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Library Investment Contracts for Agriculture

Investment Contracts for Agriculture

Investment Contracts for Agriculture

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Date of publication
June 2015
Resource Language
ISBN / Resource ID

Private investment in agriculture in
developing countries, both domestic and foreign, has been on
the rise for nearly two decades. This paper focuses on
large-scale agricultural projects in developing countries,
involving the lease of farmland, which rose sharply after
the food crisis of 2008. It is important that such
investments are sustainable not only in the long term, but
also beneficial in the short term with minimal risks or
negative effects. This paper looks at one approach to
achieving this namely, carefully devised contracts with
investors, and in doing so offers a number of concrete
solutions. This paper marries two substantial bodies of
research to show how investment contracts can be set up to
promote sustainable development. The paper presents the top
five positive outcomes and the five downsides from private
sector investments in large scale agricultural projects.
This is derived from empirical evidence gathered by the
United Nations Conference on Trade and Development (UNCTAD)
and the World Bank after visiting large-scale agricultural
projects (UNCTAD and World Bank 2014). The paper then
proposes legal options to maximizing the main positive
outcomes and minimizing the main downsides through better
drafting of contracts between investors and governments for
the lease of farmland. This derived from work conducted by
the International Institute for Sustainable Development
(IISD), which studied almost 80 contracts and produced a
guide to negotiating contracts for farmland and water,
including a model contract.

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World Bank

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