Mekong Region Land Governance Project

RESPONSIBLE AGRICULTURE INVESTMENT (RAI)

The development of responsible agricultural investment is based on cooperation between three parties; communities and farmers’ organisations, companies, and government, particularly local authorities.  

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Responsible Agriculture Investment in the Mekong Region

In the Mekong region, smallholder farmers are the prime investors on agricultural land but their autonomous investment capacity is limited and needs support. The intervention of the private sector is thus encouraged in combination with public services such as research, extension, training, infrastructures, access to credit, etc.

In addition to small-scale family farming, agricultural investments consist of a variety of interventions ranging from large-scale land concessions to joint-venture models, nucleus/out-grower schemes, and other forms of contractual arrangements, land leases, farmer or cooperative-owned enterprises. These different model of investment rest on the idea that institutional arrangements can be used to combine the assets of investors (capital, technology, markets) with those of local communities and smallholders (land, labour, and local knowledge).

Although investment in agriculture towards mutually advantageous partnerships is welcome, its actual and potential impacts on smallholder farmers’ land tenure and economy make it essential to establish principles to encourage investors to behave responsibly. In the Mekong region, principles of responsible agriculture investment (RAI) include:

  • Making sure that all those impacted by investment are consulted, following the principle of Free Prior and Informed Consent (FPIC).
  • Recognising the rights (particularly customary) of women, men, and communities, of land and natural resources
  • Ensuring transparency throughout the process of land acquisition, land leases, or other contractual arrangements between companies and farmers
  • Designing economically sound business plans
  • Ensuring the intervention is socially just by allowing for a fair distribution of benefits and value-added between the actors involved
  • Making sure investments are environmentally sustainable and incorporate measures that mitigate negative environmental impacts
  • Establishing grievance mechanisms that are accountable and accessible to farmers
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Turning these RAI principles into practices requires strong regulation, an enabling environment to maximize social and environmental benefits as well as mutual accountability and cooperation between farmers and their organizations, companies, and government, particularly local authorities.

Because the application of RAI principles implies higher costs during an initial stage, responsible investors have a disadvantage in the short term. Government policy and regulation is needed to “level the playing field” by making the application of some of these principles legally binding and by providing companies with suitable incentives. In the long term; however, the application of RAI should be profitable for the investors as well as for the communities.

To learn more about the ASEAN principles for RAI, see: https://www.aseanraiguidelines.org/

 

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