Share this Mister Wong Digg Del.icio.us Slashdot Furl Yahoo Technorati Newsvine Googlize this Blinklist Facebook Wikio Hear this text Print E-mail Tags food agricultural countries climate change sector people growing land production demand companies security africa south half available farmland united the PSB

 

Doom or green gold?

 

Every cloud has a silver lining. A glass is never half empty, it is always half full. Following this reasoning, climate change is not all doom and gloom and it is not the beginning of the end. As a matter of fact, there are a growing number of people who are of the view that somewhere, locked up in the bowls of the climate change monster, are opportunities waiting for the brave and the adventurous that will put them firmly on the road of prosperity and wealth.

 

The message conveyed to the world is that the long-term prognosis for climate change is not reassuring. Changing weather patterns, melting ice caps, rising sea levels, floods, droughts, soil erosion, food shortages, hunger, mass population migrations and many other calamities are staring us in the face.

To cap it all, it is predicted with trepidation that the world's population growth is not slowing down but is still on the increase. It is said that there could be as many as 9.1 billion people living on earth in 2050 - nearly two billion more than at present. With a world already staggering under food shortages and high food prices and with food rioting becoming a familiar occurrence in many poor countries, the bad news is that in the next 20 years alone, the worldwide demand for food is expected to rise by 50%.

Food and its production is rapidly becoming one of the biggest challenges facing mankind but, simultaneously, it is said that agriculture is going to be one of the greatest industries in the next 20 to 30 years.

Against such a bleak backdrop, it is difficult to deny that the combination of climate change and population growth spells disaster. How are people going to survive under such a demanding situation? Will there be enough food for the masses and will they be able to afford the rising food prices? Future "food wars" between nations are predicted.

The socio-economic and geopolitical consequences of worldwide food shortages are so alarming that military institutions in the United States are incorporating climate change and food security as an integral ingredient of their war game exercises. National security estimates and classified intelligence reports gives detail attention to the threat of climate change and food security.

Anyone who believes the glass is half empty will be fearful of the future when confronted with these facts. Those who argue that the glass is half full might look at the same set of facts and see possible opportunities. And it appears that an increasing number of governments, companies and individuals have done exactly that.

Most governments showing an interest in the food debate approach it, understandably, from a national interest and security perspective. Most private companies and investors are less altruistic. From a business perspective the growing food dilemma fits perfectly into the supply and demand category. If demand surpasses supply, then there is reason to investigate and seriously consider investing.

Countries, particularly those with large and increasing populations, are vulnerable. The predicament becomes exponentially worse when such a country is challenged with an inadequate agricultural sector or available farmland.

Until recently most countries found it relatively easy to solve their food challenges. With the necessary procedures and protocols in place, importation of what was required normally took care of the need before it could become a real sticky problem. But this option is disappearing fast.

The negative effects of climate change aggravated by numerous constraints in the agricultural sector of most food exporting countries are having a detrimental effect on food production and the subsequent availability of food for export. Most food importing and many food producing countries are being forced to look at other alternatives. For the former it is to become less reliant on food importation and for the latter it is to find other means to continue producing enough food for export.

As an alternative these countries are starting to look beyond their borders for available agricultural land. Africa, Asia and South America are the only areas on earth left where vast tracks of fertile agricultural land are still available. It is no wonder that more and more eyes are turning towards these regions and the list of countries queuing up to get access to farmland there is rapidly growing, with China, Saudi Arabia, Kuwait, Qatar, Abu Dhabi, United Arab Emirates, Japan and South Korea leading the charge.

In Africa, multinational and private companies have also joined the race and the pace and competition is on the increase. To refute accusations of "land grabs" and "neocolonialism" ,promises are being made that the foreign involvement and participation in the struggling African agricultural sector will benefit the continent and its people.

It cannot be denied that improved agricultural practices and seeds, better management and equipment will be beneficial, but it should never be forgotten that Daewoo of South Korea, Lonrho and other multinational companies have identified food production in Africa as the new "green gold" and that a lot of money is to be made.

More investors are also starting to realise the immense potential of investing in the agricultural sector, farmland and food production. The combination of more people and less land makes food not only a safe investment but extremely attractive with predicted annual returns of 20 to 30%. No wonder that in the United States, Britain and other developed countries, investors including the likes of George Soros and the Rothschild dynasty, pension funds, universities and many others have begun to invest in the agricultural sector.

The interest is so strong that the UK-based Emergent Asset Management Fund ,which is in the process of buying or leasing a total of 50,000 hectares in several African countries including Mozambique, South Africa, Botswana, Zambia, Angola, Swaziland and the Democratic Republic of Congo, had to establish a new sub-fund to handle the growing demand.

If you are an investor or keen on investing some available cash, the agricultural and food sector is perhaps worth considering.

Write comment

Your Contact Details:

Name:

Email: do not notifynotify

Comment:

Title:

Message:

Security

Please input the anti-spam code that you can read in the image.