Économie et Statistique n° 444-445 - 2011Land and agriculture, recent developments

Economie et Statistique
Paru le : 23/02/2012

Competition for Land: Theory and Empirical Determinants of Cross-Border Acquisitions of Farmland

Rabah Arezki, Klaus Deininger et Harris Selod

Since the 2007-2008 surge in agricultural prices, the media have been talking about a “competition for land” on a global scale, in which countries that import food commodities are reportedly trying to secure their supplies by acquiring large quantities of arable land in developing countries. Beyond speculative behaviour in response to world price fluctuations, analysts see this phenomenon as a response to demographic pressure and the expectation of an increase in global demand for agricultural products amplified by changes in income and life styles. The implications for development are substantial. Is there an opportunity for building up an export-oriented agricultural sector? Or is there a risk that land will be plundered at the expense of current users, destroying small family holdings and aggravating environmental risks? We look at the origins of the process by seeking to identify the determinants of transnational investments involving large-scale land purchases. Absent an international database and given the difficulty of consolidating national information, we rely on information published in the international press and the construction of suitable indicators for agro-ecological potential and land governance. Estimates of gravity models using these variables suggest a specificity of farmland investment that stands in contrast to the literature on general investment. While our findings confirm the centrality of agro-ecological potential as an attractiveness factor, standard governance variables appear to have no effect. Paradoxically, the countries whose population has little land-tenure security actually seem to be the most attractive-a pattern consistent with the concerns voiced in the press and by non-governmental organizations.

Economie et Statistique

No 444-445

Paru le : 23/02/2012