Investments in Land and the Phenomenon of Land Grabbing · · 2016-10-18Investments in Land and the Phenomenon of Land Grabbing Challenges for Development Policy ... , this should

Investments in Land and the Phenomenon of Land Grabbing

Challenges for Development Policy

BMZ Strategy Paper 2 | 2012 e

2 BMZ StrategY PaPer 02/2012e

Contents

Foreword 3

1. PositionofGermandevelopmentpolicy:Utilisingtheopportunitiesofresponsibleinvestmentsandpreventinglandgrabbing 5

2. FutureGermandevelopment-policyengagement 7 Creatingasolidinformationbase 7 Formulatingandimplementinginternationalguidelines 7 Supportingpartnercountriesintermsoflandpolicyandlandmanagement 8

Humancapacitydevelopment 9 Cooperationwiththeprivatesector 9 Insistingonsustainability 10

3. Context 11

Thecompetitionforlandandwater,resourcesthatarebecomingincreasinglyscareworldwide 11Informationgaps:lotsofreports,littletransparency 11

Targetcountries:predominantlycountrieswithweakgovernancestructures 12Amultitudeofplayerswithvariousdifferentmotives 13

4. Conclusion 15

Utilisingtheopportunitiesofresponsibleinvestmentsandpreventinglandgrabbing:sixbasicprinciples 15Necessityforrealisticandtransparentassessments 19

5. Bibliography 21

BMZ StrategY PaPer 02/2012e3

Foreword

Ruraldevelopmentandmeasuresdesignedto

supportagriculturearekeyelementsofalldevelop-

mentstrategiesandarevitalineradicatingpov-

erty,hungerandunderdevelopment.Innoother

sectordoeseacheurothatisinvestedhavesucha

majoreffectonreducingpovertyasinagriculture.

Unfortunately,despitebeingwellproveninempiri-

calterms,thisfacthaslongsincebeenforgotten.

Wehaveputanendtothisneglect.Withinvest-

mentsintheagricultureofsoutherncountriesnow

increasinganddevelopmentpartnersrediscover-

ingtheimportanceofruralareas,thereisagreat

dealofsatisfactionamongdevelopmentpolicymak-

ers.Wearenowfinallyseeingthemeasuresthatwe

havebeenwaitingfor.

However,positivetrendssuchasthismustnotbe

compromisedinanywayorcompletelycancelled

outbynegativetrends.Yetitispreciselyonesuch

negativetrendwhichisposingathreat.Withvast

tractsoflandindevelopingcountriesnowbeing

purchasedorleasedforthelongterm,anddone

soinsuchawaythatpeoplearedeprivedoftheir

rightsinsteadofbeingallowedtosharefairlyin

thebenefitsofinvestment,withnaturalresources

beingexploitedintheprocessratherthanused

sustainably,thisshouldsoundalarmbellsforusall.

Insuchcases,decisivemeasuresmustbetakento

counterthetrend.

Landinvestors,regardlessofwheretheyarefrom,

bearasocialresponsibility.Inahighlynetworked

world,thefactthatinvestorshaveatendencytouse

thisresponsibilityasameansofachievingtheir

owncorporatesuccessoverthemediumandlong

termis,unfortunately,notyetuniversallyknown.

Evenmoreimportantthanthebehaviourofinves-

tors,however,istheroleplayedbycountrieswhere

suchpurchasingandleasingoflandtakesplace.

Thesecountriesneedtofaceuptothechallengeof

preventingtheirresponsiblepracticeoflandgrab-

bingandguideinvestmentinterestsinsteadina

directionwhichbenefitseveryoneandwhereno-

bodylosesout.

Landgrabbingaffectsmainlycountrieswithweak

institutions,poorgovernanceandwidespread

corruption.Ifalandpolicydesignedtodeliver

developmentfailsmerelybecauseofweakgovern-

mentcapacitiesasopposedtoalackofpolitical

will,developmentcooperationcanofferexcellent

assistance:helpingtobuildsuchcapacityisacore

elementofourwork.Providingadviceonlandpol-

icyanddevelopinglandregistrationandlanduse

planningcanhelptocreateasolidbasisinequip-

pingcountriesagainstirresponsiblelandinvest-

ments.Incontrast,wherethepoliticalcommitment

islackingorwherepoliticalelitesareevencomplicit

withlocalorforeignlandinvestors,thesituation

isconsiderablymoredifficult.Insuchcases,any

developmentpolicysuccesswillonlybepossibleif

thereisthecouragetoengageinapatientandper-

sistentprocessofgovernmentdialogue,thesupport

ofcivilsocietygroupsandjointactionontheinter-

nationalstage.Internationalvoluntaryguidelines

andprinciples,theintroductionofwhichweare

nowseeing,areanimportantstepbutaresimply

notenoughontheirown.

Worldwide,landconcessionsalreadyamountingto

some200millionhectares,morethanfivetimesthe

sizeofGermany,arereportedtohavebeengranted

forinvestmentpurposesoverthelastdecade.Ofthis

figure,itisunderstoodthatAfricaaloneaccounts

formorethan130millionhectares.Thesecanonly

beextremelyroughestimatesandhereinliespart

oftheproblem.Peopleengagedinmaliciousdeeds

avoidthespotlight.Manydealsremainsecret.Asa

result,wewillworkhardtopressformoreinforma-

tionandgreatertransparencyinthelandsector.


Thisistheonlywayinwhichirresponsiblelandin-

vestmentscanbeindividuallynamedandshamed.

Andthisistheonlywayinwhichwewillbeable

todevelopaglobalcultureofethicalconductand

politicalcontrolinthelandsector.

Inkeepingwithourrecentlypublishedposition

onbiofuels,wehavenowfundamentallyreformu-

latedourpositiononlandinvestmentsandonthe

phenomenonoflandgrabbinginordertorespond

appropriatelytothedynamicscurrentlyatwork

inthisareaaswell.Overthenextfewyears,this

positionwillguideusinourcommitmenttoanim-

portantissue,namelytotakefulladvantageofthe

majoropportunitypresentedbythecurrentinterest

inlandinvestmentsandagricultureindevelop-

ingcountriesforthelong-termbenefitofallthose

involved.Ouraimistomobiliselargeamountsof

privatecapitalinordertopermanentlyeradicate

poverty,hungerandunderdevelopment.Thisaim

isnotonlyworthyof,butalsojustifiestheuseofthe

publicfundsavailablefordevelopmentpolicy.

Hans-Jürgen Beerfeltz

StateSecretaryintheFederalMinistryforEconomic

CooperationandDevelopment


1. PositionofGermandevelopmentpolicy:Utilisingtheopportunitiesofresponsibleinvestmentsandpreventinglandgrabbing

Thedemandforagriculturalgoodsforfoodpro-

ductionand,increasingly,forenergyandforindus-

trialusetoo,isrising.Asitdoesso,thecompetition

forland,aresourcethatisbecomingmoreand

morescarce,isalsogrowing.Inbothdeveloping

countriesandemergingeconomiesinparticular,

internationalaswellaslocalinvestorsareusing

long-termpurchaseorleaseagreementstosecure

vasttractsofland.Inmostcases,thisisdoneinor-

dertousethelandforcultivatingfoodorenergy

crops,primarilyforexport.However,intheexpec-

tationthatagriculturalpricesandlandpriceswill

continuetorise,landisalsoincreasinglybeingseen

asaspeculativeinvestment.

