Food security / Global
Go with the grain
Three Asian nations are tackling food security in a variety of ways. Monocle focuses on China’s efforts in Australia and the value of good relations.
How secure is your country? It is a question that usually vexes the best minds at ministries of defence, may at times keep the brightest brains at ministries of finance awake or, as the crisis in Ukraine has highlighted, can create worry lines on the brows of officials at ministries of energy.
But for many countries there is a more basic and urgent question relating to security: can a nation feed itself? Concerns over food security have in recent years led to Gulf states in particular buying up tranches of land across Africa. Now, a wave of Asian capitals are tackling the problem head on.
Over the next five pages we look at how three Asian nations are approaching the issue of food security. South Korea is investing big in research and technology. Entrepreneurs in Singapore are making up for a lack of green space in the city by colonising the rooftops of car parks and office blocks, turning them into vertical farms and gardens. China, meanwhile, is heading south to Australia. If it doesn’t have the land and expertise itself, it has no problem buying someone else’s.
Case study 1:
Outside the box
The five-hour drive between the Western Australian capital of Perth and the farming community of Newdegate can be dangerous. As well as kangaroos that sometimes spring from the bordering gumtrees into oncoming traffic, the route is often filled with super-sized freight trucks. They ferry grain around the state’s so-called Wheatbelt: a network of scattered communities that has been farming the region since the late 1800s.
It’s a journey few outside of the agricultural industry travel. Newdegate has a population of just 441, with a town centre consisting of a pub, a grocery store, a post office and a roadhouse. But the community’s unassuming appearance disguises its increasingly important role in securing the food needs of one of Australia’s closest economic partners: China.
In 2012 China’s largest state-owned agricultural conglomerate, the Beidahuang Group, spent an estimated au$70m (€47m) on 34,500 hectares of prime Wheatbelt farmland, including one of Newdegate’s largest properties, Connemara. The investment came with a plan to both inject competition into Western Australia’s monopolised grain-export trade and strengthen the supply of high-quality grain to China.
Food security is increasingly high on Beijing’s agenda. China imported 22.8 million tonnes of grain in 2013, almost double the quantity of 2012. The Beidahuang Group has helped to nurture these trades with investments around the world, including three million hectares in Ukraine and 300,000 hectares in Argentina. The Australian agriculture industry’s reputation for cleanliness and efficiency makes it particularly appealing to Asian investors, especially after revelations that around a fifth of China’s arable land is too polluted to farm.
James Hutchison, a towering man with a thick Scottish accent, is tasked with the everyday running of the Beidahuang Group’s Western Australian properties. Hutchison previously managed a neighbouring farm. In 2012 he was recruited by Vicstock Grain, an Australian company that deals in agricultural logistics and commodity trades with a particular focus on Chinese-owned farms. “The local neighbours are just glad to see someone farming Connemara,” says Hutchison. “If foreign investment didn’t come in and take over big properties like this, who else would?”
For more than a year leading up to the Newdegate purchase, the 23,000 hectare property was covered with weeds. The land was seized from its previous owners after they were hit by financial hardship – a common story in Australia’s notoriously unpredictable agricultural sector.
Today Connemara is home to 10,000 sheep and its grounds are littered with bag-silos full of grain. These snaking white tubes store the farm’s first harvest while Vicstock Grain finalises a deal to upgrade the port facilities in the city of Albany. Behind them, the paddocks are abuzz with newly bought machinery. “We’re not shipping everything in. It’s all stuff bought locally,” says Hutchison, gesturing to one of the colossal seeders. “The place runs the same as any other Australian farm.”
A closer look at Connemara reveals quirks that point towards the farm’s foreign owners. Near the entrance gate is a newly built structure that the farm managers call “The Chinese House”. It accommodates four representatives of the Beidahuang Group, who oversee the running of the company’s substantial Wheatbelt investments. They are the only Chinese-born personnel on the property. “They wander around the farm and keep an eye on things,” says Mattie Crouch, Vicstock Grain’s operations manager. During monocle’s visit, Gao Zhigang, the vice-general manager of the Beidahuang Group’s Australian arm, is spotted pacing one of the property’s dirt roads. He declines to be interviewed.
Some of the surrounding farming families have approached Vicstock Grain with pleas to help them also sell their land to Chinese investors. Others fiercely oppose the land acquisitions. Mary Nenke runs a property in the nearby town of Kukerin that farms grain and yabbies, an Australian freshwater crustacean. She says the buy-ups are symptomatic of the federal government’s lack of support for farmers. “These large tracts of land will definitely not build our communities or agricultural diversity,” she says. “It will cause short-term gain and long-term pain.”
Whether they agree with it or not, Australian agriculturalists may have to get used to more foreign deals. Chinese companies have already made agricultural investments around the Ord river in north Western Australia and Cubbie Station in southern Queensland. Prime minister Tony Abbott is also working to finalise a proposed free-trade agreement between China and Australia. It could soon make it cheaper for organisations such as the Beidahuang Group to export back to its native country (although China’s demand to make it easier to import workers into Australia has reportedly stalled the process).
