The New Land Rush

In the seven months before Egypt’s President Hosni Mubarak was driven from power in February, the trading price of wheat had more than doubled. In August 2010, faced with droughts and wildfires, Russia gave its own people first priority and restricted most grain exports, ensuring that prices would skyrocket. The choked supply line seriously affected Egypt, which imports more than half its food.

By early 2011 some 21 countries had imposed export control measures including limits and outright bans on the foreign sale of particular crops.

Saudi Arabia had a ringside seat as the Arab Spring spread across the region. The House of Saud understood that its security rests on its ability to buy the quiescence, if not the loyalty, of its citizens with affordable food and social welfare programs that make Sweden look like a Tea Party paradise.

The sheiks had been watching the writing in the sand since the 1970s, when, after the Arab oil-export embargo, they realized their vulnerability: Just as the West was dependent on them for oil, they were dependent on others for food. The prospect of being forced to bend the stiff royal knee to Western-imposed economic pressures inspired the Saudis to apply their oil technology to drilling deep for water. Using heavy irrigation, the country soon became self-sufficient in wheat. But unlike underground water supplies that are replenished by precipitation, fossil aquifers can rapidly be drained dry—and that is what is happening under the Arabian Peninsula.

Within a few decades, the prehistoric aquifer was almost exhausted, and by 2007, when food riots were roiling the region, the Saudi wheat harvest had dropped precipitously. The Saudi Ministry of Agriculture predicts that by 2016 the country will have to import 100 percent of the wheat it needs to feed its nearly 26 million people.

Saudi Arabia is one of 18 countries—which together contain half the world’s people—where water for irrigation is draining aquifers. But the export of “virtual water” incorporated into growing crops promises not only ecological problems, but also political trouble downstream. Large-scale irrigation in Ethiopia and Sudan, for example, diverts water from the upper Nile River basin and cuts into Egypt’s already limited water supply.

Despite water woes, Sudan welcomes investors. “It’s the first country that gives us land without complicated procedures,” Mohammed Rasheed al-Balawi, a former manager of the Saudi firm Hadco, told the Financial Times. “The area is big, the people are friendly, [and] they gave us the land almost free.”

That characterization of terms is hotly disputed. Although both investors and host countries often refer to acquired land as underdeveloped or empty, the deals typically displace herders and small farmers, who are not consulted and, in any case, lack legal deeds. The World Bank estimates that between 2 and 10 percent of Africa’s land is held under formal land tenure, and most of that is in urban areas.