What Drives the Global “Land Rush”?
The 2007-2008 upsurge in agricultural commodity prices gave rise to widespread concern about investors causing a "global land rush". Large land deals can provide opportunities for better access to capital, transfer of technology, and adva...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111031110520 http://hdl.handle.net/10986/3630 |
| Summary: | The 2007-2008 upsurge in agricultural
commodity prices gave rise to widespread concern about
investors causing a "global land rush". Large land
deals can provide opportunities for better access to
capital, transfer of technology, and advances in
productivity and employment generation. But they carry risks
of dispossession and loss of livelihoods, corruption,
deterioration in local food security, environmental damage,
and long-term social polarization that led some countries to
recently pass legislation restricting foreign land
acquisition. To stimulate evidence-based debate, this paper
explores determinants of foreign land acquisition for
large-scale agriculture. It quantifies demand for land
deals, showing it focused on Africa where land expansion is
about 20 times the level it was in the past. The analysis
uses data on bilateral investment relationships, together
with newly constructed indicators of agro-ecological
suitability in non-protected and forested areas with low
population density as well as land rights security. It
estimates gravity models that can help identify determinants
of foreign land acquisition dedicated to large-scale
agriculture. The results confirm the central role of
agro-ecological potential as a pull factor. In contrast to
the literature on foreign investment in general, the quality
of the business climate is insignificant, whereas weak land
governance and tenure security for current users make
countries more attractive for investors. Implications for
policy are discussed. |
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