Korea’s Daewoo Leases an Area Half of the Size of Belgium in Madagascar for Free
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According to a few under-the-radar reports, Korea’s industrial conglomerate Daewoo has just completed a deal with Madagascar for a 99 year lease of an area half the size of Belgium (about 1.3 million hectares). While complete terms of the lease are not yet available, the total price is: NOTHING.
The initial plan is to plant maize and palm oil for export to South Korea. The benefit to Madagascar of losing a little over half of their arable land would be the anticipated employment opportunities for farmers and other locals.
According to a Daewoo spokesperson:
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.
Other officials have of course claimed that while there would be no upfront payment, Daewoo would be investing significantly in infrastructure such as roads, grain storage and irrigation.
Daewoo plans to begin maize production on 2,000 hectares next year and over time will expand production across the leased land. Most of the maize production would of course be shipped back to South Korea, and it seems that very little of the maize production would remain in Madagascar.
This agreement, whereby Malagasy food is grown and shipped across the ocean to another country might be viewed as fairly counter-intuitive, considering that 70% of Madagascar’s population lives below the poverty line, chronic food insecurity faces more than 65% of the population and more than 50% of children under 3 suffer retarded growth due to poor nutrition.
Image Credit: Wharman at Flickr under a Creative Commons license.
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