Alternatives to land acquisitions Agricultural investment and collaborative business models Lorenzo...

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