Our contribution below is based on an excellent article by dr Mae-Wan Ho, geneticist and director of the Institute of Science in Society (ISIS). ISIS is a UK-based nonprofit organization that promotes the use of science in an effort to improve public welfare.
Three different developments in Agriculture have had a large impact on global land and crop prices and the situation for the world's poorest people, often farmers in subsistence farming areas. These three developments are:
1) Ongoing specialization and internationalization of Agriculture for food purposes ('outsourcing' production abroad)
The Gulf nations at the Arab peninsula, Japan, China, India, Korea, Libya and Egypt are large importers of food products, notwithstanding the fact that 2 of them (China and India) are - together with the USA - also in the top3 of global Agricultural production giants. The increased availability of capital in these countries has - in combination with depletion of local farm land, soil erosion and water problems - resulted in a situation in which they have decided to not simply act as net buyers in international import markets.
Instead, they have decided to invest and buy foreign farm land in poor countries. At first one tends to belief that this is purely positive, since it represents new demand for land in other - often poorer - nations. But the acquisition of farm land in Sudan, Cambodia, the Philippines, Kazakhstan, Mozambique, Burma, Laos, Thailand, Vietnam, Turkey, Uganda, the Ukraine, Georgia and Brazil has resulted in increased land prices in these countries and a so-called crowding-out effect that made it almost impossible for local small farmers to keep their land. It is no surprise that the Asian Peasant Coalition protested in 2009 stating that - with wealth in the world growing on average - the number of landless peasants was higher than ever before in its poorer member states.
With 1 billion people across the globe living in hunger, and with 24,000 a day dying from hunger, this is a more than worrisome mismatch.
The poorest suffer from a dynamic set of developments in Global Agriculture.
2) Land and agricultural commodity speculation
The mismatch is not only the result of the international demand for farmland abroad from the aforementioned food importers (see point 1). No, what also happened since 2007/08 is a growing interest in farm land and agricultural commodity derivatives from the side of financial services providers. Several of them have created specialized investment funds for institutional investors. In a period when stock market returns were bad because of the Global Crisis - and Globalization has led to increased correlations between Western and Emerging stock markets - this new asset class represented diversification and a new way of investing in financial securities that represented more stable and steady cash flows. But obviously this net demand for speculative purposes did help increase land prices even further. No problem for the Arabs, Chinese, Japanese, Indians, Koreans and Libyans, but making things even tougher for the subsistence farmers from poor countries.
Agriculture: Not just Food, but also Asset Class