I’ve introduced the threats large long-term agricultural investments can cause in least developed countries here. The question that I then tried to answer was: while the media terms these deals ‘land grabs’ (with a negative connotation implying there is only negative impact), what are the actual opportunities, especially for the local level? Before sharing with you what I’ve found here as part of my 3rd chapter of my thesis, I dug a little deeper to find out what are the concrete threats (and not just potential ones)?
By utilising a comparative analysis of case studies (from literature and NGO presentations) and interviews (conducted as part of my research) from 12 different cases, I’ve come to the following conclusion:
- Customary land rights are not acknowledged (58%)
- Local farmers are displaced (42%)
- Poverty increases (25%)
- External dependence increases (25%)
- Local landowners experience land expropriation (17%)
- The investor follows unsustainable practices (17%)
- Local interests are ignored (17%)
- Non-transparent contracts; regulations are unclear (8%)
- Food insecurity increases and/or causes famines (0%)
Furthermore, while the biggest problem is the big gap between formal land title registration and customary land rights systems, another issue is compensation for the loss of land and/or displacement. Data from 8 countries shows that compensation mostly fails to work in practice, and if it does it is by no means sufficient to restore livelihoods.
Opportunities?
What I’ve found is that, first of all, most opportunities depend on a number of factors and are hence potential rather than factual in nature. This holds especially for land fees and taxes. Tax exemptions, for instance, are used as incentive for investors, yet in the case of an Ethiopian land deal cause losses of 12 million US$ per year for a project of 600,000 hectare. The government makes only little direct profit in most cases and thinks of a more general profit being the stimulation of the local and national economy. That’s, however, mostly not the case. Concrete cases show that most of the benefit comes through employment opportunities, infrastructure building and increasing know-how. Success is limited, though, as all this depends on a number of factors: 1. the good will of the investor, 2. working monitoring schemes of the government, which in turn depends on 3. good governance.
Lastly, it all comes down to ‘good governance’ and how the government regulates investments. Once these mechanisms start working (better), opportunities are vast. Land deals can…
- Spur the local as well as national economy (and hence increase average wealth, uplifting livelihoods)
- Create local part-time and full-time employment (increasing know-how (human capital), social capital, as well as financial capital)
- Introduce and/or improve technological standards and agricultural R&D
- Increase yields considerably and make agriculture more efficient, hence also intensify farming (towards the commercialisation and industrialisation of agriculture rather than merely subsistence farming)
- Increase food supplies for the local and domestic market
- Improve infrastructure, and thus access to markets, health facilities, schools, et cetera.
If anyone is interested in more detailed descriptions and conclusions please contact me, I’ll be happy to send you my Honour’s Thesis once it’s done.