Daewoo's Madagascar Deal Nixed

In a post last fall ("An Unprecedented Investment in Food Security"), we noted the report by the Financial Times that the Korean conglomerate had leased half the arable land on Madagascar for industrial farming. Yesterday, the Financial Times reported that that deal has been nixed ("Madagascar scraps Daewoo farm deal"). Excerpt:

South Korea’s project to transform Madagascar into its breadbasket, branded by some as neo-colonial, came to an abrupt end on Wednesday when the Indian Ocean island’s new president said he would shelve the plan.

Daewoo Logistic’s deal to lease a huge tract of farmland, half the size of Belgium, to grow food crops to send back to Seoul was a source of popular resentment that contributed to the fall of Marc Ravalomanana, the former president.

Andry Rajoelina, who was declared president by the military and constitutional court after months of demonstrations and who will be formally sworn in on Saturday, said that Daewoo’s plan was “cancelled”.

An Unprecedented Investment in Food Security

Yesterday, the Financial Times reported that South Korea's Daewoo Logistics had leased half the arable land on Madagascar ("Daewoo to cultivate Madagascar land for free"). From the article:

Daewoo Logistics of South Korea said it expected to pay nothing to farm maize and palm oil in an area of Madagascar half the size of Belgium, increasing concerns about the largest farmland investment of this kind.

The Indian Ocean island will simply gain employment opportunities from Daewoo’s 99-year lease of 1.3m hectares, officials at the company said. They emphasised that the aim of the investment was to boost Seoul’s food security.

“We want to plant corn there to ensure our food security. Food can be a weapon in this world,” said Hong Jong-wan, a manager at Daewoo. “We can either export the harvests to other countries or ship them back to Korea in case of a food crisis.”

The editors of the paper criticized the terms of the deal as "neocolonial" in a related editorial, "Food security deal should not stand".

Hopefully, someone from the precision agriculture company Hemisphere GPS (TSX: HEM.TO) has arranged a sales call with Daewoo.

The graphic above is from the FT article.