Ruth Hall

PLAAS

University of the Western Cape

South Africa

Agricultural Investment Models in Africa

Main directions of land use change

Type A

Food to Food

Very little; some rice and

some cultivation and

livestock by SA and

Zimbabwean farmers

Type B

Food to Biofuels

Very substantial, in

Mozambique, Zambia,

Angola, Zimbabwe, South

Africa, Madagascar,

Tanzania (but slowing

down?)

Type E

Food to Nonfood

Displacements of people

and their land uses (ie.

whole settlements) for

mining, forestry and

tourism deals

Type C

Nonfood to Food

Rice expansion in

Mozambique and as

above; degree of

displacement of local

food production difficult to

ascertain

Type D

Nonfood to Biofuels

Likely widespread,

especially as “in-filling” of

unused land surrounding

cultivated fields

Type F

Nonfood to Nonfood

Widespread enclosures

for forestry (including

plantations), mining,

forestry and tourism deals

Source: Hall 2012, building on Borras and Franco 2010

Forest livelihood at Kilwa, Tanzania(Sulle, undated)

Forest livelihood at Kilwa, Tanzania(Sulle, undated)

Cleared forest at Bioshape jatropha plantation ‘trial plot’ Kilwa district (IFM report, 2009)

Land use changes not readily reversed

12 dimensions of land-based agricultural investmentsDimension Range of experiences documented

Size Available data on deals over 1,000 hectares; huge variation ranging up to deals of 500,000

hectares and plans of deals up to 10 million hectares

Duration Short to medium term, but mostly long-term 15-25 year (often renewable) leases, and up to

50 or 99 year leases

Source Domestic private investors, foreign private investors (both being individuals or large

companies), parastatals, foreign sovereign wealth funds,

Commodity Jatropha, sugar, rice, other foods, forestry, various minerals, also tourism experiences.

Business model Enclave model, colonist model, large commercial estates, nucleus estates with outgrowers,

outgrowers and processor, smallholder model

Tenure arrangements Lease, concession, illegal enclosure, or purchase (rare)

Resource access Land, water, minerals, marine resource, wildlife, forestry (and labour)

Lease / compensation

payments

Value, method of calculation, timing (once-off or repeat, eg. annual payments) and

distribution to local communities, traditional leaders and local, district, provincial and

national government

Displacement ‘Vacant’ and ‘unused’ land, claimed land, grazing land, cultivated lands, lands used for

natural resource harvesting

Labour Locally hired labour, imported labour, self-employment as outgrower

Settlement Changes in settlement (eg. villagisation), de-agrarianisation

Infrastructure Investment in infrastructure for production, processing transport (roads, ports), and social

infrastructure (schools, clinics)

3 phases of work on large-scale

land investments

• Phase 1:

– quantify and characterise the phenomenon

(how much land, who, what, where?)

• Phase 2:

– explain the phenomenon (how is it

happening, what enables it) and why is it

happening (what are the ‘drivers’?)

• Phase 3:

– identify impacts and outcomes (with what

results?) and what factors determine

different outcomes (are there better and

worse models?)

Not all land-based investments

are land grabs!

it depends on:

how they happen (process) &

what models of investments they

involve (structure)

http://www.ecdc-cari.org/countries/Africa_Map.gif

What is the best pathway to

commercialisation?

• Debates continue among policymakers and academics about

the relative merits of large and small farms, their implications

for labour absorption, rural livelihoods and growth in Africa’s

farm sector

• Some countries have promoted commercialisation in specific

regions, aiming to attract local and foreign commercial

farmers as pioneers to build a commercial farming sector.

• Recent transnational investments in commercial agriculture

have prompted the resurgence of plantations (large estates)

and other forms of large-scale commercial agriculture – often

reviving models used during colonialism and during state-led

developmentalism. (We should learn from history!)

Accumulation ‘from above’

commercialise agriculture by importing capital

in return for land & labour

1.transnational: import into country

2.domestic: import into sector

Accumulation ‘from below’

commercialise agriculture through reinvestment of

capital by those who hold the land and labour

Outcomes depend on the

model of commercialisation

• Concerns about exclusion or displacement of rural

smallholders in favour of large-scale commercial farming

have prompted policy attention towards inclusive farming

models, and specifically contract farming or ‘outgrower’

schemes.

