German, Laura, Cotula, Lorenzo, Gibson, Katie, Locke, Anna, Bonanno, Anya and Quan, Julian ORCID: 0000-0003-2388-5684 (2018) Land Governance and Inclusive business in Agriculture: Advancing the Debate. [Working Paper]

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Abstract

This paper reviews the state of the global debate on the idea of inclusive agricultural investments by assessing, and makes an original contribution by interrogating the core features of inclusive business relations in Agriculture.

Based on an assessment of areas of agreement in what ‘inclusiveness’ in agribusiness means to different business, civil society and development agency stakeholders is considered to mean, drawn from the policy literature in a series of interviews, five “pillars” of inclusive agribusiness are identified: effective arrangements for farmer representation, fair value chain relations, respect for land rights and agreement on tenure relations, employment creation and respect for labour rights, and contributions to food security. A literature review of crop and market characteristics identified four key variables that influence business configurations in different sectors (crop characteristics, scope for mechanisation, capital investment requirements, and market destinations and conditions) to develop a simple typology of value chain types: perishables linked to distant markets; labour intensive, hard-to-mechanise crops with high perishability and bulk; and labour intensive crops with high perishability and bulk that can be fully mechanised. Each of these value chain types was then examined in relation to the five dimensions of inclusiveness through literature based case studies of specific commodity sectors and geographies, respectively: high value horticulture in East Africa and the Andes; oil palm in Southeast Asia and Colombia, and sugarcane in eastern and southern Africa.

Significantly, the analysis finds that without an understanding of how crop and value chain characteristics and market trends shape opportunities and constraints in specific geographies and commodity sectors it is difficult to advance inclusiveness in agribusiness or develop effective public policy. Inclusiveness is found not to be inherent in specific types of business models, such as large plantations, outgrower schemes or contract farming, but rather a matter of degree, dependent on context, the crops and commodities n question and the outcomes for different social groups. These outcomes are affected by trade-offs amongst the different pillars of inclusiveness and how they are managed. Large plantations may create employment but also pose risks to local community land rights and food security. Labour intensive crops that are hard to mechanise encourage firms to engage smallholder suppliers, but the quality and terms of engagement are highly variable. Drives to increase efficiency can undermine inclusiveness and market restructuring have raised the bar for smallholder participation. Where small farmers have secure control over land resources companies have greater incentives to work with them, and as control over land has a bearing on all five dimensions of inclusiveness, land governance is a key area for attention in promoting greater social and economic inclusion in agriculture.

The paper offers an original and rigorous approach to understanding inclusiveness in agribusiness by focussing on the processes and terms through which small scale farming communities are incorporated and the distributive outcomes of specific productive arrangements in different value chains. It has been welcomed within development agencies and the investment community as providing a fresh analytical perspective and a framework for advancing social and economic inclusion in agribusiness investment in practice.

Item Type:	Working Paper
Uncontrolled Keywords:	Agricultural investment, Inclusive business, Value Chains, Land Tenure, Employment, Food Security, Participation.
Subjects:	S Agriculture > S Agriculture (General)
Faculty / School / Research Centre / Research Group:	Faculty of Engineering & Science Faculty of Engineering & Science > Natural Resources Institute Faculty of Engineering & Science > Natural Resources Institute > Development Studies Research Group Faculty of Engineering & Science > Natural Resources Institute > Livelihoods & Institutions Department
Last Modified:	21 Oct 2020 10:13
URI:	http://gala.gre.ac.uk/id/eprint/24299

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