Presented at the Seminar on Responsible Agricultural Investments in Developing Countries: How to Make Principles and Guidelines Effective? Organized by Swedish FAO Committee & SIANI

1. Responsible agricultural investments
– how to make principles and
guidelines effective
Presentation by Kjell Havnevik
Stockholm, March 25 2014

2. Discussion paper Swedish FAO
Committee (Publ. series no. 9)
• Basic foundation of discussion paper: In order to
make principles for responsible agricultural
investments relevant for developing countries
necessary:
• To understand features of and conflicts between
smallholder and large scale agriculture
• To adjust and transform RAI principles into
concrete guidelines as basis for strategies/policies
• To this effect, invite you to read/reflect on ch. 11.

3. Background
• RAI process initiated by the World Committee
on World Food Security (CFS) in 2012
• Principles to be of global character and to
include all stakeholders
• Zero Draft of global consultations published in
August 2013 for comments and advice
• Process to end in October 2014
• This paper limited to RAI in relation to
developing countries.

4. Overview of draft RAI principles
• Food security, nutrition and the progressive
realisation of the right to adequate food in the
context of national food security (economic,
social, environmental, culture)(Principles 1-4)
• Policy coherence and sector development (5)
• Governance and grievance mechanisms (6&7)
• Review and accountability (8)
• The 8 sub-principles of RAI will be addressed
more directly in empirical case of Ethiopia

5. Smallholder agriculture
• Major food producers in low/middle income
countries
• Potential for sustainable production regimes
• High labour absorption – seven times the
potential of large scale (Brazil)
• Challenge to understand land issues
• Challenge to improve labour & area productivity
• Support by international institutions, donors and
national governments declining since late 1970s

6. Examples of large scale investments
• Case studies in discussion paper based on
investor information, NGO studies and
research findings
• Addax Bioenergy in Sierra Leone (Swedfund
co-investor) in biofuels
• Swedish church organisation and pension
funds – forest plantations in Mozambique
• Second Swedish National Pension fund’s
investments in large scale agriculture in Brazil

7. Example from Ethiopia
• Preliminary findings of ongoing research by
Kassa Teshager on large scale investments
• Gambella and Benishangul regions in Ethiopia
• Two Indian companies (Karuturi and S & P, and
two Saudi Arabian Companies (Saudi Star and
Horizon, latter no production yet)

8. Aims Principles OUTCOMES
Respecting land
rights
Existing land rights and associated
natural resources are recognized and
respected.
Peasants have constitutional rights
to use land but not to sale and
mortgage. Private investors-
domestic and foreign- have the right
to lease and transfer their holding
rights and mortgage it. However,
informal – customary rights are not
being respected or recognised.
Ensuring food
security
Investments not to jeopardize food
security but strengthen it.
People living around the investment
areas are more food insecure than
before. Investors encouraged to
produce for export not for local
supply. Less than 8% of land
transferred to investors have been
developed.
Ensuring
transparency,
good
governance, and
a proper
enabling
Processes of land acquisitions to be
transparent, monitored and
accountable.
Laws and policies are in place.
But level of transparency is low.
Integration is weak.
No monitoring and accountability
mechanisms.

9. Consultation and
participation
All those materially affected are consulted,
and the agreements from consultations are
recorded and enforced.
Free prior informed consent of the local
community is non-existent.
No participation of Community based and civil
society organisations in land deals.
Responsible agro-
investing
Investors ensure that projects respect the rule
of law, reflect industry best practice, are
economically viable, and result in durable
shared value.
Economic viablity and appropriateness of
technology to local community questionable.
Large scale investments do not reflect the
investors best practices.
Companies lack effective farm management
and human resource handling, part. Indian.
Labor-, environmental- and other relevant
laws do not appear to be enforced.
Social
sustainability
Investments generate desirable social and
distributional impacts and do not increase
vulnerability.
No clear benefit sharing mechanisms in the
contracts.
Investors have no contractual obligation to
provide social services and basic
infrastructure.
Companies conduct their CSR in social
services and infrastructure development in a
limited way.
Environmental
sustainability
Environmental impacts of a project are
quantified and measures are taken to
encourage sustainable resource use while
minimizing and mitigating the risk and
magnitude of negative impacts.
Environmental Impact Studies rarely carried
out prior to implementation of the project.
There is no contractual agreement on
sustainable use of resources-water, land,
forest, etc. and risk management.

10. Other research findings
• Neville and Dauvergne (2012:279). In
particular in biofuel investments in SSA,
”outcomes have largely been lose-lose”
….”appears to be a systematic pattern.”
• FAO (2013), investments requiring large scale
land acquisition where land rights are unclear
and insecure, ”the disadvantages often
outweigh the few benefits to the local
community, especially in the short run.”

11. Large scale agriculture – concluding
reflections
• Highly mechanised, require little labour
• Mainly for export – food and energy
• Large land needs that lead to legal and illegal
displacements/resettlements
• Water for irrigation – water use conflicts
• Major user of fertiliser and pesticides that
decreases the fertility of the soil in longer run
– problems of sustainability

12. Major trends
• Dominant narrative in support of large scale
agriculture – win – win
• Incentives, loans, guarantees for large scale
agriculture (states, Sida, EKN, Swedfund)
• New alliances between investors (private and
state, church organisations, sovereign- and
pension funds) and states and elites of host
countries – smallholders excluded and with no
or limited voice

13. Critique of the RAI principles
• General in character, no prioritisation and lack
of attaching of responsibilities
• Do not build on experiences and knowledge
required for win-win outcomes
• Do not put sufficient emphasis on the
potential role of smallholder vs large scale
agriculture for attaining the RAI objectives
• Are not developed into concrete guidelines as
basis for policies and strategies

14. Modifying and conversion of RAI
principles into guidelines (ch. 11)
• Approach – raise ten critical question and reach
responses based on knowledge and experiences
• Basis for making RAI principles responsible and
efficient – suggest direction of future discussions
• Develop on this basis associated RAI guidelines
• Which can be the foundation for strategies and
policies with transformational potential in order
to attain RAI objectives – food security, nutrition
and environmental sustainability

15. What is required for such changes to
come about?
• To link practice and research and promote and
interdisciplinary understanding of critical issues
• To change attitudes, based on new knowledge, at
all levels – individuals, institutions and countries
• For us to move towards the boundaries of our
civilisation in order acknowledge ”the others”
• To try to understand the conditions, needs,
features and potentials of the ”others”
• Create ”third spaces” (mutual learning and
respect) that can be a foundation for developing
just and sustainable societies