Thereareagrowingnumberofreportsthatmany

oftheselarge-scalelandpurchasesandleasesbring

considerabledisadvantagesforthecountriesaf-

fectedandthelocalpopulations.Theycanresultin

displacement,causeenvironmentalproblemsand

endangerlocalandnationalfoodsecurity.‘Land

grabbing’isthetermthattheinternationalmedia

hasgiventothisformofappropriatingland.Dueto

theparticularroleassignedtotheresourceofwater

inthiscontext,theterm‘landandwatergrabbing’

isalsoincreasinglybeingused.

Inthisregard,agriculturalinvestmentsofferdevel-

opingcountriesenormousopportunities,provided

thatfundamentalhumanrightsprinciplesaswellas

social,economicandenvironmentalprinciplesare

observed.Suchinvestmentscanleadtothetransfer

ofcapitalandtechnology,easiermarketaccessand

improvedinfrastructure,increasedproductivity,

incomegenerationand,therefore,tobetterlevelsof

foodsecurity.

Germany’sFederalMinistryforEconomicCoopera-

tionandDevelopment(BMZ)condemnsirrespon-

sibleandpurelyspeculativelandgrabbingandis

advocatingthatthisformoflandappropriationbe

prohibited.ThepositionoftheBMZisthatinvest-

mentsinlandandagricultureneedtobestructured

insuchawayastopromisesustainedbenefitsfor

thedevelopmentofthetargetcountriesandthe

populationsaffected.IntheviewoftheBMZ,any

suchdevelopment-policybenefitsareguaranteedif

theinvestmentsadheretothefollowingprinciples:1

1 Basedontheprinciplesformulatedinthepositionpaperonbiofuels.Cf.FederalMinistryforEconomicCooperationandDevelopment:Biofuels:Opportunitiesandrisksfordevelopingcountries.Bonn/Berlin2011

1. Participation, transparency and accounta-

bility: Thelocalpopulationshouldbeinvolved

inplanningandnegotiationsasearlyandas

comprehensivelyaspossible.Landcanonlybe

soldorleasedwiththefree,priorandinformed

consentofthepeopleaffected.

2. Recognition of existing land and water

rights: Existinglandandwaterrights,includ-

ingtraditionalandcollectiverightsaswellas

thoserecognisedundercommonlaw,should

beacknowledgedandlaiddowninpurchase

andleasecontracts.Theymustbeacceptedby

thecompetentinstitutionsandthepopulation

involvedandsafeguardedbymeansofcor-

respondingmechanisms.Anybreachofthese

rightsmustbepenalised.

3. Managing resettlements and compen-

sation in a manner which is compatible with

human rights:Resettlementsmayonlybeun-

dertakeniftheinvestmentisexpectedtohave

relevantdevelopmentimpacts,andifitcanbe

demonstratedthatsuchmeasuresareunavoid-

ableinordertoensurethefeasibilityofthein-

vestment.Insuchcases,resettlementsmustbe

carriedoutinlinewithboththeUnited Nations


Basic Principles and Guidelines on Development-

based Evictions and Displacement andtherel-

evantstandardsoftheWorldBankGroup.

4. Unrestricted respect for the human rights to

food and water:Thefoodsecurityofthelocal

andnationalpopulation,aswellasitsaccessto

drinkingwaterandwaterforagriculturalpro-

duction,mustnotbeendangered.

5. Protection and sustainable use of natural

resources: Thedesirednewusefortheland

mustnotendangertheconservationofbio-

diversity,soilfertilityandwaterresourcesnor

ofotherecosystemservices.

6. Fair sharing in the benefits of the invest-

ment: Theparticipationofthedirectly

affectedlocalpopulationandthetargetcoun-

triesasawholeinvaluecreationintheformof

income-creatingjobswhichmeetminimum

socialstandards,butalsointheformofgen-

eralstimulationoftheruraleconomyandthe

provisionofinfrastructureandservices,must

beensured.

Withintheresponsibleinternationalinstitu-

tions,theBMZstrivestoestablishthegeneralpre-

eminenceoftheseprinciples.Partnercountriesin

bilateralcooperationaresupportedindeveloping

frameworkconditionsforstructuringlarge-scale

landpurchasesandleasesinawaywhichiscon-

ducivetodevelopmentandisinaccordancewith

theseprinciples.Germandevelopmentpolicyis

activelyhelpingtodevelopinstrumentstoensure

respectforhumanrightsandsocialandenviron-

mentalstandards.Ithelpstopluggapsininforma-

tionregardingthephenomenonoflandgrabbing

andinvestsinthetraininganddevelopmentof

specialistsintheareaoflandpolicyandland

management.

InJuly2013,theBMZwillreportonthesuccessofits

commitmenttopreventinglandgrabbingandpro-

motingresponsibleinvestmentsinland.


2.FutureGermandevelopment-policyengagement

Inordertoexploittheopportunitiesfordeveloping

countriesthatarearisinginconnectionwiththe

purchaseandleasingoflargeareasofland,andto

mitigatetherisksofirresponsibleandspeculative

landgrabbing,anticipatorysteeringofpolicyis

necessary.Thisisprimarilythetaskofthetarget

countriesforinvestmentand,inparticular,oftheir

governments.However,Germandevelopmentpoli-

cycanprovidesupportinkeyareas.

CreatinGasolidinFormationBase

Germandevelopmentpolicywillworktoensure

greaterinformationandtransparencyintheland

sector.Itwillhelptogeneratedetailedinformation

concerninglarge-scalelandpurchasesandleases

andthustocreateasolidbasisforactionatapoli-

ticallevel.Arangeofdifferentmulti-stakeholder

platformsoncountryissues2

2 InGermany:Landsub-workinggroupintheworkinggrouponglobalfoodsecurity(membersinclude,forexample,BMZ,FederalMinistryofFood,AgricultureandConsumerProtection(BMELV),GIZ,GermanDevelopmentInstitute(DIE),Misereor,FIAN,OXFAM,WelthungerhilfeandJustitiaetPax);inEurope:EUWorkingGrouponLand(membersincludetheNetherlands,Sweden,France,Germany,GreatBritain,Finland,Belgium,Denmark,AustriaandSwitzerland)

,wheretheBMZplays

anactiveroleasafoundingmember,engagein

intensiveexchangeonthismatter.TheBMZalso

supportsthesettingupofanextensiveonlineda-

tabasewhichisdesignedtoserveasasolidbasisfor

informationregardingnationalcontractparties,

foreigninvestors,landwhichhasbeenpurchasedor

aboutwhichenquireshavebeenmade,planneduse

aswellasnegotiationstatus3.

