Foreign Direct Investment (FDI) in Land in developing countries

81. IntroductionOfficial development assistance (ODA) for theagricultural sector has lost share of overall aidover time: it had been around 15% in the 1970s,but it decreased to around 5% in 2007. Thedominant spending areas supported administration,water and forestry; food crops were not apriority (OXFAM, 2009). But, according toFAO 2009, the agricultural sector in developingcountries urgently needs capital. Decades of lowinvestment have meant stagnating productivityand production levels. In order to halve the world’shungry by 2015, as targeted by the 1996 WorldFood Summit, FAO calculations show that at leastUS$ 30 billion of additional funds are requiredannually in the next ten years.Public investments can only address this requirementpartially and must be amended by privateinvestments, which currently are approximatelyfive times higher than public aid (OXFAM,2009). Private investments, therefore, can play avery relevant role in increasing agriculture’scapacity (FAO, 2009).Developing countries often face a lack of domestic– private and governmental – investmentcapacities. Foreign direct investments (FDI) inagriculture are, therefore, crucial for strengtheningthe agricultural sector. These FDI inagriculture are often closely linked to FDI inarable land in order to secure and to control theaccess to commodities produced on the land.Recently, more and more investors from foreigncountries are acquiring arable land in less developedregions – mainly in Africa, South andCentral America and Southeast Asia. Since 2000,approximately 15-20 1 million ha of land worldwidehave been acquired or are under negotiation inthe context of the recent surge of Foreign DirectInvestments in land (FDI in land) (v. Braun andMeinzen-Dick (IFPRI) 2 , 2009). Land acquisitionsby foreign private investors have taken place on asmall scale for decades. However, a changedeconomic and political environment seems tohave accelerated this process in the recent past(v. Braun and Meinzen-Dick (IFPRI), 2009;Haralambous et al. (IFAD), 2009; Grain, 2008;Cotula et al. (IIED, FAO, IFAD), 2009).1 For Comparison: Farmland Germany: 16.8 million ha (2005); EU 27: 160.7 million ha (2005), compare BMELV, 2008, p. 432.2 The papers referring to FDI in land are often assigned to the organisations that the authors work in. Therefore the organisationsare mentioned in brackets.