Präsentation fh sesssion2_gesamt

Lecture Series

Monday, 14.11.2011

Con icts over land and water: The role of The Water-Energy-Food
large scale investors in Africa
Security Nexus
Winter Semester 2011 / 2012

Dr. Michael Brüntrup,
German Development Institute / Deutsches Institut für
Entwicklungspolitik
Tanja Pickardt
Deutsche Gesellschaft für Internationale Zusammenarbeit

Conflicts over land and water:
The role of large scale investors in Africa

Michael Brüntrup, DIE

Lecture Series „The Water-Energy-Food Security Nexus“
Winter Semester 2011 / 2012
Cologne, 14. November 2011
2

© 2008 Deutsches Institut für Entwicklungspolitik 2

Background – reasons for growing large scale land acquisitions
• The boom of mainly government-induced biofuel policies in several countries
• Rising world food market prices since about 2005, particularly since food price
crisis 2007/08
- food security
- profits
• Search of financial investors for alternative investments, possibly long-term,
stable, and countercyclical to increasingly volatile and risky traditional financial
products
• Sale of certificates for reducing emissions from deforestation and forest
degradation (REDD)
• With rising oil and energy prices, biomass becomes an interesting (not policy
induced) feedstock for energy production and petrochemical industry
• Land speculation
• Globalisation of agricultural trade (demand, information, standards ..)
• Technology development (overcoming small farmer advantages)

3

© 2008 Deutsches Institut f¸r Entwicklungspolitik 3

Actors involved in LSLA
Inter- Transnational organisations
National
Investor
Government
sector structures
National
NGOs

Rural households
-displaced -workers Districts
Traditional/ -losers of -contract
Lokal indigenous access to NR farmers
authorities -other locals Local
-downstream
communities
water users -in-migrants
4


Opportunities of LSLA
• Access to new, high price, high value addition markets
• Large marketing capacities
• Access to and favourable conditions to capital/credit, some of which handed
over to local actors (contract farming)
• Infrastructure investments, some for co-use by local actors
• Access to and development of new technologies, some of which handed over
to local actors (contract farming)
• Better soil fertility management (nutrient balance)
• Co-generation of and better adaptation to public regulation and private
standards
• New networking opportunities
• Formal, often relatively well paid and secured jobs
• Indirect effects (up- and downstream sectors, demand)
• Corporate Social Responsibility (CSR) projects
• Local taxes and levies

5


Opportunities
standards

6


Dynamics of agricultural trade, Subsahara
Africa and World

Aksoy / Akaman (2010)
7


To capture more of value addition in a market chain,
farmers need to invest and organise

UNCTAD (n.d.)
8


Agricultural commodity prices are only a fraction of total food cost in
agro-industry value chains (example: USA)

Rozanski / Thompson1 (2011)

9


To access many of these markets, supplies have to be …

competitive
of constant, reliable high quantity
of high, constant apperance and quality
increasingly traceable

10


Dynamics in markets

11


Importance of domestic markets in SSA

Romanik (2006)

12


But also these markets are …

Romanik (2006)

increasingly semi-formal and formal (supermarket) channels
screened and controlled for quality and conformity

13


Opportunities
• Access to and favourable conditions to capital/credit, some of which
handed over to local actors (contract farming)
• Co-generation of and better adaptation to public and private standards

14


Smallholders are constrained by access to and
unfavourable conditions for capital
• High transaction costs for both borrowers and lenders
• Generally lower population density and dispersed demand
• Often limited economic opportunities available to local populations
• High risks faced by potential borrowers and depositors due to the variability of incomes,
exogenous economic shocks and limited tools to manage risk
• Seasonality – potentially affecting both the client and the institution
• Heavy concentration on agriculture and agriculture related activities exposes clients and
institutions to multiple risks, both idiosyncratic (one household) and covariant (entire region or
country)
• Lack of reliable information about borrowers
• Lack of market information and/or market access
• Weak institutional capacity – including poor governance and operating systems, low staff and
management skills
• “Crowding out” effect due to subsidies and directed credit
• Increased risks associated with the concentration of a portfolio on agriculture activities that are
most prevalent in the area
• Lack of adequate or usable collateral (lack of assets, unclear property rights)
• Risk of political intervention, which can undermine payment morale through debt forgiveness
and interest rate caps
• Inhospitable policy, legal and regulatory frameworks
• Undeveloped legal systems, inadequate contract enforcement mechanisms
• Undeveloped or inadequate infrastructure Andrews (2006)
• Land held may be too small to be sustainable or located too remotely to be reached efficiently
15

