Investment in land and other scarce resources

The role of business and government actors

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With nearly one billion people suffering from hunger on earth food security remains one of the biggest challenges of the global community. Land, in particular arable land is getting more important and with growing food prices investors are more and more attracted by a profitable business of land investments. Large scale investments into land are taking place above all in countries with poor land governance systems. Initiated by the International Land Coalition and supported by a large network of partners and sponsors the Land Matrix  has been set up as a documentation platform of land deals . The online database documents 924 deals of about 48.829.193 hectares (about three times the agricultural land of Germany with about 17 Mio ha). While 10% of investors account for 68% of the acquired land, more than one third of the land deals have been reported to be located in African countries.    

NGO’s like the International Land Coalition, FIAN, Oxfam and others strongly criticize the negative effects of such land deals such as increasing resource conflicts, insufficient compensation and failure of land governance and land management systems expressed in the word “land grabbing”. Also governmental organizations and international organizations have expressed their deep concern - the international discussion resulted in the adoption of the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security by the Committee on World Food Security of the FAO.

The German Federal Ministry for Development and Cooperation has formulated six principles that investments in land should adhere to with the goal for them to be structured in such a way as to promise sustained benefits for the development of the populations affected. 75% of the poor are living in rural areas and are relying on agriculture for their survival. At the same time many countries with poor smallholder agriculture systems have areas of suitable agriculture land and/or land which produce below its potential. Investments could result in an increased production of food and a transfer of know-how of sustainable and more productive agriculture systems.

Financing institutions have started to revise their investment policies, a few agro-business investment groups have started to develop specific strategies into sustainable use of land which aim to be beneficial for local communities too. Large food corporations and agricultural commodity traders have started to invest into more sustainable production of coffee, cocoa, cotton, soy, timber and many other commodities. They have to secure their raw material sources and understand more and more that benefit sharing along the supply chain is a must to stay in business.

How can “land grabbing” be avoided and responsible investments be further encouraged? Which are “good practices” of responsible investments into agricultural land (and other resources)? Which governmental guidelines exist? Neither governmental organizations nor the private sector can manage this situation alone.   How can they work hand in hand for a broader impact?

The present drought in the United States shows us the reality. Low corn and other grain harvests in United States will again accelerate investments in land as food prices have already start to increase again for the bad of many poor people world-wide. And no radical change in human behavior can be seen. Arable land is still destroyed by expansion of settlement/urban areas, water and soil resources are exploited by unsustainable agriculture supported by the consumer perception in many countries that all kinds of food needs to be available at any time of the year and as cheap as possible. The carousel is rotating and the conflictive potential is increasing. Rich countries with a high population will try to bring more foreign land under their control to satisfy the need of their own national population and investors will continue to make use of shortages in market supply as related investments will return into more profits. But how long we can play this game?
 
Contributing Institutions: Gesellschaft für Internationale Zusammenarbeit (GIZ) and  International Land Coalition


Moderator:
Dr. Babette Wehrmann, International Expert on Land Governance and CSR


Setting the scene:
Maren Kneller, Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung

Panelist:
Oliver Marquordt, Aquila Capital Green Assets GmbH


Panelist:
Michael Schneider, Deutsche Bank


Panelist:
Massimo Candelori, UNCCD International
   


Session Tasks
  1. Outline experiences from Best Practice Cases addressing critical aspects of land(water)grabbing (among others missing land governance systems, missing management systems for large scale investments in land, non-appropriate compensation for local communities and missing benefits, missing participatory approaches and resulting resource conflicts).
  2. Problem analysis have been done, Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security have been defined, now it is high time to act. Implementation is needed; show the next steps to go.    
  3. Discuss the potential of social and environmental impact assessments in accordance with the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security or certification according to sustainability standards as a tool to reduce negative impacts of land investments.
  4. Clarify how to share responsibilities between governments and private sector companies. Present successful examples of cooperation (PPP).

Information sources:

http://www.fao.org/nr/tenure/voluntary-guidelines/en/

www.unpri.org/commodities/Farmland%20Principles_Sept2011_final.pdf

www.bmz.de/en/publications/type_of_publication/strategies/Strategiepapier321_02_2012.pdf

www.giz.de/Themen/en/dokumente/Briefing_Note_Large-scale_land_acquisitions_and_leases_January_2012.pdf

www.fian.de/online/index.php?option=com_remository&Itemid=160&func=select&id=69

www.landcoalition.org

http://landportal.info/landmatrix

www.oxfam.org/grow

http://www.responsibleagroinvestment.org/rai/

http://www.aatif.lu/

http://www.vegpro-group.com/

www.aquila-capital.com
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