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Country investment plans in agriculture. Lessons from early experience

FAO Investment Centre. Learning from Investment Practices No. 3








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    Document
    Impacts of foreign agricultural investment on developing countries: evidence from case studies 2014
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    There is growing evidence that investing in developing countries’ agricultural sector is among the most efficient ways to reduce poverty and hunger. Agricultural investments can generate a wide range of developmental benefits, but these benefits cannot be expected to arise automatically and some forms of large-scale investment carry risks for host countries. Although there has been much debate about the potential benefits and risks of international investment, there is a lack of systematic evide nce on the actual impacts on the host country and their determinants. This paper summarizes the results of FAO’s case studies on the impacts of foreign agricultural investment on host communities and countries. The studies suggest that the disadvantages of large-scale land acquisitions often outweigh the few benefits to the local community. In countries where local land rights are not clearly defined and governance is weak, large scale land acquisition raises particularly high risks for the loca l community. These include reduced access to natural resources and the loss of livelihoods, which are likely to generate local opposition to the investment. Even from the perspective of the investor, land acquisition is unlikely to be the most profitable business model due to the high potential for conflict and damage to reputation. Conversely, the studies suggest that investments that involve local farmers as equal business partners, giving them an active role and leaving them in control of the ir land, have the most positive and sustainable effects on local economies and social development. These inclusive business models need strong external support for supporting farmers and facilitating the investor-farmers relationship in order to succeed. They also require ‘patient capital’, as financial returns to investment are unlikely to materialize in the first years. Beside the business model, other important factors include the legal and institutional framework in the host country, the ter ms and conditions of the investment contract and the social and economic conditions in the investment area. Strengthening the governance and capacity of institutions in host developing countries is essential to enhancing the developmental impacts of foreign agricultural investment.
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    Book (stand-alone)
    Investing in smallholder agriculture for food security
    A report by the High Level Panel of Experts on Food Security and Nutrition (HLPE) of the Committee on World Food Security
    2013
    In October 2011, the CFS requested the HLPE to undertake: “a comparative study of constraints to smallholder investment in agriculture in different contexts with policy options for addressing these constraints, taking into consideration the work done on this topic by IFAD, and by FAO in the context of COAG, and the work of other key partners. This should include a comparative assessment of strategies for linking smallholders to food value chains in national and regional markets and what can be l earned from different experiences, as well as an assessment of the impacts on smallholders of public-private as well as farmer cooperative-private and private-private partnerships” (CFS 37, Final report, October 2011).
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    Book (series)
    Guiding policies and investments to reduce agriculture-led deforestation in Viet Nam
    Expanding beef and dairy sectors, while reducing deforestation risks
    2022
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    The study unpacks the potential, current and future, linkages between beef and dairy development and deforestation, using Nghe An and Ha Tinh provinces in Viet Nam as case study, where the beef and dairy production increases are important and potential impact on the primary forests is of particular concern. It shows how beef and dairy expansion creates demand for additional land, which combined with existing land constraints, increases risk of further deforestation. The study also proposes possible entry points for developing deforestation-free value chains, which are key for decision-makers to enact new policies to overcome the dual challenge of agriculture growth without forest loss, which is likely to intensify if no action is taken.

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