Thumbnail Image

Challenges and opportunities of foreign investment in developing country agriculture for sustainable development










Also available in:

Related items

Showing items related by metadata.

  • Thumbnail Image
    Document
    Impacts of foreign agricultural investment on developing countries: evidence from case studies 2014
    Also available in:

    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.
  • Thumbnail Image
    Book (stand-alone)
    Identifying opportunities for climate-smart agriculture investments in Africa 2012
    Also available in:
    No results found.

    The agriculture sector in Africa is being called on to increase food production to meet the food demand for a growing population. This formidable challenge will be further exacerbated by climate change which will have significant impacts on the various dimensions and determinants of food security. African policymakers are thus challenged to ensure that agriculture contributes to addressing food security, development and climate change. Through the Comprehensive Africa Agriculture Develop ment Programme (CAADP) under the New Partnership for Africa’s Development (NEPAD) of the African Union (AU), a number of countries prepared National Agriculture and Food Security Investment Plans (NAFSIPs) to provide opportunities to integrate the scaling up of practices that potentially benefit development, food security and climate change adaptation and mitigation into an existing continental and countryowned sustainable agriculture development framework. This paper proposes a method ology to examine the potential of existing NAFSIPs to generate climate change benefits. A rapid screening methodology is presented and applied to 14 NAFSIPs, all of which include agricultural development programmes/ sub-programmes that benefit both adaptation to slow-onset climatic change and extreme events, and climate change mitigation. On average, about 60 percent of the activities planned are expected to generate climate benefits in terms of slow-onset climate change, 18 percent ad aptation to extreme events, and 19 percent climate change mitigation.
  • Thumbnail Image
    Book (stand-alone)
    A contribution to the analyses of the effects of foreign agricultural investment on the food sector and trade in Sub-Saharan Africa 2011
    Also available in:
    No results found.

    The growing interest of foreign investors in Sub-Saharan Africa’s vast agricultural potential raises concerns about the investment impacts on the food sector and the economy at large. This paper analyzes the likely effects of foreign agricultural investment in Sub-Saharan Africa with a focus on the impacts on the food sector by simulating the effects of the reduction of investment risks triggering an entry of foreign investment flow. The analysis employs the Global Trade Analysis and Policy (GTA P) model and simulates three investment scenarios that affect land uses, labour market conditions, and technological progress. The data are aggregated over three main sectors: food, manufacturing and services. Simulation results show that although foreign agricultural investment in Sub-Saharan Africa would lead to an increase in food prices and a decline in domestic food supply that would in turn cause an increase in food imports, the increases in factor returns and in employment would boost hou seholds’ real income to offset the loss from higher food prices. The positive income effects would be magnified if the agricultural investment brought technological progress to the food sector. Moreover, foreign agricultural investment would widen the current account deficit but improve terms of trade, whose effect on total welfare is large. The improvement of the terms of trade in the model is mainly due to a strong increase in the export price of tradable goods from the manufacturing sec tor. The service sector would unambiguously experience the strongest output growth as it benefitted from the formation of capital goods. Overall, the simulation results show that entry of foreign agricultural investment would generate a net welfare gain.

Users also downloaded

Showing related downloaded files

No results found.