• Individuals may be dependent upon only one crop with no other external sources of income12

Opportunities
standards

16


Infrastructure is indispensable, costly and beyond
smallholder, often even government capacities

African Development Bang Group (2011)

17


Opportunities
• Access to and development of new technologies, some of which handed
standards

18


Typical improved technologies and obstacles to
adoption by African smallholders

Odoemenem / Obinne (2010)
19


Opportunities

20


Also under low-input smallholder agriculture,
soil degradation can be a serious problem

Reich /
Eswaran (2004)
21


Opportunities

22


Opportunities

23


Opportunities

24


Agricultural wage labour is paid badly, but
they earn better than many smallholders
“From Mozambique to Malawi, Zambia to Ethiopia, sugar offers a lifeline for
countless families who work on sugar plantations or grow sugar themselves. They
earn enough to send their children to school, to buy food to feed them, and to
obtain at least some of the essential medicines they need to treat them when they
fall sick. “

In Sofala province in central Mozambique, employment figures have doubled since the
rehabilitation of two large sugar estates. As a result of trade in sugar, Sofala has been
transformed from the province with the highest poverty headcount in 1996-97, to
the province with the lowest incidence of poverty in 2002-03. This success story
could be repeated across the continent.
‘Cutting sugar cane is difficult. I was not
“Salaries in the sugar sector are low. very good when I started but I am better
This is particularly true for farm now, faster. At the end of six months, if
labourers and even more so for they say I can keep working then I will. I
labourers employed by smallholder need to earn money to support the family.
farmers. The latter are generally Things are difficult here – I still get
employed on far worse terms than blistered hands and the money is not really
workers on the sugar estates.”
Oxfam (2004)
enough, but I am glad to have a job.’
25


Opportunities

26


Large scale farms can create vibrant rural economies
through second-round effects, CSR and local taxes
Oxfam (2004)

27


Threats
• Unequal power and knowledge of negotiation partners (agro-industries, farmers,
communities, governments)  unfair contracts
• Detrimental interference of governments (corruption, neo-patrimonialism, politics),
but also over-protection
• Displacement of non-permanent users of natural resources (vegetation, water,
culture, )
• Expulsion of land owners without proper compensation
• Environmental degradation, particularly biodiversity, but also water, pesticides, soils
• Structural monocultures,  dependencies of workers and outgrowers +
dependencies of sub-regions
• Unbalanced distribution of profits, inequity
• Investment ruins with degraded ecological, economic and/or social environments

28


Investor – rural population relations
• Land reallocation
• Jobs (quantity, quality, wages, origin/local preferences)
• Inclusive smallholder schemes
• Contracts (markets)
• Quality and process management
• Credit
• Inputs (including water)
• Production
• Diversification
• Surplus sharing
• Capital participation (land for shares)
• Corporate Soicial Responsibility (CSR) projects
• Mutual political protection/advocacy
• Neo-patrimonial, patron-client relations
• Food availability components (attention to local suppliers!)
29


Time dimension and problem/conflict hotspots

F a i l u r e

30


Government responsibilities
Principles (human right to food): Respect, protect, fulfil
P Participation
A Accountability
N Non-Diskrimination
T Transparency
H Human dignity
E Empowerment
R Rule of Law
• Facilitate prior informed consent:
• (Help) Check large investors (reputation, demos, finances, business plans…)
• Provide model contracts
• Facilitate negotiations
• ….
• No disappropriation for private interests, fair compensation
(land for land, compulsory CSR, local taxes and levies ….)
• Policy coordination and key infrastructure (see below)
• International treaties, agreements, contracts (see below)
• Dispute settlement
(monitoring, bankruptcy laws, ombudsman, funds, courts, mediation, advisory
services, …)
31


