I just returned from the annual World Bank Conference on Land and Poverty in Washington, DC. I was happy to see that conference built off of last year’s focus on large scale land acquisitions. A full one-third of the sessions this year addressed the issue. What’s more, the conference was followed immediately by a side event attended by a variety of parties interested in discussing the same subject.
I came home with a number of takeaways.
First, several sessions—particularly the follow-up side event—featured the participation of a great many representatives of the private sector. In most cases, there are three parties to these deals: the host country government, local communities and the investor. Most often, the investor is a private company or individual. Therefore, it is essential to engage the private sector in discussions of the opportunities and challenges arising from large land acquisitions. Having sector representatives at these sessions greatly enriched the dialogue.
Second, an impressive assortment of guidelines and principles are now available to help guide the various stakeholders in designing and implementing these transactions. These include: UNFAO’s Voluntary Guidelines (a comprehensive first draft of which was released on April 15); the guidelines for Responsible Agricultural Investment drafted by the World Bank and others; principles issued by the “Roundtables” on sustainable biofuels, sustainable palm oil and sustainable soy; and a number of others. We may have reached the point where we have enough guidelines and principles.
Which brings me to my third takeaway. Principles and laws are nowhere near enough. If developing countries are going to reap the benefits of agricultural investment in ways that also benefit—and certainly do not harm—local communities, the focus must shift to implementation of the various well-meaning guidelines on which the international community has labored so long and hard. This is critically important as the land rush of large land deals is unlikely to decelerate anytime soon.
Top 3 Challenges
We face three very difficult implementation challenges: (1) a lack of knowledge; (2) a lack of capacity; and (3) finding effective strategies for dealing with irresponsible investors.
Lack of Knowledge: In most cases, the terms of proposed commercial land acquisitions are not available to the public. Indeed, local communities and the outside world often do not know that a deal is even being contemplated until the tractors arrive and the fences are under construction. Investors and host governments should ensure that the terms of land deals are made public long before the contracts are signed so that local communities and civil society can meaningfully participate in the process.
Lack of Capacity: Speakers at the conferences noted that all stakeholders, occasionally even investors, are often unable to effectively participate in the design, assessment and negotiation of large land transactions. This can lead to agreements that are detrimental to host governments, local communities and sometimes even the investors themselves. The international community must ensure that well-trained bankers, land tenure specialists and lawyers are available to conduct proper land tenure impact assessments and ensure all parties are capably represented.
Dealing with the Bad Guys: The private sector investors who attended the conference are clearly dedicated to investing responsibly. They understand that successful long-term investments are those that benefit all three stakeholders. These companies are not the problem. But many of the land acquisitions are made by investors who are interested in making a quick buck without regard to the impact on the country in which they invest. How can we influence their behavior? There are at least three pressure points: (1) host governments can more effectively negotiate with and regulate the investments. In most cases, this will require training and institution-building; (2) the banks and other institutions who finance the acquisitions can insist on responsible behavior as a condition of the loans; and (3) the customers who buy the agricultural products grown on the land can refuse to buy unless assured that the company has acted responsibly.
The implementation challenge is daunting. Let’s hope the vigorous dialogue in Washington last week leads quickly to concrete actions to address the challenges of transparency, capacity-building and irresponsible investors.