Notes for talk on principles for responsible agricultural investment

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Notes for talk on principles for responsible agricultural investment by Marc
Wegerif - Oxfam International, South Africa
Thank you very much for having me here and for giving me a chance to share some
ideas with you.
I am Marc Wegerif, Land Rights Policy Lead with Oxfam. From and based in South
Africa, working on our international level advocacy. I am here to share some
thoughts and hopefully stimulate some thinking related to the idea of principles for
RAI that could be useful in the Mekong Region. I will not necessarily be putting
Oxfam positions, although of course drawing on our work and experience on these
issues.
We know there are the PRAI agreed at the committee on world food security, they
provide useful ideas, such as the need to contribute to food and nutrition security, we
can all go and read these. I should note that they also have limits and Oxfam along
with other Civil Society (CS) groups were not happy with the final outcome. I was
happy to see the work of the China Chamber of Commerce yesterday in the rubber
round table. It is good to see such initiatives that adapt the idea of principles to
particular contexts and industries and in doing so hopefully build ownership, it was
gratifying to see in them the commitment to human rights and environmental
protection.
I am not going to repeat all principles (they and other guidelines can be found on-
line), but rather want to focus in this input on three main issues: 1) community
involvement as part of ensuring inclusive and sustainable progress that will have the
maximum impact in terms of reducing poverty and reducing rather than enlarging
inequality (an issue of grave concern to Oxfam and many others). 2) Women’s rights
and benefit and how this can be ensured. 3) integration with wider national and
regional development planning and strategy. This is not just about land rights and it
is an issue that needs a wider and more coordinated approach, than one country can
do alone. Which is why the MRLG is so interesting.
First, some basic background. Especially from 2007-8 we saw a food price crisis that
sent shock waves around the world and contributed to renewed investor interest in
agricultural land. This coincided with a financial crisis. With property markets and
stock markets collapsing in some countries, capital was looking for new investment
opportunities. There are also converging long-term pressures from factors like
climate change, continually growing demand for fuels and growing populations,
especially growing middle classes with increased demand for more resource
intensive foods, like the shift from vegetable consumption to meats. In many ways
this is a western life style and economic model that has always made heavy and
unsustainable demands on natural resources that is now spreading around the
world.

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One outcome of this, as the Land Matrix initiative identified, is about 80million
hectares of land being subject to investments in a twelve-year period, more than the
size of Thailand and Laos combined.
This new interest in and valuing of the land, water (water is very important and often
more of a driver than land itself, with control of land being a route to control and
access water) and other natural resources that rural people live on and use should
have been a major opportunity for many of the world’s poorest people who are in
rural areas. Unfortunately, it has not gone well at all in many cases as ill-considered
investments have ridden rough shod over local interests, even resulting in people
losing land and water rights in some cases. At the same time most of the
investments have not worked well for the investors either, with many of the land
deals involving large amounts of land not turning into production or profits. The
profits that have been made tend to be in land speculation and short-term
profiteering from activities such as selling forest timber rather than implementing
crop production as promised. These do not support development or help countries in
the medium to long-term.
This interest in land has sparked a slew of international and regional initiatives to try
and respond to the situation. Important ones being the VGGTs and the PRAI from
CFS and in Africa the Guiding Principles on LSLBIs.
Nevertheless, the pressure on land and related natural resources continues as
shown in recent reports released this year by people like GRAIN and the Land Matrix
initiative of the ILC. The nature of investments is shifting to some extent with more
interest in out-grower schemes, greater influence of large financial institutions and
so, these bring new threats as well as opportunities. One thing that is quite clear is
that the acquisition of large tracts of land rarely works. We should much more look at
investments in the small farmers themselves and in other parts of any sector, such
as processing. But that does not take away all risks. Power imbalances can lead to
unfair terms of trade for small farmers and out-growers suppling large companies.
Production practices promoted can still be environmentally destructive even when
practiced by small holder farmers. The increasing value of land can lead to land
grabs by local elites and mid-size farmers - even when the large investor does not
touch the land – (See work of TS Jayne and others), putting pressure on smaller and
poorer farmers including women farmers who may not have such strong rights to
land.
Our challenge is how to make the demand for land and natural resources and the
investments work to build more prosperous and sustainable communities and
countries.
So, coming to my focus issues, perhaps part of solutions, for today.
1) Community