3 Thedataislikelytobepublishedinearly2012.Investmentsfromsomesamplecountriescanbeviewedathttp://www.commercialpressuresonland.org/land-deals/search.

FormUlatinGandimPlementinGinternationalGUidelinesAspartoftheactivitiescarriedoutbytheGerman

government,theBMZwillintroducedevelopment-

policyissuesintotheformulationandimplementa-

tionofinternationalguidelinesontheresponsible

governanceoftenureoflandresources.Minimum

requirementsforgovernmentsandinvestorswill

bedefinedincooperationwithmultilateralinstitu-

tions,otherbilateraldonors,partnergovernments

andrepresentativesofcivilsociety,businessand

thescientificandacademiccommunity.Theaimof

thisistomakeinvestmentsmorecompatiblewith

applicablehumanrights,theneedsofthelocal

populationaswellaswithaspectsregardingthe

protectionofresources.Goodgovernanceprinci-

plesmustbeappliedinsuchcases.TheBMZplaysan

activeroleinshapingthefollowingthreeinitiatives

inparticular:

Voluntary Guidelines on Responsible

Governance of Tenure of Land, Fisheries and

Forests in the Context of National Food Security:

TheaimoftheVoluntaryGuidelines,whichare

currentlyinthefinalphaseofconsultationatthe

UNCommitteeonWorldFoodSecurity(CFS),isto

helpinensuringsecureandequitableaccessto

naturalresourcesforthedomesticpopulation.In

specificterms,theguidelinescovertherecognition

andprotectionofindividualandcollectiveland

ownershipandlanduserightswhichareeithercod-

ifiedorrecognisedundercommonlaw,improving

institutionallandmanagementstructures,fighting

corruptionaswellasmakingrecommendations

onhowtostructureland-relatedinvestmentsina

responsiblemanner.Prohibitingthebreachofexist-

ingrightsandrespectingthehumanrightsobliga-

tionsarisingfromtherighttofoodarefocalissues.

Theguidelinesarethefirstinternationalinstru-

mentonthispoliticallysensitivetopicareaandhave

http://www.commercialpressuresonland.org/land-deals/search


beenharmonisedtogetherwithalloftheplayersin-

volved.Theyaredirectedprimarilyatgovernments

butalsonon-governmentalplayerssuchasthe

privatesectorandcivilsociety.TheGermangovern-

mentsupportsthedrawingupoftheguidelinesand

willalsoworktoensurethattheyareimplemented

atinternational,regionalandnationallevel.

Principles for Responsible Agricultural Invest-

ment that Respect Rights, Livelihoods and

Resources (PRAI):

TheinitiativewassetupbyJapan,theWorldBank,

FAO,theInternationalFundforAgriculturalDevel-

opment(IFAD)andtheUnitedNationsConference

onTradeandDevelopment(UNCTAD)following

theG8summitinL’Aquilain2009.Itsaimistofor-

mulateprinciplesregardingthelegalandpoliti-

calstructuringofinvestmentsinagriculture.The

initiativeisalsodesignedtoofferinvestorsguid-

anceonactinginasociallyresponsiblemanner.

Framework and Guidelines on Land Policy in

Africa:TheAfrican Land Policy Initiativewassetup

bytheCommissionoftheAfricanUnion(AU)with

thesupportoftheEconomicCommissionforAfrica

(ECA)andtheAfricanDevelopmentBank(AfDB).In

consultationwiththeMemberStatesoftheAU,land

policyguidelinesweredevelopedandapproved:

questionsregardingtheirimplementationarenow

underdiscussion.TheBMZsupportsthisprocess

primarilyviatheEuropeanDevelopmentFund.

sUPPortinGPartnerCoUntriesintermsoFlandPoliCyandlandmanaGement

Germandevelopmentcooperationhasalongtradi-

tionofsupportingthesettingupoftrustworthyand

efficientstructuresofgovernmentadministration.

Itwillusethisexperienceinatargetedmannerto

offersupporttopartnercountriesincapacitybuild-

ing,therebyenablingthemtoputastoptoirrespon-

siblelandgrabbingandinsteadtoutiliseopportu-

nitiesthatarepresentedbyaninteresttoinvestin

landandagriculture.Thisoccursinparticularvia

thefollowingapproaches:

nationallandpolicies:Germandevelopmentcoop-

erationwillsupportpartnercountriesinformulat-

ingandimplementingnationallandpolicies.The

aimofthiscooperationistodevelopfairnational

landpolicieswhichareformulatedinsuchaway

astohelpreducepovertyandconflict.Suchpoli-

ciesaretobefirmlyanchoredinthelegislationof

therespectivecountryandimplementedbycorre-

spondinginstitutions.

landuseplanning:Germandevelopmentcoopera-

tionwillsupportpartnercountriesinformulating

andimplementinglanduseplans.Theaimistode-

velopplanswhichareappropriateforthesituation

inquestionandwhichwillhelptobalanceinterests

andtoregulateconflictswheretherearecompet-

inginterestsasregardslanduse,therebyconserv-

ingbiodiversityandecosystemservices.Theseplans

formthebasisfordecisionsregardinglanduseand

thegrantingofanypossibleconcessions.

landregistration:Germandevelopmentcoopera-

tionwillsupportpartnercountriesinformulating

andimplementinglandregistration.Registering

communalandindividuallandrights(including,


forinstance,thegrantingoflandtitlesandlanduse

certificatesaswellaslocallanduseagreements)

isoftenakeycomponentofcomprehensiveland

reforms.Clarifying,documentingandformalising

landrightsarewaysofincreasingtheleveloflegal

certaintyforlocalusers.Specialfocusisplacedon

securingthelandownershiporlanduserightsof

indigenouscommunitiesandparticularlyvulner-

ablegroupssuchaswomen-ledhouseholds.

Inadditiontoadvisinggovernmentagencies,

supportisalsoprovidedtonon-governmental

organisationswhichactivelyworktoensurethat

theinterestsofthelocalpopulationand,inparticu-

lar,ofmarginalisedpopulationgroupsarerepre-

sentednotonlytotheirrespectivegovernmentsbut

alsotoinvestors.Thissupportincludescapacity-

buildingintheareaofnon-violentconflictmanage-

mentwhichcanthenbeusedtopreventconflictsin

thecontextoflarge-scalelandpurchasesandleases.

HUmanCaPaCitydeveloPment

Germandevelopmentcooperationwillinvestinthe

traininganddevelopmentofdecision-makersfrom

agenciesinpartnercountriesintheareaofland

policyandlandmanagement.Ontheground,they

receivedirectsupportonissuessuchashow to use

geoinformation systemsorsetting up national

training centres.InGermany,supportisprovided

forthe Land Management and Land Tenure

course at the Technische Universität München.

Thiscourseisalsoaimedatspecialistsfrompartner

countriesandisdesignedtoenablethemtomanage

large-scalelandpurchasesandleasesprofessionally.

