Boosting agricultural productivity and investing in agriculture are essential to food security for a growing population in which one in seven people goes hungry. They are important parts of the World Bank's work to end global poverty.
The food crises of 2008, 2010, and 2012, as well as continuing food price volatility, underscore the vulnerability of the world’s food system. The world will need to feed 9 billion people by 2050. A sobering 70 percent increase in global agricultural production will be necessary to feed them. Unless higher small and large crop yields can be reached, many people will remain hungry and trapped in poverty.
Now, more than ever, the world needs to increase investment in agriculture, which is two to four times more effective in raising incomes among the very poor than growth in other sectors.
This investment must come from the public and private sectors. The FAO estimates that private sector agricultural investment alone, including foreign direct investment, must rise by nearly 50% (from some $142 billion per year to $209 billion) in order to feed a growing population.
The World Bank Group
does not support speculative land investments or acquisitions which take advantage of weak institutions in developing countries or which disregard principles of responsible agricultural investment.
Investment in agriculture and rural development is a priority for the World Bank Group, which boosted agriculture and agriculture-related investment to over $9 billion in FY12, with a strong focus on smallholder farming. The World Bank Group supports country efforts to improve agriculture’s contribution to food security through: raising agricultural productivity; linking farmers to markets; reducing risk and vulnerability; improving nonfarm rural employment; and making agriculture more environmentally sustainable, as well as a source of positive environmental services. In addition, we need to focus on reducing waste in supply chains.
Both smallholder and large-scale agriculture are necessary to feed the world’s poor
Both smallholder and large-scale agriculture are necessary to boost productivity and produce enough food to feed the world’s poor. In order to move from subsistence to commercial farming, 1.5 billion people who rely on small farms need access to knowledge, assets, credit, markets, and risk management that can come from larger-scale agricultural enterprises.
The need is particularly great in Africa, where challenges include infrastructure, policy, land tenure and degradation, and access to finance, technical assistance and inputs for smallholders.
Rising interest in farmland requires vigilance
Interest in farmland is rising due to rising food and fuel prices, biofuel mandates, food security concerns, climate finance incentives, and worries about climate change effects or scarce resources. There is concern that the remaining areas of cultivable land that are currently mostly used under customary rights is vulnerable to speculators or unscrupulous investors, who exploit smallholder farmers, herders and other local people who lack the power to stand up for their rights.
The World Bank Group shares these concerns, in particular, about the danger of neglecting local people’s rights. Questions have been raised about the extent to which such large-scale land acquisitions provide long-term benefits to local people and contribute to poverty reduction and sustainable development
Working with larger-scale farming systems is one of many tools to promote sustainable agricultural and rural development, and can directly support local communities and smallholder productivity – but this must be done right. When undertaken with appropriate safeguards and inclusion of small holders and communities as beneficiaries, large agribusiness can bring development benefits through economies of scale, market discipline, and accountability to consumers. Production at scale has the potential to lower the price for essential food; improve productivity and efficiency in the use of fertilizers and water; and enable investments in innovation that may be too costly for small farmers to adopt.
Land Tenure & Access:
Examples of Our Projects
In Indonesia , the Bank supported post-tsunami recovery efforts in Aceh through rapid community mapping and land registration and titling, introducing the concept of joint titling and gender recording. A total of 222,628 land title certificates were distributed to land owners after the tsunami, 63,181 of them to women, either individually or as joint owners with their spouses.
In Bolivia , the Bank helped update the 1952 land reform law, establish a new tenure regime for indigenous people, and modernize the land administration system. As a result, 2.8 million hectares of land were surveyed and titled – of these, 588,000 hectares were for indigenous peoples’ communal territories.
In Malawi , the Community Based Rural Land Development Project was launched in 2004 to generate greater opportunities for Malawi’s rural poor. By 2010, 15,000 poor families had access to land. Gross margins per hectare had increased ten-fold for hybrid maize from the pre-location phase.
In Brazil, the Land-Based Poverty Alleviation Project was established to address one of the major factors underlying poverty in the countryside: inadequate access to land by the rural poor. In this project, families formed groups that negotiated directly with willing sellers to purchase suitable properties and obtained financing and technical assistance to improve the land's productivity. More than 55,000 families gained access to about 1.2 million hectares of land.
However, large-scale land acquisitions pose certain risks. The World Bank Group is especially concerned that large-scale land acquisitions do not disadvantage smallholder farmers, who depend on land for their livelihoods. The World Bank Group does not support speculative land investments or acquisitions which take advantage of weak institutions in developing countries or which disregard principles of responsible agricultural investment.
