An article from The National, a United Arab Emirates (UAE) newspaper, highlighted the United Nation’s (UN) calling for a code of conduct for farmland purchases by Gulf States.

Recently, the UAE and other Gulf States have been purchasing farmland in Africa, Asia and Latin America for agribusiness. They are farming the land for cheap imports of food into the parent country and low prices at the grocery stores. From 2006 to 2008, UAE & Africa trade increased 120%.

Investment company, Al Qudra of UAE, plans to grow vegetables and grain in Croatia, Vietnam and Pakistan. Obviously, Al Qudra sees food security as a global problem in the future and also as an investment opportunity.

The UN is concerned because profits made by the country selling the farmland to the Gulf States aren’t being put back into the communities; there hasn’t been a trickledown effect. Specifically, Nigeria has violated the “right to self determination” while dealing with crude oil producers and not reinvesting profits back into their communities.

This topic will surely be addressed once again at a world summit on global food security this upcoming November.

How does this affect farmland; primarily in North America?

This story, along with so many others, affirms the notion that farmland is drawing a higher demand. In this case, Gulf States are buying up farmland because they know the farmland is decreasing globally and if they want their citizens to eat in the future, they need to secure farmland today. These investment companies and countries have the right idea; it would be nice to see the sale profits be put back into the communities though.

- Colvin