Growing Resource Scarcity and Global Farmland Investment

Abstract

Recent strong commodity prices have led to increased investor interest in farmland. Global analysis indicates that suitable land to bring into cultivation is available but concentrated in a limited number of land-abundant countries in Africa, Latin America, and Southeast Asia. In a much larger number of countries, productivity on currently cultivated land is significantly below potential. Higher returns to farming and relatively cheap land have contributed to a wave of investments into farming, mostly through very large ventures in land-rich countries. If land and other markets work well and a regulatory framework is in place, there are opportunities to generate considerable benefits by providing access to capital, technology, and new markets. However, investments have often been controversial because poor land governance and weak institutional capacity have made many of these ventures economically, socially, or environmentally unsustainable. Strengthening land governance and institutions and increasing public investment to raise smallholder productivity are major priorities for most countries to improve development outcomes from these investments.