TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

were allocated to investment projects, with the
pace accelerating after 2007. These allocations
were made either by the Office du Niger or by the
central state, in the main to large investors, on a
permanent (50 419 hectares) or provisional basis
(820 848 hectares). They cover an area almost
10 times the size of the irrigation schemes set up
since the creation of the ON in colonial times.
There is much diversity of institutional entry
points (the authority that negotiates the contract,
for instance) and of form and content of the
agreements concluded between investors and
state. Manifest gaps between law and practice
in the process of implementing contractual
arrangements have also been documented.
Generally speaking, legal requirements on
managing the environmental and social impacts
of investment projects are often sidestepped or
ignored. ‘Letters of intent’ and even actual land
leases are given out in the absence of strategic
planning. The size of some large land allocations,
compared to the neighbouring areas allocated to
family farmers, raises serious equity concerns.
The land governance challenges raised by
these dynamics have been recognized to some
extent by the ON and by the government.
This is reflected in the recent establishment
of a new Secretary of State, attached to the
Prime Minister’s office, responsible for the
integrated development of the Office du Niger
area (SEDIZON, from the French name of the
institution). It is also reflected in the initiation
of a revision of the ON management decree,
and in the cancellation of a number of letters of
intent for which investors had not complied with
requirements to carry out feasibility studies within
an agreed timeframe.
In addition to these recent developments,
ongoing initiatives related to the implementation
of the Framework Law on Agriculture (LOA) and
of the deliberations of the ‘Etats Généraux du
Foncier’ (Malian Land Tenure Congress, EDF) offer
opportunities to improve land governance in the
Office du Niger area and beyond.
While much attention in earlier research
has focused on the more worrying experiences
with agricultural investments in Mali, this study
deliberately focused on two experiences that
are widely recognized as part of better practice.
Part 4: Business models for agricultural
investment: Impacts on local development
One such experience is a sophisticated public
– private – community partnership involving a
sugar cane plantation and processing facility in
the ON area – the Markala Sugar Project (PSM).
This project has two components: a farming
component involving the establishment of a
14 123-hectare sugar cane plantation with
sprinkler irrigation, designed to produce 1.48
million tonnes of sugar cane per year; and an
industrial component involving the establishment
of a processing plant for the production of
190 000 tonnes of sugar and 15 million litres
of ethanol per year, together with cogeneration
of 30 MW of electricity. The plantation would
involve a combination of estate production and
outgrower schemes. Involvement of a multilateral
lender involved application of international social
and environmental standards. An ambitious
development programme accompanies the
investment.
The second experience studied is the work of
Mali Biocarburant SA (MBSA) in the Koulikoro
Region. This experience involves the production of
bio diesel for the national market. The company
has invested in a processing facility, and sources
jatropha seeds from local farmers on the basis
of contract farming. In other words, the venture
does not involve land acquisition for farming
purposes. Farmers intercrop jatropha with food
crops. So although based on promoting a cash
crop, the venture is not, in principle, detrimental
to food security. The farmers are organized in
a cooperative that has an equity stake in the
Malian subsidiary of the company, and thus
representation on the company board.
Both projects are based on innovative
institutional designs. Both have gone a long way
towards promoting inclusion of local farmers and
consideration of social and environmental issues.
While both projects are still at an early stage,
they both have strong potential to benefit local
groups through development opportunities. In the
case of MBSA, the venture provides a potential
source of additional income for smallholders. The
profit-sharing principle on which this experience
is based should help to reduce poverty in the
medium to longer term. The project also offers
opportunities for combating soil erosion. Similarly,
SOSUMAR is an ambitious project that can bring
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