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Recommendations to enhance positive impacts of agricultural investment

The IAWG contributes to a better understanding of the social, economic and environmental impacts of larger-scale agricultural investment on local communities and farmers, including vulnerable groups such as women and youth, investors, governments and the environment. Based on innovative research, the IAWG provides recommendations and good practices to enhance positive impacts and to reduce negative outcomes, including on context, the business model used and the way it is operationalized.

Do larger-scale agricultural investments yield sustainable benefits?

Major potential positive impacts:
  • Communities may enjoy an increase in job opportunities
  • Farmers may have improved capacities to access capital, markets and value chains
  • Investments may lead to technology transfer and increased productivity
  • Investments may generate profits for investors and farmers, and tax income for governments
Major potential negative impacts:
  • Large-scale land acquisitions can jeopardize farmers’ and communities’ access to natural resources, in particular land and water
  • Job opportunities may not materialize, or be incompatible with local capacities/li>
  • Vulnerable segments of the populations such as women and youth may be further marginalized
  • Investments may lead to environmental degradation
  • Community grievances and resistance can jeopardize projects, leaving everybody worse off

What leads to a positive impact in a large-scale agricultural investment?

Investors can contribute to enhancing positive outcomes of an investment by:
  • Carrying out a thorough assessment of the economic, social and commercial viability of the project before investing
  • Develop a robust and realistic business plan, and have finances in place
  • Choosing the right approach during the design and inception phase
  • Opting for inclusive business models rather than large-scale land acquisitions
  • Conducting meaningful consultations with local communities from the beginning
  • Integrating investments into the host country’s development strategies
Host countries can contribute to enhancing positive outcomes of an investment by:
  • Determining which forms of wish to prioritize
  • Providing the enabling legal, regulatory and policy framework
  • Providing incentives for investments that do not involve large-scale transfers of land
  • Setting up an efficient and effective pre-screening and reviewing procedure for investments
  • Considering to prioritize investors who have long-term practical experience and successful track records in agribusiness
  •  Valuing natural resources
Home countries can use home country measures to enhance responsible outward foreign investments.