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Saudi to invest over US$11bn in farmland projects

Saudi Arabia has invested around 40 billion riyals (US$11bn) in agricultural and livestock projects in the Ukraine, Brazil, Argentina, Canada and Sudan, it was reported.

The projects in the Ukraine, Brazil, Argentina and Canada were announced by Eid al-Ma’arik, the chairman of the agricultural investment committee at the Saudi Council of Chambers, according to Al-Watan newspaper.

The Asharq Al-Awsat newspaper also reported that Fahd Balghunaim, the Saudi agriculture minister, had signed an agreement to increase its investment in agricultural land in Sudan.

Balghunaim said earlier this year the kingdom was encouraging Saudi companies to invest in farms in Africa as it seeks to secure supplies of food imports to replace local production.

Related Post: Economic disaster beckons as water-hungry investors buy up Africa’s land

The government decided in 2008 to gradually phase out all water-intensive crops including grains by 2016 amid commodity price spikes, Balghunaim said at a World Economic Forum meeting in Addis Ababa, Ethiopia’s capital.

Saudi Arabia plans to increase imports of food, including the 3 million metric tonnes of wheat consumed annually, he said.
“Africa is the region that represents the biggest opportunity to increase food production with vast tracts of land and a big difference between existing potential and current productivity,” he said.

“Saudi companies are bringing the technology and equipment to help increase production.”

In Ethiopia, Saudi Star Agricultural Development, a food company owned by billionaire Mohammed al-Amoudi, announced last year it plans to invest $2.5bn by 2020 developing a rice-farming project on 10,000 hectares of land on lease for 60 years.

It also has plans to rent an additional 290,000 hectares from the government.

Critics of the project including GRAIN, the Barcelona-based advocacy group, argue that domestic farmers are being dispossessed and the country shouldn’t rent land cheaply to foreign investors to grow crops when about 13 percent of its approximately 80 million people still rely on food aid.

“We want to be an assisting player in the African agriculture revolution,” said Balghunaim. “Our ethics don’t allow us to take food from the mouths of people who need it.”

African nations should be able to end their dependency on food imports, become net crop exporters and cut trade deficits by adopting modern farm methods, Balghunaim said.

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Norway Commits $300 million/year to Support Carbon Markets & Energy Efficiency

The oil-rich nation of Norway has announced significant financial commitments to support broader global access to energy and the development of a new carbon marketplace.

As part of its “Energy+ Partnership” with the UK, France, Denmark, Switzerland, the Netherlands and South Korea, Norway will invest $300 million a year to further these goals.  Poor, developing nations including Bhutan, Ethiopia, Kenya, Liberia, Maldives, Morocco, Nepal, Senegal and Tanzania will receive aid to build new, efficient power plants and increase public access to energy.

The Energy+ Partnership initiative will be launched this June at the Rio+20 summit.  The top priority of the conference will be broadening global access to energy.  The International Energy Agency (IEA) warns this undertaking may cost $48 billion a year – at a minimum.

Included in the Energy+ agenda are measures to reduce greenhouse gas emissions in developing nations and develop practical ways to establish new carbon markets.  Instead of the project-by-project approach established by the U.N.’s Clean Development Mechanism system, many governments are now advocating for the creation of carbon markets across entire sectors.  Norway’s investments will go towards furthering these markets in energy.

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Water Stress- Global Concern for Businesses

Did you know that the average pair of blue jeans uses up 919 gallons of water during its lifetime?

Levi Strauss & Company is all too aware. Water is an increasingly scarce commodity in the world, and Levi’s and other major companies are worried about the potential impact on their bottom line.

Clothing manufacturers are not the only industry concerned with the effects of global water shortages.  Food & beverages, clothing, tobacco and metals & mining conglomerates are all heavy water consumers who have long been accustomed to cheap, easy and reliable water access.  As water demand increases and climate change effects take hold, that may all change.

Water is a crucial for nearly every part of the manufacturing cycle, no matter if the end product is a bottle of soda or a pair of jeans.  Water shortages present significant risks to these businesses and may even jeopardize their business model in the coming decades.  Water savings and conservation efforts are becoming a top priority.  This is particularly true in the developing world, where many manufacturing plants and cotton fields are located.

In the clothing world, growing cotton requires access to lots of water for irrigation purposes.  Water is also needed for the processing, dying and stitching of the garment.  However, much of the irrigation practices utilized by small scale farmers in India, Pakistan, Brazil and West and Central Africa (where much of the world’s cotton is grown) are outdated and inefficient.

Last year, flooding in Pakistan and droughts in China destroyed much of the cotton crop, resulting in skyrocketing prices.  Levis, for example, felt this impact directly, because nearly 2 pounds of cotton are needed for every pair of jeans the company produces.  Over the coming years, climate change may accelerate such extreme weather events and thereby increase risks for cotton-dependent industries and companies.

The clothing industry is taking action to reduce these threats.  In 2005, the international nonprofit Better Cotton Initiative was established to promote water conservation, reduce the use of pesticides and strengthen child-labor restrictions in the garment industry.  Large companies and industry groups have signed on, including Levis, IKEA, the Gap and Adidas.

Use of drip irrigation, rather than conventional field flooding, is highly encouraged.  Drip irrigation saves time, money, energy and reduces the amount of water farmers need to properly water their fields.  The Better Cotton Initiative has passed this and other knowledge on to many cotton farmers in India, resulting in a 32% reduction in water and pesticide usage on farms over a three year period.

