TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

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BRAZIL Trends and impacts of foreign investment in developing country agriculture TABLE 2 The world’s 25 largest TNC suppliers of agriculture, ranked by foreign assets, 2007 Assets Sales Employment Rank Corporation Home economy Foreign Total Foreign Total Total US$ million and number of employees 1 BASF AGa Germany 44 633 68 897 49 520 85 310 95 175 2 Bayer AGa Germany 24 573 75 634 24 746 47 674 106 200 3 Dow Chemical Companya United States 23 071 48 801 35 242 53 513 45 900 4 Deere & Company United States 13 160 37 176 7 894 23 999 52 000 5 El Du Pont De Nemours United States 9 938 34 131 18 101 29 378 60 000 6 Syngenta AG Switerzland 9 065 12 585 9 281 9 794 21 200 7 Yara International ASA Norway 8 009 8 541 9 939 10 430 8 173 8 Potash Corp. of Saskatchewan Canada 6 079 9 766 3 698 5 632 5 003 9 Kubota Corp. Japan 5 575 12 691 4 146 9 549 23 727 10 Monsanto Company United States 4 040 12 253 3 718 8 563 18 800 11 Agco Corporation United States 4 034 4 699 5 654 6 828 13 720 12 The Mosaic Company United States 3 881 9 164 3 859 5 774 7 100 13 ICL-Israel Chemicals Ltd. Israel 2 066 4 617 2 092 4 351 14 Provimi SA France 1 962 2 237 2 523 2 805 8 608 15 Bucher Industries AG Switerzland 1 648 1 850 2 058 2 172 7 261 16 Nufarm Limited Australia 1 191 2 010 925 1 512 17 CLAAS KGaA Germany 1 000 2 619 2 884 3 781 8 425 18 Sapec AC Belgium 826 826 837 837 692 19 Terra Industrires Inc United States 735 1 888 389 2 360 871 20 Aktieselskabet Schouw & Company A/S Denmark 695 2 016 1 350 1 598 3 541 21 Genus PLC United Kingdom 652 851 394 469 2 124 22 Scotts Miracle-Gro Company United States 591 2 277 470 2 872 6 120 23 Kvemeland ASA Norway 367 487 649 741 2 717 24 Sakata Seed Corp. Japan 331 843 140 383 1 711 25 Auriga Industries A/S Denmark 319 849 624 856 1 615 Source: UNCTAD, 2009 A General chemical/pharmaceutical companies with significant activities in agricultural supplies, especially crop protection, seeds, plant science, animal health and pest management. Note: Data are missing for various companies. In some companies, foreign or domestic investors or holding companies may hold a minority share of more than 10 percent. In cases where companies are present in more than one agrifood industry, they have been classified according to their main core business. 34
BOX 3 Monsanto Company Part 3: Policies for attracting FDI and impacts on national economic development Monsanto Company, together with its subsidiaries, provides agricultural products for farmers in the United States and internationally. It has two segments: Seeds and Genomics, and Agricultural Productivity. The Seeds and Genomics segment produces corn, soybeans, canola and cottonseeds, as well as vegetable and fruit seeds, including tomato, pepper, eggplant, melon, cucumber, pumpkin, squash, beans, broccoli, onions and lettuce. This segment also develops biotechnology traits that assist farmers in controlling insects and weeds, as well as provide genetic material and biotechnology traits to other seed companies. The Agricultural Productivity segment offers glyphosate-based herbicides for agricultural, industrial, ornamental, and turf applications; lawn-and-garden herbicides for residential lawn-andgarden applications; and other herbicides for control of pre-emergent annual grass and small seeded broadleaf weeds in corn and other crops. The company offers its traits products under Roundup Ready, Bollgard, Bollgard II, YieldGard, YieldGard VT, Roundup Ready 2 Yield, and SmartStax; row crop seeds under DEKALB, Asgrow, Deltapine, and Vistive; vegetable seeds under Seminis and De Ruiter; herbicides under Roundup; and corn and cotton under Harness brand names. It also licenses germplasm and trait technologies to seed companies. The company sells its products through distributors, retailers, dealers, agricultural cooperatives, plant raisers, and agents, as well as directly to farmers. Monsanto Company has a joint venture with Cargill, Inc. to commercialize a proprietary grain processing technology under the name Extrax. It also has a collaboration agreement with BASF in plant biotechnology that focuses on highyielding crops and crops that are tolerant to adverse conditions. The company was founded in 2000 and is based in St. Louis, Missouri. Source: http://finance.yahoo.com/q/pr?s=MON+Profile Monsanto arrived in Brazil in 1951 and has its headquarters located in São Paulo, the state where it installed the first factory in São José dos Campos (SP) in 1976. In Brazil, Monsanto produces herbicides and seeds of corn, soybeans, cotton and vegetables, and varieties of cane sugar. Source: http://www.monsanto.com.br/institucional/monsanto-no-brasil/monsanto-no-brasil.asp exports of a handful of agricultural products, mostly coffee and sugar. Attempts were made to industrialize the country, for example through import substitution policies introduced in the 1930’s, but with limited impact (Abreu and Bevilaqua, 2000). Between 1960 and 1972, various policies adverse to the agricultural sector were applied, such as the overvaluation of the currency, high tariffs for imported industrial products, quantitative restrictions for agriculture exports, discrimination against raw commodities export and preference for industrialized valueadded agricultural products, and policies that sought to make domestic food prices affordable to the growing urban centres. The Government of Brazil tried to compensate the adverse consequences of these policies with the creation in mid-1960 of a highly subsidized rural credit system. Credit was offered for working capital, investments (machinery, cattle, etc.) and marketing (discounting promissory notes and transport). Some analysts estimate that subsidized credit was directly responsible for a 66 percent increase in agriculture production during the 1970s (Lucena and Souza, NA). This very same decade saw the birth of the Brazilian Agriculture Research Enterprise (EMBRAPA), an R&D institution that has become key for the generation of agricultural technology. 35 BRAZIL