CooPerationwitHtHePrivateseCtor

Germandevelopmentcooperationwillsupportthe

implementation of partnership-based business

models, suchascontractfarming,leaseagree-

mentswhichincludeprofit-sharingwithland

owners,jointventuresormanagementcontracts

wherebylocalfarmersmanagethelandonbehalf

ofacompany.Thankstosuchmodels,inwhich

smallholdersareintegratedintothevalue-creation

chain,manyoftherisksoflarge-scalelandpur-

chasesandleasesthathavebeenmentionedcan

beavoided.Furthermore,theyhelptoputinplace

valuesandprinciplessuchastheestablishmentof

long-term,fairbusinessrelationships,cooperation

basedontrustbetweenactorsaswellasresource

efficiencyandtheconservationofecosystemsand

theirservices.

Germandevelopmentcooperationwillalsowork

toensurethattheproblemsconcerninglandasa

resourcearereflectedinthecontinued develop-

ment of market-based standard systems and

thattheseareappliedinamannerwhichwillhave

abroad-basedimpact,forinstancethroughdevel-

opmentpartnershipswiththeprivatesector.The

Roundtable on Sustainable Biofuels,theRoundtable

on Sustainable Palm Oil,the Roundtable on Responsi-

ble Soy, theForest Stewardship CouncilandtheBet-

ter Sugarcane Initiativehavealreadyincorporated

aspectsoflandmanagementandlandrightsinto

theircataloguesofcriteria.Theseinclude,forexam-

ple,theprincipleoffree,priorandinformedcon-

sentasawayofinvolvingthelocalpopulationinne-

gotiations.Germandevelopmentcooperationalso

focusesonthepromotion of forums for dialogue

and raising awareness whichprovideaplatform

forengaginginexchangewiththeprivatesector.


insistinGonsUstainaBility

TheBMZwillonlyapprovethosebilateraldevelop-

mentcooperationprojectsinvolvingthepurchase

andleaseofland,andgrantsupporttoprivatein-

vestmentinthisareaifthedevelopment-policyben-

efitofthemeasureanditsrespectforhumanrights

andenvironmentalandsocialstandardsaredemon-

stratedbeyonddoubt.

Throughitscontractingprocedure,theBMZ

ensuresthatprojectssupportedviaGermanimple-

mentingorganisationsofTechnicalandFinancial

Cooperationwithinthecontextofbilateraldevel-

opmentcooperationareinalignmentwiththe

Ministry’sstrategies.Inparticular,thepositions

setoutinthispaperareinlinewiththestrategy

papersRural development and its contribution to food

security and Human rights in German development

policy. BMZstrategypapersserveasaguidelinefor

theown-accountbusinessofKfWEntwicklungs-

bank(KfW),DeutscheInvestitions-undEntwick-

lungsgesellschaft(DEG)mbHandGesellschaftfür

InternationaleZusammenarbeit(GIZ)GmbHwith

itsInternationalServicesdivision.Furthermore,

anysuchbusinesswhichisperformedisboundby

internationalstandards(suchastheInternational

FinanceCorporation(IFC)standards,forinstance).

The World Bank and regional development

banks eachapplytheirownstandardstothe

assessmentofprojectsinvolvinglandleasedand

purchasedforthepurposeofagriculturalinvest-

ments.Thus,asetofpoliciesknownasSafeguards

areappliedtoallprojectsoftheInternationalBank

forReconstructionandDevelopment/Interna-

tionalDevelopmentAssociation(IBRD/IDA),while

PerformanceStandardsareappliedtoallprojects

oftheInternationalFinanceCorporation/Multi-

lateralInvestmentGuaranteeAgency(IFC/MIGA).

TheBMZtakesanactiveroleintheongoingdevel-

opmentofthesebanks’respectiveconditionsand

standards,andurgesthemtomakehumanrights,

environmentalandsocialprinciplesfundamental

preconditionsoftheirprojects.Furthermore,the

BMZisinvolvedinthedevelopmentofcountryand

sectorstrategiesbythedevelopmentbanks,which

inturnlayfoundationsfortheorientationofcon-

creteprojects.If,forexample,projectproposalsare

referredtotheBoardduetothehighpoliticalsen-

sitivityofthesituationorthehighvolumeofcredit,

infuturetheBMZwillcontinuetoassertitsposition

inspecifictermswhenindividualprojectsareunder

discussion.


3.Context

tHeComPetitionForlandandwater,resoUrCestHatareBeCominGinCreasinGlysCareworldwide

In2010,thenumberofpeopleworldwidesuffering

fromhungertotalledsome925million.Asaresult,

foodsecurityremainsoneofthebiggestchallenges

ofourtime.However,inadditiontofoodandfodder,

demandisalsoincreasingforbiomass–bothasa

sourceofrawmaterials(e.g.cottonforclothing)and

togenerateenergy(e.g.maizeforbiofuel).These

variousdifferentinterestsarecompetingmoreand

moreforeverscarcerlandandwaterresources.

Theexpansionofsettlementareasandtheaccom-

panyingpavingoverofland,unsustainablearable

farming,overgrazing,desertificationandthenega-

tiveimpactsofclimatechangeareonlyservingto

increasethepressureonland,anditsassociated

naturalresources,asafactorofproduction.

inFormationGaPs:lotsoFrePorts,littletransParenCy

Providingevidenceforthephenomenonofland

grabbingintheformofhard-and-fastfiguresisa

difficulttask.AccordingtothereportoftheGlobal

Commercial Pressures on Land Research Project 4,

4 Land Rights and the Rush for Land(IIED,CIRAD,ILC,2011),http://www.landcoalition.org/cplstudies

investorsarereportedtohaverequestedapproxi-

mately200millionhectaresoflandworldwide2000

and2010–anareamorethanfivetimesthesizeof

Germany;ofthisfigure,Africaaccountsforover130

millionhectares.Intermsofsize,theagricultural

landundernegotiationisoftenequaltoaconsider-

ableshareofthetotalagriculturalareaavailable

inthetargetcountries5.

5 Itshouldbenotedthatthesefiguresarebasedonmediareportswhichhavenotbeenverifiedlocallyandsomeofwhichrelatetoconcessionsforwhichenquirieshavebeenmadebutwhichhavenot(yet)beengranted.

Todate,though,only20%

ofinvestmentprojectshaveactuallyresultedina

productiveuseoftheland(WorldBank2011).How-

ever,thereisaconsiderabledegreeofuncertainty

attachedtoallofthesefigures.Thesensitivityofthe

issueiscreatingahighdegreeofmediaattention

andafloodofinformationfromvarioussources.

