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Responsible Agricultural Investments: Rationalizing Land Grabbing

Responsible Agricultural Investments: Rationalizing Land Grabbing

Jan 15, 2012

Responsible Agricultural Investments: Rationalizing Land Grabbing

by Joseph Purugganan

Since January 2010, global institutions like the World Bank, the Food and Agricultural Organization (FAO), the International Fund for Agricultural Development (IFAD), the United Nations Conference on Trade and Development (UNCTAD) have been pushing for Principles for Responsible Agricultural Investment that Respects Rights, Livelihoods and Resources or RAI as a means to address growing concerns over the possible negative impact of huge acquisitions of agricultural lands on people’s rights and livelihoods.

RAI is a set of seven principles that all stakeholders (governments, investors, communities) should adhere to for investments to do no harm, be sustainable, and contribute to development. (1)

These principles include:
1.    respect for land and resource rights — which entails the recognition and demarcation of land rights, setting limits on expropriation, and clear and transparent mechanisms to transfer land rights;
2.    ensuring food security — making sure that investments are consistent with national agriculture and food policies and that risk and mitigation measures are put in place;
3.    ensuring transparency, good governance and a proper enabling environment — better access to information, clearer and more effective incentives for investors, and appropriate business, legal and regulatory environment at par with global standards;
4.    consultation and participation — linking investments to local development plans, meaningful consultation and representation,  and meaningful and enforceable agreements;
5.    economic viability and responsible agro-enterprise investing — adherence to high standards of business practice and ethical behaviour by investors, cost-effective processes to assess viability and monitor implementation by governments;
6.    social sustainability — providing for fair compensation for displaced communities, and benefit-sharing arrangements; and
7.    environmental sustainability — quantifying and measuring environmental impacts, pushing for sustainable resource use, and minimizing and mitigating the risk and magnitude of negative impacts.

These seven principles, serving as guideposts for responsible agricultural investments, are being pushed as a win-win solution that would ensure that the risks and threats associated with large-scale land and agricultural investments are minimized and that the benefits and opportunities are realized.

While there seems to be a consensus among governments, multilateral institutions, and corporations over the necessity and importance of RAI, social movements representing peasants, small farmers and farm workers, as well as networks working on agriculture and agrarian issues however, are not buying the idea that rationalizing large-scale investments is the answer to the global problem of land grabbing. Groups like the Global Campaign for Agrarian Reform, a campaign led by international peasant movement La Via Campesina, human rights group FoodFirst Information and Action Network (FIAN) and the Land Rights Action Network (LRAN) have strongly rejected the RAI initiative and the principles themselves as means to legitimize the long-term corporate takeover of rural peoples’ farmlands. (2)

These groups assert further that “land grabbing forecloses vast stretches of lands for current and future use by peasants and nomads, and therefore is in breach of the obligations by government (to carry out agrarian reform, to safeguard people’s access to land and to other appropriate means of production, to allow people to feed themselves and the populations of their countries in dignity).” (3)

The food price crisis of 2007-2008 and the desire by developed countries to secure food supplies (given the volatility of food and commodity prices) have been tagged as having triggered the increase over the years in the large-scale acquisition of land for agriculture and natural resource use across Africa and Asia. (4) The World Bank reports around 56 million hectares worth of large-scale farmland deals towards the end of 2009. (5)

While deemed by some as representing a huge opportunity in terms of facilitating much needed agricultural investments to spur agricultural growth and rural development, these huge land purchases or leasehold transactions have nevertheless raised serious concerns over their negative impact on peoples’ rights and livelihoods.

In the Philippines, one of the most recent and highly controversial land deals involved the proposed lease of 1 million hectares of agricultural land for the production of hybrid varieties of corn, rice and sorghum. Covered under a Memorandum of Agreement signed by the Philippine government with the Chinese government (through the People’s Government of Jilin and the China Development Bank) and a private corporation (the Jilin Fuhua Agricultural Science and Technology Development Corporation, Ltd) the deal together with 18 other such agreements involving both public and private parties from both China and the Philippines, was hailed as a major accomplishment in facilitating Chinese investments in agriculture and fisheries in the Philippines. (6)

Questions on the constitutionality of the Philippine-China agreements and the ensuing public outcry over the lopsidedness of the deals however eventually led to the suspension of these agreements. One of the most critical issues in the whole fiasco was the virtual transfer of ownership of land rights afforded under these agreements to the Chinese government and private corporations at a time when the future of the Philippine’s agrarian reform program hang precariously in the balance.The land investment deals contained in the scrapped agreements with China are by no means the only ones in the horizon. According to the World Bank’s Foreign Investment Advisory Services (FIAS) together with the Philippine Board of Invesments (BOI) from 2008-2009, there was in the pipeline around US$1 billion of potential investments in land and 200 new expansion opportunities for investors. (7)

In 2002, FIAS with the objective of removing constraints to foreign direct investments conducted a review of laws on Philippine investment incentives. In 2006, with inputs from the Multilateral Investment and Guarantee Agency (MIGA), FIAS provided assistance to the BOI for the development of a program of foreign investment retention, expansion and diversification.

