UAE minister calls for overhaul of agriculture investment rules
May 1, 2013
Global rules for investment in agriculture need to be overhauled, Sultan Al Mansouri, the UAE Minister of Economy, said yesterday, as signs emerge of rising barriers to the flow of investment around the world.
“We in the UAE and the GCC are facing a crisis [in the agriculture industry] as we have to import a large majority of our food,” he said during an annual investment meeting in Dubai yesterday.
“But one of the issues we had is the rules and regulations governing investment in the agriculture sector in some countries is not there. That was a big challenge for us. When we needed assurances we didn’t get them.”
He said the market needed regulating at an international level to ensure a fair outcome for both food-producing nations and their people and foreign investors.
His comments reflect what has become a trickier investment environment in recent years. Inflows of global foreign investment sagged 18 per cent to US$1.3 trillion last year, close to the lows of 2009, Petko Draganov, the United Nations Conference on Trade and Development deputy secretary general, said yesterday.
A faltering and uncertain economic outlook and increased regulations on inflows of foreign capital and trade imposed by governments were among reasons he cited for the slump.
“This means that recovery in foreign investment flows that started in 2010 and 2011 will now take longer,” he said. “We estimate foreign direct investment will now reach $1.4tn in 2013 and $1.6 tn in 2014.”
Karl Sauvant, a resident senior fellow at the Vale Columbia Center on Sustainable International Investment in New York, agreed with Mr Al Mansouri that investment in land needed to be more closely regulated.
“It is extremely sensitive,” he said. “Investment in land deserves a lot more attention in terms of countries formulating their policy regimes and considering very carefully the sectors to promote investment.”
He said investors from emerging nations needed to learn lessons from food companies in developed nations that had owned land in the past only to have it expropriated. As a result, such companies had sealed other arrangements not involving ownership to allow them to receive agricultural supplies.
The UAE has been an active buyer of tracts of overseas land in recent years as it seeks to secure sufficient basic staples for its growing population and to help hedge against shocks in the global food chain caused by bad weather and rises in food prices.
Mr Al Mansouri highlighted the case of some developing countries that had rich agricultural potential but did not have the technical capability to maximise their output. The UAE, he said, could help with the secondary stage of processing food.
It is not the first time Mr Al Mansouri has spoken out against rules controlling global food supply. In September last year, he called for international organisations monitoring food markets to do more to help governments secure basic staples in the event of droughts and other shocks to food supplies. Courtesy The National
World Agriculture News,
Published: Zarai Media Team