Adding up to our posts on foreign direct investments in agriculture, the Surrey International Law Centre and the Environmental Regulatory Research Group just published a fact-finding report on the so-called ‘land-grab’ which will be used as a basis for a more in-depth piece of research.

The abstract reads as follows, and the full document can be found here.

Following the 2008 world food crisis, many international investors have engaged in a race for land acquisition and food production. This new form of Foreign Direct Investment (FDI) is increasingly criticised in the public sphere, which commonly refers to it as a ‘land grab’.

In the absence of consequent primary sources relating to the subject matter, however, this working document provides an overview of what the authors describe as an ‘agri-FDI’ trend, based on the cross analysis of secondary sources. It first draws a geographical map of the trend as a means to emphasise who invests and where. Second, it considers the origins of the trend are, including the 2008 food crises and the impact of increased demand for biofuel. This document, overall, constitutes the basis of a forthcoming paper which, in turn, will formulate hypotheses and questions as to whether agriculture-oriented investments differ from traditional FDI.

A. Martin and M. Ayalew, Acquiring Land Abroad for Agricultural Purposes: ‘Land Grab’ or Agri-Fdi? Report of the Surrey International Law Centre and Environmental Regulatory Research Group (March 2011). Surrey Law Working Papers – 08/2011 Available on SSRN at http://ssrn.com/abstract=1788948

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Adding up to the ‘Agri-FDI’ section of the International Law Notepad, we are re-publishing a communication of the Ethiopian Government regarding investments in land.

Development or Exploitation? Foreign Investment in Ethiopia’s Agriculture

(MoFA, Mar 04, 2011)- Ethiopia’s development strategy and policies have resulted in double digit economic growth for the past seven years. Last year it also launched the ambitious but achievable Growth and Transformation Plan (GTP) to sustain the momentum of this growth through the next five years. A major element in the plan is agriculture and agro-processing. Agriculture remains one of the mainstays of the economy and the main source of employment and foreign exchange, and the government has committed itself to promote and attract potential investors to participate in agricultural investment with a variety of incentive packages as well as transparent policies, laws, regulations and procedures. Ethiopia is of course politically, socially and macro-economically stable; it has significant market opportunities, an abundant and trainable labor force, and diversified agro-ecological zones.

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With the view of adding a word to the land acquisition chronicles of the Law Notepad, this note provides a brief perspective on the constitutional framework of Ethiopia, considered as one of the major land-dealing countries.

The Constitution of Ethiopia stipulates that land is publicly owned and hence is not a subject of contract of sale (Art.40 (3)).

Individuals can only have a right to use it. There are a number of ways of acquiring land in Ethiopia. The constitution states that every Ethiopian peasant and pastoralist has the right to have land free of charge (Art.40 (4) & (5). Others can acquire land on the basis of lease agreement either from the federal government or state governments.

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As a result of the 2008 world food crisis, many investors have engaged into a race for food production also known as ‘landgrab’. (See for instance here) That being said, it is interesting to note that although many press and NGO comments can be found on the net, very few official sources can be relied upon in order to draw reliable trends.

First, the ‘langrab’ issue importantly illustrates a general malaise as to the increasing demand for food in times where the means to anwer such a demand are limited. Second, the point allows suggesting that to some extend, the ability of money-rich states to acquire land in money-poor but land-rich states generates many issues. In many cases indeed, harvests may be integrally repatriated to the home-states’ markets, while host-states by contrast remain reliant on international food-aid. Problematically however, the ‘landgrab’ debate by putting the blame on foreign investors tends to fail to consider the very origins of such a trend. At this point, it is indeed difficult to find neutral reports and comments in which the “why” prevails on the “what”. While it should be recalled that Foreign Direct Investment (FDI) are vehicules for development-funding which should be distinguished from greed, this essential aspect of the trend is hardly considered.

The Int’l Law Notepad therefore intends to open its columns to such a debate, and an ‘agri-FDI’ category is now available for this purpose. Notes should follow as soon as possible.

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