Rising Global Interest on Farmland: Can it Yield Sustainable and Equitable Benefits?

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The 2007–08 boom in food prices and the subsequent period of relatively high and volatile prices reminded many import-dependent countries of their vulnerability to food insecurity and prompted them to seek opportunities to secure their food supplies overseas. Together with the reduced attractiveness of other assets due to the financial crisis, the boom led to a “rediscovery” of the agricultural sector by different types of investors and caused a wave of interest in land acquisitions in developing countries. With little empirical data about the magnitude of this phenomenon, opinions about its implications are divided. Some see it as an opportunity to reverse long-standing underinvestment in agriculture that could allow countries with abundant land resources and large numbers of people in rural poverty to gain access to better technology and more employment and thereby create the preconditions for sustained broad-based development. Others say that an eagerness to attract investors in an environment where state capacity is weak, property rights ill-defined, and regulatory institutions starved of resources could lead to projects that fail to provide benefits, e.g. because they are socially, technically or financially non-viable. Such failure could result in conflict, environmental damage, and a resource curse that may benefit a few, but leave a legacy of inequality and resource degradation. It is difficult to determine which of these positions is right without reliable information on large-scale investment and how much it varies across countries with different policy and environments. This information is also critical for advising countries on how they can minimize the risks associated with such investments and potentially capitalize on any opportunities they may provide.

This report aims to provide key information needed for informed debate about large-scale land acquisition. It draws on the experience from past land expansions, discusses predictions for future demand, and provides empirical evidence of what is happening on the ground in the countries most affected by the recent increase in demand for land. It complements demand-side considerations by assessing how much land, whether currently cultivated or not, might potentially be available for agricultural cultivation at the global and country levels. The report then describes the policies in place to manage land acquisition and analyzes how these policies may affect outcomes. This can help governments in land abundant countries to assess how best to integrate increased demand for land into their rural development strategies and provide opportunities and benefits to all involved, including existing smallholders. This is particularly important as many of these countries also have high-yield gaps. It also highlights how, where land acquisition by large investors makes sense from a social, economic, and environmental perspective, governments can create an environment that can attract outside investment that contributes to broad-based growth and poverty reduction.