Fertile Land with Access to Water has Become a Strategic Asset

Fertile soil may become more important to land values than oil or minerals in the ground. Some say it is already a strategic asset on a par with oil.

We lose topsoil to development, erosion, and desertification. The U.N. says that on a global basis, the rate of loss is 10-100 times faster than that of replacement and replacing it isn’t easy. With conventional farming it grows back an inch or two over hundreds of years. The obvious investment conclusion: Buy farmland. For you, that means keep it!

Now unfolding is a new concern in the agricultural boom. The facts are that there are fewer and fewer options these days for importers looking for large quantities of high-quality grains. But on a deeper issue: there is an emerging shortage of fertile soil.

The number of grain-exporting regions has dwindled, like the vanishing buffalo herds. Before World War II, only Europe imported grain. South America, as recently as the 1930s, produced twice as much grain as North America. The Soviet Union exported grain. Africa was self- sufficient. Today, only three major grain exporters remain: North America, Australia, and New Zealand.

“This is a new trend within the global food crisis,” says Joachim von Braun, the director of the International Food Policy Research Institute. “The dominant force today is security of food supplies.” Food prices are already reflecting this shortage in supply.

So begins the scramble to secure farmland. Saudi Arabia, for example, has little ability to produce its own food. The kingdom, reports the Financial Times, “is scouring the globe for fertile lands in a search that has taken Saudi officials to Sudan, Ukraine, Pakistan and Thailand.” Saudi Arabia’s quest is not one it pursues alone. There are many hunters.

The United Arab Emirates has also been looking to lock down acreage in Sudan and Kazakhstan. Libya is looking to lease farms in the Ukraine. South Korea has been poking around in Mongolia. Even China is exploring investing in farmland in Southeast Asia. While China has plenty of cultivable land, it does not have a lot of water.

The mainstream press doesn’t talk about which may be the most important thing of all: a growing shortage of quality topsoil. On average, the planet has little more than three feet of topsoil spread over its surface. The Seattle Post-Intelligencer calls it “the shallow skin of nutrient-rich matter that sustains most of our food.” In the 1980s, the amount of land under cultivation began to fall for the first time and it continues to fall today.