FDI and land access: economic land concessions, contract farming, short term and long term renting


A significant part of the renewed land insecurity among smallholders in the Mekong Region is associated with foreign direct investment (FDI). Much of this investment is in the land- and resource- richer countries of Cambodia, Lao PDR and Myanmar and comes from the industrialising countries of China, Thailand and Vietnam. There is thus a strong cross-border dynamic. Investment is in agribusiness, mines, dams and industrial zones. Land deals are often done before specific areas of land are identified, putting pressure on local authorities to "find" land for investors. Territorialisation has helped make such areas legible, hence identifiable for expropriation. FDI also engages capital in contract farming and other relationships with farmers other than straight expropriation, but which still allow investors certain forms of control over land and labour for agricultural development. Local and national state authorities often play an important brokerage role in such deals.

Key reform issues:

  • Greater transparency in land deals
  • Moratoria on FDI in the plantation sector
  • Limiting compulsory acquisition for FDI projects to those with a clear public interest
  • Legislation linking compensation to market values of land
  • Giving priority to smallholders in productive use of land rather than prioritising foreign investors
  • Local government negotiating on behalf of farmers rather than on behalf of investors

Current critique and debate:

Governments in the Mekong Region continue to seek FDI in plantation agriculture as a means to "modernise" agriculture and make use of "unproductive" land. Critique of large scale FDI in land-based production questions the efficiency and productivity compared with small scale farming. There is confusion between land productivity and labour productivity. There is also obfuscation between private interests associated with transnational land deals and purported public interest that they are supposed to serve. Employment promised by land-based investment is rarely achieved, both in terms of numbers and in providing jobs to those displaced from their land by large enterprises versus imported labour. Tax revenues also fall short of expectations.

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