L Cotula 2

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					Large-scale land acquisitions for agricultural investment
                        in Africa:

                      Trends and issues



Lorenzo Cotula
(and Sonja Vermeulen, James Keeley, Rebeca Leonard,
Berhanu Adenew and Moussa Djiré)
International Institute for Environment and Development (IIED)
                Setting the scene
 Spate of media reports worldwide yet little systematic
  empirical data

 FAO/IFAD/IIED study; IIED involvement in World Bank-led
  study

 “What”: trends and drivers; and “how”: characteristics
  of land deals, land access impacts – focusing on
  government-partnered investment and on sub-Saharan
  Africa

 Ongoing literature review, qualitative interviews,
  quantitative inventories in 6 countries (Ethiopia, Mali in)

 Limitations
                Outline



1.   “What”: Trends and drivers

2.   “How”: Characteristics of land deals
1.   “What”: Trends and drivers

2.   “How”: Characteristics of land deals
                    A fast evolving context:
             Investment flows to sub-Saharan Africa
   Major increase since 2000                              40
                                                                                                         FDI flows
                                                                                                         FDI stock as % GDP

                                                                                                                                                                                      50

                                                                                                                                                                                      45
                                                           35




 Driven by commodity demand,
                                                                                                                                                                                      40
                                                           30
                                                                                                                                                                                      35
                                                           25
                                                                                                                                                                                      30




                                    $ billion




                                                                                                                                                                                             % GDP
    esp extractives, and policy                            20                                                                                                                         25



    reform                                                 15
                                                                                                                                                                                      20

                                                                                                                                                                                      15
                                                           10
                                                                                                                                                                                      10




 Highly uneven distribution
                                                           5
                                                                                                                                                                                      5

                                                           0                                                                                                                          0
                                                                               1980                                1990                                 2007




 Likely to slow with economic
                                                                                                            1980             1990           2005
                                                           35

                                                           30
    downturn                                               25

                                      $Billion (nominal)   20



 But, longer term, stuctural                              15

                                                           10

    factors likely to stay                                  5

                                                            0
                                                                Burkina Faso




                                                                                                                               Mozambique




                                                                                                                                                                 Senegal




                                                                                                                                                                                           Uganda
                                                                                          Chad
                                                                               Cameroon




                                                                                                                                                       Nigeria




                                                                                                                                                                           Tanzania
                                                                                                 Ghana


                                                                                                           Kenya




                                                                                                                                             Namibia
                                                                                                                      Mali
Source: UNCTAD
    Agricultural investment - drivers
                                                  Food vs fuel, Ethiopia


   Biofuels – energy demand (transport),
                                                             Food produce      Biofuel


    government targets, oil prices (though
    decline after summer 2008)

   Agrifood - long term projections re: global
    food demand; food price hikes 2008

   Host country policy reforms to encourage       BITs by 12 African countries
    investment
                                                  200


   Land acquisitions as policy and market        150

    reaction                                      100


   Why Africa? Investors: “inexpensive land”,
                                                  50

    “favourable climates”, “labour available”      0
                                                        1960-69 1970-79 1980-89 1990-99 2000-on
                                                                   by decade   cumulative
  Agricultural investment - Key players
 Some governments promote            Ethiopia - classification submitted projects
                                      by investor type




  acquisitions overseas - food             8%
                                                                                Wholly Domestic Co




  importing, official reserves (oil
                                                                                Foreign Stake Domestic Co

                                      5%
                                                                                Foreign private company



  revenues, trade surpluses)
    E.g. Gulf states in Sudan                                          87%




 Private investors (agribusiness,
  finance) - expect significant       Mali - classification of submitted projects
                                      by investor type                               Wholly Domestic Co



  returns and/or land value                                                          Foreign Stake Domestic Co



  increases
                                                                      42%

                                      17%
                                                                                     Domestic state-owned




    E.g. Lonrho, Daewoo, Hadco
                                                                                     company


                                                                                     Foreign company




     deals; private fund activity
                                      8%
                                                                                     Foreign company, partly
                                                                                     foreign government owned



     in parts of Africa
                                           8%                         8%
                                                                                     Foreign company, majority
                                                        17%                          government owned
Ethiopia (2004-2008)
    Number of projects                                          Allocated land (ha)
                        By year          Cumulative                                             Allocated land (ha) - by year
   200                                                                                          Allocated land (ha) - cumulative

   150                                                                      500000
                                                                            400000




                                                                 Hectares
   100
                                                                            300000
                                                                            200000
    50
                                                                            100000
     0                                                                          0
             2004    2005         2006         2007      2008                         2004         2005       2006       2007       2008




 Investment commitments                                         Investor origin
                             By year        Cumulative              Africa       Central Asia    China    Middle East    Europe    N. America


100000000
90000000
80000000
70000000
60000000
50000000
40000000
30000000
20000000
10000000
         0
              2004   2005         2006         2007      2008
1.   “What”: Trends and drivers

2.   “How”: Characteristics of land deals
Acquirer    Government              Private
Provider 
Government    QIA deals in Sudan,    Daewoo-Madagascar;
               Indonesia, Vietnam     Hadco-Sudan
              UAE deals in Sudan,    …
               incl Abu Dhabi Fund
               for Development
              …
Private                               Jarch Capital deal in Sudan
                                      …
                                             Type of land rights


                                                            Lease <50yrs              Lease >50yrs
    Mainly govt leases (cf legal              100%
                                                            Sale                      N/A
    constraints): qualitative (Lonrho,             80%
    Sudan) and quantitative (eg 100%
                                                   60%
    Ethiopia)
   Land fees not main govt benefit                40%

    (Sudan); reported prices (Mali,                20%
    Ethiopia) 0-12 USD/ha/yr, possible 5-          0%
    yr exemptions                                                   Ethiopia               Mali

   Investment and empoyment
    commitments – but what legal              Land acquired from
    value?
   Plantations seem predominant but        100%
                                                                                             Government, but
    some contract farming esp in biofuels   80%                                              with some use or

   Provisions on produce export – 100%     60%
                                                                                             land claims

    guaranteed?                             40%
                                                                                             Government,
                                            20%                                              with no other
                                                                                             land claims
                                             0%
                                                         Ethiopia              Mali
    Local land rights
 Land commonly state-owned,
  protection of use rights varies
 “Wasteland” – but what is it?
    100% of land allocations in
    Ethiopia (now triangulating);
    Mali: farming, herding
   No or little local involvement in
    decisions (but Ethiopia, 3/6
    projects: agreement with local
    leaders)
   Compensation tends to be
    limited to improvements if
    state-owned land,
    compensation rates an issue
     Final remarks                             1960                        2000


   Major risks: loss of land access, esp
    where growing scarcity; food insecurity,
    economic marginalisation...
   But also opportunities: harnessing
    capital, know-how, market access...

   Terms and conditions key – What              Population density (UNEP, 2004)
    business models? What benefit sharing?
    Who decides and how?                         [Lenders, insurers]       Host state agencies




   Properly negotiated investor-state deal,
    but also triangle with local resource
    users (decisions, benefits)
                                                       Investor(s)
                                                                                                     NGOs



   Secure land rights key to minimise
    arbitrary dispossession and maximise
    local benefit
                                                                           NGOs


                                                                                                 Local resource users

				
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posted:11/30/2011
language:English
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