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TRENDS AND IMPACTS OF FOREIGN INVES
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Trends and impacts of foreign inves
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Acronyms ABRAF Brazilian Associatio
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EAC East African Community EC Execu
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JV Joint Venture Kascol Kaleya Smal
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PTF Privatization Trust Fund PTS Pe
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Foreword Large-scale international
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xvi Page 4. The business climate fo
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xviii Page 4. Investments by transn
Page 22 and 23: xx Page 7. Conclusions and recommen
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Page 28 and 29: TANZANIA: ANALYSIS OF PRIVATE INVES
Page 30 and 31: ZAMBIA: INVESTMENT IN AGRICULTURAL
Page 32 and 33: xxx Page Table 4 Foreign investment
Page 34 and 35: xxxii Page Table 5 Additional tax b
Page 36 and 37: PART 4: BUSINESS MODELS FOR AGRICUL
Page 39: P A R T O N E INTRODUCTION
Page 42 and 43: Trends and impacts of foreign inves
Page 53 and 54: 1. Introduction 1 Foreign Direct
Page 55 and 56: FIGURE 2 Trends in FDI-African case
Page 57 and 58: FIGURE 6 Average annual growth in c
Page 59 and 60: FIGURE 9 Share of agriculture in to
Page 61 and 62: FIGURE 12 FDI flows to agriculture
Page 63: FIGURE 18 Agricultural Investment i
Page 67 and 68: Improving the business climate for
Page 69 and 70: BOX 1 A brief history of FDI in Bra
Page 71: BOX 2 TNCs and the Brazilian agrifo
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Page 77 and 78: the same time, conserving natural r
Page 79 and 80: CHART 2 Factors that contributed to
Page 81 and 82: TABLE 3 Performance of Brazil for s
Page 83 and 84: BOX 6 Checklist for Foreign Direct
Page 85 and 86: factors that affect, lead to succes
Page 87 and 88: CHART 4 PROMECIF phases cycle Phase
Page 89 and 90: the priority indicators within thes
Page 91 and 92: 73 rd in a total of 182 countries e
Page 93 and 94: Sutainable Development: Lessons fro
Page 95: World Bank. 2009. Awakening Africa
Page 98 and 99: TANZANIA Trends and impacts of fore
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TANZANIA Trends and impacts of fore
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: Foreign investment and agricultur
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the two data sources are compiled o
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survey (accounting to approximately
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Students are entitled to tuition fe
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Free Trade Agreement (TAFTA), was s
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Germany, Switzerland, United Kingdo
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FIGURE 1 Investment promotion polic
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percent of GDP in 2001considerably
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Philippines indicate their signific
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TABLE 4 Foreign investment approved
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TABLE 6 Export-oriented FDI in the
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followed by fisheries, livestock an
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FDI and employment The impact of FD
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TABLE 12 Employment generated by fo
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BOI investment promotion policy are
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National Food Institute of Thailand
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: Analysis of private investment in
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FIGURE 3 Value of planned foreign i
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TABLE 1 Investment incentives, Ugan
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TABLE 3 Summary of enterprises in c
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Over 95 percent of the total annual
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CHART 1 Uganda coffee value chain C
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CHART 2 Value chain of chrysanthemu
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CHART 3 Value chain for fish proces
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companies and fully owned subsidiar
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(a) the decreasing fish stocks and
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TABLE 5 Sources of investment finan
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Part 3: Policies for attracting FDI
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TABLE 6 Market destinations for sel
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BOX 9 Community services provided b
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BOX 10 Examples of environmental im
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contributed to opening internationa
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Websites 1. faostat.fao.org 2. htt
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Local impacts of selected foreign a
