Foreign Land Deals in Africa: Implications for Agricultural Trade

Ogundipe, Adeyemi and Akinyemi, Opeyemi and Ogundipe, Oluwatomisin (2013): Foreign Land Deals in Africa: Implications for Agricultural Trade.

Abstract

This study investigates the implications of foreign land deals in Africa especially with regard to agricultural trade. It is motivated essentially by large scale foreign deals of land in Africa, Latin America, Central Asia and Southeast Asia that have been reported in recent years. One of the driving forces has been attributed to the presumed availability of land in these regions. This study employs data sourced from World Development Indicators and World Governance Indicators on key variables such as arable land per person, agricultural land as percentage of land area, net food import, regulatory quality, among others (1995-2010) on selected African countries where instances of foreign land deals have been reported. The study formulates empirical models that draw from institutional development theory, which is estimated using the Generalized Method of Moments (GMM). The study found LSFLDs to impact negatively on agricultural export in selected countries, the indexes of institutional framework used were found to be significant; likewise, agricultural land becomes highly significant with relative larger magnitude when interacted with institutional indexes. This therefore implies that as more agricultural land is acquired, agricultural export tends to dwindle and incidences of food insecurity are heightened. The preliminary investigation suggests the need for controlling the issue of massive foreign land deals through viable institutional framework, which can be engendered by building sound legal and procedural measures that will protect local rights and take into account the aspirations of local farmers and the welfare of citizenry.

• Item Type: MPRA Paper
• Language: English
• Keywords: Agricultural exports, Food security; Institutional quality; Land deals
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q15 - Land Ownership and Tenure ; Land Reform ; Land Use ; Irrigation ; Agriculture and Environment; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q18 - Agricultural Policy ; Food Policy; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations

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