Evaluating the Impact of Large-Scale Agricultural Investments on Household Food Security Using an Endogenous Switching Regression Model - Wegayehu Fitawek and Sheryl L. Hendriks

Large-scale agricultural investments, employment and household food security

The acquisition of large-scale agricultural land has increased since the global food and fuel price crisis of 2007/8. Africa is the leading targeted continent for large-scale land acquisitions in the global south. In most sub-Saharan African countries, the purposes of land acquisitions are for producing food crop, biofuel, fiber crops and flower for export. Studies identified the main drivers of large-scale agricultural investment such as food security initiatives, fuel security, climate change mitigation strategies and week land tenure system. The study focused on three Africa countries, namely, Kenya, Madagascar and Mozambique.

Employment and food security

There are two main arguments on the impact of large-scale agricultural investment.  Some researchers are concerned that large-scale agricultural investments could have adverse effects on the food security of local communities. Others point out that such acquisitions could have positive spillover effects for local communities. Large-scale agricultural investments that create job opportunity, improved infrastructure, increase production and access to farm inputs and technologies may have positive impact on development and food security. Employment by large companies provide income and food security for subsistence agriculture households. Some studies have found that large-scale agricultural investments could also bring mixed blessings. However, negative social, economic and environmental impacts may negatively affect the livelihoods and health communities. Few attempts have investigated on the impact of large-scale investments on the food security of households in developing countries. Most available studies have focused on the impact of large-scale agricultural investments on household income, production and productivity, livelihoods of the households, land tenure and governance and environmental aspects rather than food security. This study estimated the employment impacts by large-scale agricultural investments on household food security in Kenya, Madagascar and Mozambique.

Findings

The study found different determinant factors for the participation of household members in large-scale agricultural investment in the three countries. The descriptive and econometric model results confirmed that households with employed members were more food security than households without members employed in a large-scale agricultural investment. Employment seemed to smooth consumption in the study areas.  

Large-scale agricultural investments that create job opportunities help improve household food security status in the surrounding communities, although employment may be seasonal. This study only used one data point for each country, due to lack of baseline data. Therefore, to capture the seasonality nature of food security, we suggest further study using panel data to study the impact of large-scale agricultural investments on household’s food security.

This article was published in Land on the 20^th of March 2021. Access the full article here.

Prof Sheryl L. Hendriks is the Head of the Department of Agricultural Economics, Extension and Rural Development, and a professor in Food Security.

Wegayehu Fitawek is a PhD candidate in Agricultural Economics at the University of Pretoria.