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linkages; unsecured land ownership;
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hectare and 1.5 tonnes per hectare,
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3.2 FDI in agriculture by nationali
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form of pure Korean ownership or pa
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of the discrepancies between CDC da
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TABLE 7 Distribution of ELCs by nat
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the country’s economy. It is ther
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on forest use 13 . Across the count
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The National Strategic Development
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team in December 2010 in the Kompon
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order to transport materials and wo
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other agricultural purposes, but la
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stream (one that is 20-30 m wide) a
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MAFF, prohibited the import of live
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7.5 NGOs/Civil society Local NGOs
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: business models in Ghanaian agri
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TABLE 3 FDI agricultural projects a
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Part 4: Business models for agricul
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level of foreign ownership for each
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land disputes, slowing and complica
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TABLE 6 Ease of doing business in G
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TABLE 8 Selected indicators of the
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estate and out-grower scheme for th
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vice-chairman, secretary, assistant
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are exported, 40 percent are sold t
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strong advocate of bush fire preven
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chiefs, irrespective of whose land
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The Assemblyman of Jimle, a locally
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TABLE 12 Key features of the Solar
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given the lengthy time frame involv
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ESD (Environmentally Sustainable De
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Large-scale agricultural investment
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Touré, 2009). So, agricultural mod
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the lineage holdings to one family
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BOX 2 Content of agricultural inves
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of largescale land acquisitions. 6
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percent); and students, undoubtedly
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BOX 4 The conclusions of the feasib
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Malians. Significant players includ
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out in the absence of strategic pla
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ESIAs. The mass influx of foreign i
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objectives, but the contract makes
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in the sugar sector. The aim was to
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stresses the government’s respons
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covering 857 hectares of land, plus
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Final remarks about project design
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As a result, activities to implemen
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and rural electrification (Agence M
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shareholders began to ask questions
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so far. The revenues received from
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were allocated to investment projec
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family farmers to have access to le
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SENEGAL Trends and impacts of forei
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ZAMBIA Trends and impacts of foreig
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The findings of the studies present
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3. The significance of business mod
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were introduced to enhance producti
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The presence of enabling factors is
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5.8 Type of production system and c
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The available data confirm that the
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the project. This situation increas
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debates on resource-seeking foreign
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programmes for government officials
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EDITED BY: Pascal Liu Suffyan Korom
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TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

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