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I will use this term “community” as a shorthand, it for me includes many diverse
actors, importantly including the primary producers, mostly small-holder farmers. We
know that the small-holder farmers are collectively the largest investors in the land
and in agriculture. What we must make sure we also look at are all those other
traders, processors, transporters and local businesses that they interact with, that
collectively make the system small farmers are part of work and that all derive
benefits and livelihoods out of that system. It is not the farmer and their particular
land tenure rights alone that make it work.
Central is to target the poorest, or at least close to the poorest. Don’t rely on trickle
down, we know that does not work. Rather focus on the poorer and we are not
leaving out other people and sectors as we know trickle up does happen.
The implementation challenges include how to overcome the power imbalances
between investors, governments and communities and how to support community
organising. The community needs to be well informed, well advised and well
organised to be able to work with the investor and achieve good outcomes. There
needs to be space and support for the operation of the CS groups and community
leaders and organisation that are best placed to do such facilitation and community
organising.
Choice for the local community for farmers is key to having any power in
negotiations. The investment should not be the only option, they need choices to be
able to negotiate good options. Certainly, from government, funders and CS we
should not be facilitators of specific investments for certain companies, this becomes
an unfair assistance to those companies in the building of community relations that is
the task of all companies.
Good facilitation is also needed. Oxfam has developed a gendered community guide
and tested it and is still developing it. We need more of such work, at the very
community level in a language people can understand. We also need resources for
such processes, but how should such be financed?
I would argue that it is wrong and not sustainable for donor funds to be used to do
the community facilitation and also problematic for a company to finance the
community organising due to the inherent bias. An interesting solution being tested
now by The Forest Trust (TFT) is Kumacaya. The basic idea being that companies,
committed to working well with communities put money in to support the community
facilitation and advice. The fund then appoints civil society groups to do the
facilitation in arrangements where the accountability is to the community and
Kumacaya trust, not to the company. It is new, we will see how it works.
Free Prior and Informed Consent (FPIC) is a key tools when land ownership and/or
use is changed. We need this to ensure community benefit, company good relations
and through that greater sustainability. These things are far more likely to be
achieved through agreement than through force. We know FPIC is a recognized right

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for indigenous communities. I urge us to respect that, but here I am also suggesting
that it makes sense as good practice for all. If the outcomes we want to see are
improved. We have seen how if local people are not onboard with a project it causes
ongoing problems, an intervention for the national good, that does not bring those
directly affected along tends not to work. Increasingly companies and investors do
not want to be caught up in lengthy disputes that not only impede operations on the
ground, but also impact their brand image with consumers and shareholders,
including governments. Ensuring well facilitated FPIC can avoid these negative
outcomes.
Interestingly CEDAW guidance note 34 from 2016 suggests the application of FPIC
for all rural women, noting that rural women are particular group that tend to be left
out of decision making, but should be in full agreement to ensure they benefit and
through that one tends to get a more inclusive outcome with improved poverty
reduction and food security benefits.
This leads me to the second main points, that of ensuring women are fully involved
and benefit
Women’s rights and benefit
Our own work and studies as Oxfam have found (Promises, Power and Poverty)
how, even when investors claim to be bringing wider community and development
benefits, women tend to be less involved in decision making related to investment,
get less opportunities, loose more, etc… FAO supported a range of case studies,
including in Laos, published between 2013 and 2015 focussed on the gendered
impact of investments, and found women tended not to benefit as much as men.
We know that patriarchy is still widespread and therefore unless we take specific
proactive measures to ensure women’s involvement, including in decisions making
within communities and in negotiations with any potential investors, then it does not
happen. The Guiding Principles on LSLBI agreed at the African Union in 2014 are
strong in this area. They identify that:
“LSLBI[s] that do not specifically set out to recognize and improve women’s
rights to land will inevitably exacerbate gender inequalities thereby
compromising progress towards the gender equality aspirations of Member
States as detailed under various global, regional and national initiatives.”
They therefore have “Fundamental Principle 4: which reads
“LSLBI[s] respect the land rights of women, recognize their voice, generate
meaningful opportunities for women alongside men, and do not exacerbate
the marginalization of women.”
I like the idea of ensuring that investments do not exacerbate marginalization of
women. We know the investors did not create the marginal position of women or

