Large-scale Land Acquisitions – Employment Generator or Job-Killer?

Presentation at the 16th Annual World Bank Conference on Land and Poverty

Linking Land Tenure and Use for Shared Prosperity

The World Bank, Washington DC 25 March, 2015

Martin OstermeierKerstin NolteChristof Althoff

Background

Large-scale land-based investments and employment• Small-scale agricultural farming very labour intensive

Main employment sector in many developing countries

• Commercial farming capital intensive

• Employment amongst the most common commitments investors make to local communities Actual realisation often debated

• Employment as a key component for poverty alleviation National governments often welcome and foster agricultural

Foreign Direct Investment (FDI)

Methodology

Previous approaches

• Employment figures reported by investors

Not officially validated

Different employment types not considered

• Before-and-after comparison using national statistics

Disaggregation level not sufficient

Difficult to isolate effect

Idea

Comparing employment effects of small- and large-scale

farming through labour intensity of certain crops

Methodology

Crops

• According to frequency in

Land Matrix database

Banana

Barley

Cassava (Maniok)

Corn (Maize)

Cotton

Jatropha

Oil Palm

Rice

Rubber

Sorghum

Soya Beans

Sugar Cane

Sun Flower and

Wheat

Methodology

Small-scale farming

Main characteristics

Farm size below 2 hectares

Mainly family and/or subsistence

farming

Labour intensive

Data

Agricultural survey; Household

survey (here: UNHS 2005/06)

Large-scale farming

Main characteristics

Farm size over 200 hectares

Commercial farming

Capital intensive

Data

The Land Matrix Global

Observatory

Crop associations, research

results

Zambia (corn) Ethiopia (cotton)0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

Labour Intensity per Crop(mean workers per hectare)

Small-scaleLarge-scale (crop associations)Large-scale (LM_planned)

Descriptives

Corn (maize) Mean workers per hectare

Small-scale 1.83502

Large-scale (crop associations) 0.32599

Large-scale (LM planned) 0.08799

Δ to small-scale

n.a.

-82.2%

-95.2%

Cotton Mean workers per hectare

Small-scale 0.98446

Large-scale (crop associations) 0.27690

Large-scale (LM planned) 0.07446

Δ to small-scale

n.a.

-71.9%

-92.4%

Zambia (corn) Ethiopia (cotton)0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Potential Job Creation (projected employment based on LM)

Small-scaleLarge-scale (crop associations)Large-scale (LM_planned)

Next steps

• Scale up analysis

• Distinction of type of employment E.g. casual worker, domestic or foreign worker, etc.

• Economies of scale• Quality of employment

E.g. security of employment, working hours, remuneration, health and safety

• Backward / forward linkages E.g. further job opportunities through processing, packing,

exporting, etc.

Contact

Martin Ostermeier

GIGA German Institute of Global and Area Studies Neuer Jungfernstieg 21 / 20354 HamburgTel. +49-(0)40-42825-768 Email: Ostermeier@giga-hamburg.deSkype: Martin-OstermeierHomepage: http://www.giga-hamburg.de