Field Survey f the Principles fr Respnsible Agricultural Investment (PRAI) with Investrs and Lcal Cmmunities Hafiz Mirza Chief, Investment Issues Research UNCTAD Inter-Agency Wrking Grup: FAO, IFAD, UNCTAD and the Wrld Bank
Aims f the Survey Assessing: 45-50 Investment prjects, acrss Africa and Suth East Asia What investrs are ding t prmte ecnmic, scial and envirnmental gains and sustainability (and cnsequently degree f cnsistency with the PRAI). Hw cmmunities living arund the investment perceive and are affected by it. Key aims: Understand what the main issues are n the grund. Test feasibility f the PRAI and translate principles int actins fr investrs, gvernments, dnrs and internatinal agencies. Explre hw differences in size, business mdel, type f investr, lcal capacities and circumstances etc. can influence the impacts f an agricultural investment. Cntext matters.
Palm Oil Rice Rubber Sugar Wheat Cca Barley Flwers Oilseed Sybean Milk prducts Jatrpha Banana Maize Cttn Sesame Animal Feed Sample 8 7 6 5 4 3 Principal prduct Area wned r leased: 25,000 hectares average 8,000 ha media Range 100 t 250,000 ha Average years in peratin: 15 Range 1 t 55 years 2 1 0
Sample - Investrs Business mdel Trading cmpany Prcessing factry and utgrwers Prcessing factry Estate and utgrwers Estate 0 5 10 15 20 20% f prjects have a dmestic main partner
Resident/farmer near investment Emplyee f investment Outgrwer/ cntract farmer Farmers' assciatin / C-perative / Unin Gvernment fficial Village/cmmunity leader Previus user f the land f the investment Migrant Supplier/trader t/with investr NGO / MFI Member f marginalised cmmunity Resettled as a result f the investment Sample lcal stakehlders 100 Classificatin f critical incidents (mre than ne may apply t each interviewee) 80 60 40 20 0 Over 200 critical incident respnses, encmpassing interviews with a wide range f stakehlders. One CI respnse ften cnsist f views f multiple number f peple (fcus grups, several members f a family, etc.), s the number f peple spken with is even larger.
Selected key utcmes: Emplyment Jbs, indirect jbs Stability f frmal emplyment Higher wages, training, careers Shift frm subsistence farming Less migratin frm rural areas Jbs fr underprivileged grups Investment may fail Wages can be lw Casual, seasnal jbs Land fr jbs deals Sum f all investments Mean Maximum Ttal frmal emplyment 36,833 1,023 5,278 Permanent 19,485 541 3,086 Temprary/Casual 17,348 482 3,700 Outgrwers 149,638 13,603 120,000 Ttal direct emplyment 223,304
Number f investrs Selected key utcmes: Land Utilisatin Mst land acquired is used fr purpse But much is nt In 25% f cases n 10% f land acquired is used. WHY? - AND IMPLICATIONS Adverse cnditins (due diligence?) Lack f finance (inadequate screening?) Inapprpriate use f land, speculatin Tensins between investrs and cmmunities Deleterius impact n ecnmic plans Degree f land utilisatin 9 8 7 6 5 4 3 2 1 0 0-10 10-20 20-30 30-40 40-50 50-60 60-70 70-80 80-90 90-100 Utilisatin (%)
Selected key utcmes: Fd Security Natinal fd prductin Prductin fr urban markets Emplyment and incme Ancillary benefits assciated with emplyment Prductivity f fd crps Knwledge transfer t lcal farmers Cmmunity fd prgrammes Nn-fd crps dminate, esp. fr freign investrs Mix f crps grwn changes Land fr subsistence farming is lst Land disputes are intimately tied t fd security issues. All investrs Principle market fr utput Crp Freign Dmestic Fd crp 9% 26% Nn-fd crp 46% 20% Freign investrs Principle market fr utput Crp Freign Dmestic Fd crp 8% 23% Nn-fd crp 58% 12% Dmestic investrs Principle market fr utput Crp Freign Dmestic Fd crp 11% 33% Nn-fd crp 11% 44%
Hw investrs can influence the utcme: Gd and Bad Practices 1. Inclusiveness, cmpleteness and credibility f pre-investment cnsultatins and n-ging dialgue with stakehlders. Bad practice: Assuming prir investrs r Gvernments have dealt with issues. Gd practice: Full and early cnsultatin f lcal cmmunities 2. Credibility f impact assessments, due diligence and ther pre-investment prcedures. Bad practice: Cursry, bx-ticking exercise. Gd practice: Thrugh impact assessments, reflected in business plan. 3. Recgnitin f existing rights t land and ther natural resurces. Bad practice: Failure t deal adequately with infrmal claims t and usage f land and ther natural resurces. Gd practice: Full survey, recgnitin, registratin and reslutin f existing rights t land prir t cmmencement f peratins. Specific tls & prcedures Inter-Agency Wrking Grup: FAO, IFAD, UNCTAD and the Wrld Bank
Hw investrs can influence the utcme: Gd and Bad Practices 4. Transparency and disclsure f infrmatin n the investment. Bad practice: Opaque terms f land acquisitin / cncessin agreements. Gd practice: Spending time t make infrmatin available t stakehlders 5. Investr s access t finance and wrking capital. Bad practice: Acquisitin f land as a means t raise capital ad hc Gd practice: Up-frnt capital required t fund all pre-peratinal prcesses prir t apprval f cncessin. 6. The business mdel (e.g. benefits r revenue sharing arrangements). Bad practice: Enclave-type develpment with few interactins with lcal cmmunities. Gd practice: Explicit revenue-sharing r benefit-sharing arrangements negtiated and cntractually agreed with lcal cmmunities. N ne-size fits all Inter-Agency Wrking Grup: FAO, IFAD, UNCTAD and the Wrld Bank
BACKUP SLIDES Inter-Agency Wrking Grup: FAO, IFAD, UNCTAD and the Wrld Bank
The Principles: What d the PRAI cnsist f? 1. Land and natural resurce rights f existing land users are respected 2. Investments d nt jepardize fd security rather strengthen it 3. Plicy framewrk ensures transparency & accuntability 4. Agreements based n extensive cnsultatins with all ptentially affected cmmunities 5. Investrs respect human rights and ther best practices (e.g. regarding wrking cnditins) 6. Investments generate brad scial benefits fr all surrunding cmmunities 7. Investments are envirnmentally sustainable Inter-Agency Wrking Grup: FAO, IFAD, UNCTAD and the Wrld Bank