Generally,thereportsrelyextensivelyoninforma-

tionfromtheinternationalmediaandfromthe

localpressinthecountriesconcerned.Itisoften

unclearfromthesereportswhetherthecountry

transactionswhicharedescribedarecontracts

whichhavealreadybeensigned,ongoingnego-

tiationsorinvestmentintentions.Nobindingor

detailedinformationregardingthenatureandcon-

tentofthecontractsisproactivelyprovidedeither

bygovernmentagenciesorinvestors.Asaresult,

thereisahugelackoftransparencyregardingthe

wholeissue.Internationalresearchanddevelop-

mentorganisations(includingtheWorldBank,

InternationalFoodPolicyResearchInstitute(IFPRI),

InternationalInstituteforEnvironmentandDevel-

opment(IIED),FAO,IFAD,GIZ)aretryingtoplugthis

informationgap,gainacomprehensiveoverviewof

thedimensionsoflarge-scalelandpurchasesand

leasesandtouseempiricalcountrycasestudiesin

ordertoshowcurrentgovernancedeficits6.

6 RelevantstudiesincludeLand grab or development opportunity? Agricultural investment and international land deals in Africa(IIED,FAO,IFAD,2009),Rising global interest in farmland: Can it yield sustainable and equitable benefits? (WB,2011),Land Rights and the Rush for Land (IIED,CIRAD,ILC,2011)andForeign Direct Investment (FDI) in Land(GTZ,2010).

http://www.landcoalition.org/cplstudies


tarGetCoUntries:PredominantlyCoUntrieswitHweakGovernanCestrUCtUres

Manyofthecountriesaffectedbylarge-scaleland

purchasesandleasesareamongtheworld’spoorest

developingcountries.Insomecases,thesecountries

arestrugglingtoovercomeseriousmalnutrition

andruralpoverty,whileagriculturalincomelevels

areverylow;mostsufferfrompoorgovernanceand

weakjusticesystemsandoftenrevealshortcomings

intermsoftheirlandpoliciesandlanduseplan-

ning.Manyofthemare,orhavebeen,involvedin

violentconflicts.Mostofthecountriesaffectedare

bigcountriesintermsoflandarea,andaresituated

insub-SaharanAfrica.Worldwide,theseaccountfor

roughlytwothirdsofthetotallandspaceaffected

bylarge-scalelandacquisitionandleasing.

Accordingtotheinformationavailable,thefol-

lowingpartnercountriesofGermandevelopment

cooperationareparticularlyaffectedbylarge-scale

landacquisitionandleasing:Ethiopia,Ghana,

Cambodia,Columbia,Laos,Liberia,Mozambique

andthePhilippines.However,comparabledevelop-

mentscanalsobeobservedinmanyothercoun-

large-scalelandacquisitions:reported areas

sources

Data: International Land Coalition

imprint

authors: elias Hodel, Kurt geberOrganisation: CDe Centre for Development and environment November 2010

Peru482.141

Guatemala66.606

mali180.105

senegal66.606

liberia17.000

Ghana400.112

Brazil1.631.000

niger2.500

nigeria10.000

Cameroon6.000

Zambia46.515

Benin236.100

Columbia308.269

india68.890

Pakistan5.926

ethiopia2.226.270

somalia21.500 kenya

316.700tanzania16.263

madagascar2.150.000

malawi196.037

Philippines5.057.688

laos308.994

russia108.000

Bangladesh24.456

mozambique10.875.922

Country total reported area in ha

reported area between 1,000,000 and 10,000,000 ha

reported area more than 10,000,000 ha

reported area between 100,000 and 1,000,000 ha

reported area less than 100,000 ha

Countries with no reported cases

Cambodia1.232.080


tries(seemap).Itisquiteclearthatthepurchase

andleasingoflargeareasoflandisaphenomenon

whichisbothwidespreadandhardtocategorise.

Furthermore,itisonewhichdoesnotonlyaffect

countrieswithweakgovernancestructures.

amUltitUdeoFPlayerswitHvarioUsdiFFerentmotives

Amonginvestorsengagedinlarge-scalelandpur-

chasesandleases,adistinctioncanbemadebe-

tweenstate,parastatalandprivateplayers.Thema-

jorityofinvestmentsarecarriedoutbytheprivate

sector,i.e.byagriculturalcompanies,although

increasinglybyinvestmentfundsaswell.Inmany

cases,nationalelitesorcompaniesinthedevelop-

ingcountriesthemselveshaveaninterestinthese

deals,forexampleaspartnersinjointventuresoras

intermediariesforforeigninvestors.Insomecases,

purchaseandleasecontractsarenegotiateddirect-

lybetweengovernments(represented,forexample,

bytheiragriculturalministriesorstateagricultural

developmentcompanies)orconcludedbygovern-

mentfundsandcompanieswherethestateisthe

soleorthemajorityshareholder.Inaddition,some

governmentsarepromotinginvestmentbyprivate

investorsbymeansoftargetedsupport,thecreation

offavourablegeneralconditionsorindirectpar-

ticipationsbygovernmentfundsinprivatesector

investments.Financingbydevelopmentbanksis

alsohelpingtopromoteinvestmentprojects.

Thereareanumberofdifferentinterestsunderly-

ingthepurchaseandleasingoflargeareasofland.

Thesecanbecategorisedasfollows:

> Theoutsourcingoffoodproductiontothird

countriesasameansofensuringtheirown

food security andsecuringwaterrightsisa

strategypursuedbythosecountrieswhichdo

nothavesufficientagriculturallandorwater

resourcesoftheirown.Theseinclude,inpar-

ticular,countrieswithahighlevelofpopula-

tionpressureandstrongeconomicgrowth

(mainlyEastAsiancountrieslikeChina,South

KoreaandJapan,aswellasothercountries

suchasSouthAfricaandVietnam)inaddition

tocountrieswithextremelylimitedlandand

waterresources,butplentyofcapitalavailable

thankstooilriches(Bahrain,Libya,Kuwait,

Qatar,SaudiArabia).Suchcountriesare

dependenttoalargeextentonfoodimports

andthepricetrendsonglobalmarkets.The

exportbanimposedbysomenetexportersof

foodinreactiontothefoodcrisisin2008as

wellassharplyfluctuatingfoodpriceshave

encouragedtheseimportingcountriestostep

uptheireffortstoreducedependencyonthe

worldmarketforagriculturalproducts.

> Theglobaldemandforbiomass in order to

generate energy,butalsoforfoddercrops

andagriculturalrawmaterialsforindustrial

usehasmadedevelopingcountriesthefocus

ofinterestforagriculturalinvestors,primarily

fromthedeveloped world.Energyinvestors,

forinstance,areacquiringlandwiththeaim

ofgrowinglargeareasofenergycropsand

fast-growingtreespeciesfornationalandin-

ternationalbioenergymarkets.Inmanyplaces,

blendingquotasforagrofuels,forinstancethe

EuropeanUnion(EU)Directive(2009/28/EC)on

thepromotionoftheuseofenergyfromrenew-

ablesources,risingoilprices,aswellasefforts

tophaseoutnuclearpowerprovideadditional

incentivestoeithercarryoutorencouragein-

vestmentsinthecultivationofenergycrops.


