Trends for 2011

#8 “Long land”
According to the World Bank, agricultural production must increase by 70% by the year 2050. Why? The primary reason is demographic – there will be more people in the future and they will want something to eat.

The second reason is consumption habits – more people with more money means switching to meat-based diets, especially in Asia (see Food inflation, trend #7). The third reason is bio-fuels. Energy companies are interested in land not because of way lies beneath but because of what can be grown on top. The result? People taking a ‘long’ position on fertile land, especially land in foreign lands, with the expectation that the value of the land (and the food grown on it) will increase over the years ahead.

For example, according to the World Bank, purchases of land in developing regions increased tenfold in 2009 to 45 million hectares. This trend is set to make the value of good land soar, especially well-watered hinterlands in Africa and Latin America. But buyers beware. Land isn’t just another commodity. Land is tied up with notions of nationalism and is semi-sacred in many regions so also expect counter-trends around colonial cultivation and sovereign soil.

Implications
Expect a global land grab by wealthy foreign investors (especially Chinese and Middle-Eastern sovereign wealth funds) to increase substantially over the coming years – but also expect protectionist backlashes over the purchase, or attempted purchase, of land by foreign investors. Also expect the issue of water access to rise to the surface.

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