In many countries of Africa, Asia and South America, over the past few years there has been a rapid increase in the demand by foreign and domestic investors for land suitable for agriculture. Large-scale investments in land, which are typically in the range of tens of thousands to hundreds of thousands of hectares,  are either for agro-fuel production or – more recently – outsourced food production.
This new demand from outsiders is bringing about financial resources, infrastructure and technology, but also increased pressures and competition over land and water in rural areas, where the local population is still growing  and where the average size of family farms is declining. Such pressures and competition may disproportionately affect poor rural people whose livelihoods depend on agriculture, livestock and forests, eroding their already precarious ability to gain and maintain access to natural resources.
The choice of approaches by which local and national governments consider this demand is critical for the prospects of rural communities. Massive foreign investments in rural areas can be an opportunity for development. At the same time, it might well be that direct acquisition of land by outsiders is not necessary for the products – food and feed – that this demand aims to secure. If the price for these products is remunerative, then the supply can be organized by the current owners or users of the land, the majority of whom are smallholder farmers. Public investments in infrastructure and other public
goods, private investment in processing industries and financial services and organization of producers and local communities can result in win-win situations. Such situations can maximize opportunities in terms of, inter alia, increased agricultural income, new employment opportunities and overall rural development while minimizing risks related to the alienation of land rights and the marginalization of poor rural people. In this connection, public policy choices and, in particular, the systematic and inclusive consultation of local communities and farmers’ organizations have a critical role to play
and could make the difference.
The present paper aims to provide background information for the discussion at the Round Table on Growing Demand for Land – Risks and Opportunities for Smallholder Farmers, organized in conjunction with the thirty-second session of IFAD’s Governing Council. It provides an overview of the emerging phenomenon,  its trends and drivers. It reflects on the challenges associated with these trends and on their possible implications for rural communities, both in terms of risks and opportunities. Finally, it suggests some options for good practices that could enable smallholder farmers and rural communities – in particular, poorer people – to actually benefit from the growing global demand for food, feed and agro-fuel and to partner with private and public stakeholders in the food and energy sectors without alienating their rights to and control over their land and territories. The paper closes with a set of questions to guide the Round Table discussions.

By: IFAD

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