LEGAL TOOLS FOR RESPONSIBLE INVESTMENT IN AGRICULTURE

The document examines the public-private incorporated joint venture (JV) model in agriculture, highlighting its potential to combine private sector innovation with public interest objectives. It warns of 'in-built conflict of interest' and risks such as lack of real oversight and the failure of dividends to materialize. To mitigate these, it recommends detailed JV agreements covering funding, board decision-making, 'reserved matters', and clear exit strategies, while cautioning against including investment contract-type incentives within the JV agreement itself.

• Public-private incorporated joint ventures in agriculture are less common than in water or infrastructure sectors, but are increasingly used for production technology and trade infrastructure, with examples in the Philippines, Rwanda, Malawi, and South Africa.
• Governments may perceive agricultural JVs as more politically feasible and acceptable than leases or concession agreements because they are seen as a model that keeps land in public hands.
• A fundamental risk of the JV model is an 'in-built conflict of interest' where the state's goal of maximizing public welfare clashes with the private company's goal of maximizing profit.
• Public partners may lack real control and oversight if they lack the capacity to participate in management or if private partners make key decisions before board meetings to avoid board-level discussion.
• JV companies may artificially reduce profits to avoid paying promised dividends through methods such as self-dealing, paying high executive salaries, or lending excess cash to affiliates.
• To protect minority public shareholders, JV agreements should include specific board decision-making procedures, such as quorum requirements and 'reserved matters'—key decisions that require a veto or permission from the public partner.
• Investment contract-type commitments, such as tax incentives or assistance with permits, should be handled in a separate contract rather than the JV agreement to avoid placing the public partner in a conflicted position.

APA

Brewin, S. (2021). LEGAL TOOLS FOR RESPONSIBLE INVESTMENT IN AGRICULTURE. International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-08/investment-agriculture-joint-ventures.pdf

Chicago

Brewin, Sarah. LEGAL TOOLS FOR RESPONSIBLE INVESTMENT IN AGRICULTURE. International Institute for Sustainable Development, 2021. https://www.iisd.org/system/files/2021-08/investment-agriculture-joint-ventures.pdf.

Wikipedia

{{cite report |last1=Brewin |first1=Sarah |title=LEGAL TOOLS FOR RESPONSIBLE INVESTMENT IN AGRICULTURE |publisher=International Institute for Sustainable Development |date=August 2021 |url=https://www.iisd.org/system/files/2021-08/investment-agriculture-joint-ventures.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{brewin2021legal, author = {Brewin, Sarah}, title = {{LEGAL TOOLS FOR RESPONSIBLE INVESTMENT IN AGRICULTURE}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = aug, url = {https://www.iisd.org/system/files/2021-08/investment-agriculture-joint-ventures.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }