Investment in agriculture and gender equality in developing countries

 

By Axele Giroud,
Professor of International Business at Manchester Business School and visiting professor with the University of Gothenburg
Axele.Giroud@manchester.ac.uk
 

 

 

By Jacqueline Salguero Huaman,
Associate Economic Affairs Office at International Trade Centre and PhD Fellow at UNU-MERIT
j.salguerohuaman@student.maastrichtuniversity.nl

 

 

For Citation: SITE4Society Brief No. 21-2020
Country Focus: Developing countries
SITE Focus: Environment, Engagement, Governance
Sub-disciplines of science/social science/humanities: Gender, Industrial Organization, International trade, Agricultural economics.
Based on: Giroud, A and Salguero Huaman, J (2019). Investment in agriculture and gender equality in developing countries. Transnational Corporations Journal, 26(3), 89-110. United Nations Conference on Trade and Development. Geneva: United Nations.
https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=2598
Related to the following Sustainable Development Goals (SDGs): #SDG2 Zero Hunger, #SDG5 Gender Equality, #SDG8 Decent work and economic growth, #SDG10 Reduced inequalities, #SDG17 Partnership for the goals.

Context: Across developing countries, the agricultural sector is an essential source of economic growth, employment, poverty reduction, and food security. In recent decades, developing countries have encouraged larger scale domestic and foreign investment in the agriculture sector. A larger scale investment in agriculture in general refers to the purchase or (long-term) lease of large portions of land (i.e. disproportionate in size compared to the average landholding in the region). It not only refers to the size of the cultivated area, but also to the larger economic size in terms of the capital and labor involved. Furthermore, multinational larger scale investors tend to have their production units in remote rural areas in developing countries, where women do not have equal access to skills, finance, resources, and market. However, as many corporates have embraced promotion of gender equality and women’s empowerment, larger scale investments by multinationals in rural areas open up possibilities for the promotion of women’s empowerment, leading to the following questions.

Research Questions:

  • How do women participate in large-scale foreign investments in developing countries?
  • How do large-scale foreign investments in agriculture directly or indirectly affect women’s economic and social position in developing countries?

 

Motivation for Research Questions: Firstly, there is little research focusing on the impact of rising foreign investment in the agricultural sector vis-à-vis the role of women and gender equality. Second, the answers are not obvious. There might be replication of local inequalities or there might be improvement. Third, positive and negative outcomes are likely to be shaped not only by the multinational strategy, but also by other contextual features such as status of local inequalities, infrastructure, statuary laws and customary laws.

Data and Methodology Used: Data collected during a project led by UNCTAD and the World Bank on The Practice of Responsible Investment Principles in Larger-Scale Agricultural Investments. Researchers visited eight operations in four countries – Cambodia, Ethiopia, Mozambique and Tanzania – conducting a total of 113 detailed, in-depth interviews with 349 stakeholders, primarily from communities in which the operations were based.

Main findings:

  1. Diverse types of low paid participation: The main types of women’s participation in larger-scale agriculture are as: paid and casual workers, daily workers, and contract farmers through outgrower schemes (i.e. contract farming). Also, as unpaid workers in family plots.
  2. Mixed impact of foreign larger investment in agriculture: Many investors tend to be located in rural areas through selected business models, which are at the lowest end of the agricultural value chain and labour-intensive. In such remote areas, as there are practically no alternative employment opportunities of this scale, the arrival of investors represents an enormous economic opportunity. Under this setting, we would expect to find only positive impact. However, as the following table reveals, the impact was mixed.

 

Type of effect Positive Negative
Economic Employment, income, better land access, better use and control of own financial resources. Notably, almost half of women employed on farms mentioned that this job represented their first paid opportunity, which allows them to save. Low-paid jobs, work instability, unsafe working conditions, unfavourable changes in land and water access
Gender-Specific Better intra-household decision-making and resource control; Better access to access to investment-related infrastructure development and provision of social goods (e.g. roads). Under-representation in higher value-added tasks and activities, higher gender wage gaps, sexual harassment, limited number of contracts given the size of plots
Spillovers personal development, social recognition, increased women’s’ spending in the local community and related benefits for their children’s health, nutrition and education Limited representation in local governance, risk of social exclusion, low production capacity, few opportunities for agricultural development  and  technology transfer, increased vulnerability to marginalization,  reduced access to water resources

~Table 1. ~

2.1 No major country specificity: For each one of the eight agricultural investments studied in Ethiopia, Mozambique, Tanzania, and Cambodia, the pros and cons concerning direct employment, social development, access to market, economic spillovers, and infrastructure provision were similarly pinpointed by communities. This, despite the diversity in terms of land size, geographical location, and the different types of high-value crops produced – maize, rice, sugarcane, flower, spices.

2.2 No major crop specificity:  In general, we would expect to find that high-value crops generate an influx of direct employment (e.g., maize, mango) where different types of skills are required, and women will benefit from these types of jobs. However, the payments received by women do not seem satisfactory. Many interviewees mentioned that they would like to be paid more, yet they were happy with the opportunity of having a job.

Policy and Strategy Recommendations:  As the Table shows, larger investments also engender negative effects, which could be either due to existing endogenous conditions that are simply replicated or because of adopted firm strategies and business models. Thus, to contain the negative outcomes we suggest measures to change both the ground realities and the firm or investor strategies.

For the government, we recommend the following three types of actions.

  1. Top-down policies that focus on access to women through promotion of: equal rights to land, property and inheritance for both men and women, women’s independence in their civil status, women’s rights to sign contracts, register a business, open a bank account and apply for a loan, education, employment and representation in local governance.
  2. Public investments that augment participation and returns to women in agriculture: For example, national programs on skilling or infrastructure.
  3. Public interventions in larger investments in the form of gender impact assessments, baseline assessments, consultations with local communities, gender-based benefit sharing arrangements and monitoring schemes. Doing so early in the process would raise awareness of the foreign investor on the specific impact of investment on women and help minimize the negative impacts.

 

Similarly, investors can develop initiatives that augment the positive impact of larger agriculture investment on women, either through actions internal to firm functioning or outreach investments as follows.

  1. Gender-based investment strategy: adopt business models and plans with an explicit gender strategy (e.g. facilitate rural women’s access to financial resources and markets, provide essential items such as tools, seeds and fertilizer, establish gender targets/quotas or focal points, and put in place on-the-job training programs)
  2. Gender promoting outreach investment: development of community relationships, partnerships and networks with other organisations working to promote women’s empowerment (e.g. civil society organizations, trade promotion organizations, farmers’ groups or women’s cooperatives).

 

Photo credits: The Guardian Nigeria, Oxfam International Pan Africa