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Ruth Hall
PLAAS
University of the Western Cape
South Africa
Agricultural Investment Models in Africa
Main directions of land use change
Type A
Food to Food
Very little; some rice and
some cultivation and
livestock by SA and
Zimbabwean farmers
Type B
Food to Biofuels
Very substantial, in
Mozambique, Zambia,
Angola, Zimbabwe, South
Africa, Madagascar,
Tanzania (but slowing
down?)
Type E
Food to Nonfood
Displacements of people
and their land uses (ie.
whole settlements) for
mining, forestry and
tourism deals
Type C
Nonfood to Food
Rice expansion in
Mozambique and as
above; degree of
displacement of local
food production difficult to
ascertain
Type D
Nonfood to Biofuels
Likely widespread,
especially as “in-filling” of
unused land surrounding
cultivated fields
Type F
Nonfood to Nonfood
Widespread enclosures
for forestry (including
plantations), mining,
forestry and tourism deals
Source: Hall 2012, building on Borras and Franco 2010
Forest livelihood at Kilwa, Tanzania(Sulle, undated)
Forest livelihood at Kilwa, Tanzania(Sulle, undated)
Cleared forest at Bioshape jatropha plantation ‘trial plot’ Kilwa district (IFM report, 2009)
Land use changes not readily reversed
12 dimensions of land-based agricultural investmentsDimension Range of experiences documented
Size Available data on deals over 1,000 hectares; huge variation ranging up to deals of 500,000
hectares and plans of deals up to 10 million hectares
Duration Short to medium term, but mostly long-term 15-25 year (often renewable) leases, and up to
50 or 99 year leases
Source Domestic private investors, foreign private investors (both being individuals or large
companies), parastatals, foreign sovereign wealth funds,
Commodity Jatropha, sugar, rice, other foods, forestry, various minerals, also tourism experiences.
Business model Enclave model, colonist model, large commercial estates, nucleus estates with outgrowers,
outgrowers and processor, smallholder model
Tenure arrangements Lease, concession, illegal enclosure, or purchase (rare)
Resource access Land, water, minerals, marine resource, wildlife, forestry (and labour)
Lease / compensation
payments
Value, method of calculation, timing (once-off or repeat, eg. annual payments) and
distribution to local communities, traditional leaders and local, district, provincial and
national government
Displacement ‘Vacant’ and ‘unused’ land, claimed land, grazing land, cultivated lands, lands used for
natural resource harvesting
Labour Locally hired labour, imported labour, self-employment as outgrower
Settlement Changes in settlement (eg. villagisation), de-agrarianisation
Infrastructure Investment in infrastructure for production, processing transport (roads, ports), and social
infrastructure (schools, clinics)
3 phases of work on large-scale
land investments
• Phase 1:
– quantify and characterise the phenomenon
(how much land, who, what, where?)
• Phase 2:
– explain the phenomenon (how is it
happening, what enables it) and why is it
happening (what are the ‘drivers’?)
• Phase 3:
– identify impacts and outcomes (with what
results?) and what factors determine
different outcomes (are there better and
worse models?)
Not all land-based investments
are land grabs!
it depends on:
how they happen (process) &
what models of investments they
involve (structure)
http://www.ecdc-cari.org/countries/Africa_Map.gif
What is the best pathway to
commercialisation?
• Debates continue among policymakers and academics about
the relative merits of large and small farms, their implications
for labour absorption, rural livelihoods and growth in Africa’s
farm sector
• Some countries have promoted commercialisation in specific
regions, aiming to attract local and foreign commercial
farmers as pioneers to build a commercial farming sector.
• Recent transnational investments in commercial agriculture
have prompted the resurgence of plantations (large estates)
and other forms of large-scale commercial agriculture – often
reviving models used during colonialism and during state-led
developmentalism. (We should learn from history!)
Accumulation ‘from above’
commercialise agriculture by importing capital
in return for land & labour
1.transnational: import into country
2.domestic: import into sector
Accumulation ‘from below’
commercialise agriculture through reinvestment of
capital by those who hold the land and labour
Outcomes depend on the
model of commercialisation
• Concerns about exclusion or displacement of rural
smallholders in favour of large-scale commercial farming
have prompted policy attention towards inclusive farming
models, and specifically contract farming or ‘outgrower’
schemes.
