32Table 4: Demand for <strong>FDI</strong> <strong>in</strong> Madagascar (2009)Area, <strong>in</strong> ha without the Daewoo project Area, <strong>in</strong> ha <strong>in</strong>clud<strong>in</strong>g the Daewoo project<strong>FDI</strong> <strong>in</strong> land (<strong>in</strong> total) 1,720,300 3,020,300<strong>FDI</strong> <strong>in</strong> land for food production 446,500 1,446,500<strong>FDI</strong> <strong>in</strong> land for agro-fuelproduction1,231,700 1,531,700<strong>FDI</strong> <strong>in</strong> land for cash cropproduction9,100 9,100<strong>FDI</strong> for other purposes 33,000 33,000Source: Own researchMost of these demands are still <strong>in</strong> the plann<strong>in</strong>gphase and land contract<strong>in</strong>g has not been f<strong>in</strong>alisedyet.The overall size of <strong>FDI</strong> <strong>in</strong> land <strong>in</strong> Madagsacaris the highest of all selected target <strong>countries</strong>,represent<strong>in</strong>g an area equal to nearly 50% of thecurrently cultivated land area. So far the <strong>FDI</strong>`spurpose is dom<strong>in</strong>ated by agro-fuel.In Madagsacar, <strong>in</strong>vestors from European andAmerican <strong>countries</strong> are <strong>in</strong>terested <strong>in</strong> the productionof agro-fuels, <strong>in</strong>vest<strong>in</strong>g especially <strong>in</strong> Jatropha,whereas Asian <strong>countries</strong> are ma<strong>in</strong>ly look<strong>in</strong>g for<strong>FDI</strong> <strong>in</strong> food production. In most cases, all productionwill be exported. It is worth not<strong>in</strong>g that<strong>in</strong>vestors <strong>in</strong> agro-fuels are rarely agro-bus<strong>in</strong>esscompanies but either newly established companiesrais<strong>in</strong>g money at the stock exchanges, or from<strong>in</strong>ternational <strong>in</strong>vestor companies or companieswork<strong>in</strong>g <strong>in</strong> the petrochemical <strong>in</strong>dustry. This oftenresults <strong>in</strong> bad plantation management due to alack of experience <strong>in</strong> agriculture. Furthermore,Jatropha yields are often tremendously overestimated.The question still is what will happen withthe plantations and the farmers work<strong>in</strong>g on themwhen <strong>in</strong>vestors realise that the expected resultswill never be reached.This is different with <strong>FDI</strong> <strong>in</strong> food production.In general, companies <strong>in</strong>vest<strong>in</strong>g <strong>in</strong> this type ofproduct are work<strong>in</strong>g <strong>in</strong> the agro-bus<strong>in</strong>ess sectorand are experienced <strong>in</strong> agricultural production.Social conflicts aris<strong>in</strong>g from the assignment ofland to foreign <strong>in</strong>vestors reveal the sensitivity ofthe citizens with respect to <strong>FDI</strong> <strong>in</strong> land. It is notonly the property rights that fuel the conflicts, butthe role land plays <strong>in</strong> the context of traditionalbeliefs. <strong>Land</strong> is holy and is still owned by theancestors, who play an important role <strong>in</strong> the life ofMalagasy people.After the world economic and f<strong>in</strong>ancial crisis, thedemand for land seemed to dim<strong>in</strong>ish and some ofthe projects have been stopped ma<strong>in</strong>ly due to alack of f<strong>in</strong>ancial resources. In addition, first experiences<strong>in</strong> large-scale and low-cost farm<strong>in</strong>g have leadto disillusionment about the possibilities ofrealis<strong>in</strong>g the envisaged profits.Most <strong>in</strong>vestors seem to be aware of the importanceof the unique biodiversity <strong>in</strong> Madagascar or fearpressure from the numerous <strong>in</strong>ternational NGOswork<strong>in</strong>g <strong>in</strong> biodiversity conservation. At least no<strong>FDI</strong> <strong>in</strong> land for agricultural production is knownthat is destroy<strong>in</strong>g bio diverse spots. This is nottrue for m<strong>in</strong><strong>in</strong>g projects. The two big m<strong>in</strong><strong>in</strong>gprojects of Sherritt (Ambatovy) and QMM bothare work<strong>in</strong>g <strong>in</strong> hotspot-areas destroy<strong>in</strong>g large areasof ra<strong>in</strong>forest.Impacts on food security differ from project toproject. Some projects might <strong>in</strong>crease food productionor augment revenue of farmers whichcould improve the supply of food for <strong>in</strong>dividualfarmers. Other projects implemented on fertileland produce food for export purposes and wouldonly reduce food security.
33Cocoa HarvestJatropha Nursery of Eco Flower InvestorRice Harvest
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