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Agricultural Land Investment Contracts
Food security is at the very core of human existence. Agriculture is thus a critical part of sustainable development. It is estimated that Agriculture contributes about 33% of the world’s gross-domestic product. A significant number of countries with the most arable land belong to the categorization of low to middle income nations, while a significant number of the high-income nations are dependent on food imports from the former. As a result, domestic and foreign agricultural land investment contracts are common as countries seek to achieve food security. The UNIDROIT/FAO/IFAD Legal Guide to Agricultural Land Investment Contracts (ALIC) is thus a welcome framework for ensuring that these investments contribute to the sustainable development goals. On the overall, the legal guide provides comprehensive instrument that effectively highlights the critical components of such agricultural land contracts and is thus commendable.
The UNIDROIT/FAO/IFAD draft guide on Agricultural Land Investment Contracts is an exciting addition to existing guidance and norms surrounding investor-state (and other) contracts for agricultural projects. One potentially transformative feature is the guide’s discussion of multi-actor contracts (also known as “tripartite contracts”), which would include land-holding communities and other legitimate tenure rights holders as a party. Why is this a good idea? What challenges do we face in encouraging more multi-party contracts? And when are such contracts likely to facilitate the fulfillment a community’s right to give or withhold its free, prior and informed consent (FPIC) and to meaningfully participate in decision making? This submission considers these questions.
The UNIDROIT-FAO-IFAD Legal Guide on Agricultural Land Investment Contracts (The Guide) is a tool to promote responsible agricultural foreign investment. Many international organisations insist that more private investment is needed to meet the sustainable development goals (SDGs). Agricultural foreign investment, particularly, is central to a world with no poverty (SDG 1) and no hunger (SDG 2) (The Guide 2019, 10, 13), but the link between foreign investment and these goals should not be taken for granted. Foreign investment can probably promote these and other SDGs; however, it also creates costs and risks.