmir.

To the dismay of biodiversity advocates and environmentalists, Brazil has become a dramatic success in food production by making use of the Cerrado (literally meaning Closed), a region of grassland near the equator that was considered not cultivable. The large scale American agribusiness investments have transformed the region into a major producer of soybean and made Brazil a food exporter rivaling the United States. Soybean is a major source of protein for livestock. Livestock farming is in big demand as the world consumes more meat and dairy products. Brazil is also the largest producer and consumer of biofuels and self-sufficient in energy.

The world food and energy crises clearly present opportunities for investors to invest in countries with plenty of fertile farmland but low farm productivity. By bringing the farm expertise and enhancing crop yields, agribusiness companies such as Archer-Daniel, Cargill, Bunge, Dow and Monsanto and their international competitors have tremendous opportunities in South Asia. So do companies like Caterpillar, John Deere, Kubota, Hyundai, Mahindra and others in the farm machinery and construction business. While many South Asians may be concerned about the negative impact of big agribusiness on the society and the environment, the over-riding need for efficiency to feed the growing population and international export opportunities will likely trump these concerns.


Riaz Haq said…
#Qatar to import #food products worth $1 billion from #Pakistan | Pakistan |

In the wake of strained relations between Saudi Arabia and Qatar, Doha’s high-powered trade delegation has visited Pakistan last week for exploring opportunities for importing meat including beef and mutton, chicken, rice and dairy products worth over a billion dollar.

Qatar is a rich country having potential to import over a billion dollar food items from Pakistan. “In the upcoming Special Economic Zones (SEZs) which will be established with the help of China, proposals are under consideration to establish modernised farm houses with the purpose to boost exports of live animals as well as of both beef and mutton manifold in years ahead,” said the official sources.

Earlier, Qatar used to import major chunk of food items from Saudi Arabia but after strained relationship with Gulf States now Qatar is exploring new markets to import food items and Pakistan can become potential player in this regard in weeks and months ahead.

Qatar is the 38th largest export economy in the world as in 2015, their exports stood at $79.9 billion while imports were $34.7 billion, resulting in a positive trade balance of $45.2 billion. In 2015 the GDP of Qatar was $164 billion.

The top exports of Qatar are Petroleum Gas($44.3B), Crude Petroleum ($17.3B), Refined Petroleum ($6.47B), Ethylene Polymers($2.26B) and Nitrogenous Fertilizers ($1.22B), using the 1992 revision of the HS (Harmonized System) classification.

Its top imports are Cars($2.87B), Planes, Helicopters, and/or Spacecraft ($2.6B), Gas Turbines ($1.09B),Aircraft Parts ($1.04B) and Jewellery ($970M).

The top import origins are China ($3.51B), France ($3.23B), the United Kingdom ($3.08B), the United States ($2.96B) and the United Arab Emirates ($2.76B).

Qatar borders Saudi Arabia by land and the United Arab Emirates, Bahrain and Iran by sea. In 2015, Qatar imported $34.7 billion worth of products making it the 58th largest importer in the world. During the last five years, the imports of Qatar have increased at rate of 8.5 percent increased from $22.8 billion in 2010 to $37.7 billion in 2015.

The recent imports are led by cars, which represents 8.27 percent of total imports of Qatar, followed by planes and then other items.

President Federation of Pakistan Chamber of Commerce & Industry (FPCCI) Zubair Tufail on Monday confirmed to this paper that Qatar’s trade delegation paid visit to Pakistan last week for exploring trade opportunities and they were interested in importing food items.

“We have helped them to establish contacts with major business houses involved in food items’ export from Pakistan and it is expected that exporters could get their potential shares in months and years ahead,” he concluded.
Riaz Haq said…
UAE to build Red Sea port in Sudan in $6 billion investment package

The United Arab Emirates will build a new Red Sea port in Sudan as part of a $6 billion investment package, DAL group chairman Osama Daoud Abdellatif, a partner in the deal, told Reuters.

Abdellatif said the package includes a free trade zone, a large agricultural project and an imminent $300 million deposit to Sudan's central bank, which would be the first such deposit since an October military takeover.


The UAE deal also includes the $1.6 billion expansion and development of an agricultural project by Abu Dhabi conglomerate IHC and DAL Agriculture in the town of Abu Hamad in northern Sudan, Abdellatif said.


Rumours of Gulf investments in Port Sudan, and in agricultural projects elsewhere in the country, have in the past stirred opposition and sometimes protests.


Alfalfa, wheat, cotton, sesame, and other crops would be grown and processed on the 400,000 acres of leased land, he said. A $450 million, 500 km (310 mile) toll road connecting the project to the port would be built as well, financed by the Abu Dhabi Fund for Development.

Under the agreement, the Fund would also make a deposit of $300 million to the Central Bank of Sudan, Abdellatif said.

Abdellatif said the agreement was reached initially in July 2021, under a civilian-led transitional government.

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