Policy areas for influencing impacts of
large scale land investments
Taxation
Labour
Economic Outward oriented policies
development (investment, trade, etc.)
Food Security
Investor contracts
Rural development Infrastructure
Land use planning
Land+Water+other NR Input/Output
markets
Agriculture Environment

Corporate Social Responsibility; CSR

Primary
produc7on
Processing
Marke7ng

32


Area 1: The rural development and food security
complex
• Coherent, inclusive policies and strategies
(food security > fair benefit sharing > inclusive growth)
• Farmer and community organisation empowerment
• Research (for supporting planning and decision making)
• Rights on land and natural resources and their transfers
(property and rights, registration, valuation, taxation, markets, litigation, …)
• Water and other natural resources management
• Multi-sector, multi-level land use planning
• Agricultural value chain development
• Linkage programmes
• Reliable food markets (infrastructure, information, storage, …)
• Rural development hubs
• Special regards on vulnerable, displaced and losing groups

33


Area 2: Investment Agreements and Investor Contracts

• Pre-establishment Rights
• Exclusion of Performance Requirements
• National Treatment
(Deviations from)
• Most Favoured Nation Treatment National Policies
• Fair and Equitable Treatment
• Prohibition of Expropriation without compensation
• Right to Products Export
(Deviations from)
• National Security (food security) Investment
• Safeguards Agreements
• Dispute Settlement
• Local content rules
Stabilisation
• Social and environmental conditions clauses
• Infrastructure, compulsory CSR
• Risk insurance/set aside funds (for mitigation failure)

34


Opportunities for Development Cooperation
• Support of international Code of Conduct
• Support for formulation of investment agreements
• Support to creating specific Corporate Social Responsibility
• Support to sectoral initiatives and (soft) standards
• Support for creating international transparency and “intelligence”
• Support of national policy coordination, including transparency
• Support of (selected) national policies and strategies
• Support of investor contract design, moderation and arbitration of contract
negotiations and implementation
• Advocacy for rural communities and neglected interests
• Selective support of contract implementation, e.g. by support of local farmers
and communities in making best use of new opportunities and avoid or mitigate
negative effects, connecting research, extension, BDS and investor schemes

35


Conflicts over land and water: The role of large scale
investors in Africa - Risks

Tanja Pickardt
University of Cologne, 14 November 2011

Structure

• Background: Investments in land
 Extent

 Risks

 Reasons
for
low
level
of
partcipa7on
of
the
popula7on

– Examples from the field
 Mali

 Namibia

„Land Grabbing“: Media attention

Global in-
vestment
in land

Source: HLPE 2011, p. 15.

Large-scale land acquisitions and leases, reported area

In developing countries, 227
million hectares of land has
been reported to be sold or
leased since 2001.
(Oxfam / Land Matrix Partnership 2011)

Regional distribution and production orientation of
large scale investments in land

Source:
Deininger et al.
(2010)

Actor
Mo(ve
Country
of
origin:
Country
of
origin:

characteris(cs
examples

State
Sa7sfy
the
rapidly
rising
demand
High
popula7on
pressure
South
Korea,
Japan,

State-‐owned
for
food,
fodder
crops
and
Strong
economic
growth
China,
Vietnam,

enterprises
agricultural
commodi7es
South
Africa

State
Reduce
dependency
on
world
Food
impor7ng
countries
with
Bahrain,
Libya,

State-‐owned
market
by
cul7va7ng
own
food
limited
land
and
water
Kuwait,
Katar,
Saudi

enterprises
abroad
resources,
but
high
capital
Arabia

endowment
thanks
to
oil

extrac7on

State
Reduce
dependency
from
limited
Promo7on
instruments
for
USA,
EU
member

available
oil
resources
investments
from
industrialised
states

Mi7gate
climate
change
eﬀects
countries

(focus
on
renewable
resources)

Private
Sector
Secure
land
for
the
cul7va7on
of
Entrepreneurs
from
USA,
EU
member

agricultural
commodi7es,
to
industrialised,
emerging
and
states,
emerging

proﬁt
from
high
world
market
developing
countries,
and
developing

prices
investment
agencies
countries

Private
Sector
To
realize
short
term
gains
from
Entrepreneurs
from
USA,
EU
member

land
specula7on
industrialised,
emerging
and
states,
emerging

developing
countries,
and
developing

investment
agencies
countries

Large-scale land investments: Risks

• Food
security
and
water
supply
endangered:
Poten(al
human
right

viola(on

• Rese]lement
without
compensa7on,
forced
evic7ons:
Human
right

viola(on

• Aggrava7on
of
land
conflicts:
Increased
rural
exodus

• Local
jobs
at
risk:
Deteriora(on
of
livelihoods

• Race
to
the
bo]om:
Nega(ve
impacts
on
human
livelihoods,

environment,
ecosystems

• Discrepancy
between
the
availability
of
produc7ve
land
and
the
supply

of
water
for
irriga7on:
Overconsump(on
of
water,
nega(ve
impacts
on

downstream
users,
nega(ve
impacts
on
ecosystems

• Insufficient
contractual
provisions:
Nega(ve
effects
on
na(onal

economies

 Many
of
those
risks
occur
due
to
a
lack
of
par7cipa7on
of
the

affected
popula7on
in
decision-‐making
and
nego7a7on

Reasons for a lack of participation of the local population in
negotiation, planning and implementation

• Informa7on
asymmetry
and
power
imbalances
between
the

investor,
the
government
and
the
aﬀected
popula7on
(the
local

popula7on
is
ocen
not
informed
about
their
rights)

• Lack
of
informa7on
on
the
land
rights
situa7on
(statutory
law
vs.

tradi7onal
land
rights)
as
well
as
on
sectoral
plans

• Corrup7on

• Level
of
par7cipa7on:
ocen
communi7es
are
“consulted”
and
give

their
consent
without
being
properly
informed
and
involved
in
the

planning
process.
Principle
of
free,
prior
and
informed
consent
?

What
level
of
par7cipa7on
is
adequate
?

• Not
all
interest
groups
do
have
legi7mate
representa7ves,
if

par7cipa7on
takes
place

Case
study
1:
Interior
Delta
of
the
Niger
River,
Mali

Source: http://fr.wikipedia.org

Investment
projects

Source: A. Sangaré: Etude rélative à l’établissement d’un bilan des ressources en eau

Water
demand
and
contractual
arrangements
in
the
Interior
Delta
of

the
Niger
River

• 100
000
out
of
1.8
Mio.
ha
presently
cul7vated
(up
to
350.000
ha
are

es7mated
to
have
irriga7on
poten7al
)

• The
total
number
of
awarded
contracts
is
es7mated
to
cover
761.000
ha.
4

contracts
with
interna7onal
investors
are
known
to
be
signed,
with
a
total

surface
area
of
156.000
ha.
All
four
investments
have
commenced
or
are

about
to
start.

• The
new
investments
foresee
two
cul7va7on
periods
/
year
for
rice,
other

cereals
and
sugar
cane

• Suﬃcient
water
availability
during
rainy
season
(June
–
December)

BUT

• Water
deﬁciency
in
dry
season
(January
–
Mai)
already
at
present:
cri7cal

mark
(40m³/s)
is
regularly
exceeded
(especially
due
to
sugar
cane
and
rice

cul7va7on)

• Only
2
of
the
exis7ng
investment
contracts
make
provision
for
water

rights;
those
require
more
than
half
of
the
dry
season’s
cri7cal
reserve,
as

well
as
exclusivity
of
service
in
emergency
situa7on

Case
study
2:
Overlapping
sectoral
planning,
unclear
responsibili7es
and
lack

of
informa7on,
Namibia

Caprivi
Region

?

Small
Scale
Commercial

Farming
Areas

Na7onal
Park
and

Conservancies

Irriga7on
Scheme

Agro-‐industrial
Planta7on

(Interna7onal
Investor)

Thank you for your attention !

Präsentation fh sesssion2_gesamt

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Andere mochten auch

Andere mochten auch (8)

Ähnlich wie Präsentation fh sesssion2_gesamt

Ähnlich wie Präsentation fh sesssion2_gesamt (20)

Mehr von bfnd

Mehr von bfnd (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Präsentation fh sesssion2_gesamt