DP8644 Land deals in Africa: pioneers and speculators

Author(s): Paul Collier, Anthony Venables
Publication Date: November 2011
Keyword(s): Africa, farmland, land deals, lease, rent
JEL(s): O13, O55, Q1
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8644

Much African land currently has low productivity and has attracted investors purchasing (or leasing) land as a speculative option on higher future prices or productivity. If land deals are to be beneficial they need to induce productivity enhancing investments. Some of these will be publicly provided (infrastructure, agronomic knowledge), and some can only be provided by ?pioneer? investors who discover what works and who create demonstration effects. Such pioneers can be rewarded (incentive compatibly) for the positive externalities they create by being granted options on large areas of land. However, pioneers must be separated from speculators by screening and by requirements to work a fraction of the land.