OECD Global Standard blog | 9 July 2009
By Kanayo Nwanze
President of the International Fund for Agricultural Development (IFAD)
The global food security crisis of 2008 led to a new and interesting development wherein land poor countries began to acquire large tracts of land in land-rich countries to invest in food production for their domestic markets. This phenomenon has often been labelled as "land grabs" and a number of commentators have pointed to the danger such investment may pose to poor farmers in developing countries.[1] As this phenomenon is likely to continue in the coming years -- in part triggered by growing population pressures and climate change -- it is important that appropriate international guidelines or global standards are developed to govern such investments.
I believe that properly structured such land deals can lead to a potential win-win situation for all concerned. Properly handled such large foreign investments have the potential of supporting broader agricultural development in African countries by providing resources for investments in better roads, irrigation, technology and training. If done the right way, land deals can improve the lives of poor rural women and men. They can create jobs, infrastructure, and market access and help poor rural people lift themselves out of poverty.
Global standards to guide such investments should include the following elements:
- The voices of poor rural people must be heard - including the most vulnerable, whose land tenure is often insecure. The principle of free, prior and informed consent should be a cornerstone of government policy.
- Governments in the land-rich countries need to provide a clear legal and regulatory framework in which foreign investors operate, and through which land deals can be monitored.
- Innovative forms of collaboration between the large commercial farms and smallholder farmers should be encouraged. Foreign investors can provide investments for infrastructure, including roads and irrigation, the provision of fertilisers, seeds and other inputs, to enable the farmers to increase their production sharply. In return, in a medium-term arrangement, the farmers would provide assured supplies on agreed market-related prices.
IFAD is supporting a pilot initiative along these lines in Ghana. Its lessons could serve as a model, which could be replicated and up-scaled in other countries
[1] IFAD and the FAO supported an important study on this phenomenon prepared by the International Institute for Environment and Development entitled "Land grab or development opportunity? Agricultural investment and international land deals in Africa" (http://www.ifad.org/pub/land/land_grab.pdf) It has also supported the FAO-led Voluntary Guidelines for Responsible Governance of Land and Other Natural Resources.