Model Contracts for Agricultural Investments

This IISD guide advocates for the use of model contracts to ensure that agricultural investments in developing countries are responsible, transparent, and aligned with sustainable development goals. It explains how model contracts can mitigate risks, such as the use of restrictive stabilization clauses, and provides a framework for governments to develop their own nationally tailored templates.

• Agricultural investor-state contracts are used by governments to fill legislative gaps, resolve inconsistencies between domestic laws, and advance sustainability goals, especially where robust national legal frameworks are not yet established. However, poorly drafted contracts can restrict a government's ability to regulate in the public interest and may fail to generate quality jobs or sufficient tax revenue.
• Model contracts serve as standardized templates that help governments integrate international best practices and standards into specific agreements. They streamline the contracting process, reduce the risk of omitting critical provisions, and can include 'conditions precedent'—events that must occur, such as environmental and social impact assessments or financial reviews, before a contract is performed.
• Stabilization clauses are identified as highly problematic because they can 'freeze' the legal framework or provide compensation for legal changes, potentially hindering a government's ability to address environmental and social issues. The document suggests alternatives such as using insurance or multilateral lenders to mitigate regulatory risk, or limiting stabilization to non-discriminatory fiscal issues.

APA

Maina, N. (2025). Model Contracts for Agricultural Investments. International Institute for Sustainable Development. https://www.iisd.org/system/files/2025-04/legal-tools-investment-agriculture-model-contracts.pdf

Chicago

Maina, Nyaguthii. Model Contracts for Agricultural Investments. International Institute for Sustainable Development, 2025. https://www.iisd.org/system/files/2025-04/legal-tools-investment-agriculture-model-contracts.pdf.

Wikipedia

{{cite report |last1=Maina |first1=Nyaguthii |title=Model Contracts for Agricultural Investments |publisher=International Institute for Sustainable Development |date=April 2025 |url=https://www.iisd.org/system/files/2025-04/legal-tools-investment-agriculture-model-contracts.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{maina2025model, author = {Maina, Nyaguthii}, title = {{Model Contracts for Agricultural Investments}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = apr, url = {https://www.iisd.org/system/files/2025-04/legal-tools-investment-agriculture-model-contracts.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }