Workshop “Responsible land governance and domestic investments into land and agriculture" - final report and presentations

On 29 June 2017 DEVCO sponsored a one-day workshop in Brussels entitled “Responsible Land Governance in the Context of Domestic Investments into Land and Agriculture.” Experts on land and agriculture joined representatives of donors, implementing partners and CSOs to discuss investments in land and agriculture in developing countries by wealthy or influential domestic individuals or companies.

Participants noted that most of the attention paid to the “land rush” has focused on foreign investment. For this reason, comprehensive data on the characteristics, impact and drivers of domestic investments is lacking because such investments have been ignored to some extent. However, there is evidence that domestic investors account for a significant share of the land area acquired for agricultural investment purposes in many low-income countries.

Evidence from several countries suggests that domestic investors tend to be elites, such as government officials, civil servants and business people and they are mostly men. Moreover, experts stressed the fact that often it is difficult to categorize investors as foreign or domestic because many investment companies have both national and international ownership.

The available studies indicate that investments appear to be driven by several factors: (1) the desire to partner with a foreign investor; (2) land speculation; (3) an attempt to profit from high food prices and increasing demand from more affluent consumers for better food; and (4) to take advantage of government policies and programs favoring commercialized agriculture.

Participants noted several policy concerns arising from domestic investments: (1) possible negative impact on smallholders; (2) potential to undermine customary tenure and institutions; (3) low productivity of domestically-owned farms run by those without experience in agriculture; and (4) possible negative impact on women and marginalized groups.

The discussion in the afternoon focused on the wide range of instruments that have been developed in recent years to guide, facilitate and monitor more responsible international investments in agriculture and the extent to which such instruments are relevant to domestic investors. Participants considered whether it may be best to take an investment approach (making tools available to specific investors or investments) or a systemic approach (working to improve overall governance of domestic investments) or perhaps some combination of the two. Speakers contributed several presentations on experience in various countries related to the governance of domestic investments.

Ultimately, the participants did not reach any specific consensus on the suitability of existing instruments to domestic investments in agriculture. There did appear to be agreement that: (1) much more research must be done to gain a better understanding of the nature, extent and impact of domestic investments in agriculture; (2) because domestic investments are so numerous and tend to be smaller than foreign investment, it may not be feasible to try to influence their behavior through the existing responsible investment instruments; rather, an approach that relies on those instruments that cover broader governance aspects (such as the VGGT) may be more effective; and (3) there are many approaches to improve governance of domestic investments that could be adopted, including incorporating responsible land goverannce principles and guidance into national legal frameworks and improving the enforcement of these mechanisms.

Suggestions for future action included: (1) engage in additional research to better understand the impact of domestic investments; (2) seek ways to engage with domestic investors to build awareness of responsible investment principles, (3) ascertain whether existing instruments may be useful to them and develop ways to help such investors make more productive and socially sustainable investments; and (4) continue to support governments in developing countries to improve their legal frameworks on responsible investments and implementation thereof.