“The Australian government is clearly supportive of Chinese investment in the agribusiness sector,” says Doug Ferguson, head of Asia business at kpmg Australia. Ferguson recently accompanied Abbott on a tour of Asia.
According to him, part of the motivation for China’s investments is the chance to acquire farming methods that could be implemented back home. “There’s no doubt that there is interest in learning our scientific approach to agribusiness, which Australia in some respects leads the world in,” he says. “They are particularly interested in overcoming domestic challenges such as aggregation, pollution, mediation and genetic technologies.”
As Crouch points out, opposition to foreign involvement in Australian agriculture is nothing new: “People used to feel the same about the Italians,” she says. Unlike the hostility that was directed toward Mediterranean farm workers in the 1950s, offending the Chinese could cost the industry millions in much-needed capital. “There is some concern from Chinese investors about not being treated consistently with other foreign investors,” says Ferguson. “If Australia isn’t providing the right environment, either through policy, cost base or social welcome, then they will invest elsewhere.”
Ferguson puts China’s ownership of Australian farmland at below 1 per cent. But Nenke says the number is misleading as non-government organisations that make purchases under au$248m (€168m) do not have to register their investment with Australia’s Foreign Investment Review Board. Her solution is to create a register of foreign-owned land. “We still haven’t got one – what are they afraid of finding?”
The 24-hour work cycle during seeding time leaves the staff at Connemara little time to ruminate over the debates that surround the property’s owners. Just like other farmers in the area, it’s the weather that occupies most of Hutchison’s thoughts.
When quizzed about the outlook for this year’s rain, his response could easily apply to the state of Australia’s agricultural sector as it negotiates the new complexities of Chinese influence: “It’s hard to say if it is getting better or getting worse.”
Case study 2:
Reaching for the sky
Keith Loh is one of the founders of Comcrop, a 550 sq m rooftop farm launched last June to raise awareness about food security in Singapore, a country that imports more than 90 per cent of its food and where space to grow is at a premium. Comcrop’s aim is to demonstrate that green space can be created at the top of towers, from car parks to shopping malls.
Given its population density, scarcity of land and near-total dependence on imported food, Singapore has had little choice but to become a regional leader in food security. The government has allocated €17m to a food fund to help local farms boost productivity. It is funding research into new rice-farming methods and varieties of rice that are better able to cope with climate change.
Singapore’s urban farmers, meanwhile, are keen to show the commercial viability of rooftop farming by supplying restaurants, cafés, bars and hotels with freshly grown produce, hoping to expand the concept across the city one rooftop at a time.
At its Orchard Road farm, Comcrop has built a vertical aquaponic growing system in which water enriched with nutrients from tilapia-stocked tanks is pumped through pipes lined with plants. It has focused initially on items restaurants have a hard time sourcing locally, such as herbs and heirloom tomatoes, and the response has been good.
Rooftop farms may prove instructive to the Ministry of National Development, which earlier this year announced a scheme to turn all new housing development car-park rooftops into community gardens, equipped with planter beds. Challenges remain, such as the high rental costs for companies and the lack of graduates skilled in this type of farming. However, a boom in rooftop gardens could make for some exciting changes.
Case study 3:
It’s hard to stay hungry for long in Seoul: the South Korean capital has too much appetising fare. Yet few ingredients are grown on Korean farms, with 90 per cent of food imported.
After a half-century of migration in South Korea from rural areas to cities, the government is trying to rebuild a shrinking farm sector with a €317m plan to turn one city into a national food capital. When completed in 2016, Foodpolis in Iksan will include labs, offices, processing facilities and housing for some 20,000 workers. So far 88 companies and research centres have signed on, including 38 from 13 other countries.
Officials from the Agency for Korea National Food Cluster, formed in 2011 to oversee the project, stress that food self-sufficiency is not the objective. They want farmers to become more resilient to global forces. “Sixty per cent of our country is mountainous. We accept the fact we can’t feed ourselves on our own,” says agency official Kim Jong-do. The model, says Kim, was Food Valley in the Netherlands. That country’s arable land is comparable in size to South Korea’s but it earns 15 times more from food exports thanks partly to investments in R&D.
Food only accounts for 3 per cent of South Korea’s GDP and less than 1 per cent of exports. South Korean firm Daewoo agreed a deal to buy 1.3 million hectares of farmland in Madagascar in 2009 but controversy over the proposal led to a coup which ousted the East African island’s leader. But with big industries such as semiconductors, shipbuilding and electronics struggling to fend off competition from China and Taiwan, officials are having to think creatively about new ways to generate growth. The Ministry of Agriculture, Food and Rural Affairs wants to nearly double food exports to €7.2bn by 2017, mainly to neighbours in Asia.