Securing livelihoods, land and natural resource rights through partnerships between small-scale farmers and outside investors: Lessons from IFAD

Steven Jonckheere

International Fund for Agricultural DevelopmentLand and Poverty Conference, World Bank, March 2014

Context

Renewed interest in

agricultural investment

Large-scale acquisitions of

farmland

Polarised debates about “land grabbing”

Alternative ways of structuring agricultural

investments

IFAD and agricultural investments

• Identifying private-sector models that strengthen land and natural resource rights and boost agricultural development & introducing project models with private-sector investment

• Key principles:- Smallholder family agriculture is a business- Overcoming gender inequalities and empowering

women- Land is fundamental to the lives of poor rural people- Deepening engagement with the private sector

Assessing value sharing

• Economic viability is a precondition for agricultural investments to benefit the local population

• Focus on the way in which business models share value between the business partners

• Four closely interlinked criteria

Value sharing

Ownership

Voice

Risk

Reward

Examples from IFAD supported projects

Swaziland – Lower Usuthu Smallholder Irrigation Project

Business model

- Sugar cane- Nucleus estate & contract farming- Smallholders, Ubombo Mill & Government

Ownership - Ubombo (nucleus, shares)- Smallholders (land sharing, farmer companies)

Voice - National (SSA)- Mill (mill group committee)- Farm (farmer company)

Risk - Smallholder (production, rejection, price)- Ubombo (marketing, price)

Reward - Smallholder (income,services, food security, paid jobs)- Ubombo (supply, sales, co-investment)

São Tomé & Principe - Participatory Smallholder Agriculture and Artisanal Fisheries Development Programme

Business model

- Organic and fair-trade cocoa- Contract farming- Smallholders, Kaoka, CaféDirect & Government

Ownership - Smallholders (land distribution, cooperatives)- Companies

Voice - Associations and cooperatives- Forum for community needs

Risk - Smallholder (production, rejection, post-harvest)- Companies (quantity, quality, market)

Reward - Smallholder (sole buyer, income, services, self-esteem)- Companies (supply, sales)

Lessons learned

• No single model emerges as the best possible option• Willingness of the company to engage with more

inclusive business models as a genuine economic component of their business

• Negotiating power of smallholders- Security of local land rights (engaged in agriculture production

directly/agricultural production carried out by agribusiness)

• Smallholders’ access to information• Monitor impact at household level• IFAD’s role

- Act as broker and facilitator- Strengthen the capacity of host governments and smallholder

groups to negotiate and manage contracts with agribusiness- Policy dialogue and knowledge sharing