Professional Documents
Culture Documents
25
20
15
10
Number of deals (right) 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1
Africa South Eastern Asia Northern Africa Western Africa Americas South America Central Africa Europe/Oceania Eastern Europe 0 10 20 30 40 50 60 0 5 10 15 20 25 30 35
Asia
Cropland 22
Grassland 27
Forest land 31
* Other refers mostly to bare land Source: Land Matrix, Globcover, ESA
Former use
Private company 11
Community 14 State 51
Smallholder (private) 14
Three broad groups of economic players in agricultural land: - Governments eager to secure food and energy supplies - Agricultural companies - Financial investors
Types of investors
Million ha
PPP Investment 0,6 fund 3.3 3,3
11,5
Private companies
30,3
Financial investors
Partnerships
Origin of investment: Emerging countries (increasingly), Gulf states and the North
The origin of investment - top 20 countries
Million ha 14 12 10 8 6 4 2 0 Italy South Africa Australia India South Korea Singapore Saudi Arabia Great Britain Argentina
8
Reliable
Only reported
Malaysia
Canada
Sweden
Norway
Japan
Brazil
UAE
USA
China
Egypt
Qatar
No information 12,8
Agriculture 82,9
Agenda
1 2 3 4
The global rush for land Drivers of investment in farmland Risks and opportunities Win-win-win strategies
1. Increasing demand
Growing world population (7 bn now, 9 bn in 2050 developing countries, urban areas) Rising incomes in developing countries Increased consumption of resource-intensive foods like meat Increasing use of biofuels
2. Constrained supply
Water Energy Climate change
LatAm 800 East Europe and Central Asia 600 East and South Asia 400 200 0 OECD LAM SSA MENA FSU Asia 0
Sources: World Bank, DB Research
123
52
14
MENA
Decades of underinvestment in ag. R&D and rural infrastructure Limited access to inputs and credit Some regions were bypassed by the Green Revolution
LAM
25.000
Asia
10.000
SSA FSU
also in Asia offer huge opportunities for productivity gains and yield improvements
5.000 1961
1971
1981
1991
2001
A profitable investment
1. Good prospects of achieving income through rising agricultural productivity 2. Rising prices of agricultural land 3. Portfolio diversification 4. Hedge against inflation
Other 21% Multiple use 17% Food crops 31% Biofuels 21% Food crops 37%
Other: forest, livestocvk area or hunting ground Sources: Land Matrix, DB Research Sources: World Bank, DB Research
Agenda
1 2 3 4
The global rush for land Drivers of investment in farmland Risks and opportunities Win-win-win strategies
- Agricultural production (agronomy, bad weather) - Volatile commodity prices - Political risk - Economic and social rights of local populations - Environmental sustainability - One-sided agricultural development
- Food security
A concern in case of food export or nonfood production in food-insecure countries
Limited consultation
29
6 10 20 30 40 50 60
- Conflicting land claims in a context of weak land governance - Compensation and evictions
Reported evictions
Number of cases
Up to 999 evictions 1,000 to 2,499 2,500 to 4,999 5,000 to 10,000 more than 10,000
Based on 40 projects Sources: Land Matrix, DB Research
15 5 4 6 10 0 5 10 15 20
Sub-Saharan Africa
World
South Asia
Southeast Asia 0 20 40 60 80
90 30 23 3 20 40 60 80 100
- Country-level benefits
- Economic growth - Export revenues - Workers skills and income - Food security
14 13 12 14 11 25 0 10 20 30
25 20
Agenda
1 2 3 4
The global rush for land Drivers of investment in farmland Risks and opportunities Win-win-win strategies
Collaborative business models between small farmers and investors: contract farming, joint ventures boost agricultural productivity while reducing poverty and hunger
Principles for responsible agro-investment (RAI) Land and resource rights Food security Transparency, good governance and enabling environment Consultation and participation Economic viability and responsible agroenterprise investing Social sustainability Environmental sustainability
Source: RAI, Knowledge exchange platform developed with The World Bank, FAO, UNCTAD, IFAD
Principles for responsible investment in farmland (PRI) Promoting environmental sustainability Respecting labour and human rights Respecting existing land and resource rights Upholding high business and ethical standards Reporting on activities and progress towards implementing and promoting the principles
Source : UNPRI (2011)
Publications
Disclaimer
Copyright 2013. Deutsche Bank AG, DB Research, 60262 Frankfurt am Main, Germany. All rights reserved. When quoting please cite Deutsche Bank Research. The above information does not constitute the provision of investment, legal or tax advice. Any views expressed reflect the current views of the author, which do not necessarily correspond to the opinions of Deutsche Bank AG or its affiliates. Opinions expressed may change without notice. Opinions expressed may differ from views set out in other documents, including research, published by Deutsche Bank. The above information is provided for informational purposes only and without any obligation, whether contractual or otherwise. No warranty or representation is made as to the correctness, completeness and accuracy of the information given or the assessments made. In Germany this information is approved and/or communicated by Deutsche Bank AG Frankfurt, authorised by Bundesanstalt fr Finanzdienstleistungsaufsicht. In the United Kingdom this information is approved and/or communicated by Deutsche Bank AG London, a member of the London Stock Exchange regulated by the Financial Services Authority for the conduct of investment business in the UK. This information is distributed in Hong Kong by Deutsche Bank AG, Hong Kong Branch, in Korea by Deutsche Securities Korea Co. and in Singapore by Deutsche Bank AG, Singapore Branch. In Japan this information is approved and/or distributed by Deutsche Securities Limited, Tokyo Branch. In Australia, retail clients should obtain a copy of a Product Disclosure Statement (PDS) relating to any financial product referred to in this report and consider the PDS before making any decision about whether to acquire the product. .
Deutsche Bank DB Research Dr. Claire Schaffnit-Chatterjee Aug 28, 2013 30