S Korean group to lease farmland in Madagascar / Daewoo unsure of Madagascar deal

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Daewoo Logistics of South Korea has secured a huge tract of farmland in Madagascar to grow food crops to send back to Seoul, in a deal that diplomats and consultants said was the largest of its kind.
The company said it had leased 1.3m hectares of farmland - about half the size of Belgium - from Madagascar for 99 years. It planned to ship the corn and palm oil harvests back to South Korea. Terms of the deal were not disclosed.
The pursuit of foreign farm investments is a sign of how countries are seeking food security following this year's food crisis, which saw record prices for commodities such as wheat and rice and food riots in countries from Egypt to Haiti.
Agricultural commodities prices have tumbled by about 50 per cent from their record levels this year but countries remain concerned about long-term supplies.
The United Nations' Food and Agriculture Organisation warned this year that the race by agricultural commodity-importing countries to secure farmland overseas risked creating a "neo-colonial" system.
Those fears could be heightened by the fact that Daewoo's farm in Madagascar represents about half the African country's arable land, according to estimates by the US government.
Shin Dong-hyun, a senior manager at Daewoo Logistics in Seoul, said the company would develop the arable land for farming over the next 15 years, using labour from South Africa. It was intended
to replace about half South Korea's corn imports.
South Korea, a resource-poor nation, is the world's fourth-largest importer of corn and among the 10 largest buyers of soyabean.
Carl Atkins, of consultants Bidwells Agribusiness, said Daewoo Logistics' investment in Madagascar was the largest it had seen. "The project does not surprise me, as countries are looking to improve food security but its size it does surprise me."
Concepción Calpe, a senior economist at the FAO in Rome, said the investment came after this year's food crisis. "Countries are looking to buy or lease farmland to improve their food security," she said.
Al-Qudra Holding, an Abu Dhabi-based investment company, said in August it planned to buy 400,000 hectares of arable land in countries in Africa and Asia by the end of the first quarter of next year.
Meles Zenawi, the prime minister of Ethiopia, said this year its government was "very eager" to provide hundreds of thousands of hectares of agricultural land to Middle Eastern countries for investment.

Daewoo unsure of Madagascar deal
Daewoo Logistics of South Korea has not received approval from Madagascar for a plan to farm maize and palm oil in an area half the size of Belgium, contrary to statements by company officials, it has emerged.
Daewoo managers told the media last month the company would develop 1.3m hectares on the island to secure stable food supplies for South Korea under a 99-year lease, joining a flurry of Asian and Middle Eastern companies seeking to tap Africa's agricultural export potential.
A Daewoo official told the Financial Times that the company understood it would not have to pay to lease the land, given the investment involved and the jobs to be created.
But in a statement attributed to the company and posted on the website of the Malagasy president, Daewoo said: "There is not yet a contract on the land between Daewoo Logistics and [the] Madagascar government."
Echoing that, the Malagasy land reform ministry told the FT: "There has been no contract at regional or central government level. They [Daewoo] have prospected for land and now the central government is waiting for the prospecting reports."
The ministry said an environmental investigation would be required as well. Marius Ratolojanahary, the land reform minister, confirmed to a Malagasy newspaper that Daewoo still had several hurdles to clear.
"Every request must be examined by a commission before being supported by the cabinet," he said. "So Daewoo was free to file an application in line with the procedure but that does not mean it will get the land."
Daewoo declined to confirm or comment on the statement on the government website.
Responding to initial reports of the deal, critics said the welfare of Malagasy people and global food security would be better served by islanders being helped to manage their own farms.
They stressed the trickle-down effect of Daewoo's plan would be marginal and noted the company's focus on exporting food from a country in which about 600,000 people rely on relief from the United Nations World Food Programme.
South Korea is the world's fourth biggest maize importer and wants to wean itself off US shipments.