> New investment and speculation opportuni- there are, as yet, barely any reliable findings

ties: Private sector investment funds investing relating to the impacts on long-term develop-

in agricultural land in order both to gener- ments of the most recent financial crisis, it is

ate a profit from agro-industrial production plausible to assume that the expectation of a

and to benefit from the increased value as a continued rise in land prices will entail further

result of the shortage of land are an attractive land purchases and leases and will increase

product on the financial markets. Even though speculation.

Large-scale land acquisitions: Share of projects by commodity and production status

Food crops, production

Food crops, no production

Biofuels, production

Biofuels, no production

Livestock, game farm and forestry, production

Livestock, game farm and forestry, no production

Industrial or cash crops, production

Industrial or cash crops, no production

6%

31%

4%

17%

5%

16%

7%

14%

Source: Deininger/Byerlee (2011)

Large-scale land acquisitions: Share of projects by commodity and production status

Food crops, production

Food crops, no production

Biofuels, production

Biofuels, no production

Livestock, game farm and forestry, production

Livestock, game farm and forestry, no production

Industrial or cash crops, production

Industrial or cash crops, no production

Source: Deininger/Byerlee (2011)

6%

31%

4%

17%

5%

16%

7%

14%


4.Conclusion

UtilisinGtHeoPPortUnitiesoFresPonsiBleinvestmentsandPreventinGlandGraBBinG:sixBasiCPrinCiPles

Theeconomic,political,social,ecologicaland

humanrightsimpactsonthelocalpopulationand

regionoflarge-scalepurchasesandleasesofland

dependgreatlyontheregulatoryframeworkwithin

whichtheymustoperateandonhowthecontracts

aretobestructuredandimplemented.Inruralareas

inparticular,responsibleinvestmentscanimprove

thelivesoftheaffectedpopulation.Manydevel-

opingcountrieshavehugeagriculturalpotential

which,thusfar,hasremainedeithercompletelyor

largelyunexploited.Thiscanbemobilisedbymeans

ofdevelopment-orientedlanduseplanningand

increasesinagriculturalproductivityaswellasby

tappingthepotentialofpublicenvironmentalgoods

toagreaterdegree7.

7 Thepotentialforthisisshown,forexample,bytheinternationalinitiativeThe Economics of Ecosystems and Biodiversity(TEEB)athttp://www.teebweb.org/.

However,manydeveloping

countriesareunabletoraisetherelatedinvestment

capitalindependentlywhichisthereasonwhyin-

vestmentsbyexternaldonorsareoftenvital.Yetin-

vestmentswhichareneithersustainablenorwhich

failtobenefitthelocalpopulationcanalsomakethe

livesoftheaffectedpopulationmuchworse.

Inconnectionwiththepurchaseandleasingof

largeareasofland,Germandevelopmentpolicyis

convincedthatthefollowingbasicprinciplesmust

beobservedinordertorealisethepotentialofin-

vestmentsinsustainableagriculturalprojectsand

tosuccessfullycountertherisksassociatedwith

suchpurchasingandleasing.

1.Participation,transparencyandaccountability

Thelocalpopulationshouldbeinvolvedasearlyand

ascomprehensivelyaspossible,i.e.whenformulat-

inglandpoliciesandlanduseplansaswellaswhen

planningagriculturalprojects.Contractnegotia-

tionsaretobeconductedtransparentlyandwith

systematicinvolvementoftherelevantstakehold-

ers,includingcivilsocietyand,mostparticularly,

locallandusers.Aboveall,populationgroupswho

arefrequentlydisadvantagedindecision-making

processes(women,forinstance,whoareoftenin

relationshipsofdependencywhereaccesstoland

andwaterisconcernedandwhoarenotgiventhe

appropriateopportunitytoputforwardtheirinter-

ests),shouldhaveasayinthenegotiations.Thedeci-

sionastowhetherandunderwhatconditionsland

issoldorleasedtoaninvestorshouldonlybetaken

withthefree,priorandinformedconsentofthe

peopleaffected.Inordertosafeguardtheirpoliti-

calparticipation,importantconsiderationsarethe

establishmentofadministrationsclosetothecom-

munitiestheyserveasameasureaccompanying

theinvestment,theefficientprovisionofmunicipal

servicesandinfrastructure,andthepromotionof

capacitydevelopmentmeasuresonthesubjectof

accountability.

2.recognitionofexistinglandandwaterrights:

Iflandownershipandlanduserightsintheaffected

territories(e.g.rightstograzing,rightsofway,

waterrightsandrightstogatherproductssuchas

firewoodandmedicinalplants)havenobasisin

formallaworareonlyinadequatelydocumented,

barelyanyprotectioncanbeaffordedtothelocal

populationagainstriskssuchaslandconflicts,

uncompensatedresettlementanddisplacement.

Existinglandandwaterrightsthereforeneedtobe

acknowledgedandlaiddowninpurchaseandlease

contracts.This is a main precondition for ensur-

http://www.teebweb.org/


ing that investments do not damage but instead

benefit the affected population. Thechallengeis

becomingespeciallyclearinAfrica:whereasde jure

thelandclaimedforaconcessionisoftenstateland,

de factoitwillhavebeenusedbylocalarableand

livestockfarmersforgenerations.Thismeansthat

informalandtraditionallandownershipandland

userightsarealsotoberespectedandguarantees

regardingfutureusesmustbeinsertedintothecon-

tracts.Womenarefrequentlydisadvantaged,both

inmodernandintraditionallandlaw,particularly

withregardtoquestionsofownership.However,

recognitionoftraditionalrightsmustnotplaya

roleinperpetuatingdiscrimination.Instead,equal

accesstolandandwatermustbeguaranteed,irre-

spectiveofthelegalform.Tothisend,theregistra-

tionofcommunalandindividuallandandwater

rightsisacentralelementwhichis,inturn,funda-

mentaltotheformulationandimplementationof

landpoliciesandlanduseplans.Thecorresponding

rightsmustbeacceptedbythecompetentinstitu-

tionsandthepopulationinvolvedandimplemented

andguaranteedusingthenecessarymechanisms.

Anybreachoftheserightsmustbepenalised.

Callingforlandandwaterrightstoberecognised

andlaiddownisalsoanimportantinstrumentin

involvingthepopulationinnegotiationsatanearly

stageand,wherenecessary,insettingguidelines

regardinganycompensationpaymentswhichmay

berequired.

3.Handlingresettlementsandcompensationin

amannerwhichiscompatiblewithhumanrights

Theforcedresettlementofpeopleisamajorpoint

ofconflictandshouldbepreventedatallcosts.

Yeteveninvestmentswhichmakesensefroma

developmentpolicyperspectivemay,inindividual

cases,requirepeopletoberesettledifthefeasibil-

ityofinvestmentsdependsonthis.Inorderfor

theseresettlementstobecarriedoutinamanner

whichiscompatiblewithhumanrights,theymust

adheretotheUNBasicPrinciplesandGuidelines

onDevelopment-basedEvictionsandDisplacement

andthecorrespondingstandardsoftheWorldBank

Group.Thesespecifythatallalternativestoforced

resettlementmustbeexaminedfirst,vulnerable

groupsmustbegivenspecialprotectionandprior

consultationshouldbesoughtwiththepopulation

affected.Anyonelosingland,livingspaceorsources

ofincomefromlandusemustbecompensated

onthebasisoftheequivalentlivelihoodvalueof

whateverislost.Thosepersonsaffectedmustbe

grantedopportunitiestolodgecomplaintsaswell

asbegivenrecoursetotakelegalaction;particular

regulationsandconsiderationsapplyinsuchcases

toindigenousgroups.

