TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

ZAMBIA
Trends and impacts of foreign investment in
developing country agriculture
318
to their lack of education and skills. In
addressing the daunting problem of rural
poverty, the government should put in place
policies that promote inclusive investments
in agriculture. Investments in rural
infrastructure should be the top priority.
The government should also double efforts
in the provision of education to the rural
population: adult education, and vocational
training should be extended to rural areas.
2. Consistent with previous studies on
privatization, e.g. Cheelo and Munalula
(2005), employment levels and/or conditions
of service generally fall after privatization.
The decline in employment is likely to
persist when there is no significant growth
in the size of a firm. Improvements in
efficiency that accompany privatization
should be followed by action to support
firm growth in order to generate new
jobs. Firm growth will most likely require
that investors actually inject into the
company the amounts pledged during the
bidding process. Effective monitoring and
enforcement of the contractual relationship
by government authorities play an
important role in this.
3. The country as a whole has abundant
arable land, but access to arable land
by poor people is becoming increasingly
difficult in some places. Land policy should
strike a balance between the need for
agricultural investments and the interest of
poor farmers. Before any land is allocated
to an investor, the government should take
into account both the present and future
land needs of local people. The impact of
large-scale investments on demographic
changes should also be taken into account
in estimating future land needs. Ideally, the
discipline of town and country planning
should be developed to the extent
where it takes into account the peculiar
conditions that obtain in rural areas. With
increasing population and the need for rural
investments, it is becoming clear that land
use planning should be extended to rural
areas. The current system where chiefs are
heavily involved in land allocation is not
working well in some cases. The chiefs are
demonstrating a growing unreliability in
matters of protecting the needs of their
subjects.
4. There is a tendency for investors to take
up large tracts of land which they do not
fully utilize, and by so doing, they create
artificial shortages of land in some cases.
Investors should only obtain land that they
can utilize within a reasonable span of
time. Depriving the poor of access to land is
socially and economically irresponsible. The
government should proactively protect the
rights of the poor by ensuring that investors
do not hold on to land they do not utilize
for many years. Mechanisms should be put
in place to allocate to investors only such
land as they can utilize within a reasonable
span of time, and to withdraw land from
investors who do not comply with agreed
development plans.
5. A key enabling factor in the initial stages
and in the ultimate successes of the Kascol
and Mpongwe investment projects was
the association with the Commonwealth
Development Corporation (CDC). The CDC
provided investment funds and managerial
expertise to both companies in return for
comparatively low levels of financial returns.
Although not set up as a development aid
agency, the CDC was in practice a vehicle
for delivering development aid to poor
countries. It invested in the least developed
countries and in sectors that would ordinarily
be shunned by private investors; it undertook
investment projects where financial returns
were too low, too distant or too risky to
attract capital flows from private investors.
The Government of the United Kingdom did
not require it to make a profit beyond that
needed to service its debts (Tyler, undated).
Strategically targeted development aid
can play an important role in promoting
commercially viable and socially inclusive
models of agricultural investments.