Working to protect the rights of existing land users and to help secure benefits for smallholder farmers
The World Bank (IBRD and IDA) interacts primarily with governments to increase agricultural productivity, strengthen land tenure policies and improve land governance. More than 90% of the World Bank’s agriculture portfolio focuses on the productivity and access to markets by small holder farmers. Ten percent of our projects focus on the governance of land tenure.
Similarly, investments by the International Finance Corporation (IFC), the World Bank Group’s private sector arm, including those in larger scale enterprises, overwhelmingly support smallholder farmers through improved access to finance, inputs and markets, and as direct suppliers. IFC invests in environmentally and socially sustainable private enterprises in all parts of the value chain (inputs such as irrigation and fertilizers, primary production, processing, transport and storage, traders, and risk management facilities including weather/crop insurance, warehouse financing, etc.). IFC due diligence and Performance Standards, which address issues ranging from environmental and social impacts, to labor practices, to assuring future livelihoods for existing users, apply in all cases. IFC’s Performance Standards were recently strengthened to address many risks associated with land investments and are widely regarded as best industry practice.
IFC investments made directly in the agricultural sector have already delivered substantial economic benefits, including helping provide jobs for 37,000 people, including 11,000 women, and reaching 4.2 million farmers (equivalent to 20 million people supported). In addition, IFC-invested companies are expected to source more than $4.6 billion of goods and services from local companies and contribute more than $287 million in tax revenues in FY12.
Having a strong anchor organization or supply chain intermediary achieves a multiplier effect in adopting new practices, setting standards, and expanding market access. For example, IFC provided $74 million in loans and equity to Jain Irrigation, India’s producer and distributor of drip irrigation equipment. Jain Irrigation introduced drip irrigation to India’s agriculture and has grown to become the world’s second-largest player in the micro-irrigation industry. The use of Jain’s drip-irrigation technology, which allows water usage to be cut by 40 percent, has resulted in water savings equal to the annual water consumption of more than 10 million households. In addition, it has tailored its business model to include the poor—creating a supply chain of 25,000 small farmers, 90 percent of whom work with less than one hectare of land. The use of drip irrigation has also led to efficiency gains that have raised annual incomes for small farmers by up to $1,000.
Working for policies that recognize all forms of land tenure
The World Bank supports and consistently recommends government policies that implement systematic land surveying and titling programs that recognize all forms of land tenure: public and private; formal and customary, including those of pastoralists or others with weak formal rights; collective and individual, including women’s’ rights; and rural and urban.
The World Bank has supported government’s efforts to strengthen land policies and administration systems in member countries for over four decades. Since 1990, the Bank has provided finance of US$2.7 billion to more than 60 land administration projects around the world. At the request of individual countries, we provide support through information and research, and by working with governments to implement sound policies.
As of August 2012, we have 23 projects under implementation supporting improved governance of land tenure with IBRD/IDA commitments of US$ 964 million. There are 12 projects in Eastern Europe and Central Asia, 6 in Latin America and the Caribbean, 3 in East Asia and the Pacific, and one each in Sub-Saharan Africa and in South Asia. In addition, there are 23 projects which include a land tenure component (13 of which are in Sub-Saharan Africa).
For example, for many years in Nicaragua, the lack of an institutional and legal framework made it difficult for indigenous and ethnic community groups to have their rights and natural resources formally recognized and their territories demarcated and titled. Under the Land Administration Project, the World Bank helped to demarcate, title, and register 1 million hectares of land in the country’s Atlantic coastal region, and prepare territorial management plans with participation of the indigenous and ethnic communities and their leaders and authorities to guide future development efforts.
In Indonesia, the Bank supported post-tsunami recovery efforts in Aceh through rapid community mapping and land registration and titling, introducing the concept of joint titling and gender recording. A total of 222,628 land title certificates were distributed to land owners after the tsunami, out of which 63,181 were given to women either individually or as joint owners with their spouses.
In Bolivia, the Bank helped update the 1952 land reform law, establish a new tenure regime for indigenous people, and modernize the land administration system. As a result, 2.8 million hectares of land were surveyed and titled – of these, 588,000 hectares were for indigenous peoples’ communal territories.
Land governance – working to facilitate transparency and accountability
In addition, the Bank and several partners have developed the Land Governance Assessment Framework (LGAF), a diagnostic tool to assess the status of land governance at country level in a participatory process that draws on local expertise and existing evidence rather than on advice from outsiders. To date, LGAF assessments have been carried out or are under way in 13 countries (eight of which are in Africa).
