Is serfdom making a comeback?

South Korean giant Daewoo Logistics Corp. has leased more than 3 million acres in poverty-stricken Madagascar to raise corn and palm trees as a source for palm oil. The lease, good for 99 years, applies to nearly half of that country’s arable land. Most notably, according to Financial Times, it looks as if Daewoo will not actually have to pay for its use of the land.

Is Madagascar, a nation already ravaged by the effects of deforestation, now susceptible to the problems of mono-agriculture? About three-quarters of the leased land, largely on the island nation’s west coast, will be used to grow corn for which South Korean industry has been struggling to find a steady supply. Over the past year, China which had largely filled the gap, has begun to place restrictions on the amount of corn which may be exported in order to meet supply needs at home.

South Korea banned imports of American corn after StarLink contaminated tortillas found their way into Korean markets. The Koreans only began allowing genetically modified corn back into the country legally in May of this year. Until the ban, the United States supplied South Korea with most of its corn, of which 80 percent is used as animal feed. Most of the remaining 20 percent or so goes into the production of corn starch which is used in a wide variety of food products.

In lieu of payment, evidently, Daewoo has pledged infrastructure development and jobs, although whether any of the food it grows in Madagascar will stay in that country is up for conjecture, said the Financial Times piece.

Daewoo’s venture in Madagascar is part of a larger trend by industrialized Asian nations including various Arab Gulf states looking for reliable supplies of raw materials and, now, food in Africa. According to Financial Times, Daewoo is not the first Korean company to make inroads in Madagascar.


3 Responses to “Is serfdom making a comeback?”

  1. Anonymous Says:

    Mr. Burkett: This was a very important blog on a little understood subject. Have you consider doing an update on the situation? Also, do you hope to continue your blog?

    Ben Shomshor

  2. Why buy local when you can buy the whole country? « Industrial Omelet Says:

    […] buy local when you can buy the whole country? By ericburkett Several months ago, we posted a link to a story from Financial Times discussing the move by Asian and Arabian Gulf states to buy or […]

  3. Drying up the desert one glass of milk at a time « Industrial Omelet Says:

    […] Like its neighbors, United Arab Emirates and Kuwait, as well as east Asian nations such as South Korea, the 77-year old kingdom is buying huge tracts of land in desperately poor nations where it hopes […]

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