Veni Grant 2014 for Maarten Voors

Investments by foreign actors in African farmland – largely for the production of food crops and bio-fuels – have increased dramatically. In Africa, currently an area the size of Europe is foreign owned, for some countries totaling 30% of their landmass. This trend is likely to increase due to the projected rise in demand for food and energy crops.

Some herald this new wave of investment by commercial parties as an important vehicle to achieve poverty reduction. Others, however, attest that it increases inequality, leading to social conflict and corruption. Despite the scale of foreign investments in African agriculture, it has failed to receive rigorous academic investigation.

This project explores the casual linkages between investments and development. I set out by developing an overarching framework and empirically analyse the impacts of international investments in agriculture in two ways. First, at the cross country level, I assess the development impact of commercial investments. To do so I construct a panel data set of African countries using novel data on land acquisitions. Second, at the micro level, I compare the impacts of a recent large-scale commercial agricultural project to a support program for small-holders. I make use of a unique opportunity in Sierra Leone, where both types of interventions are about to be implemented in an area where I previously collected detailed household and community level data. This setup allows for a rigorous difference-in-difference analysis. Moreover, by collecting additional rounds of data I am able to assess short and medium term impacts. Also, throughout the project I pay particular attention to heterogeneous responses to investments: focusing on the ultra-poor, landless and minorities. Quantitative work will be supplemented with qualitative analysis to embed research findings, and obtain a deep understanding how large investments in African agriculture can translate in to pro-poor development.