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Friday, 16 November 2012

New FAO report urges caution on large-scale land acquisitions in developing countries

International investments that give local farmers an active role and leave them in control of their land have the most positive effects on local economies and social development, according to a new FAO report published on Tuesday 13 November.
The report, Trends and Impacts of Foreign Investment in Developing Country Agriculture, emphasizes that investment projects that combine the strengths of the investor (capital, management and marketing expertise, and technology) with those of local farmers (labour, land, local knowledge) are most successful.
Business models that leave farmers in control of their land give them an incentive to invest in land improvements and also favor sustainable development. The publication offers a number of case studies on the impact of foreign investment in Africa and Asia, including large-scale land deals often referred to as land grabbing.
"While a number of studies document the negative impacts of large-scale land acquisition in developing countries, there is much less evidence of its benefits to the host country, especially in the short-term and at local level," says the report. "For investments involving large-scale land acquisition in countries where land rights are unclear and insecure, the disadvantages often outweigh the few benefits to the local community," it notes. The report advises that "acquisition of already-utilized land to establish new large farms should be avoided and other forms of investment should be considered."
FAO estimates that investment to the amount of more than $80 billion a year is needed to keep pace with population and income growth, and feed more than 9 billion people in 2050.
Although Foreign Direct Investment has risen significantly, especially in Asia and Latin America over the past decade, only a small share goes to agriculture -- less than five percent in sub-Saharan Africa. This represents an opportunity, however, given the high potential for growth, particularly in the light of currently high international food prices.

 

Source: FAO