The impacts of agribusiness and plantation investments on the forests of the Mekong region have been widely documented. Taken together, much of this evidence paints a picture of global economic forces bearing down on fragile ecosystems and ethnically diverse communities of smallholder farmers. What emerges is a set of well-known trade-offs – agricultural investments can bring livelihood improvements and benefits to smallholders, but also multiple risks to people and landscapes. This has been a trend over several decades, linked to regional integration, national policies on agricultural commercialisation, and the pursuit of foreign direct investment. How to promote more responsible agribusiness investments in Mekong forests is the overall focus of day 2, and specifically session 4, of the Mekong Regional Land Forum, on May 27.
In principle, alternative forms of agricultural development such as contract farming, nucleus/out-grower schemes or land lease arrangements, offer better prospects than large-scale land concessions, particularly as smallholders tend to retain control over their land. Advantages include access to markets and technology, and increased yield and income. Disadvantages comprise increased dependency on large agribusiness companies, vulnerability to price fluctuations and the risk of over-indebtedness, distress land sales and growing inequality within communities. The substantial power imbalances between smallholder out-growers and agribusiness companies are self-evident. Women, in particular, are often excluded and rarely on an equal footing in investment decisions. Then there are the environmental risks, particularly forest clearance and conversion to different uses, as well as the startling rise of chemical inputs.
With the growing demand for agricultural commodities, both out-grower and concession models are set to continue in the Mekong countries. Increasingly, governments and civil society are embracing the principles of Responsible Agricultural Investment as a framework to promote investment that enables mutual benefits among farmers and investors while avoiding negative social and environmental impacts. The Association of Southeast Asian Nations universally adopted Guidelines on Responsible Investment in Food, Agriculture and forestry in 2018 (ASEAN-RAI), bringing together a set of principles that steer towards more responsible practices. The RAI principles are based on the cooperation between communities and farmers’ organisations, companies and government, particularly local authorities. They include: the recognition of customary land rights, empowerment of women and marginalized groups, the principles of Free Prior Informed Consent (FPIC), fair sharing of benefits, and respect for the environment.
A number of large companies and investors already apply many aspects of the RAI principles, the question is how can they become basic tenets of all agribusiness? Currently, companies that aren’t concerned about reputational risk are free to avoid responsibility for social and environmental impacts, giving them a competitive advantage over more responsible investors. This situation needs to be reversed, via enabling policy environments, binding requirements, incentives and standards, to steer investment behaviors towards more inclusive and sustainable practices across the board. Join the debate on these issues and more at the Mekong Regional Land Forum 2021, to hear from experts in the field and companies demonstrating how investment practices in Mekong forests can be improved.
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