Importers investing abroad to raise wheat

Farm and Ranch May 28, 2009 The short wheat supplies and high prices of 2007/2008 have led some importing countries to try and secure land abroad where they can raise their own wheat. Washington Grain Alliance CEO Tom Mick uses the term “land grab” to describe this trend. He points to Saudi Arabia as the latest example.

 Mick: “Saudi Arabia is in negotiations in two or three African countries and in major negotiations with Pakistan to buy or lease for long term, land to produce grains, for example wheat, that can be shipped directly to their country. They got out of the wheat growing business because it was so expensive for irrigation in the desert.”

If it is food security these importers are seeking, Mick doubts they will get it.

Mick: “We think this is a major mistake. If there is going to be a shortage of food in the world and in these countries that are signing into these leases, their populace is going to rebel and they will have food riots and they will not allow it to continue. It makes more sense of countries like Saudi Arabia or others would contract long term production. That way they can be assured of getting their needs and it can be done a lot cheaper than laying out billions and billions of dollars to buy land or lease it.”

South Korea and Japan are two other importers involved in this new phenomenon. Japan is looking at raising wheat in Kazakhstan.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on the Northwest Ag Information Network.