Presented at the Seminar on Responsible Agricultural Investments in Developing Countries: How to Make Principles and Guidelines Effective? Organized by Swedish FAO Committee & SIANI

1. Large-scale land-based agricultural
investments -- Current status, lessons
learned, way foward
Dr. Madiodio Niasse
Director, ILC
Seminar on Responsible Agricultural Investments in Developing Countries: How to
Make Principles and Guidelines Effective?
Swedish FAO Committee & SIANI
Stockholm, Sweden
25March 2014

2. I. About the International Land
Coalition

3. ILC - a Global multi-stakeholder platform
Established in mid-1990s as: Popular Coalition to Eradicate Hunger and Poverty, which became
ILC in 2003
TODAY: 150 MEMBER ORGANISATIONS, INCLUDING:
10 IGOs (FAO, IFAD, WB, UNCCD, UNEP, WFP, IFPRI, IWMI, ILRI, ICRAF)
100 Southern-based FOs (AFA, FUNDAPAZ, EAFF) and CSOs (ANGOC, CEPES, LN-WA)
40 global and Northern-based CSOs (Oxfam, SNV, WRI, LANDESA, CIRAD, IIED)
5 Strategic Partners (MFA-Netherlands, SDC-Switzerland, EC, Sida-Sweden, AU-LPI)
HOW DO WE WORK?:
• advocacy
• dialogue
• knowledge sharing
• capacity building
and empowerment.
WHO? A global
alliance of civil
society and
intergovernment
al organisations
WHAT PURPOSE?
Promote secure &
equitable access to
and control over
land for poor women
and men

4. THE RURAL POOR MEN AND WOMEN - A LARGE DIVERSITY
Who do we serve?

5. II. Current global wave of large-
scale land transactions

6. (1) 2007-08. Bad weather conditions
 poor harvest in key food
exporting countries (Aust, Ukr)
(2) (5) Food price hikes
2007-2008 : Surge in large-scale transnational land
deals
(4) Record high Oil
prices
(3) (6) Freeze/ban of food
exports in 20+ countries
(8) Riots in
various big
cities in the
South
(9) GLOBAL RUSH FOR
LAND
Food
Energy (7) Panic food purchases

7. 10 12 3 10 10
33
72 66
100
212
Understanding the crisis - underlying causes
Trends in transnational land deals -2000-2009 (Land
Matrix -only based on reported deals)
Underlying drivers:
☞ Pursuit of national food security in a context of
a failing global food market
☞ Energy security in a context of high dependency
on fossile oil, with dwindling reserves and price
oil price hikes
☞ Environmental security (climate change
mitigation)
☞ Search for alternative investment opportunities
after the crisis of the banking sector (2007-
2008)

8. Magnitude and characteristics of LSLAs
Magnitude - Estimates varies:
25 millions ha (IFPRI, 2009)
56 millions (BM, 2010)
65 millions (Global Land Project, 2010)
50-80 millions (Land Matrix, 2012)
36 millions ha based on size in concluded 936 deals
80 million ha concluded and intended size in 1130 concluded
and intended deals (Land Matrix, Feb. 2014)
Key features
• Escalation following food and energy price crises of 2008/9
• Key drivers: food crops; agrofuels
• A large proportion small-scale landgrabbing within countries, but often
unnoticed.
• No single predominant investor type: Top ten countries of origin- both
emerging and developed economies
• China and Gulf countries - active but not predominant
• Linkages between weak governance and attractiveness to LSLBIs?

9. 52%
12%
22%
6%
8%
Target Regions
Africa America Asia Europe Oceania
Food crop and agrofuel as main
drivers
Africa, the main target region :
more than half of land area
Key features

10. Usa 7,095,352
Malaysia 3,394,113
Arab Emirates 2,819,223
UK 2,262,676
India 2,023,703
Singapore 1,840,755
Netherlands 1,684,896
Saudi Arabua 1,573,218
Brazil 1,368,857
China/ Hong Kong 1,342,034
Top 10 Countries of orgin of investors
Papua New Guinea 3,799,169 ha
Indonesia 3,549,462 ha
South Sudan 3,491,313 ha
DRC 2,717,358 ha
Mozambique 2,167,882 ha
Brazil 1,811,236 ha
Ukraine 1,600,179 ha
Liberia 1,361,213 ha
Sudan 1,191,013 ha
Sierra Leone 1,184,403 ha
Top 10 Investor Targeted
Countries
Key questions:
• Why Now?
• Is it sign of a new era or a short-term phenomenon?
Features

