Alternatives to land acquisitions

Agricultural investment and collaborative business models

Lorenzo Cotula

Senior researcher International Institute for Environment and Development

(IIED)

Intro Growing interest in agricultural

investment – food security, commercial returns

Global land rush: lively if polarised debate

Is it possible to invest in ways that leave land and share value with smallholders?

Ongoing research and lesson-learning – in collaboration with IFAD, FAO and SDC

Not imply that family farmers always need outside investors to succeed

Beware of “new orthodoxies” – need for farmers’ voice to be heard

No tinkering around the edges – assess inclusiveness of core business model based on Ownership Voice Risk Reward

The models

There are alternatives to land acquisitions Wide range of models - contract farming,

joint ventures, lease/management contracts, supply chain relations...

Great diversity within models Often used in combination Some well tested and documented, others

more recent Collaboration in production vs value-

sharing mainly through rewards (eg leases)

Context and crop key

All that glitters is not gold – devil is in the detail

Whether collaborative models benefit local groups depends on process and terms

Contract farming: access to inputs and markets, more stable incomes – or exploitative outsourcing of risks

Joint ventures: equity stake, board representation, dividends – or land loss, nominal say, transfer pricing

Local disaggregation needed to assess impacts; longer-term, impacts on land access possible

Challenges and ways forward

Assumption that large-scale is beautiful, ad hoc negotiations, weak governance Strategic vision based on informed public debate

in host countries Careful scrutiny of investment proposals Transparency and public oversight

For investors: little incentives, high transaction costs Secure local land rights Well thought out policy incentives Intermediaries and development agencies

Unequal negotiating power Collective action Information is power External support