Global businesses must adapt to a new water reality – what was once cheap and consistent may no longer be true.  As business models change and new practices and innovations take hold, we expect to see a new range of opportunities for profitable investment in the water sector.

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Posted by on November 3, 2011 in Water

 

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China Accelerates Iron Ore Initiatives in Africa

China leads the world in the consumption of iron ore, a key element of the steel-making process.  Demand is increasing as industrialization expands and new domestic infrastructure construction projects get underway.

Last year, China imported 618 million tons of iron ore, largely from only four countries – Australia, Brazil, India and South Africa. In order to break its dependence on the world’s “Big Three” global miners (BHP Billiton, Rio Tinto and Vale), China is accelerating investment into new mining projects in West Africa.  In total, estimates say nearly 250 million tons of iron ore could be produced every year over the medium to long term.

Chinese iron ore imports in 2011 are predicted to rise 8% from last year’s total.  Prices for iron ore with 62% iron content have risen by one-third over the past year, and doubled over the past two.  Acquiring new supplies is crucial for large ore importers like China.

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Posted by on August 25, 2011 in Natural Resources

 

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World Needs "Green Agricultural Revolution": UN

The United Nations is calling for a new global “green agricultural revolution.” In the latest  World Economic and Social Survey, it says the world must incorporate new sustainable agricultural practices to increase food production.

If the global agricultural sector is to increase production by 70% – 100% by 2050 – which is necessary to  meet the nutrition demands of a predicted global population of 9 billion – energy, water and natural resources must be utilized more efficiently.

The survey focused on short and medium term solutions to global hunger and recommended significant innovation and investment in small scale farming.  “Large-scale agriculture is the way ahead,” remarked Sha Zukang, U.N. Under-Secretary General.  “But to get started on the way to sustainability you have to invest in small-scale farming.”

Such investments would help solve the staggering food scarcity problems in much of the developing world.  It is estimated that close to one-seventh of the world’s population, or 925 million people, are undernourished.  Of this group, 98% lives in developing nations, with 578 million in Asia and 239 million in sub-Saharan Africa, two of the fastest growing regions in the world population-wise.  Demand for food is only going to increase.

Immediate action is necessary to avoid the future food crisis situations witnessed in 2007-2008 and earlier this year prior to the Arab revolutions.  These events, the authors state, “have revealed deep structural problems in the global food system and the need to increase resources and innovation in agriculture so as to accelerate food production.”

Read the U.N. report here

 

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DuPont Committee: Billions Needed to Address Global Food Shortages

Global food and chemicals conglomerate company DuPont issued an urgent call for global investment in agriculture, warning that without strong action the world may face serious food shortages that cannot be addressed by technology advancements alone.

The DuPont Advisory Committee on Agricultural Innovation & Productivity for the 21st Century issued a report today outlining the effects of global population growth, increased food demand combined with historically low global grain stocks.  The end result?  Not promising, according to DuPont.

The global food dynamic is in a fragile condition.  Solving the major problems of food shortages and global malnutrition will require billions of dollars in private investment, as well as increased government incentives to boost agricultural production.

According to some estimates, global food production must increase by 70% in order to meet demand from a world population expected to top 9 billion by 2050.

“People are starting to realize that food demand is outstripping supply,” said DuPont Executive VP Jim Borel.  “If the world doesn’t figure out how to effectively deal with this challenge, then the results are ugly.”

The DuPont report made numerous policy suggestions including revitalizing out-of-date agricultural infrastructure, increasing long-term corporate investments in emerging markets, stronger lands rights provisions and new regulations for genetically altered crops and new plant biotechnology.  Tremendous work is required particularly in the agriculture producing regions of Africa and Asia.

“There is nothing easy about what we have to do,” remarked former U.S. Senator Tom Dashcle, chairman of the DuPont Committee.  “This is one of the greatest challenges facing the human race.”

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Experts Warn Insufficient Water Storage Puts Food Security at Risk

According to a report by the International Water Management Institute (IWMI), the world’s food security and economic growth prospects are in jeopardy due to insufficient water storage capacity.

Changing climate and rainfall patterns have hit many of the world’s agricultural production regions hard, especially in regions of Africa and Asia.  Despite advances in irrigation technology, it is estimated that 66% of Asian agriculture is dependent on rainfall, and in Sub-Saharan Africa, that percentage is as high as 94%.

Experts are urging policy makers to help farmers improve storage systems and develop better water management skills.  “For millions of people dependent on rain-fed agriculture, reliable access to water can make all the difference between chronic hunger and steady progress toward food security,” said hydrologist Matthew McCartney.  “Just as modern consumers diversify their financial holdings to reduce risk, smallholder farmers need a wide array of ‘water accounts’ to provide a buffer against climate change impacts.”

The report warns against over-dependence on one source of water, and encourages governments in vulnerable regions to consider storage solutions big and small, from large-scale dams to local ponds, tanks and reservoirs.  “Even small amounts of stored water, by enabling crops and livestock to survive dry periods, can produce large gains in agricultural productivity and in the wellbeing of rural people,” said McCartney.

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Posted by on September 9, 2010 in Agriculture, Climate Change, Water

 

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