How to Reap the Benefits
5 Oct 2012
By Aslilhan Arslan, Setareh Khalilian, Mareike Lange for Kiel Institute for the World Economy
Part 4
How to Reap the Benefits
This section draws suggestions on how to make land deals beneficial to both the investors and the receiving countries including local communities. The proposals mainly tackle the topics of land rights, transparency of negotiations, sustainable resource use, the sharing of benefits, and knowledge and technology transfer to local communities. Major issues to address in order to make investments beneficial to the receiving country are the strengthening of transparent governmental decision and monitoring structures based on a code of conduct, the enabling of local communities to participate in the negotiations, and the recognition and enforcement of communal rights to land, water and other natural resources.
Given the fact that unclear local land rights and the displacement of people are among the key issues of investments in agriculture, host governments should ensure protection of their populations in this respect. This can be done by respecting and safeguarding customary land rights, which implies that they should be clearly defined, identifiable and enforceable. Locals should be consulted from the beginning of the process, and all stakeholders should take part in the decision-making process – which would lead to compensatory payments if the locals are willing to relocate. National and international agencies should help the locals to exercise their rights and improve their bargaining power through collective action. This implies that negotiations need to be open and transparent.
The host governments should also ensure that the land is used sustainably with respect to soil and water usage, and the social and environmental impact assessments of the proposed investments are provided by third-party organizations. Von Braun and Mainzen-Dick (2009) also point out that the strengthening of the policy environment and the implementation capabilities of the host countries should also play a major role.
After the investment decision is made, it is important that local communities benefit from the investments. Thus, small-scale local farmers in the region need to be better involved and informed. They must be provided with inputs, extension services and credits. Out-grower schemes and contract farming can further facilitate the integration of smallholder farmers into large scale investments. In addition to the direct involvement of smallholders into the production process, contracts should ensure that benefits from the investment are shared with the host countries. Thus, host country governments need to enforce a continuous measurement of investments made and revenues generated to enable the enforcement of the promised investments and share of benefits.
In terms of food security, large investments should not put the national food security of the host country at risk due to large exports of the harvest made. Thus, national investment conditions should include rules such that domestic food supplies have priority in food risk situations.