Helping women achieve equal treatment in obtaining land rights
Women often have often difficulties in proving they own the land they work and live on. The lack of clear property rights denies them an opportunity to earn more for example by renting the property out or using it as collateral for loans. The Word Bank has helped women in Ethiopia, Honduras, Indonesia, Kosovo, Nicaragua, and Vietnam better understand their rights and secure clear land title to their properties, enabling them to get more out our their most important asset.
As Tashegu Woretaw, an Ethiopian widow from Gola Kebele tells, “I was not really interested in putting any long-term investment in the land. After getting the certificate, I planted eucalyptus and also prepared part of it for grass for fattening small stocks and oxen.”
Securing access to land for the poor
Securing access to land is critical for millions of poor people. Modern, efficient, and transparent land tenure policy is important in reducing poverty, and promoting growth and sustainable development. Security of property rights is central to preserving livelihoods, maintaining social stability, and increasing incentives for investment and for sustainable, productive land use.
For example in Malawi, inequitable access to arable land, combined with insecure land tenure, unsustainable farming practices, and intense competition for resources have resulted in chronically low incomes and persistent poverty. To address these challenges, the Community Based Rural Land Development Project was launched in 2004 to generate greater opportunities for the poorest of the Malawi’s rural poor. By 2010, 15,000 poor families had access to land. Gross margins per hectare had increased ten-fold for hybrid maize from the pre-location phase.
The World Bank Group supports the seven principles of Responsible Agro-Investment:
Principle 1: Existing rights to land and associated natural resources are recognized and respected.
Principle 2: Investments do not jeopardize food security but rather strengthen it.
Principle 3: Processes for accessing land and other resources and then making associated investments are transparent, monitored, and ensure accountability by all stakeholders, within a proper business, legal, and regulatory environment.
Principle 4: All those materially affected are consulted, and agreements from consultations are recorded and enforced.
Principle 5: Investors ensure that projects respect the rule of law, reflect industry best practice, are viable economically, and result in durable shared value.
Principle 6: Investments generate desirable social and distributional impacts and do not increase vulnerability.
Principle 7: Environmental impacts due to a project are quantified and measures taken to encourage sustainable resource use while minimizing the risk/magnitude of negative impacts and mitigating them.
In Brazil, under the Land-Based Poverty Alleviation Project families formed groups that negotiated directly with willing sellers to purchase suitable properties. They then obtained financing and technical assistance to establish themselves on or near the land and to improve the productivity of the acquired properties. Thanks to the project, more than 55,000 poor rural families gained access to about 1.2 million hectares of land.
In Bosnia and Herzegovina, systems for the registration of property rights had been in disarray since World War II and made worse following the 1992-1995 war. Informal development of large areas occurred because of the difficulty in getting permission to build or occupy property. It was very difficult to complete basic real estate transactions, develop property or to borrow money based on property as collateral. The World Bank-financed Land Registration Project contributed to a significant reduction of backlogs in property registration and more efficient customer service in many courts. Now 80 percent of all transactions are resolved in five days or less and mortgages are registered within a day in 16 of the 47 courts, including Sarajevo.
Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security
More recently, the World Bank Group has actively supported preparation and endorsement (March 2012) by the Committee on Food Security (CFS) of the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (“the VGs”). The Bank is actively engaged with multiple partners (UN agencies, bilateral donors, civil society organizations) in supporting the implementation of the VGs at the country level through wide-spread dissemination, capacity building, financial support to policies and projects that enhance the governance of land tenure according to these guidelines. The World Bank Group considers these VGs as a major international instrument to guide specific policy reforms, since it provided an agreed framework for action, broad participation, and monitoring outcomes.
Recognizing the increasing interest in farmland, and the potential associated risks, the World Bank is working with partners to “retrofit” principles of responsible agricultural investment to 40 agribusiness investments to determine how application of the principles would have impacted the results.
The Principles for Responsible Agro-Investment (PRAI)
In 2010, the United Nations and the G20 asked the Food and Agriculture Organization of the United Nations (FAO), the International Fund for Agricultural Development (IFAD), the United Nations Conference on Trade and Development (UNCTAD), and the World Bank - in consultation with a broad range of stakeholders - to generate principles that could be used by both foreign and local investors and to help governments address the needs of vulnerable groups, especially small farmers. The PRAI process is led by the Committee on Food Security, and global consultations on the principles are continuing.