• A variety of institutional arrangements establish
partnerships between:
– local landholders (contributing the land and water rights, and
often the labour) and
– external investors (contributing the capital, market linkages and
technical expertise) under
• There are a variety of different types of land, production
and associated contracting arrangements.
Questions to ask about
investment & accumulation
1. What new models of agricultural investment are
emerging?
2. How do these affect people’s resource access
through displacement and dispossession?
3. What forms of accumulation are occurring?
4. In sum, who owns what, who does what, who
gets what, and what do they do with it
(Bernstein 2010)?
Questions to ask about the
impacts on livelihoods
1. What are the livelihood and food security impacts
of different kinds of land transactions and
institutional arrangements on rural communities
2. What is the nature of rural social differentiation – in
terms of class, gender, ethnicity – following
changes in land use and land property relations as
well as organisations of production and exchange?
3. For different types of deals, who wins and who
loses?
4. How are these impacts evident over time?
Three models of agricultural
commercialisation in Africa
• Large plantations or estates
• Contract farming or outgrower schemes
• Commercial farming areas
Three models of agricultural
commercialisation in Africa
Plantations
• large, self-contained
agribusiness farms
• vertically-integrated
processing chains,
• associated with one
major crop,
• permanent or
seasonal hired
labour.
• not much interaction
with local economy
• medium-to-large
farms
• more or less
contiguous, and
dominate an area
• associated with
mixed farming
operations
• owned by individuals
or small companies
• may be planned or
not
• a processing firm,
sometimes with a
nucleus estate
• outgrowers are
contracted to supply
their produce
outgrowers farm on
their own land
• use their own family
labour
• may also work on
the nucleus estate
Commercial farm
area Contract farming
Ghana• Norpalm oil palm plantation on 4,500ha
following privatisation of state farm and
processing mill, 68% Norwegian owned
• No displacement as this was an
established plantation but conflict with
chiefs over rent and revenue
• Blue Skies outgrower scheme for fresh
cut fruit processing for European
market, 90% UK owned
• Substantial factory employment but
wholly seasonal (2,000-2,500 in
season)
• Commercial mango farming area at
Somanya: mostly (retired) urban
business and political elites, expanding
production and local small farmers
becoming workers – while sometimes
maintaining their own plots
Zambia• Illovo’s Nakambala sugar estate is
expanding its outgrower scheme,
mostly benefitting larger landowners
(and men)
• Younger men’s labour now in higher
demand
• Negative effects on poorer
households and women who have
less land and rely more on common
property resources
• Zambeef Chiawa estate in Lower
Zambezi, producing staple grain
crops, little integration into local
economy
• Limited employment creation, mostly
women on casual or temporary
contracts
Nigeria
• New Nigerian Farms, Shonga, in Kwara
State: commercialisation through
settlement of 13 white Zimbabwean and
South African farmers
• Dairy and grain production from 2005, on
1,000ha plots
• Commercial ‘success’ entirely due to
state provision of land & cheap state-
guaranteed credit
• Production declined to under half the
area cultivated, with uptake of more local
staple crops
• Displaced villagers compensated with
alternative land, leading to conflict, but
rising (male) employment (though
increasingly seasonal)
Assessing the 3 models
Initial evidence suggests that:
• big plantation agriculture might be most weakly integrated into
local economies – more ‘enclave’ than dynamic catalyst of
development.
• in commercial farming areas, what passes as ‘growth’ might be
merely the transfer of capital from one sector to another, for
instance Ghana mango farmers and Nigeria dairy farmers.
Insecure tenure & absence of finance is an impediment to
‘endogenous’ commercial farmers (more than markets).
• outgrowing or contract farming is a way to connect small farmers
into markets, but variation in how this is done; important that
they participate in value-adding processes; also a need to
preserve land (and water) for food crops, otherwise marginalises
women.
Conclusions
1. There are clear patterns of capital accumulation happening within
agriculture in many African states
2. This is happening in different ways and with different implications
for rural poverty and underdevelopment; important not to look at all
agricultural investments in the same light.
3. The key is to enable re-investment within agriculture, to allow for
‘accumulation from below’.
4. At the same time, an inflow of capital is essential – but this cannot
be only from the private sector, which typically prefers large-scale
investments.
5. Policymakers may well be missing the degree to which
‘commercialisation’ is the transfer of capital from one sector to
another, rather than endogenous development. The impacts of
commercialisation on local economies, on poverty and on
employment depends on the model.