Investing in Food Security - in Other Countries

Bloomberg news recently reported Japan's efforts to promote farm investment overseas to enhance food security.

Japan is considering providing loans from a government-owned bank for companies to purchase and lease farmland abroad, Munemitsu Hirano, counsellor at the international affairs department of the Ministry of Agriculture, Forestry and Fisheries, said. The government may also use foreign aid to improve infrastructure such as storage and port facilities in developing countries, he said. . . . Japan relies on imports for 60 percent of its food and last year purchased almost all its corn requirements from the U.S., the world’s largest exporter.

Grain imports are indispensable for Japan as we don’t have enough arable land to satisfy domestic needs,” Hirano said in an April 24 interview. “We also need to diversify supply sources as we are heavily dependent on imports from the U.S.

The article reported that the investments are likely to focus on Brazil, Argentina, Paraguay, Kazakhstan, Ukraine, Romania and Hungary as possible investment targets.

Japan's efforts are part of an increasing trend.


The map above is associated with the International Food Policy Research Institute (IFPRI) report issued in April titled, Land-grabbing by Foreign Investors in Developing Countries. The report notes the risk of "second-generation colonialism" in such deals. The report concludes:

Foreign investment can provide key resources for agriculture, including development of needed infrastructure and expansion of livelihood options for local people. If large-scale land acquisitions cause land expropriation or unsustainable use, however, foreign investments in agricultural land can become politically unacceptable. It is therefore in the long-run interest of investors, host governments, and the local people involved to ensure that these arrangements are properly negotiated, practices are sustainable, and benefits are shared. Because of the transnational nature of such arrangements, no single institutional mechanism will ensure this outcome. Rather, a combination of international law, government policies, and the involvement of civil society, the media, and local communities is needed to minimize the threats and realize the benefits.