Large-scale land acquisitions for agricultural investment in Africa: Trends and issues Lorenzo...
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Transcript of Large-scale land acquisitions for agricultural investment in Africa: Trends and issues Lorenzo...
Large-scale land acquisitions for agricultural investment in Africa:
Trends and issues
Lorenzo Cotula(and Sonja Vermeulen, James Keeley, Rebeca Leonard, Berhanu Adenew and Moussa Djiré)International Institute for Environment and Development (IIED)
Setting the scene Spate of media reports worldwide yet little systematic
empirical data
FAO/IFAD/IIED study; IIED involvement in World Bank-led study
“What”: trends and drivers; and “how”: characteristics of land deals, land access impacts – focusing on government-partnered investment and on sub-Saharan Africa
Ongoing literature review, qualitative interviews, quantitative inventories in 6 countries (Ethiopia, Mali in)
Limitations
Outline
1. “What”: Trends and drivers
2. “How”: Characteristics of land deals
1. “What”: Trends and drivers
2. “How”: Characteristics of land deals
A fast evolving context: Investment flows to sub-Saharan Africa
Major increase since 2000
Driven by commodity demand, esp extractives, and policy reform
Highly uneven distribution
Likely to slow with economic downturn
But, longer term, stuctural factors likely to stay
Source: UNCTAD
0
5
10
15
20
25
30
35
Burk
ina F
aso
Cam
ero
on
Ch
ad
Gh
an
a
Ken
ya
Mali
Mo
zambiq
ue
Nam
ibia
Nig
eria
Sen
eg
al
Tan
zan
ia
Ug
an
da
$B
illion
(no
min
al)
1980 1990 2005
0
5
10
15
20
25
30
35
40
1980 1990 2007
$ b
illio
n
0
5
10
15
20
25
30
35
40
45
50
% G
DP
FDI flowsFDI stock as % GDP
Agricultural investment - drivers
Biofuels – energy demand (transport), government targets, oil prices (though decline after summer 2008)
Agrifood - long term projections re: global food demand; food price hikes 2008
Host country policy reforms to encourage investment
Land acquisitions as policy and market reaction
Why Africa? Investors: “inexpensive land”, “favourable climates”, “labour available”
Food produce Biofuel
Food vs fuel, Ethiopia
BITs by 12 African countries
0
50
100
150
200
1960-69 1970-79 1980-89 1990-99 2000-on
by decade cumulative
Agricultural investment - Key players
Some governments promote acquisitions overseas - food importing, official reserves (oil revenues, trade surpluses) E.g. Gulf states in Sudan
Private investors (agribusiness, finance) - expect significant returns and/or land value increases E.g. Lonrho, Daewoo,
Hadco deals; private fund activity in parts of Africa
Ethiopia - classification submitted projects by investor type
87%
5%
8%
Wholly Domestic Co
Foreign Stake Domestic Co
Foreign private company
Mali - classification of submitted projects by investor type
42%
8%
17%
8%
8%
17%
Wholly Domestic Co
Foreign Stake Domestic Co
Domestic state- ownedcompany
Foreign company
Foreign company, partlyforeign government owned
Foreign company, majoritygovernment owned
Ethiopia (2004-2008)
0
50
100
150
200
2004 2005 2006 2007 2008
By year Cumulative
0
100000
200000
300000
400000
500000
2004 2005 2006 2007 2008
Hec
tare
s
Allocated land (ha) - by year
Allocated land (ha) - cumulative
0
10000000
20000000
30000000
40000000
50000000
60000000
70000000
80000000
90000000
100000000
2004 2005 2006 2007 2008
By year Cumulative
Number of projects Allocated land (ha)
Investment commitments Investor originAfrica Central Asia China Middle East Europe N. America
1. “What”: Trends and drivers
2. “How”: Characteristics of land deals
Acquirer Provider
Government Private
Government QIA deals in Sudan, Indonesia, Vietnam
UAE deals in Sudan, incl Abu Dhabi Fund for Development
…
Daewoo-Madagascar; Hadco-Sudan …
Private Jarch Capital deal in Sudan …
Mainly govt leases (cf legal constraints): qualitative (Lonrho, Sudan) and quantitative (eg 100% Ethiopia)
Land fees not main govt benefit (Sudan); reported prices (Mali, Ethiopia) 0-12 USD/ha/yr, possible 5-yr exemptions
Investment and empoyment commitments – but what legal value?
Plantations seem predominant but some contract farming esp in biofuels
Provisions on produce export – 100% guaranteed?
0%
20%
40%
60%
80%
100%
Ethiopia Mali
Lease <50yrs Lease >50yrsSale N/A
0%
20%
40%
60%
80%
100%
Ethiopia Mali
Government, butwith some use orland claims
Government,with no otherland claims
Type of land rights
Land acquired from
Local land rights
Land commonly state-owned, protection of use rights varies
“Wasteland” – but what is it? 100% of land allocations in Ethiopia (now triangulating); Mali: farming, herding
No or little local involvement in decisions (but Ethiopia, 3/6 projects: agreement with local leaders)
Compensation tends to be limited to improvements if state-owned land, compensation rates an issue
Final remarks
Host state agencies
Investor(s)
Local resource users
[Lenders, insurers]
NGOs
NGOs
Major risks: loss of land access, esp where growing scarcity; food insecurity, economic marginalisation...
But also opportunities: harnessing capital, know-how, market access...
Terms and conditions key – What business models? What benefit sharing? Who decides and how?
Properly negotiated investor-state deal, but also triangle with local resource users (decisions, benefits)
Secure land rights key to minimise arbitrary dispossession and maximise local benefit
1960 2000
Population density (UNEP, 2004)