1. Will Speller
Economist, Investment Issues Section
United Nations Conference on Trade and Development
Investment Contracts for Agriculture:
Practical Guidelines
1

2. 2
This paper draws togethertwo bodies ofresearchon
agriculturalinvestment…
UNCTAD and World Bank (2014)
• Detailed primary field research on 39 mature agribusinesses
in Africa and South East Asia.
• Investigates what investors are doing to promote economic,
social and environmental gains and sustainability.
• Shows how communities and other stakeholders living around
the investment perceive and are affected by it.
IISD (2014)
• Review of 80 agricultural investment contracts between
investors and host governments.
• Provides a guide for negotiating contracts for farmland
and water.
• Outlines a model contract, including model provisions,
which investors and host governments can adapt.

3. 3
…with a view to operationalisingthe responsible conduct of
agriculturalinvestment through practicalguidance.
• Demand for more detailed, practical guidance on how, in concrete terms, to
ensure that agricultural investments are not only sustainable in the long-
term, but also beneficial and with minimal risks or negative effects in the
short-term.
• Proposal of contractual solutions (based on IISD research) to the key
positive and negative outcomes of large-scale agricultural projects (drawn
from UNCTAD and World Bank research).
• The contract cannot solve all problems, but is one approach to generating
positive, sustainable outcomes for investors, governments and communities.
• One element of a programmatic approach of the inter-agency working group
of FAO, IFAD, UNCTAD and World Bank.

4. 4
Top 5 positiveand negativesfrom farmland investments
Positive Negative
Employment Creation Loss of land and poor resettlement plans
Integration of local farmers Lack of openness and engagement with
local communities
Expansion of market opportunities Weak assessment of commercial viability
Establishment of community
development programs
Poor management of environmental and
social impacts
Increased incomes improved food
security
Insufficient mechanisms to raise
grievances

5. 5
Stages in the contracting process
Preparing for
contract
negotiations
• Assessment of suitability and availability of land, soil and
water;
• Meaningful inclusion of communities;
• Feasibility studies and business plans;
• Pre-screening of prospective investors.
Negotiating
the contract
• Defining rights and obligations;
• Stating applicability of domestic laws;
• Engaging with communities;
• Defining what information is public.
Monitoring
and
enforcement
• Monitoring adherence to domestic laws and terms of
agreement;
• Reporting requirements and indicators;
• Enforcement of sanctions for non-compliance;
• Application of contingency plans.

6. 6
Examples of how to maximise keybenefits of agricultural
investment through the contractingprocess…
Preparing for contract
negotiations
Drafting the contract Monitoring and
enforcement
Employment Creation Consider likely
composition of employees
and jobs.
Require training to
integrate local staff.
Integration of local farmers Include provision requiring
the establishment of an
outgrower scheme.
Participate in and monitor
price setting mechanisms.
Expansion of market
opportunities
Give priority to investors
which will set up local
processing facilities, where
viable.
Establishment of
community development
programs
Establish terms and
process for community
development programmes
or financially-inclusive
business models.
Increased incomes
improved food security
Monitor impact of
investment on local food
security.

7. 7
Examples of how to minimise the keyrisks of agricultural
investment through the contractingprocess…
Preparing for contract
negotiations
Drafting the contract Monitoring and
enforcement
Loss of land and poor
resettlement plans
Map out and identify all
existing users of the land,
including formal and informal
rights.
Lack of openness and
engagement with local
communities
Engage with local communities
during the design of the project
and drafting terms of the
contract.
Weak assessment of
commercial viability
Screen investors with respect
to technical and financial
capabilities.
Design contingency
plans for cases in which
investors fail.
Poor management of
environmental and
social impacts
Incorporate findings of impact
assessments and management
plans.
Insufficient mechanisms
to raise grievances
Include a provision for
establishment of grievance and
redress mechanism.

8. Thank you!