10 February 2020

In her research, Dilini Abeygunawardane focuses on understanding land use and agricultural development trajectories in the developing world. For over three years, she has been working with the MIDLAND project at University of Louvain, Belgium, studying agriculture and forestry investments in emerging and frontier markets in Southern and Eastern Africa. Before joining University of Louvain, Dilini worked as a consultant for CGIAR research centers undertaking projects in monitoring and evaluation, institutional analysis, and decision support systems development. She has extensive fieldwork experience working in Sub-Saharan Africa and South and South East Asia. She holds a PhD in environmental management from The University of Queensland, Australia. The interview to Largescaleagriculture.com is based on her work with the MIDLAND project at University of Louvain.

With respect to large-scale land acquisitions (LSLA), there exist two divergent views. On the one hand, the deontological view considers LSLA as ‘land grabbing’ – the process that leads to displacement and dispossession in rural areas. On the other hand, the utilitarian view refers to LSLA as ‘land investments’ that are potentially able to improve land management and productivity, create jobs and so on. Ms. Abeygunawardane, do you think there is a potential for the two perspectives to converge on the issue of LSLA? Overall, would such a convergence be desirable? 

It is an interesting question, but I would rather frame it differently: they are both legitimate viewpoints that deal with very different problems. For example, in the regions of Africa where I work, one must only skim through population, nutrition, agriculture or food balance sheets stats to see that the need for investments is real, but how you do it is a different problem. In many parts of Africa, the issues of ‘land grabbing’ revolve around bad management and often boil down to the lack of good governance. In my point of view, what is at the crux of ‘land grabbing’ is the state’s failure to protect its own people. In the emerging and frontier markets, there is an obvious lack of policy and regulation frameworks and institutions. However, even more important than the former is the lack of willingness. In addition, one should not forget that, in Africa, land grabbing often equates to failed investments. Another layer to all of this is the question of capital, in particular, whose capital it should be, what is the source and origin of capital? This is the real normative question and this is the point at which we start taking sides, for the different preferences, allegiances, and ideals we own.

At the same time, I would tend to argue that neither framing - ‘land grabbing’ or ‘land investments’ – is deontological nor utilitarian. However, disentangling these different threads of argument is important, as it does help us realize that these are not alternative formulations of ‘to be or not be’. Bad management is not a reason to question the necessity of investment, it is rather an indicator of management issues that needs to be fixed and addressed. Whether investment is necessary is a separate question for which the answer should have been sought and established in the first place. To sum up, these are not different formulations of a single problem, but very different problems altogether. 

Land investors differ by their strategies, business models and approaches. Is any type of investors particularly prone to invest ‘responsibly’? Have you come across any broad evidence of responsible large-scale land-based investments (in your focus region)?

Well, yes and no. There are quite a number of business typologies, but we are yet to see the evidence to support one being particularly responsible than the other. Investors are a very heterogeneous group and when you look at a single sector there are not that many either. So, it is always empirically challenging to identify the patterns. That said, there is a common understanding, for which we also see emerging evidence that increasing consumer pressure for transparency in value chains and development financing’s best practice demands are thrusting businesses more and more toward being responsible and accountable. So, it depends on what is at risk, and you can see businesses being forced into addressing these risks and adopting higher and better standards in land rights, workers’ rights, and environmental management. In terms of business models these translate into how integrated the value chain is, where the consumer base is, how big the consumer base is, and who is funding. 

When it comes to transnational investments in frontier or emerging markets, something that people often disregard is that it is the colliding of two different cultures, mind sets, bureaucratic setups, demands and working conditions, head-on, which neither party had fully comprehended. What we see in these markets time and time again is that it is extremely difficult to be successful without being responsible, and to be both, one needs a particular set of skills. So, it actually comes down to the calibre of people on the ground running the operations. For example, in Africa, those responsible, skilful, and sharp-witted managers who masterfully navigate the corporate, bureaucratic, and agrarian setting are the ones who deliver business models or solutions that maintain good relationships with their workers and communities and also make money. As simple as it may sound, I would say it is more about people than about business models.

How do local stakeholders perceive large outside investors coming to their countries/regions/areas? 

I think their perception is very mixed and often partisan. It closely aligns with what you mentioned in your first question, deontological versus the utilitarian, not that I agree with it (otherwise it could seem that I am conflicting myself). What is obvious is that these perceptions clearly overlap with people’s political orientations and economic worldviews conceived or imposed upon. So, there is a lot of prejudgement involved. 

What is (or should be) the role of nation states in LSLA? Do you observe any positive tendencies in governance of LSLA in your focus region?

Unfortunately, there are not many positive developments from the governments who are the recipients of LSLA projects. They have been very slow to respond, for those very reasons we talked about earlier. On the one hand, you do see many initiatives promoting responsible land investments from the Western governments, especially the state development and funding agencies like DFID (UK), EIB (EU), FMO (The Netherlands), Norfund (Norway), who invest directly or indirectly into LSLA projects in frontier and emerging markets. Investments into LSLA projects in recent years have been dwindling, and much of them come from the development finance institutes (DFIs) like the ones mentioned. So, they do command agencies over this. DFIs come under a lot of scrutiny over the projects they fund, both from their own governments and taxpayers. Accordingly, they invest heavily into developing best practice guidelines and financing preconditions and restrictions mainly targeting institutional and private investors investing into frontier and emerging markets.

On the other hand, there has been a lot of self-learning by the investors themselves. As I mentioned before, being responsible and accountable has now become a pre-requisite to survive and make money in these markets. Although we hear about many investments, the number of investors involved in them is small – it is a small community. So, information travels, and it travels fast. The learning cycles have therefore become shorter. As one of the investors said, ‘I don’t repeat the same mistakes my forerunners did, my phase one is already learning from and building on his third phase’.

Thank you for your time.