The Wall Street Journal reported that a new report released by the the Asia Society and the International Rice Research Institute in the Philippines noted that farm investments in Asia that were started in response to the global food crisis in 2008 have stalled for a variety of reasons, including disputes over land ownership, lack of capital and concerns over environmental issues. This is very unfortunate given that much of the increase in global food demand currently comes from Asia itself.
Sadly, I am not surprised that such a situation should arise. The legal infrastructure in this part of the world is very poorly developed, which makes agricultural investments very risky. As an example, I was involved in a very small-scale project in a neighbouring country to produce certain cash crops. The project ran into problems from the start, as some of the local parties colluded to attempt to cheat us of the money for the land lease, despite the fact that we had hired a reliable local lawyer to complete all the required due diligence. In the end, because we had done all the necessary paperwork, it was easy to prove criminal intent in the other party, and they backed down after being threatened with jail time.
Another problem that I can see from the ground is corruption and cronyism, all too rampant in this part of the world outside of Singapore. In many instances, well-connected people tend to get land concessions from the government, who then turn around to try to extract 'rent' from foreign investors. These cronies are big on talk and small on implementation skills, and thus the boosting of food output end up often being mere pipe dreams.
All these things are unfortunate because there is still plenty of under-utilised fertile land in this part of the world, which can be used to substantially increase food output when combined with the right technology and managerial know-how.
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