Gulf states covet Asian farms (invest in food vs US investments)

[ensho]

http://www.atimes.com/atimes/Southeast_Asia/JI26Ae01.html


Once committed largely to perceived safe-haven investments in the United States, Gulf nations are now looking to send their petrodollar surpluses towards a more exotic global destination: Southeast Asian farmland.

Last month, two high-level Kuwaiti delegations toured Southeast Asia's food-producing countryside, looking to invest in agricultural lands and agro-business partnerships on a contract farming basis. Those visits came amid similar regional overtures from other Gulf states, including Saudi Arabia, Qatar and the United Arab Emirates (UAE).

Most of the deals are still in the negotiation stages and provisionally appear to involve leasing rather than outright purchasing of agricultural lands, where Gulf state companies pay to rent the land, provide inputs and contractually agree to buy the produce.

Such an arrangement would be similar to the contract farming deals China has recently cut across the region, including in Myanmar and Laos. It's unclear if the Gulf state-invested produce would be purchased at a fixed future rate or prevailing market prices, and what percentage would be paid to local farmers who actually work the lands.

What is clear is a pressing Middle Eastern need to shore up the region's shaky food security. The Gulf Research Center (GRC), a Dubai-based think-tank, in May highlighted the declining agricultural production by the Gulf Cooperation Council's (GCC) six member states and the wider region's increasing financial exposure to spiraling food prices.
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food and water

[WinkyDink]

1. I know "state" also means "nation", but the OP could look like you mean, say, LA or TX.