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Impacts of foreign agricultural investment on developing countries: evidence from case studies










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    Document
    Gender opportunities and constraints in inclusive agribusiness models
    The case study of Unifrutti in Mindanao, Philippines
    2015
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    As many developing countries, Philippines is making vigorous efforts to attract and facilitate private investment in agriculture with the expectation that such investment will contribute to production growth, poverty reduction and food security. However, recent research has highlighted that investments do not necessarily produce positive results. Several studies have shown that certain types of investment, in particular large-scale land acquisitions, have led to negative effects such as displaci ng small farmers, undermining or negating existing land and labour rights, reducing food security and increasing livelihood vulnerability. Conversely, investments adopting inclusive business models and respecting rural populations’ rights seem to be more beneficial for small farmers and workers. The cases analysed in this report show that the investment models and contractual arrangements implemented by Unifrutti -a major private company producer, processor and exporter of pineapple and banana i n the Mindanao Region- have had positive implications for the livelihood of the rural communities involved. However, the study also demonstrates that women and men have not equally benefitted from the investment opportunities. An important lesson learned is that gender neutral practices and approaches do not necessarily lead to gender equitable results. Instead, both investment schemes and policy frameworks need to recognize and address the differentiate needs and priorities of women and men to ensure more gender equitable distribution of benefits.
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    Book (stand-alone)
    Extraterritorial investments in agriculture in Africa: the perspectives of China and South Africa 2020
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    The 2008 global food price crisis, and the resurgence of food prices in 2010-2011, caused both widespread concern and expectations. On the one hand, countries whose food supply depends on procuring food from international markets saw food price spikes as threats to their national food security. On the other hand, investors saw in these price spikes an opportunity to make profitable investments in agriculture. Either as threat or opportunity, food price spikes raised interest in Africa, whose lands are fertile and have unrealised potential. Concerns of a possible land acquisitions in Africa, and in particular the impacts of Large-Scale Land-Based Investments in Agriculture (LSLBIA) on local communities, became prominent policy and academic themes. Unfortunately, quantifying the phenomenon has proved hard due to the difficulty of finding empirical evidence. As a result, debates are either theoretical or based on anecdotal evidence. This publication thus explores a different path, and explores the reasons why entities from China and South Africa were interested in investing in African agriculture. This publication examines the reasons why investors were interested in Africa, and the relationship that these bear to The Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (the ‘Voluntary Guidelines’ or ‘VGGT’). While primarily aimed at governments, the VGGT also contain important provisions that are applicable to the private sector. They focus on helping investors pursue their projects in ways that recognise and respect legitimate tenure rights and human rights. In addition, the VGGT also contain provisions and encourages good practices for responsible investment in land, forests and fisheries. The VGGT are a valuable tool for helping investors minimise risk while also safeguarding the rights of local communities. China and South Africa represent important sources of LSLBIA in Africa, although the bulk of such investment comes from western countries. Their investment may intensify in the future for a variety of reasons. First, China has the third largest land area in the world but its expansion through additional land use is limited. Second, the dual agricultural economy of South Africa is preventing commercial farming located in well-endowed areas from expanding into remote, resource-poor areas where small-scale subsistence-based production is prevalent. This publication assesses the extent to which selected investors from China and South Africa and the governments of those countries have adopted the best practices represented by the VGGT in relation to LSLBIA in
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    Book (stand-alone)
    Operationalization of fish auction market feasibility study 2011
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    With an EEZ of 1.9 km2, the Government of Mauritius envisions the land based oceanic industries as a strategy for extracting more value from the ocean to spearhead sustainable economic growth. Development of the seafood hub, the marine fisheries and aquaculture are the landmarks of the aforesaid strategy. In 2007 the Ministry of Fisheries and Rodrigues (MOFR) has precipitated the development of an electronic fish auction market at Fort William without any feasibility study and/or a business mode l. Actually construction works are completed and installation of electro-mechanical and refrigeration equipment is underway at a total cost of Rs 35 million. An additional capital investment of about Rs 15 million would be required for the acquisition of an electronic fish auction system and associated equipment to enable the operationalization of the facility. The parent Ministry reckons that it is not within its prerogative to be directly involved in the operationalization of the fish auction market on account the commercial / business orientation of the latter. It intends to procure a private operator-cum-investor to operationalize the facility through a Public-Private Partnership model. The present study has been commissioned by the MOFR to perform a techno-economic appraisal of the project in view to chart out appropriate operationalization strategies for the project. The fish auction at Fort William is designed to deal in fresh / chilled fish harvested by the domestic fisheries b ut an in- depth supply analysis has concluded that this is not feasible for various reasons. All the same, the facility is not adequately located and equipped to auction frozen by-catch of foreign tuna long line vessels which is available in sufficiently large quantities at the fishing port. Therefore the project is techno-economically unsustainable unless it is overhauled. According to the By-catch regulation 2004, all licensed foreign tuna long line vessels have an obligation to land their by- catch at the Agricultural Marketing Board (AMB) Cold Storage Facility at the fish docks while non-licensed visiting vessels have no obligation whatsoever unless the market conditions are attractive. The total annual supply of frozen by-catch in Mauritius estimated between 4000 and 9000 metric tonnes. To take advantage the market opportunities, the business model of fish auction facility to be adjusted to frozen by-catch trade and in this process the 300 tonne AMB cold storage facility at the fis h docks of Fanfaron will have to be amalgamated with the FAM. The refrigeration system installed at the FAM will be operated as an Ice-flakes Production Unit on a commercial basis. It will cater for effective demand of ice-flakes arising from the artisanal and semi-industrial (chilled) fisheries as well as fish marketing structures in its surrounding. However the administrative centre including the electronic backbone of the auction system will stay at Fort William. S.W.O.T analysis of the proje ct has concluded on two critical points which are: -The frozen by-catch is a secured business under the By-catch Regulations and the Licensing Policies of foreign tuna long line vessels. Government commitment to this project is a key determinant for the success of the project. -The major weakness of the project is the lack of local expertise and familiarity in electronic fish auction that can be obviously compensated by a proven foreign operator –cum-investor through a suitable PPP model or a st rategic alliance by means of a Joint Venture. investment The feasibility study of the FAM is prepared in a conservative approach. The total Public Investment is re- adjusted at Rs 25 million to reflect its actual market value. Additional Private Investment is estimated at Rs 15 million. The opportunity cost of long term public borrowings is taken at 6%, which is slightly higher than current financial market rates and that of the private project loans, at 10%. A weighted mean discounting factor o f 7.75 % is used to examine the Net Present Value (NPV), Internal Rate of Return (IRR) and Break-Even (B/E) points of the project. The life cycle of the project is assumed at 15 years. Supply of by-catch supply for the first year of operation is projected at 1500 metric tonnes with and increment of 10% per year for the consecutive years. The mean market price of by-catch fish species is taken at prevailing international ex-vessel price including a price inflation rate of 5% per annum. Auction fe e is projected at 10 % of the primary sale price. The Ice-flakes Production Unit (IPU) will operate at 50% of its installed capacity which is minimal.

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