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Impacts, challenges and opportunities of foreign agricultural investment

Following international concerns on large-scale land acquisitions, FAO conducted extensive research on the impacts, challenges and opportunities of foreign agricultural investment. FAO shares its research results and lessons learnt on a regular basis through publications and working papers.

Main findings

FAO research shows that much more agricultural investment, including foreign direct investment, is needed to eradicate hunger and poverty and promote rural development. Agricultural investment by domestic and foreign investors can generate a wide range of benefits such as higher productivity, increased food availability, employment creation, poverty reduction, technology transfer and access to capital and markets.

However, these benefits cannot be expected to arise automatically. Investments that involve local farmers as equal business partners, do not involve transfer of land ownership and build on intensive consultations, can have positive and sustainable effects on local economies and social development. Conversely, other forms of investment, notably large-scale land acquisitions, carry risks for local communities, host countries and investors.

While investors have a key role to play in ensuring that investments are responsible, good governance at the national and local levels is crucial for positive outcomes and reduction of risks. However, laws and policies may not always be consistent and institutional capacities may be low.

Major publications

Challenges and opportunities of foreign investment in developing country agriculture for sustainable development
This paper describes challenges, opportunities and determinants of foreign investment in developing country agriculture for sustainable development. Options and good practices for generation of mutual benefits and prevention and mitigation of risks are presented.

Impacts of foreign agricultural investment in developing countries: evidence from case studies
This paper summarizes the results of FAO’s case studies on the impacts of foreign agricultural investment on host communities and countries. The studies suggest that the disadvantages of large-scale land acquisitions often outweigh the few benefits to the local community. 

Trends and impacts of foreign investment in developing country agriculture – Evidence from case studies
This publication examines the trends in agricultural FDI and its economic, social and environmental benefits and risks and at the national and local levels, as well as the determinants of these impacts. Download as e-book or PDF.

A contribution to the analyses of the effects of foreign agricultural investment on the food sector and trade in Sub-Saharan Africa
This paper analyzes the likely effects of foreign agricultural investment in Sub- Saharan Africa with a focus on the impacts on the food sector by simulating the effects of the reduction of investment risks triggering an entry of foreign investment flow.

Contact

  • Mr Pascal Liu, Team Leader