Thoseinneedofprotectioninclude,inparticular,

theinhabitantsofareaswheretherearetraditional

ownershipandlanduserights,especiallyvulner-

ablegroupssuchasindigenouspeoples,migrants

andwidowsaslandisusuallytheonlyresource

fromwhichtheycanderivetheirsubsistence.

Wheretherearefewfall-backareasandthepopu-

lationdensityishigh,theriskisespeciallygreat

thattheywillbeforcedbackontodegradedland.

Particularlyincountrieswhicharestrugglingto

overcomecorruptionandalackoflegalcertainty,

large-scalelandpurchasesandleasescanleadto

humanrightsviolationssuchasforcedresettle-

ments,orexacerbatetheseincountriesalready

affectedbyconflict.Insuchsituations,theseland

transactionscanposeathreattothestabilityand

peaceinaregionorcountry.

4.Unrestrictedrespectforthehumanrightsto

foodandwater

Thefoodsecurityofthelocalandnationalpopula-

tion,aswellasitsaccesstodrinkingwaterandwater


foragriculturalproductionmustnotbeendan-

gered.Inthecaseofanylarge-scaleinvestmentin

land,theavailabilityofandaccesstofoodandwater

mustremainguaranteedforallpopulationgroups.

Especiallyincaseswhere,followinginvestment,

landwhichwasonceusedforsubsistenceagri-

cultureandforagriculturalproductiontoserve

domesticmarketsisnowcommittedtobeusedfor

exportproducts,thealreadyoftenprecariousfood

situationforthelocalpopulationmaybeexacer-

batedfurtherifthereisnocompensatorylandavail-

able.Fulfillingtherighttofoodmayalsobecome

moredifficultforthepopulation.Furtherconflicts

regardingaccessandallocationmayariseand

already-existingdisputesmaybeaggravatedasa

resultofthe(over-)exploitationofwaterresources;

suchcircumstancesalsoplacethefulfilmentofthe

righttowateratrisk.Ifequalsharingoftheaffected

populationgroupsinthebenefitorintheprofits

oftheinvestmentfailstobringaboutindividual

increasesinincome,orifsuitablecompensation

agreementsarenotsignedorimplemented,these

negativeeffectswillbeintensified.

Thisdoesnotmean,however,thatinvestment

projectsalwayshavetoberejectediftheagricul-

turalproductionwhichtheyaimtogenerateistobe

usedpurelyforexportpurposes.Fromashort-term

perspectiveinparticular,adaptingproductionto

meettheneedsofthedomesticmarket,oratleast

focusingbothondomesticandforeignmarkets,

certainlyhelpstoreducetherisksofgreaterfood

insecurityatlocallevel.Thekeypoint,however,and

especiallywhenviewedfromalong-termperspec-

tive,isnotwhetheraninvestmentistargetedat

localorinternationalmarketsbutinsteadwhether

aninvestmentgivestheaffectedpopulationafair

shareinthebenefitsofthemeasuretaken,and

whetherthecreationofareliablestreamofincome

makesitpossibleforthepeopleaffectedtobuyfood

atlocalmarkets.Asfarasinvestmentsinlandare

concerned,inclusivebusinessmodelsinparticular

(seepoint6)appeartobeasuitablemethodforhelp-

ingthepopulationtoachievethisfairshareand

reliableincome.

5.Protectionandsustainableuseof

naturalresources

Wheneverlargeareasoflandarepurchasedor

leased,negativeimpactsonnaturalresources(soil,

water,forests,biodiversity,ecosystems,climate)

mustbepreventedorminimisedasfaraspossible.

Insodoing,particularaccountshouldalsobetaken

ofthekeyimportanceofecosystemservicesforfood

security.Tothisend,itisvitalnotonlytoadhereto

sustainabilitystandardsandprinciplesbutalsoto

carryoutstrategicenvironmentalimpactassess-

mentsintermsoflandpolicyandlanduseplanning.

Afailuretosufficientlyprotectnaturalresources

ortousetheseinasustainablefashionduringland

useplanningwillresultinconsiderablenaturaland

environmentalhazards.Thisisaverydistinctrisk,

especiallyincountrieswheregovernanceisweak.

Themostnotablethreatsincludeover-exploitation

anddeteriorationinthequalityofsoilandwater

resources(e.g.asaresultofover-fertilisation,exces-

siveuseofpesticidesandsedimentfromerosion),

adeclineinbiodiversityandacceleratedclimate

changeduetothelossofCO2reservoirs.Thelatter

occursinparticularwhenecosystemswithahigh

capacitytosequestercarbon(e.g.forests,bogsand

mires)areconvertedintoarableland.

However,opportunitiesfornatureandtheenviron-

mentactasacounterbalancetotheriskswhich

needtobetackled.Theseopportunitiesshouldbe

exploited.Forinstance,investmentsinlandcan

helptorehabilitateareasofdegradedlandforag-

riculture.Cropcovercanstemtheerosionofthese


soilsandimprovetheircapacitytostorewaterand

CO2.Moreover,therehabilitatedareascanbeused

aseco-corridorstolinkupexistingecosystems,

whichsupportstheconservationofbiodiversity.

Althoughconsiderableinvestmentisrequiredin

ordertopreparelandforsuchmeasures,appropri-

ateincentivescanbeputinplaceforinvestors,

e.g.theycanbetiedintogovernmentinvestment

incentiveprogrammes.

6.Benefit-sharing

Inordertoensurethatthedirectlyaffectedlo-

calpopulationaswellasthetargetcountryasa

wholebenefitfromaninvestmentinagriculture,

itisessentialthatthedetailedformulationofcon-

tractsshouldbedevelopment-oriented,pro-poor

andcompatiblewithhumanrights.Fairsharingin

thebenefitofinvestmentscanbedeterminedbya

numberofimportantfactors.Theseincludedirectly

creatingjobswhichmeetminimumstandards,the

applicationofpartnership-basedmodelsofcoop-

eration,profit-sharingmechanisms,stimulation

oftheruraleconomy,increasingthelevelofgov-

ernmentresourcesallocatedtodevelopmentand

ensuringanoveralleconomicbenefit.

Employment:Sinceincome-creatingjobswhich

meetminimumsocialstandardsareanimportant

wayofensuringtheparticipationofthelocalpopu-

lation,thisshouldbeclearlystipulatedincontracts.