• A variety of institutional arrangements establish

partnerships between:

– local landholders (contributing the land and water rights, and

often the labour) and

– external investors (contributing the capital, market linkages and

technical expertise) under

• There are a variety of different types of land, production

and associated contracting arrangements.

Questions to ask about

investment & accumulation

1. What new models of agricultural investment are

emerging?

2. How do these affect people’s resource access

through displacement and dispossession?

3. What forms of accumulation are occurring?

4. In sum, who owns what, who does what, who

gets what, and what do they do with it

(Bernstein 2010)?

Questions to ask about the

impacts on livelihoods

1. What are the livelihood and food security impacts

of different kinds of land transactions and

institutional arrangements on rural communities

2. What is the nature of rural social differentiation – in

terms of class, gender, ethnicity – following

changes in land use and land property relations as

well as organisations of production and exchange?

3. For different types of deals, who wins and who

loses?

4. How are these impacts evident over time?

Three models of agricultural

commercialisation in Africa

• Large plantations or estates

• Contract farming or outgrower schemes

• Commercial farming areas

Three models of agricultural

commercialisation in Africa

Plantations

• large, self-contained

agribusiness farms

• vertically-integrated

processing chains,

• associated with one

major crop,

• permanent or

seasonal hired

labour.

• not much interaction

with local economy

• medium-to-large

farms

• more or less

contiguous, and

dominate an area

• associated with

mixed farming

operations

• owned by individuals

or small companies

• may be planned or

not

• a processing firm,

sometimes with a

nucleus estate

• outgrowers are

contracted to supply

their produce

outgrowers farm on

their own land

• use their own family

labour

• may also work on

the nucleus estate

Commercial farm

area Contract farming

Ghana• Norpalm oil palm plantation on 4,500ha

following privatisation of state farm and

processing mill, 68% Norwegian owned

• No displacement as this was an

established plantation but conflict with

chiefs over rent and revenue

• Blue Skies outgrower scheme for fresh

cut fruit processing for European

market, 90% UK owned

• Substantial factory employment but

wholly seasonal (2,000-2,500 in

season)

• Commercial mango farming area at

Somanya: mostly (retired) urban

business and political elites, expanding

production and local small farmers

becoming workers – while sometimes

maintaining their own plots

Zambia• Illovo’s Nakambala sugar estate is

expanding its outgrower scheme,

mostly benefitting larger landowners

(and men)

• Younger men’s labour now in higher

demand

• Negative effects on poorer

households and women who have

less land and rely more on common

property resources

• Zambeef Chiawa estate in Lower

Zambezi, producing staple grain

crops, little integration into local

economy

• Limited employment creation, mostly

women on casual or temporary

contracts

Nigeria

• New Nigerian Farms, Shonga, in Kwara

State: commercialisation through

settlement of 13 white Zimbabwean and

South African farmers

• Dairy and grain production from 2005, on

1,000ha plots

• Commercial ‘success’ entirely due to

state provision of land & cheap state-

guaranteed credit

• Production declined to under half the

area cultivated, with uptake of more local

staple crops

• Displaced villagers compensated with

alternative land, leading to conflict, but

rising (male) employment (though

increasingly seasonal)

Assessing the 3 models

Initial evidence suggests that:

• big plantation agriculture might be most weakly integrated into

local economies – more ‘enclave’ than dynamic catalyst of

development.

• in commercial farming areas, what passes as ‘growth’ might be

merely the transfer of capital from one sector to another, for

instance Ghana mango farmers and Nigeria dairy farmers.

Insecure tenure & absence of finance is an impediment to

‘endogenous’ commercial farmers (more than markets).

• outgrowing or contract farming is a way to connect small farmers

into markets, but variation in how this is done; important that

they participate in value-adding processes; also a need to

preserve land (and water) for food crops, otherwise marginalises

women.

Conclusions

1. There are clear patterns of capital accumulation happening within

agriculture in many African states

2. This is happening in different ways and with different implications

for rural poverty and underdevelopment; important not to look at all

agricultural investments in the same light.

3. The key is to enable re-investment within agriculture, to allow for

‘accumulation from below’.

4. At the same time, an inflow of capital is essential – but this cannot

be only from the private sector, which typically prefers large-scale

investments.

5. Policymakers may well be missing the degree to which

‘commercialisation’ is the transfer of capital from one sector to

another, rather than endogenous development. The impacts of

commercialisation on local economies, on poverty and on

employment depends on the model.