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