Hohoe, June 23, GNA - Governments and development agencies must do much more to promote fairer, more inclusive business models and support for small-scale farmers in their relations with investors.
A report published by the International Institute for Environment and Development, (IIED) made the recommendation.
The research was commissioned by the Food and Agriculture Organisation of the United Nations, the International Fund for Agricultural Development (IFAD) and the Swiss Agency for Development and Cooperation (SDC) and made available to the Ghana News Agency, on Tuesday. Dr Lorenzo Cotula, co-author and a Senior Researcher at IIED said agricultural investment could bring benefits to developing nations but large land deals carry big risks as local people may lose access to the land and the resources they have used for generations. He said more promising investments are those that involve supporting local smallholders rather than large plantations. Harold Liversage, Land Tenure Programme Manager of IFAD, expressed optimism that secure land rights and equitable access to land especially for smallholder farmers are essential for economic growth and poverty reduction. The research showed that agricultural investments in developing nations could be structured as alternatives to large-scale land acquisitions. It documents a range of more inclusive business models that could bring benefits to small-scale farmers and protect their land rights while ensuring returns to companies.
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 to be mutually inclusive and beneficial. It discusses these options under six broad headings namely, Contract Farming; Management Contracts; Tenant Farming and Share-Cropping; 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 and still turning a profit, the report said. This could 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 could 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 needed to embrace them as a genuine economic component of their business and not just as part of a corporate responsibility programme. The report stated that action to strengthen the negotiating power of local farmers was crucial.
