Brazil Farmers Buying Up African Land On the Cheap
For years we have heard stories about American and Chinese businessmen and farmers buying up land in South America in order to grow row crop corn and soybeans. Now we are getting reports that South American farmers are making the jump across the Atlantic to buy up ground in Africa, particularly in Mozambique. Reports from Reuters show the government of Mozambique recently offered farmers from Brazil 50 year leases on 15 million acres of land: an equivalent to a bit more than half of the acreage under cultivation in Iowa. The price was reported at $5.30 per acre. Wow! Compare that to the going rate of good farmland in Brazil at over $4,000 per acre, who wouldn’t be interested? From what​ ​I've heard, the farmers that are taking the deal​​ operate in Brazil’s "Cerrado Region," a vast, scrubby savanna with unpromising, acidic soil. In just 30 years, they have turned what once was considered an agricultural wasteland into one of the world’s most productive sources of corn, cotton, and soybeans. The land in Mozambique is said to ​be ​quite similar to that of the Brazilian Cerrado. Using technology developed in the Cerrado, there is a chance Mozambique could emerge as agriculture’s next frontier. Certainly something that could greatly enhance the country’s economy. According to the World Food Program, 54% of the population lives below the national poverty line; 63% of rural children live in absolute poverty; and 34% of households are food insecure and face perpetual hunger. However, according to a Financial Times article, this deal isn’t really about feeding Mozambique; it’s about producing commodities for the export markets and the government getting the tax dollars. The article reports that the allure for Cerrado farmers -- apart from laying claim on basically free land -- is increased proximity to lucrative markets in the Middle East and Asia. Of course, some of the profit will trickle down to Mozambique’s people in the form of low-wage farm work. Make no mistake, Africa looks to be the next big jump in the race to develop more global ag production.
For years we have heard stories about American and Chinese businessmen and farmers buying up land in South America in order to grow row crop corn and soybeans. Now we are getting reports that South American farmers are making the jump across the Atlantic to buy up ground in Africa, particularly in Mozambique. Reports from Reuters show the government of Mozambique recently offered farmers from Brazil 50 year leases on 15 million acres of land: an equivalent to a bit more than half of the acreage under cultivation in Iowa. The price was reported at $5.30 per acre. Wow! Compare that to the going rate of good farmland in Brazil at over $4,000 per acre, who wouldn’t be interested? From what​ ​I've heard, the farmers that are taking the deal​​ operate in Brazil’s "Cerrado Region," a vast, scrubby savanna with unpromising, acidic soil. In just 30 years, they have turned what once was considered an agricultural wasteland into one of the world’s most productive sources of corn, cotton, and soybeans. The land in Mozambique is said to ​be ​quite similar to that of the Brazilian Cerrado. Using technology developed in the Cerrado, there is a chance Mozambique could emerge as agriculture’s next frontier. Certainly something that could greatly enhance the country’s economy. According to the World Food Program, 54% of the population lives below the national poverty line; 63% of rural children live in absolute poverty; and 34% of households are food insecure and face perpetual hunger. However, according to a Financial Times article, this deal isn’t really about feeding Mozambique; it’s about producing commodities for the export markets and the government getting the tax dollars. The article reports that the allure for Cerrado farmers -- apart from laying claim on basically free land -- is increased proximity to lucrative markets in the Middle East and Asia. Of course, some of the profit will trickle down to Mozambique’s people in the form of low-wage farm work. Make no mistake, Africa looks to be the next big jump in the race to develop more global ag production.
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