It documents a range of more inclusive business models that can bring benefits to small-scale farmers and protect their land rights, while also ensuring returns to companies.
The report, published yesterday 21 June, 2010 by the International Institute for Environment and Development (IIED), was commissioned by the Food and Agriculture Organization of the UN (FAO), the International Fund for Agricultural Development (IFAD) and the Swiss Agency for Development and Cooperation (SDC).
The report shows that any international guidance on agricultural investments should go beyond minimizing the possible negative impacts of large-scale land acquisitions, to also promote investment models that maximize opportunities for local smallholders.
It shows a range of ways for big investors and local smallholders to collaborate that can be mutually beneficial. It discusses these options under six broad headings: contract farming, management contracts, tenant farming and sharecropping, joint ventures, farmer-owned business and upstream/downstream business links.
No single model emerges as the best possible option for smallholder farmers in all circumstances. In order to benefit smallholders, while still remaining attractive for investors, each specific context must take into account the local land tenure, policy, culture, history, and biophysical and demographic considerations.
There are many ways for companies to do business in more inclusive ways whilst minimizing risk and still turning a profit, says the report. This can mean closer working relationships with local partners, landholders and farmers, and more sharing of the value generated by the investments.
The report focuses on the way alternative business models can share value — in terms of risk, reward, ownership, and voice in influencing business decisions — between the investor and local partners. It analyses the advantages and disadvantages, opportunities and constraints, and options for scaling up each of these alternative business models.
According to the report, for more inclusive land agreements to work, companies need to embrace them as a genuine economic component of their business, and not just as part of a corporate responsibility program. The report also states that action to strengthen the negotiating power of local farmers is crucial.
The report says governments and development agencies can do much to promote fairer, more inclusive business models, and support smallholders in their relations with government and investors.
Press Release June 21, 2010
Sent By International Institute for Environment and Development