There has been no clear position by the Philippine government under the new Aquino administration on RAI. The Department of Agriculture (DA) however, the same agency that led the negotiations for the MOAs with China, has identified as a priority the promotion of agricultural investments in the country. Through the Philippine Agricultural Development and Commercial Corporation (PADCC), the government has two main initiatives to provide agribusiness investment opportunities– the agribusiness land investments centre, which consolidates basic information about available new agribusiness lands throughout the country and its attendant agribusiness opportunities to spur investments; and the agribusiness exports showroom, a one-stop display and promotion centre showcasing exportable fresh and processed Philippine made products and packaging the export and mainstream markets. (8) The Department of Agrarian Reform, on its part, identified public-private partnerships, enlargement of its official development assistance portfolio and convergence with initiatives of other agencies such as DA and the Department of Environment and Natural Resources as strategies for CARPER’s beneficiary development or its support services provision.

The strong push by the Aquino government for public-private partnerships and its push for more foreign (and even domestic) investments into the country can be taken as strong signals that may hint toward a favourable Philippine position on RAI.  It will be interesting to know however how the government would navigate around sensitive issues of land ownership at this critical stage of CARPER implementation and in the wake of continuing threats to food sovereignty.

Table 1. Critique of the Principles of RAI


Principles for Responsible Agricultural Investment that Respects Rights,

Livelihoods and Resources (RAI) 


Critique of Rural Social Movements such as La Via Campesina, FIAN, and the Land Research Action Network (LRAN)
1) Land and Resource Rights: Existing rights to land and natural resources are recognized and respected.


– Necessary conditions but not sufficient to effectively guarantee respect for land and protection and advancement of the right to land of local communities.

– Concerned about ensuring a smooth transferability of existing land rights to investors, than it is about keeping the lands of rural people and communities in their hands now and in the future

– Does not cover the rights of landless people to re-gain effective access to land. The rights of future generations are not covered under this principle

– Deciding who has rights over land resources is a political process/matter that involves conflicting interests and power relations and not merely a technical/administrative issue.

2) Food Security: Investments do not jeopardize food security, but rather strengthen it.



– Food security is a limited concept that does not take into consideration how the food was produced by whom and where. It can be a case where net food production increases due to large scale investments as normally reported in official figures but at the cost of dispossession of local communities of their land.

– Human right to adequate food and food sovereignty are not considered.

3) Transparency, Good Governance and Enabling Environment: Processes for accessing land and making associated investments are transparent, monitored, and ensure accountability


These are desirable policies but alone do not guarantee outcomes in favour of the rural poor. History and experience have shown that even transparent and legal processes have led to dispossession of farming, fishing, pastoral, and forest communities.
4) Consultation and Participation: Those materially affected are consulted and agreements from consultations are recorded and enforced.


As envisioned by this initiative, the principle assumes that the outcome of consultations will always be acceptance of the investment project. This turns consultation into mere “window dressing”, tokenism and legitimize the project.


5) Economic viability and responsible agro-enterprise investing: Projects are viable in every sense, respect the rule of law, reflect industry best practice, and result in durable shared value.


Economic viability does not usually lead to processes and outcomes that advance the interests of project affected peoples and communities.


6) Social Sustainability: Investments generate desirable social and distributional impacts and do not increase vulnerability.


From the Bank’s perspective, “social sustainability” are usually in terms of creating jobs and raising incomes but fail to discuss the kind of investments that will realize the rural poor’s rights, and the different options to improve peoples’ livelihoods and respect their control over their resources and lives
7) Environmental Sustainability: Environmental impacts are quantified and measures taken to encourage sustainable resource use, while minimizing and mitigating their negative impact



In many instances, quantification and measures mean economic and monetary calculations. While it will be easy to quantify or measure environmental costs, say of burning or clearing forests, it is unclear how this will be applied to the food-energy model within which agricultural investments are embedded. This include environmental costs of monocrop and industrial agriculture, biodiversity loss, transport/storage of food crops over long distances, waste disposal, etc. In other words, RAI land deals are inherently environmentally unsustainable.

Source: Manahan, Mary Ann, Is Asia For Sale? Trends, Issues, and Strategies against Land Grabbing Kasarinlan Journal

1. Klaus Deininger, Derek Byerlee et al. (2011). Rising Global Interest in Farmland: Can it yield sustainable and equitable benefits? The World Bank
2. Why we oppose the Principles for Responsible Agricultural Investments (RAI). Statement by the Global Campaign for Agrarian Reform and the Land Research Action Network (LRAN).  October 2010.
3. Ibid
4. Joachim von Braun and Ruth Meinzen –Dick (2009). “Land Grabbing by Foreign Investors in Developing Countries: Risks and Opportunities. IFPRI Policy Brief 13.  Accessed at http://www.ifpri.org/sites/default/files/publications/bp013all.pdf. Last visited July 6 2011.
5. Klaus Deininger, Derek Byerlee et al. (2011). Rising Global Interest in Farmland: Can it yield sustainable and equitable benefits? The World Bank.
6. RP-China Agreements: Separating Facts from Fiction. Briefing paper prepared by the China Trade Desk of the Department of Agriculture. 21 August 2007.
7. Manahan, Mary Ann, Is Asia For Sale? Trends, Issues, and Strategies against Land Grabbing Kasarinlan Journal
8. Inputs to 2010 Year-end Report of President Benigno S. Aquino III. Department of Agriculture, December 2010.

(Published on Focusweb.org September 2011: http://www.focusweb.org/content/responsible-agricultural-investments-rationalizing-land-grabbing)

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