Investment Contracts for Agriculture Maximizing Gains and Minimizing Risks

This policy brief outlines how to use investment contracts to ensure large-scale agricultural projects in developing countries are sustainable and beneficial. It identifies five key positive outcomes—employment creation, integration of local farmers, expanded market opportunities, community development programs, and improved food security—and five primary downsides, including land loss, lack of community engagement, weak commercial viability, poor environmental/social management, and insufficient grievance mechanisms. The brief provides a framework for managing these factors across three stages: preparation, contract drafting, and monitoring and enforcement.

• The most successful business model for agricultural investments, and the only one showing significant technology transfer, is the integration of nearby farmers through outgrower schemes.
• The most significant negative impact on local communities is the loss of land combined with poorly executed resettlement plans.
• Lack of transparency and inadequate consultation with local communities regarding land deals can create operational and financial difficulties for investors due to resulting fear, mistrust, and resentment.
• Many agricultural projects struggle or fail because of a weak assessment of commercial viability, which could have been mitigated by better pre-investment screening, due diligence, and feasibility studies.
• Environmental and social impact assessments are often treated as "box-ticking" exercises and are frequently not translated into monitored management plans.
• Investment contracts are critical legal instruments that define rights, obligations, benefit-sharing, exit strategies, and redress modalities, often filling gaps in domestic laws.

APA

Okumura, A. (2015). Investment Contracts for Agriculture Maximizing Gains and Minimizing Risks. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/world-bank-policy-brief-investment-contracts-for-agriculture.pdf

Chicago

Okumura, Asuka. Investment Contracts for Agriculture Maximizing Gains and Minimizing Risks. International Institute for Sustainable Development, 2015. https://www.iisd.org/system/files/publications/world-bank-policy-brief-investment-contracts-for-agriculture.pdf.

Wikipedia

{{cite report |last1=Okumura |first1=Asuka |title=Investment Contracts for Agriculture Maximizing Gains and Minimizing Risks |publisher=International Institute for Sustainable Development |date=October 2015 |url=https://www.iisd.org/system/files/publications/world-bank-policy-brief-investment-contracts-for-agriculture.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{okumura2015investment, author = {Okumura, Asuka}, title = {{Investment Contracts for Agriculture Maximizing Gains and Minimizing Risks}}, institution = {International Institute for Sustainable Development}, year = {2015}, month = oct, url = {https://www.iisd.org/system/files/publications/world-bank-policy-brief-investment-contracts-for-agriculture.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }