As global agri-investment increases, policies must put local people centre stage

Corporate interest in agricultural investment is up, but a new report shows that policies are skewed against inclusive investments. We need to reshape them so investments meet local people's needs and aspirations. 

Lorenzo Cotula's picture
Insight by 
Lorenzo Cotula
06 December 2012
A Kenyan landscape. Global interest in agricultural investment is on the rise.

A whole new landscape - global interest in agricultural investment is hotting up. Photo: Copyright, Bill Vorley

Earlier this week, agribusiness companies, financiers, commodity traders and consultancy firms gathered in central London for the latest in a series of corporate events on global agricultural investment. If corporate ‘bashes’ are a good indicator of private sector interest, then interest in farming is clearly growing fast. After years of neglect, commercial investments in developing country agriculture are on the rise.

This renewed interest is a positive development, but not all investment is good. As companies set up large plantations there are real concerns that the deals will dispossess farmers, herders and foragers, marginalise small-scale producers and deliver few economic benefits. It is a particular risk where governance is weak and local residents don’t have much say. This week’s conference in London rekindled civil society mobilisation against 'land grabbing'.

So can commercial investments in agriculture respond to local farmers’ aspirations? Research and experience both say yes, but first we have to tackle the policy problem.

Problems with policy

A new report published today by Oxfam and IIED shows that, despite very diverse contexts, public policy tends to promote non-inclusive deals.

In many African countries, for example, centralised government control over land facilitates large-scale land acquisitions and undermines local rights. Many governments do not charge much for the land, and that fuels speculative acquisitions. Measures designed to promote agricultural investment — including investment protection, facilitation and incentives — are mainly designed for large-scale commercial operators. That’s despite the fact that small-scale farmers account for the bulk of agricultural investment many in low income countries.

Good intentions but poor implementation

There are policy innovations that work to include local farmers and communities. Strengthening local control over land and natural resources, for example through legal requirements for free, prior, and informed consent; regulating commercial investments effectively; and government action that promotes the equitable inclusion of small-scale producers in value chains can all drive more inclusive investment in agriculture. Equally, public investment in infrastructure and capacity building can improve smallholders' 'investment-readiness' and promote business models that support small-scale producers.

Yet there is typically a big gap between good policy intentions and what happens on the ground. It is not enough to design well-meaning policy — you also need to invest in implementing it. And vibrant local-to-global organisations that represent the interests of rural producers are indispensable. They can help rebalance power relations that might otherwise constrain implementation.

Put people first

For host countries and communities, promoting investment should not be an end in itself, but a means to an end — improving people’s livelihoods. So people should be at the centre of investment processes. The main question should move beyond how best to tweak prevailing investment paradigms so as to ensure that local people participate in the benefits, and ask instead how investment can be oriented so that it responds to the needs and aspirations of those people — as well as producing a financial return for the investor. Reshaping the policies that regulate land and investment is an important part of promoting this change.

Read Tipping the Balance: Policies to shape agricultural investments and markets in favour of small-scale farmers