11. III. Land and water in the
emerging geopolitics of food

12. Understanding the current context
Food Self-sufficiency
paradigm
Food Security
paradigm ?
Food price index
Global food production

13. 100
200
300
400
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
150
250
350
sources: UNESA 2013, FAOSTAT 2013, FAO 2011, HLPE 2012, MEA 2005, Rockstrom et al 2009
Relativegrowth
baseline=1960=100
global cereal production
global extension of cultivated land
global freshwater withdrawal
global extension of irrigated land
2010-2020 : A turning point for land & water
governance?

14. Elements of the new geopolitics
Expanding demand for land
for food:
• Rapid population growth
• Nutrition transition
• Energy and climate
mitigation demand for
land/water
Constraints to expanding food
supplies:
• Climate change and
variability
• Reduced yield gaps
• Closing land and water
frontiers in traditionally
high performing grain
producing regions , etc.
• Japan Syndrome
Structural dimensions of current/emerging food security problems:
• Land and water -- reaching the resource limits (planetary
boundaries) . Illustration : Saudi Arabia
• Japan syndrome: A densely populated fast-growing and
industrialising countries, experiences the shrinking of their
grainland, translating into increased dependency on imports
(Bown, 2004). -- Illustration : China and India

15. Land and water constraints - Example of Saudi Arabia (1/2)
 Plan A - Food self-sufficiency taking advantage of the oil boom:
 form the late 1970s, a 30-year effort to crete giant farms (artificial
oases) to produce wheat, fodder, etc.
 by 1990s: US$85 billion invested, resulting in:
 SA became self-suffcient in wheat for more than 20 years
 SA being one of the "world largest exporters" of wheat!
 At what cost?
 Heavy subsidies in support of the agriculture sector (for each ton
produced farmers paid 5 times than EU/North American farmers
 Unsuainable water use: for every ton of wheat 3000-6000 tons of
water required ( against an avg of 5,000 tons) ;
 In recent years, the country was pumping 20 million cum of
groundwater per year
 As a result of this "hydrological madness" (Pearce, 2012), only 1/5 of the
country's fossile groundwater is remaining !!

16.  Plan B - Rely on imports to achieve food security:
 in 2008 decision to phasing out of wheat production by 2016
and relying on the market
 Coincided with the triple food, energy and financial crises
 In spite of increased oil revenues, SA had enomous difficulty
importing the food it needed (many traditional food exporters
deciding to limit or ban exports)
 Plan C - Food security through foreign land acquisitions
 Initiative for Saudi Agricultural Investment Abroad targeting 27
countries (Egypt, Suda, Pakistan, Philippines, etc.)
 One of the most active acquirers of foreign land: > 1,035,186ha
acquired abroad since 2000.
 About 28 countries expering similar "water-based food bubbles" (L.
Brown, 2011)
Land and water constraints - Example of Saudi Arabia (1/2)

17. 5, 3 M ha (17
M agr))
The Japan Syndrome (Shimizu, 2011)
3, 6 M ha (4.5
M agr)
- 32% since
1960s
0
500
1000
1500
2000
2500
3000
1960 1970 1980 1990 2000 2004
Areax1000hecatres
Trends in arable land in South Korea (Honma & Hayami, 2007)
0
100
200
300
400
500
600
700
800
900
1000
1960 1970 1980 1990 2000 2004
Arablelandx1000hectares
-20% since
1980s)
China and India : Threats of the Japan syndrome and implications for
global food security
Trends in arable land in Taiwan(Honma & Hayami. 2007)
-50% since
1970s)

