Increasing Agricultural Productivity:
Encouraging Foreign Direct Investments in the COMCEC Region
27
investment in land (e.g. acquiring land) has been the most proliferated manifestation of
agricultural FDI. This is especially the case for African COMCEC Member Countries.45 A shift in
focus of agricultural FDI seems to have occurred. Such FDI was traditionally focused on
investments in the agro-food sector, which had primarily been undertaken from efficiency- and
market-seeking motives.46 Securing access to (strategic) natural resources, particularly land and
water, tends to be the prime motive for recent agricultural FDI.
In addition, new FDI agricultural investors stress the production of basic foods rather than
producing and exporting tropical crops. Consequently, the case of agriculture and FDI is of
particular interest for two reasons. Firstly, in comparison with other sectors, the level of FDI
activity in the agricultural sectors of developing countries is relatively large. Second, FDI activity
appears to be diverse in these sectors, that is, resource, market and efficiency-seeking.47 As
illustrated in Figure 10, the recent growing flow of FDI in food and agricultural sectors has
triggered a considerable amount of attention and discussion to the issue of agricultural FDI and,
in particular, its effects on host economies.48
Figure 10: FDI Inflows in Agriculture, Including Forestry and Fishing and Food and Beverages,
1990-2010 (billions of dollars)
Source: UNCTAD, 2012.
Along with the intensifying flows of agricultural FDI, the discussion concerning the potential
effects of agricultural FDI on host countries has intensified.49 FDI is generally perceived as
45 FAO, 2012a
46 Ibid
47 FAO, 2013.
48 Ibid
49 Gunasekera et al, 2012.