A ‘Win-Win’ Scenario for Land Deals

The increase in food staples prices in 2006 was followed by different measures and policies meant to stabilize prices and ensure the supply of food as seen through the different regions of the world. One controversial policy undertaken by food insecure or net food importing countries was ‘farmland acquisition’. This involves purchase of both the ownership and use rights through leases or concessions whether short or long term. Reasons for acquiring land consist of achieving a stable supply of food, the production of biofuels and forestry products and the increasing scarcity of natural resources. Land acquisitions attracted a lot of attention due to its implications on the food security of the host as well as the investing country and its impact on the livelihoods and welfare of small farmers. 

The issue resurfaced when the result of a year-long investigation by Global Witness was released last 13 May on the alleged involvement of a private bank and an international organisation in funding Vietnamese firms that are establishing a rubber plantations in  Laos and Cambodia. The study showed that the operations of these firms were causing widespread evictions, illegal logging and food insecurity. It is just one of the many cases that presents the costs attached to acquisition of agricultural land by foreign investors.

On paper, foreign investments in agriculture are expected to generate jobs and incomes and facilitate the transfer of knowledge and modern farming techniques to increase agricultural productivity. A recent report by the Food and Agricultural Organization (FAO) asserts that there are benefits from such arrangements. Particularly, deals in Uganda and Senegal were the success stories where both parties benefitted. In these countries, foreign investors considered the farmers and local communities as “partners” in the implementation of the projects.

The rise in farmland acquisition has been contentious and complex since it is intertwined with other issues such as food security, property rights and to some extent, land reform. Most developing governments welcome foreign investments on their farmlands because of the potential socio-economic benefits and a solution to their struggling agricultural sectors. However, the real challenge for them is to create an effective policy framework that would maximise the benefits from the deal and lead to a sustained inclusive growth. At the same time, the objective of achieving food security should also be paramount. In particular, it should include the participation of inputs of the most vulnerable to the land deals – smallholder farmers and local communities.

An inclusive policy on farmland acquisitions can be implemented on the ground by both national and local governments. Specifically, the latter can play as a mediator between the smallholder farmers and foreign investors. Dialogues and consultations between both parties will not only increase transparency but also facilitate the exchange of information and knowledge. On a broader scope, national governments can act as a watchdog and ensure that the rights of the smallholder farmers and local communities are respected. An effective monitoring system is crucial for realising the benefits brought about by the investments. In this case, the ‘win-win’ scenario is largely hinged on the role of the policymakers.

This blog post has been written by Maria Carmencita S. Morales. Maria Carmencita is an Associate Research Fellow at the RSIS Centre for Non–Traditional Security (NTS) Studies.