Invest in farmers, not in farmland

With land central to the livelihoods of millions of people in Africa, Lorenzo Cotula examines the impact of large-scale land acquisitions on the continent's farmers and says that promoting agricultural development in Africa and addressing the world's food security challenges requires investing in farmers - not in farmland.

Lorenzo Cotula's picture
Insight by 
Lorenzo Cotula
22 February 2012

"Land grabs" are now one of the biggest issues in Africa.

Over the past few years, companies and foreign governments have been leasing large areas of land in some of Africa's poorest countries.

Many commentators have raised concerns that poor villagers will be forced off their land and agribusiness will marginalise family farming.

Others say that foreign investment can help African countries create jobs, increase export earnings and use more advanced technologies.

Three years since media reports started raising public awareness on this issue, evidence has been growing on the scale, geography, players, features and impacts of the land rush. The emerging picture provides ground for concern.

Last year the World Bank documented media reports of land deals over the period between 2008 and 2009.

The deals were for nearly 60 million hectares worldwide, roughly the size of a country like Ukraine - and two-thirds of the land acquired was in Africa.

While new figures continue to emerge, all evidence points to a phenomenon of unprecedented scale.

Also, some individual deals are for very large areas. For example, Liberia recently signed a concession for 220,000 hectares.

Money to be made

Media attention has focused on investments by Middle Eastern and Asian government-backed operators but Western companies have also been heavily involved.

Companies acquire land because they expect world food and commodity prices to increase - so there is money to be made in agriculture.

Some governments have also promoted land acquisitions abroad as a way to secure affordable food for their people.

In many African countries, agriculture has suffered from years of neglect - and investment is needed to improve productivity and market access.

But not all investment is good - and growing evidence strongly indicates that large land deals are not the way to go.

Short-lived jobs

A synthesis of over 30 reports worldwide found that many investments have failed due to insufficient soil fertility, financing difficulties or over-ambitious business plans. For example, in Mozambique and Tanzania, some large biofuels projects have now been abandoned.

Even where investments are profitable, it is often difficult to see how they contribute to poverty reduction. The jobs created are few, short-lived and low-paid - and public revenues are limited by tax exemptions.

A report published last year raised serious questions about the terms of the contracts that governments are signing up to.

Some of the world's poorest people are losing the land, water and natural resources that have supported their livelihoods for generations. In Uganda, for example, 20,000 people claim to have been evicted from their land and a legal case is pending before courts.

Not every deal is a "land grab" - much depends on local context, the investor's track-record, the terms of the lease, and whether these reflect the free, prior and informed consent of local landholders.

But for local people, the context in which the deals are being concluded tends to make negative outcomes more likely.

Best intentions

There are huge power imbalances among international companies, government and local landholders. Many land deals are being negotiated without transparency and local consultation.

In many parts of Africa, local farmers, herders and gatherers only have insecure legal rights to the land they see as theirs. Most have no written documents for their land. Much land is owned by the state, which can allocate it to outside investors even against local opposition.

And while international law provides relatively effective protection for foreign investment, international human rights law remains inaccessible and ineffective for people losing land.

So even when investors come with the best intentions, this means local groups are exposed to the risk of dispossession - and investors to legal disputes.

Family farmers have long provided the backbone of African agriculture - and, when given a chance, they have been able to compete on global markets.

Family farming

In Ghana, for example, a co-operative of 60,000 cocoa farmers has run a successful business for nearly 20 years and owns 45% of a UK company that manufactures and distributes chocolate.

The global demand for food and agricultural commodities creates new opportunities for African farmers.

Public policies and infrastructure to support family farming are needed today more than ever.

Evidence also shows that private investments to improve productivity or market access can be structured in ways that support local farmers.

Many companies successfully source agricultural produce from family farmers, and have invested in other activities along the production line - in ways that secure their supplies and improve local livelihoods.

In Mali and Zambia, some farmer associations own shares in the company they collaborate with, which gives them monetary benefits and a greater say.

Co-operatives or intermediaries can reduce the costs linked to working with large numbers of farmers. Public policy plays a key role in promoting fairer investment models.

The perception that large plantations are needed to "modernise" agriculture in poorer countries is dominant in many government circles.

But evidence shows that this perception is misplaced.

Promoting agricultural development in Africa and addressing the world's food security challenges requires investing in farmers - not in farmland.

Lorenzo Cotula leads the Land Rights Team at the UK-based research body the International Institute for Environment and Development.

This was first posted on the BBC website.

Want to find out more? Read IIED's briefing: Farms and funds: investment funds in the global land rush