Will Trade Oil [Money] for Food

What would you do if you were running a country that is having to balance the benefits of high energy prices and the costs of high food prices?  Ask Saudi Arabia, which is now gearing up its efforts to buy more and more agricultural land in other countries in order to reduce the pressure on food supplies.

The approach is somewhat interesting, as the investments go into securing productive capacities in other countries, rather than strictly relying on imports or supporting [in many instances] less efficient domestic producers.  One of the reasons behind this move is that

Saudi Arabia has reduced its agricultural production with the objective of economizing water and has been seeking land in other countries on which to grow crops.

More from WSJ here. I wonder what will be the response to this from domestic producers, who have been subsidized for decades, as the money transfers are reduced. 

Also, an issue that is not mentioned in many of the pieces on this is that many countries restrict ownership of agricultural land (especially by foreign investors) – which means the number of countries in consideration for this initiative is probably going to be quite limited.

Published Date: August 26, 2008