Agricultural growth corridors: prospects for mobilising investment and delivering policy Rebecca Smalley

1. Agricultural growth corridors: prospects for
mobilising investment and delivering policy
Rebecca Smalley – rebeccasmalley@gmail.com
Panel Session: Agricultural corridors and commercialisation in Eastern Africa
Conference on Land Policy in Africa
Addis Ababa, Ethiopia – November 2017
www.future-agricultures.org/apra
Funded by UK aid from the UK Government

2. An introduction to agricultural corridors
• Prospects for mobilising investment and delivering policy
• Introduction to corridors before case studies:
– LAPSSET in Kenya
– Nampula and Beira in Mozambique
– SAGCOT in Tanzania
• Based on review of literature and programme documents
• Part of Agricultural Policy Research in Africa (APRA),
a 2016-2021 research programme funded by UK aid through
DFID, led by Institute of Development Studies with Centre for
African Bio-Entrepreneurship, PLAAS and University of Ghana
www.future-agricultures.org/apra

3. What are agricultural growth corridors?
• Corridor: A geographical area of one or more countries surrounding a
major transport route such as a highway or railway, which supports
economic activity at the ends of, and along, the route
• Development corridor, growth corridor, logistics corridor:
Build or rehabilitate transport infrastructure and add communications,
soft infrastructure, measures to expedite cross-border trade, rural
development policies in corridor regions > leveraging infrastructure
• Agricultural growth corridor: A type of development corridor whereby
planners aim to attract agribusiness investments in corridor regions which
will benefit from improved transport infrastructure. Investors are attracted
by the infrastructure and by PPPs or concessional finance. It is hoped that
the investments will improve productivity and market linkages in
agriculture, thereby increasing incomes and stimulating local economies
www.future-agricultures.org/apra

4. Origins of recent corridors
• In the past 10-15 years, increased interest in
using corridors as a strategy for:
– Delivery of development policy
– Improving conditions for investment
– Delivering business objectives of market access
and vertical integration
• The focus or anchor of a corridor can vary:
– LAPSSET: oil and communications
– SAGCOT: agriculture
– Mozambique: mining and agriculture
www.future-agricultures.org/apra

5. Common themes of recent corridors
• Investment in large-scale agriculture alongside small
and medium-sized farms; irrigation; crop and livestock
processing; clusters or hubs; farmer training and inputs
• Assisting farmers to join global supply chains
• May be structured as public–private partnerships and
use private equity, catalytic funds, matching grants or
concessional finance to fund agribusiness ventures.
Consultants influential in design and administration
• Involve acquisition, allocation and repurposing of land
• Mostly southern and eastern Africa so far
www.future-agricultures.org/apra

6. What is driving interest in corridors?
1. Domestic governments
2. Donors and lenders
3. Private sector
www.future-agricultures.org/apra

7. What is driving interest in corridors?
1. Domestic governments:
– Increased spending on infrastructure for development and trade
– Use of transport corridors to attract investment and deliver
development policy goals
→ Experience of South Africa and NEPAD in 1990s
www.future-agricultures.org/apra

8. What is driving interest in corridors?
2. Donors and lenders:
– Strategy of development through economic growth, commercialising small
farmers, linking producers to value chains
– Concern with barriers to trade and business
– Focus on agricultural market linkages, not just productivity
– Renewed interest in importance of infrastructure (e.g. JICA)
– and scale
www.future-agricultures.org/apra
External investment
commitments for infrastructure
in Sub-Saharan Africa by private
sector, China and official
development finance,
1990-2012, in US$ millions
Source: Brookings Institution
2015

9. What is driving interest in corridors?
3. Private sector:
– Extractives and agribusiness demand for transport infrastructure
(e.g. mining boom in Mozambique in early 2000s)
– Agribusiness: demand for organised producers and rural access
– Need to reduce investment risk using piggybacking and public finance
– The private sector has often been the driving force behind recent
corridor initiatives
www.future-agricultures.org/apra

10. What is driving interest in corridors?
1. Domestic governments
2. Donors and lenders
3. Private sector
→ Development of the corridors has been possible because actors in the extractives
and agribusiness sectors have been able to align their strategic interests with the
interests of government and donors in three main areas:
• Infrastructure
• Private-sector development and foreign investment
• Spatial development and territorialism (e.g. geopolitical status, cross-border
trade, poverty reduction in rural areas, value chains)
www.future-agricultures.org/apra

11. Potential benefits
Based on documented outcomes of current and past corridors and SDIs
• Improved investment environment
• Improved roads, rail, power and communications
• Lower transport and trade costs for business
• Marketing opportunities for small farmers and herders
• Technology transfer and greater access to inputs
• Local business development
• Job creation (e.g. for women in processing), although
not necessarily under good working conditions
• Many current proponents and donors also argue that
agricultural growth corridors will increase food
security, and improve food supply to urban areas, but
little evidence for this was found in the literature
www.future-agricultures.org/apra

12. Potential risks
Based on documented outcomes of current and past corridors and SDIs
• Loss of access to land, improper land allocation, displacement or speculation:
– Affects farmland but also land needed for infrastructure (e.g. roads, port developments)
– Women and youth are among the most vulnerable
• Spillover effects are minimal:
– Limited temporary or poor-quality job creation
– Exclusion rather than inclusion of local farmers and herders and SMEs
– Produce is destined for export rather than domestic markets
• Lack of added value or cluster effect:
– Agribusiness ventures or development programmes would have happened anyway
– Emphasising production over other elements (e.g. processing, farmer organisation, staple crops)
• Investment risk and political instability
• Environmental degradation (ports, corridor regions)
www.future-agricultures.org/apra

13. Overarching observations: what does the literature tell us about the
prospects for corridors to mobilise investment and deliver policy?
1. High risk of well-meaning policy aims and investment safeguards being overtaken
by interests of big business and large land-owners
2. Challenge of managing multiple parties and competing interests and channelling
investment into most impactful areas: need patient capital and good governance
3. Good land governance and planning is crucial – but administration often fails to
protect local land users, including women and youth
4. Importance of participation and early involvement of civil society and farmers’
groups to ensure long-term stability and achieve policy objectives
5. Need more clarity on the mechanisms through which corridor investments will
improve food security, stimulate SMEs and ensure inclusion of small farmers
– often models and theories of change are ambiguous. Worst case: corridors are
subsidising multinational corporate strategies in the name of poverty alleviation
6. We need to better understand if putting agricultural development at the centre of
a corridor design, and including cluster development or research and extension
services, adds value for farmers over simply providing hard and soft infrastructure
www.future-agricultures.org/apra

14. www.future-agricultures.org/apra
• Overview paper with further information available
at Future Agricultures website,
www.future-agricultures.org/publications/working-
papers-document/agricultural-growth-corridors-on-the-
eastern-seaboard-of-africa/
Thank You