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