18. Preventing the Japan syndrome - Case of China
 China - 20% of the world population ; 8.5 % of arable land; 6.5% of
freshwater (Hofman and Ho, 2012)
 Land reform, green revolution solutions, coupled with heavy
investment on water infrastructure helped achied food self-
sufficiency
 Paying the cost of the Green Revolution:
 Unsustainable use of water ==> closing river basins; dwindling
groundwaters
 Land degradation, and loss of fertile land;
 Narrowing of the "yield gap" in cultivated land, and reduced
scope for further intensification per unit of land
 Loss of arable land: 8.2 million of arable land between 1997 and
2010 (Hofman and Ho, 2012)
 Loss of food self-suffficiency: Net food importer from 2004

19.  China's responses:
 "Going Global", including in the farming sector :
 State firm engaged in Land acquisitions in Asia
(Loas, Cambodia), Latin America (Argentina), Africa. One of
the top-ten leading foreign land acquirers
 Containing "Japan syndrome": China has a set a bottom-line of
120 million hectares of arable land that need to be safeguarded
in a context of growing land coversion for urban and industrial
purposes
 massive investment in land and water development
infrastructure : hundreds of billion of US$ in the coming decade
 Open question for discussion: Can China prevent the Japan
Syndrome?
Preventing the Japan syndrome - Case of China

20. Case of India (striking similarities with China):
- Same effects of Green Revolution: dwindling groundwaters, land
degradation
- Country also starting to experience the Japan Syndrome: Major
threat to landlessness / eviction facing small farmers and
marginalised groups: industralisation (SEZs), infrastructure
projects; urbanisation. ==> Risk of losing its food-self-sufficiency
Responses:
 "Sanctuarisation" of the grainland: India contemplating the
possibility to "classify" its remaining arable land to prevent its
conversion to other uses
 Acquisition of foreign land: one of the top ten largest investor
countries in foreign land
The way China and India will manage their land and water will have major
implications for global food security
Preventing the Japan syndrome - Case of China

21. IV. Challenges facing targeted
countries

22. • Need for development of agricultural land:
– Only 7% of Africa’s arable land is under irrigation (4% for SSA): against 20% globally
– Rate of irrigation development: less than 1%/year
• Need for development of water infrastructure
– Only 1300 large dams for all Africa (2/3 in Southern Africa) against: about 45,000 globally
( Africa’s hydro installed capacity: 21,000 MW (3% of the world total--TGD: 18,300 MW)
• Estimated investment needs
– CAADP: USD$250 billion from 2002-15 (including US$ 70 for SLM and water control
infrastructure)
Actual investments being mobilised:
– Only 7 out of 53 African countries have met the Commitment known as
Maputo Declaration to allocate at least 10% of national budget to the
agricultural sector;
– On avg, African government spend US$20 per rural inhabitant per year
(Pearce, 2012)
– Agricultural aid was reduced by half between the mid-1980s and the
2000s, to bottom at 3-4% of total aid (Pearce, 2012)
– CAADP largely based on the old paradigm of food security with heavy
reliance on the market and aid money
Challenges facing targeted countries - The case of Africa

23. Severe land degradation
Lack of investment in
agricultural modernisation
Lack of investment
in water control
infrastructure
Poverty - hunger
A generation gap: loss of farmer pride; youth
outmigration
Africa's millions of smallholder farmers face a primary challenge of
feeding themselves
Challenges facing targeted countries - The case of Africa

24. A. First, give priority to domestic, intra-regional solutions
• Development national food security strategies
– These strategies define, among others, conditions of acceptability of foreign investment (E.g.
Qatar's National Food Security programme with foreign investment as a component; India;'s
National Food Secutirty bill under debate with the aim of achieving a "Hunger-Free India")
• Strengthen security of tenure of farmland, esp. for smallholder farmers and of
common property resources, esp. for pastoral and IP communities
• "Sanctuarisation" of the grainland:
– China has a set a bottom-line of 120 million hectares of arable land that need to be
safeguarded in a context of growing land coversion for urban and industrial purposes (8.2
million ha of arable land lost btw 1997-2010)
– India contemplating the possibility to "classify" its remaining arable land to prevent its
conversion for other uses
• Stepping up investments in food security:
– CAADP : a sound response to an era that longer is: investment levels too modest in the
cuurent challenges
– National compacts developed as part of CAADP are not enough
• Develop intra-regional cooperation on food security ("food exchange
agreements")
What is the best strategy for targeted countries - Africa ?

