South Korea to lease half of Madagascar's arable land for corn, oil palm production
November 19, 2008

UPDATE: Madagascar denies an agreement has been reached

South Korea's Daewoo has signed a 99-year lease for half of Madagascar's arable land, reports the Financial Times. The firm expects to pay "nothing" for the lease.

The agreement covers 1.3 million hectares (3.2 million acres) — an area half the size of Belgium. Daewoo says it plans to plant corn on 1 million hectares in the arid western part of the island and 300,000 ha (740,000 acres) of oil palm on land in the tropical east, a region that is home to the bulk of Madagascar's rare rainforests. The company will produce the food for export and plans to import workers from South Africa, although a Daewoo spokesman said that the project could create up to 70,000 local jobs. The company expects the project to cost $6 billion over the first 25 years.

Baobab trees among rice paddies and a Lepilemur in Madagascar.
The Daewoo annoucement comes after the United Nations' Food and Agriculture Organization (FAO) warned that the push by some countries (notably China, Malaysia, and Middle Eastern nations) to secure farmland overseas could create a 'neo-colonial' system.

"The project does not surprise me, as countries are looking to improve food security, but its size — it does surprise me," Carl Atkins of Bidwells Agribusiness, a consulting firm, told the Financial Times.

"We suspect there will be very limited direct benefits [for Madagascar]," added an unnamed 'European diplomat in southern Africa'. "Extractive projects have very little spill-over to a broader industrialization."

Environmental concerns

The development will likely stoke environmentalists' fears that agricultural expansion will come at the expense of Madagascar's biologically-rich ecosystems that are home to rare and unique species of lemurs, frogs, and reptiles. Daewoo has done little to allay these concerns.

"It is totally undeveloped land which has been left untouched," the Financial Times quoted Hong Jong-wan, a manager at Daewoo, as saying.

Madagascar, larger than California and about the size of Texas or France, is the world's fourth largest island. It is famous for its biological and cultural diversity, but is desperately poor, ranked near the bottom of United Nations Development Program's Human Development Index which measures achievements in terms of life expectancy, educational attainment and adjusted real income. Most Malagasy — as the people of Madagascar are known — live on less than a dollar per day and nearly half of the country's children under five years of age are malnourished.

"Some 50 per cent of children under three years of age suffer retarded growth due to a chronically inadequate diet," notes U.N.'s World Food Program.

  • Javier Blas. Land leased to secure crops for South Korea. Financial Times November 18 2008
  • Song Jung-a, Christian Oliver in Seoul, and Tom Burgis. Daewoo to cultivate Madagascar land for free. Financial Times November 19 2008
UPDATE: Madagascar denies 'land grab' by South Korean conglomerate

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