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invent gender discrimination, but they should not benefit from it. And should not act
to increase or reinforce it. That means, in some cases, challenging community
norms. That would best be done through good facilitation as touched on above. We
need specifically gendered materials, tools and methods of work. We need women to
be in and leading teams.
In processes like identifying and even registering land rights, relatively simple and
inexpensive interventions can normally make a big difference to gendered outcomes.
The starting point is a conscious effort, with resources behind it and a commitment,
not just to treat women equally, but to ensure more gender equitable outcomes.
The SDGs have included land specific targets and indicators (1.4.2, 5.a.1 and 5.a.2)
and all of these require gender disaggregated data and in 5.a.2 looks at the
proportion of governments that are taking specific measures to close the gender gap
in land rights. In the spirit of the partnerships and multi-stakeholder approaches to
implementing the SDGs (SDG 17), let us ensure that in our work on land and large
scale agricultural investment we all work to secure land rights and specifically land
rights for women. These are in the SDGs, because they are recognised by all UN
Member states as important goals in their own right and because they are seen as
essential to achieving a wider range of the other development goals.
All countries will hopefully be monitoring and reporting on these indicators, and I am
happy share that the methodologies for the monitoring of these particular indicators
have now all been developed and approved for graduation from Tier III to Tier II this
week at the IAEG-SDGs meeting in Bahrain.
We have to be conscious of the particular impacts of investments on women. If
negotiations for out grower schemes or for a land acquisition only happen with
registered owners or rights holders, in many situations that will only be men and
compensation and opportunities then tend to go to the men. FAO has found in case
studies that they did on gender and large agricultural investments that in plantation
style investments women got lower paid and more insecure jobs, such as seasonal
labouring. Some of that due not to the company excluding women, but to the care
work women do at home. Out-grower schemes were also found to increase the work
load of women within the family farms. without them necessarily gaining more control
of the income generated. So, we have to be willing to look at the gendered impacts
of investments and take into account and address the existing gender power
relations, including women’s roles in the household. Governments can also look at
reducing this burden of care with improvements in the provision of basic services
that women tend to take responsibility for such as health and child care services.
Now to my 3rd point; the issue of integration with wider national and regional
development and food security planning and strategy.
Firstly, back to the biggest investors, the small holder farmers themselves. We are
talking of “large-scale agricultural investment”. How the small farmers and those they

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work with reach scale of investment, is not through scaling up and single large
investors, it is rather through a much more equitable approach of replication, with the
actors combining to reach scale of delivery. We need to find ways to reinforce that
process and not undermine it. We need to ensure national development plans and
actions that focus on those small-holder farmers and their sustainable farming
practices. We heard yesterday from research on investments in rubber production in
this region that the best outcomes for people came when governments had this
focus and ensured services, such as credit and agricultural extension reached them.
Around the world we have seen how there are greater impacts on poverty reduction
and economic growth from investments in small-farmers. The work of John Mellor
and others over many years has shown that this is not so much about issues of small
farmer efficiency, that people like Lipton and Prof. Rodolphe De Koninck (who spoke
before me) have focussed on, it is as much or more due to the multiplier effects into
the local non-farm economy with the high level of local employment created and
spend of small farmers in their local communities. A 2017 publication by Mellor was
based on a comparative study of small and larger farmers in India and confirmed that
growth in productivity on the smaller farms (1.2Ha to about 30Ha) had much better
impacts than on the larger farms (above 30Ha).
The other thing the work of Mellor indicates, and any study of the wider food system
shows, is that there are multitudes of other economic actors involved in enabling the
small-farmer to prosper. These are normally actors of a scale and mode of operation,
that relate well with the farmer, such as the small trader and other small and micro
enterprises, etc.. this we know is also where many jobs are created. They also don’t
need or use written contracts that the companies try with difficulty to hold the famers
to, they are more bound in a set of social relations. We need to understand these
relations and the systems small farmers are part of better, in order to ensure they are
not undermined and instead to create an enabling environment for them to grow. The
undermining of the existing systems can happen at any level. If retailing is dominated
by large supermarkets that want to buy from large suppliers that don’t want to deal
with thousands of small farmers, the farmer can lose important markets that they
may have accessed through many traders and processors. If the processor is of
such a scale that they can only take truck-loads of rice, then the famer or local
traders with 10 sacks will be shut out.
There is a need for land formalisation, this I take for granted is understood by the
MRLG, that should happen and not happen only where and when a large company
wants land in that area. There are technically very good processes of land
formalisation with community involvement and mapping, using new technology, etc…
that have been supported largely by donors in certain areas. I could talk at length on
these if I was making a more technical input. The problem with many of these
initiatives is that they are only in an area where a particular company wanted land
and in some cases even already had a concession. This is skewing a land
formalisation and favouring a particular company over others who may also have

