Foreign Direct Investment (FDI) in Land in developing countries

64GlossaryAgro-fuelsAgro-fuels are defined as liquid energy sourcesproduced from agricultural commodities (e.g.from sugar, starch and oil crops), which are usedin the transport sector as well as for thermalenergy generation (heat and power). Fuels fromagricultural waste and residues are less controversialand not included in this definition.Source: GTZ.Foreign Direct Investment (FDI)Foreign investment involves a lasting interest ineffective management control over an enterprise.Foreign direct investment can include buyingshares of an enterprise in another country, reinvestingearnings of a foreign owned enterprise inthe country where it is located, and parent firmsextending loans to their foreign affiliates. InternationalMonetary Fund (IMF) guidelines consideran investment to be a foreign direct investment ifit accounts for at least 10 % of the foreign firm’svoting stock of shares. However, many countriesset a higher threshold because 10 % is often notenough to establish effective management controlof a company or demonstrate an investor’s lastinginterest.Source: World Bank.Contract farmingContractual partnership between small farmersand a processing and/or marketing firm for thepurpose of commercial production, frequently atpredetermined prices. Depending on the termsof contract, small farmers may receive technicalassistance, seeds, agro-chemicals and some creditfrom their contract-partners, and are ensured ofguaranteed markets, secure income and employment.Source: HU Berlin; SLE.FDI in LandFDI in land by a foreign company or state that isbased on a lasting interest in taking control overland use rights. The transaction includes eitherrights of land use or land-ownership. The landuse rights are generally valid for a limited periodand can possibly be extended. Source: (Owndefinition following the general definition of FDI).Increased access to FDI is seen as one of the keybenefits of globalization because it is thoughtto lead to capital formation, technology andknowledge transfer, higher wages and greater jobopportunities. The UN Conference on Financefor Development argues that FDI, along withinternational financial stability, are vital componentsto national and international developmentefforts. Many other international policy documentsstress the value of FDI but critics areconcerned that its benefits are very unequallydistributed, both globally and within societies.Source: WHO.Forest AreaForest area is the land spanning more than 0.5 hawith trees higher than 5 metres and a canopycover of more than 10 %, or trees able to reachthese thresholds in situ. It does not include landthat is predominantly under agricultural or urbanland use. Forest is determined both by the presenceof trees and the absence of other predominantland uses. The trees should be able to reach aminimum height of 5 metres (m) in situ. Areasunder reforestation that have not yet reached butare expected to reach a canopy cover of 10 % anda tree height of 5 m are included, as are temporarilyunstocked areas, resulting from human interventionor natural causes, which are expected toregenerate. It includes: areas with bamboo andpalms provided that height and canopy covercriteria are met; forest roads, firebreaks and othersmall open areas; forest in national parks, naturereserves and other protected areas such as those ofspecific scientific, historical, cultural or spiritual