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