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been interested. It defies one of the principles we heard about from the Chinese
Chamber of Commerce yesterday, which is “Open, transparent and fair competition”.
I believe public funds, from here and from other countries, should go into creating
public goods that should create an enabling environment for small farmers and local
business to operate and prosper. All our governments have been involved in
agreeing the SDGs and I hope will be working on their implementation, including the
targets on improving land rights and governance, let investors come in and support,
not distort this process.
Development finance should not be used for the benefit of specific companies in
ways that can increase the power imbalance between the company and the small
farmers and create unfair competition with other companies. There needs to be a
wider government strategy and that strategy needs to look at what scale and nature
of farming and other related business work best for the country. I believe we need a
variety of options and scales of business, we need to be able to prioritise local and
national business over international business. Not all private sector and all
companies are the same, we need to be strategic in creating an environment
supportive of those that work best for countries and the majority of their people.
Within that one can analyse where there are gaps that international and large
investors can assist to fill in a way that reinforces rather than undermining other
actors in the economy.
When working on the GP-LSLBI these issues arose from the experiences of
governments and others in attempting to attract and manage mostly foreign
investments in the agricultural sectors of their countries.
The PRAI touch on this, but at a very broad level with “Principle 2: Contribute to
sustainable and inclusive economic development and the eradication of Poverty”.
The GP on LSLBI are much more specific with “Fundamental Principle 2: Decisions
on LSLBI are guided by a national strategy for sustainable agricultural development
which recognizes the strategic importance of African agricultural land and the role of
smallholder farmers in achieving food security, poverty reduction and economic
growth.” And they go into more explanation.
The SDGs have also recognised the importance of small farmers and small business
in addressing poverty and hunger. Such as in targets 2.3 and 8.3, specifically calling
for a doubling of the agricultural productivity and incomes of small-scale food
producers, in particular women, and creation of opportunities for value addition and
non-farm employment”. They also call for policies that support the growth of micro-
,small- and medium-sized enterprises.
Another issue where the GP-LSLBI go further than other principles is in calling on
member states, in their case of the African Union, “to uphold high standards of
cooperation, collaboration and mutual accountability”. The issue they were trying to
address is that investors would move from one country to another if they thought the

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conditions where better for them in other countries. For example, if one country taxes
more highly or requires treatment of waste water to avoid contamination of water
sources, the company might move to a neighbouring country with no such taxes and
restrictions. This type of race to the bottom can be very destructive and reduce the
potential benefits of investment. The issue is not so much the cost of complying with
regulations, but that these costs are the same for competitors. Government
regulations at national level is critical for this, but also a common approach with
countries that investors may move to, such as in this region, where crops that can
grow in one country can also be grown in most of the neighbouring countries.
In conclusion
Bring communities on board, focus on the poorest, the small-farmers and their
related processors and traders. This needs creative ways of supporting community
awareness raising, organising and provision of advice to truly give them choice and
allow for FPIC. Why should people be forced from their land? Embrace trickle up,
when investment works for the least of us, it will work for the rest of us as well.
Ensure that women are fully part of decision making and have explicit commitments,
backed by action, to ensure gender equitable outcomes. This needs gendered
processes and information materials and a wider analysis than we normally do to
understand the particular situation women are in and how they are impacted by
investments.
The role of the state goes beyond regulation, it should also shape national
development priorities and strategies. Investments must align with and contribute to
wider national and regional development and food security strategies. At national
level, it is important to favour the smaller national businesses and investors,
including the farmers. At a regional level, it is important to have cooperation between
countries for common standards.
Thanks for listening.