Spring Food Crisis May Trigger Economic Collapse

Nearly 75 million acres of farmland — an area roughly the size of Italy — is lost each year due to industrialization, urbanization, and environmental degradation, a recent UN report found. This disappearing farmland results in the hunger and loss of livelihood for about 500 million small farmers across the globe. Environmental degradation notably makes up less than one-third of the acreage lost. The rest is due to rapid urbanization and industrial practices, some in the form of land grabs.

Land grabs are an increasingly popular practice on the part of wealthy nations and even private investment firms. As urbanization takes over in more developed countries, they look to purchase land from developing nations to ensure food stability for their own populations. Unfortunately, this practice often strips small and tribal farmers of their land, threatens the food security of the developing country's population, and drives up the price of farmland internationally.

HANOI, VIETNAM (Commodity Online): Dwindling water supplies in Asia are hurting rice production causing widespread food security concerns, an official said at a rice conference in Vietnam.

Asian rice farms typically use nearly 400 gallons of water to produce about 1 pound of rice. Less than half of the water, however, is used by the plant. Robert Zeigler, the director general of International Rice Research Institute, told the news agency on the sidelines of a rice conference in Hanoi that irrigation problems and water scarcity issues were affecting rice crop yields in Asia.

Gap Inc., J.C. Penney Co., and other U.S. retailers may have to pay Chinese suppliers as much as 30 percent more for clothes as surging cotton prices boost costs.

"It's a little terrifying to deal with cotton suppliers now," said Vicky Wu, a sales manager at Suzhou Unitedtex Enterprise Ltd., a closely held, Jiangsu province-based clothes maker that counts Gap and J.C. Penney among its clients.

CHINA is gearing up for a multi-billion-dollar investment push into the Australian agricultural sector to secure food supplies after a senior official admitted the country would face pressure supplying farm produce to its 1.3 billion people over the next five years.

The Australian has learned that interest from Chinese buyers across the whole spectrum of Australian agribusiness has stepped up markedly in the past six months, with the sweet spot being in "under the radar" private farms, aggregation and processing businesses worth between $10 million and $200m.

Purchases of businesses within this range would avoid scrutiny by the Foreign Investment Review Board, whose purview is limited to businesses worth more $231m.

Despite high expectations fuelled by two failed multi-billion-dollar bids for Nufarm and CSR's sugar business Sucrogen, China has been slower than expected in broadening its Australian investment strategy outside the mining sector.

So far investments in Australia's agriculture sector by China have been mainly projects under $40m, with the majority under $10m. Some examples include Beijing Sanyuan Dairy Co's investment in Dairy Farm in WA; Qiantang Group (Zhejiang) in orchard farms in Tasmania; Shan Shan Group (Zhejiang) in wine in NSW; and Shanghai Yanlong International Trade in Tasmanian spring water.

Among the major state-owned companies looking at Australian assets are Shanghai's Bright Food, which made last year's unsuccessful bid for Sucrogen; China's largest food and drinks wholesaler, Cofco; and private player New Hope, which last year posted sales of $6.5 billion and is executing an ambitious global strategy.