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Large-scale land acquisition study

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Introduction

Acquisition of use or ownership rights to large areas of land for production of agricultural commodities, forest, or provision of environmental amenities by large investors has recently attracted considerable interest. A combination of higher and more volatile global commodity prices, demand for bio-fuels, population growth and urbanization, as well as globalization and overall economic development are likely to imply that such investments will be of great importance in the future. In many contexts, large-scale acquisitions of land highlights renewed interest in plantation-based agriculture that is fuelled by skepticism regarding the effectiveness of market mechanisms to guarantee access to basic food supplies and the belief that large scale production can help modernize the agricultural sector. A wave of press reports illustrates the magnitude of these trends and recent Bank documents refer to tens of millions of hectares being considered for potential acquisition for agricultural production or other forms of natural-resource based use other than mining.

 

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Recognizing that land acquisition and agroenterprise issues are interconnected, the World Bank has adopted a dual-pronged approach in response to this phenomenon: (i) dialogue with governments to define principles, provide guidance, and assess the magnitude of ongoing trends through empirical research; and (ii) a definition of issues, best practices, decision tools, guidelines and codes of practice for governments and investors in land-extensive agriculture.  With respect to item (i), the World Bank has initiated a study on large-scale land acquisition for agriculture and natural resource-based use.  The study will take a phased approach, with the first phase assessing country-level policy frameworks and documenting projects proposed or implemented in the last five years.  If merited, a second phase will involve more in-depth economic and social analysis of one or more projects from the country-level project inventory.

 

A short Note describing the issues involved as well as a Concept Note detailing the hypotheses and objectives of the study are available for further information. In addition, this website will be updated periodically with information on the progress of the research.

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Introduction
Progress with in-country work
Preliminary insights and directions
Implications and next steps
Further information
Disclaimers 

 

Status Report: June 2009

 

Progress with in-country work

Country-level inventories & policy framework: Consultants are working in 15 countries to provide descriptions of the policy framework in a comparable format and an inventory of land acquisitions either for the entire country or a region chosen to be representative of broader trends.

 

Economic and social analysis: 

Pilot in-depth analysis of social impacts and economic parameters of specific cases of large-scale land acquisition is ongoing in a joint effort with other units of the Bank. Results (to include draft manuals of good practice in both areas) will provide a basis for expanding to other countries.

 

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Preliminary insights and directions

Difference between requested and approved: Virtually everywhere, the amount of land requested by far exceeds what has actually been transferred. Interest peaked in mid-2008; since then the financial crisis, drops in commodity prices, and greater scrutiny by host government reduced the extent of land transfers.

 

Investor origin: While press attention focuses on government-sponsored projects of acquisitions by foreigners, these are at best the tip of an iceberg. Even in Africa, local investors from the private sector are at least as important and the issue should be seen in the context of possible broader shifts in global agricultural technology and supply that have not yet been fully appreciated.

 

Lack of good examples: While stating that such deals can have significant benefits has become commonplace, surprisingly few success cases are documented. Failure to do so will make it difficult to make a convincing argument or to generate buy-in for a relevant code of conduct for such investment. 

 

Weak information systems: Weak information systems, lack of contractual detail, and low capacity for enforcement can render good policies ineffective, cause conflict, and lead to non-transparent deals that undermine governance. Helping governments to improve these can be a ‘quick win’ strategy.

 

Property rights: Investments cause less conflict and seem to be more beneficial if property rights over land (at individual or group level) are well-defined. Examples for groups entering into joint ventures with investors provide interesting models. Countries’ desire to attract foreign investment can boost efforts to systematically adjudicate property rights and improve land administration.

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Implications and next steps

Operational follow-up: There is high demand for technical assistance and experience sharing between affected countries, especially on (i) ways to identify suitable land in a participatory way that secures local rights and improves the information basis for investors; (ii) information systems to collect rent or tax land on a consistent basis; and (iii) manuals for economic, social and environmental analysis of proposals to identify and mitigate risks, through focus on key parameters. The project will aim to respond to these needs.

 

Coordination with partners: The work is undertaken in close collaboration with partners in FAO, IIED, and IFAD, as well as a number of other organizations. Team members will be attending various conferences to discuss preliminary results and explore opportunities to use the results from this study to help shape policy and improve the land rights of the poor.

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Further information

For media inquiries, please contact Elizabeth Petheo (epetheo@worldbank.org).

For research inquiries, please contact Mercedes Stickler (mstickler@worldbank.org).

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Disclaimers

Please note that the opinions presented in this website and associated Notes represent those of the authors alone and do not represent official World Bank policy on these issues.  The World Bank does not yet have a position on the trends being explored by this study. 

Please be advised that, due to the highly sensitive political nature of the data, results will only be reported in aggregate at the country level after official approval from the appropriate authorities.

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