InadditiontoguaranteeingtheILOcorelabour

standards,theOECDGuidelinesforMultinational

Enterprises,theUNGlobalCompactandothervol-

untarystandards,contractsshouldalsoincludea

commitmentonthepartoftheinvestortocreate

aminimumnumberofjobsandtoprioritiselocal

overforeignworkers.Theinvestor’scommitment

totrainlocalworkersshouldbemadeacontractual

requirementespeciallyifmechanisedproduction

methodsaretobeused.

Partnership-based cooperation:Inmanycases,

establishingpartnership-basedcooperationbe-

tweenaninvestorandvariousotherlocalplayers

canbeanimportantbasisforsharingbenefitsfairly.

Inclusivebusinessmodels,suchascontractfarm-

ingormentormodels,aremodelsofpartnerships

characterisedbyclosecooperationbetweenlocal

employees,suppliersandtheprocessingindustry,

integratedqualitymanagementandconsult-

ingandtrainingservicesthroughoutthevalue-

creationchain.Localworkersarethereforeableto

developtheirskills(e.g.onfarmingandprocessing

methods).Thedevelopmentofsocialandtechnical

infrastructure,suchashealthcentres,schoolsand

roads,aswellastheregistrationandformalisation

ofcommunalandindividuallandrights(e.g.feesfor

theawardingoflandtitlesandlandusecertificates

arecoveredbytheinvestor)canbeintegralcompo-

nentsofsuchmodels.Inclusivebusinessmodelspro-

videlocalsmallholderswithaccesstoknowledge,

capitalandmarkets.Forinstance,byimprovingthe

qualityoftheirproducts(e.g.byusingbetterseeds

orbylearningaboutproductstandards),theycan

achievehighermarketpricesandthusraisetheir

incomelevels.

Equity-participations: Onewayinwhichthelocal

populationcanshareinthebenefitsofinvestment

isbymeansofequityparticipations.Theseallow

afarmers’unionoranotherlocalorganisationto

exchangeitslanduserightsforsharesinacompany

andtherebyshareintheprofit.Bothjob-allocation

andprofit-sharingmechanismsshouldbedesigned

withgenderequityinmind.Inordertoensurethat

staterevenuesareusedtransparentlyandforthe

nationalwell-being,itisagoodideatoforwardany

dutiespaid,suchasatradetaxinthecaseoffiscal

decentralisation,directlytothemunicipalitiesin

question.


Measures to ensure the general stimulation of

the rural economy:Investmentsinlandhavethe

potentialtocreateadditionalemploymentand

incomeopportunities.Byincreasingproduction

andraisingproductivity,andthankstobettersales

opportunities,localproducerscanachieveahigher

levelofincome.Thecreationofadditionalupstream

anddownstreamjobsenableslocalworkerstopur-

suegainfulemployment.Onthewhole,thechance

ofearninganincome,buildingupsavingsandcar-

ryingoutinvestmentsincreasesasaconsequence.

Ageneralriseinpurchasingpowerwillultimately

provideopportunitiesforeconomicdiversification,

asawayofincreasingvaluecreationinruralareas.

Thispotentialforgenerallystimulatingtherural

economyexistsmostnotablywhereinvestmentsin

landcomehandinhandwithotherprivatesector

investmentsinruralinfrastructure(inparticular

electrificationandroadbuilding)andinthetrain-

ingofworkers.

Increasing government resources allocated to

development and ensuring an overall economic

benefit: Theintroductionoflanduselicencesand

thecollectionofproductiontaxesandexportduties

isawayofincreasingstaterevenueandallowing

thistobeusedforimprovingservicestothepublic

(e.g.intheareasofeducation,healthandinfra-

structure).Thisincreaseintheamountofgovern-

mentresourcesdevotedtodevelopmentcanalso

improvethegeneralconditionsforstimulatingthe

economyfurther.However,atthesametime,the

riskoflandinvestorsbeinggrantedveryhighsub-

sidiesunderinvestmentincentiveprogrammesin

theformoftaxrelief,tradingpreferencesorbelow-

costwaterprices,mustbeavoidedsincesuchfac-

torswillinturncounteracttheexpectedimpacts

intheformofjobs,taxreceiptsandtechnology

transfer.Anynon-sustainableuseoflandcauses

thelossofkeyecosystemservices,whichshouldbe

givengreaterweightineconomicconsiderations8.

8 TheBMZexaminestheeconomicassessmentofnon-sustainableuseofagriculturallandinthestudyentitled“TheEconomicsofLandDegradation”(publicationin2012).Thepotentialforcapturingthevalueofecosystemservicesishighlightedby,forexample,theinternationalinitiativeentitled“TheEconomicsofEcosystemsandBiodiversity”(TEEB):http://www.teebweb.org/.

Caremustalsobetakentoensurethatconcessions

grantedtoinvestors,forexamplethroughsupport

fromtheircountriesoforiginandbyinternational

developmentbanks,donotdistortthecompetition

and,asaresult,leadtosmallholdersbeingforced

outoflocalmarkets.

neCessityForrealistiCandtransParentassessments

Iflarge-scalelandpurchasesandleasesareagreed

uponandimplementedwithdueregardtothesix

basicprinciples,theycanplayanimportantrole

fromadevelopmentpolicyperspectiveinthedevel-

opmentofruralareas.

Toarriveatarealisticassessmentoftherisksand

opportunities,ananalysisoftheeconomicbenefits

andanobjectiveappraisalofthehumanrights,

socio-economicandecologicalimpactsofthe

proposalshouldbecarriedoutbeforecontractual

negotiationsbegin9.

9 EffectiveinstrumentsforthispurposearetheEnvironmentalandSocialImpactAssessment,HumanRightsImpactAssessmentandthePovertyandSocialImpactAssessment.TheduediligenceobligationsassociatedwithcorporatehumanrightsresponsibilitiesaresetoutintheUNFrameworkforBusinessandHumanRights“Protect,Respect,Remedy”,whichshouldbeusedasanimportantreference.

Evidenceofsustainability

shouldbedemonstratedandcommunicatedona

continuousbasisbymeansofcertificationsystems.

http://www.teebweb.org/


Resultsofassessmentsandevaluationsshouldbe

accessiblenotonlytoinvestorsandpolicy-makers

butalsototheaffectedpopulationandthegeneral

publicinanappropriateform.Theroleofcivilsocie-

tyisanimportantone,bothwithregardtoinforma-

tionabouttheopportunitiesandrisksoflarge-scale

landpurchasesandleases,andinrelationtomoni-

toringcontractnegotiations,contractimplementa-

tionandtheimpactsofinvestment.Representatives

ofcivilsociety,particularlytheaffectedparties

themselves,shouldbeactivelyinvolvedinthecon-

tractnegotiationsand,wherenecessary,actively

supportedinexercisingtheirmonitoringfunction.

Inthisregard,attentionmustbepaidtoequitable

representationoftheaffectedpopulationgroups,

andofmenandwomeninparticular.


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Published by the

Federal Ministry for economic Cooperation and Development (BMZ),

Division for development education and information

edited by the

BMZ, Division rural Development; global Food Security

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March 2012

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