United Nations Cautions Investors On Gulf Foods Deal

The Wall Street Journal reports that the head of the United Nations’ food agency is deterring investors from purchasing land for the production of crops in Middle Eastern countries, to avoid local backlash or other controversy, which could cause the investment trend to dry up.

Oil-rich Gulf states are discussing billions of dollars worth of agriculture investment to ease food-security concerns in the Gulf, which imports more than 50% of its basic food needs. The Gulf food strategy is to create a guaranteed supply of food at guaranteed prices by investing locally in land and the production of crops.

Jacques Diouf, the director-general of the Food and Agriculture Organization, said he is advising investors against outright land purchases, claiming they could trigger political backlash in developing countries that are struggling to feed their own populations. Diouf said he doesn’t want unintended scandals to cause this new wave of interest and investment in agriculture to dry up.
“Foreign direct investment in agriculture is the only way we are going to eradicate global poverty,” Diouf said. “I have no problem in Arabs doing the investment. Where I start getting worried is [a situation in which investors] rush and buy land all over the place. Land is a political hot potato. My job is to avoid…provoking a negative response in the developing world.”

The deals have raised concern that agriculture resources could be dominated by foreign investors who will ship food overseas, instead of using the food locally. In politically unstable countries, meanwhile, critics worry that large-scale foreign investments could prop up unpopular regimes or exacerbate longstanding legal disputes over land ownership, much as big foreign oil or mining concessions have done, the WSJ article said.