25. What options for Africa ?
B. A more strategic approach to foreign investment opportunities
1. First create conditions for mobilising small farmers investments in their land
2. For investments by foreign governments:
• For government-led foreign investments, give priority to "exchange agreements"
(Mukherjee, 2012)
– Foreign government invest in the host country's national food security strategies
(capital, infrastructure, technology, scientific assistance)
– Host country to gurantee to the investor government an agreed share of the increase in food
production during the payback period; priority to the investor guarantee in exports after the
payback period
3. For investments by foreign private actors /companies:
– Alternative business models such as carefully negotiated contract farming, joint
ventures, purchase agreements (e.g. Social Fuel Seal in Brazil), etc.
– Land concessions conceivable in contexts where:
o The development of the land to be allocated requires resources (capital, technical expertise , etc.) not
availanble through other means;
o Existing land rights of owners, inhabitants and users of the land are respected, whether they are statutory
or customary rights; and that land owners and users are duly consulted and give their consent
o Highest environmental standards are followed in the assessment/management of social and
environmental impacts of the venture;
o Venture is labour-intensitive and international farm labour standards are respected
o Venture is integral part of the national agricultural and food security strategy and is complementary
with the the smallholder farming sector

26. Investor perspective -- Common mistakes
• Assuming that the land is idle, empty, abandoned, void of rights
• Ignoring overlapping rights – State land does not mean that the land does not
belong to and is used by other communities
• Over-reliance on government officials and locally elected officials and political
and customary leaders ( Case of SENHUILE – Senegal)
• Underestimating the food security priority faced by many countries – Assuming
that food security is achieved when income increases (e.g. through agrofuel
revenues) – Need to ensure instead that the investment involves staple food crop
production (e.g. Malibiocarburant SA)
• "Land greed" – Because it is easy to acquire more land once you engage in a
country and know the key actors: Tempting to ask for as much land as
possible, even if not needed immediatement (all land demands for hundreds of
thousands, sometimes millions of hectares of land)
• Quick and dirty feasibility studies (tech, eco, financial) studies, as well as of
impact assessment studies
• Secrecy – concealing transactions, and avoiding disclosure of key documents such
as ESIA reports
• Tendency to overlook impacts on water and related ecosystem services

27. Moving forward -- Frameworks to guide actio
Many concurrent proposals for standards and benchmarks:
 VGGT (section 12 -- 15 paragraphs)
 PRAI Principles (7 principles): FAO-IFAD-WB-UNCTAD
 RAI Principles under the auspices of CFS: e-consultations;
negotiations from April
 Guiding Principles on Large-Scale Land-Based In Africa
 OCDE-FAO Joint initiative to promote responsible investment in
agriculture -- "Responsible Business conduct", based on all
significant proposals (PRAI, VGGT, Equator Principles, UN
Compact, etc..). Setting in place of an advisory committee to lead
the development of "practical guidelines"
Common features:
-- They are NOT ONLY about land, although land is an
important component
-- They are "voluntary", but important to guide action

28. Moving forward -- What a country like Sweden can do?
• Re-engage in supporting rural and agriculture sector development
in poor countries
• Help developing countries formulate and implement sound food
security strategies
• Accompany land reform and governance strengthening efforts
(securing land rights)
• Ensure responsible conduct of Swedish and EU private sector
companies in developing countries
• Support civil society international and of the South in their
watchdog role
• Support effort toward increased transparency
• Work toward consensus on RAI, and support effective
implementation

29. Conclusions
• Food security : one of greatest challenges of the 21st century
• The challenge is linked to the shrinking of farmland in a context of water
scarcity
• This has resulted in rush for land, in reality about water
• Protection of existing arable land and restoration of degradated should be
key pillars of national food security strategies in all countries
• In poor countries, national food security strategies should be centered on
smallholder farmers as main investors in food production in line with
what WDR-8 calls a "smallholder-based productivity revolution"
• When foreign investments are needed, priority should be given to the
ones that do not imply large concessions to the investors
• Developed countries such as Sweden should reengage in support the
revival of agriculture and rural development in poor countries, and ensure
responsible business conduct of its private sector companies when
engaging the South

30. THANK YOU !