Agribusiness investments and the role of NGOs, reflections from Oxfam

Over the past 5 months, I had the chance to reflect on agribusiness investments in fragile states and the role of NGOs, using Oxfam as a case study. The following blog post highlights the results of my research.

Agribusiness investments in fragile states are likely to continue to increase over the next years. While this might raise concerns for some, the positive impact these investments could have is significant. First, agribusiness investments have an important role to play in securing the growing food needs and increase agricultural production in fragile states. Second, research shows that investing in the agricultural sector is one of the best ways to eradicate extreme poverty and promote economic growth in fragile states. Taking into account that poverty will be increasingly concentrated in fragile states, that the population of these states will grow significantly over the next years, and that fragile states are increasingly recognised as a risk to global security, stimulating agribusiness investments in these states is becoming a global priority.

 

‘There’s never been a better time to find those win-win solutions. The trillions of dollars sitting on the side-lines, earning little interest, and the investors looking for better opportunities should be mobilized to help us meet the exploding aspirations of people all over the world […] Getting the private sector engaged in creating jobs and growing economies may be one of the best ways to prevent conflicts in the future’

                                                                                 World Bank director Yong Kim, 2017.

 

However, evidence shows that agribusiness investments in fragile contexts often do not contribute to local economic growth or food security. Instead, these types of investments are often of predatory nature with significant negative impacts on communities and farmers. Therefore, these are an urge to investigate alternative agricultural investment models that foster development in fragile states but counter any negative impacts.

Background of the research
The aim of this research was to find out if NGOs can play a constructive role in engaging with agribusiness operating in fragile contexts to stimulate responsible agricultural investments. Responsible agricultural investments should contribute to local economic growth that has a significant impact on reducing rural poverty and increase food security. The research was conducted at Oxfam Novib to reflect what obstacles exist within an NGO that would foster collaborations with agribusiness in fragile contexts. A thorough literature review of internal documents within Oxfam and key expert interviews led to findings of this research.

Findings
While business-NGO partnerships in fragile contexts are receiving an increasing amount of attention, good practise examples of such partnerships are almost not existing. This appeared also to be the case within Oxfam. Two main obstacles were identified why partnerships in fragile contexts between business and Oxfam are almost not existing.

The first obstacle is Oxfam’s traditional position towards business versus a new partnerships model. A collaborative partnership model with companies would question the fundamental position of NGOs like Oxfam in society. Traditionally, NGOs have a watchdog position in which they monitor if companies are doing no harm to the location in which they operate. In many fragile contexts, the state has poor regulatory power and companies are under limited control by states. NGOs often monitor these companies and publish their negative impacts. Going from this watchdog position towards a collaborative partnership with agribusiness in fragile contexts challenges the traditional role of NGOs like Oxfam in society.

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picture 1. Negative effects of Palm Oil plantation highlighted by NGO Global Witness

 

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Picture 2. IFC fostering the positive effects of private sector activates in fragile states to create new opportunities

The second obstacle to foster agribusiness – Oxfam partnerships in fragile states is related to the organisational structure within Oxfam. Traditionally fragile states are the domain of the humanitarian oriented departments whereas private sector activities are the domain of the development-oriented departments. Partnerships with agribusiness in fragile states require a linkage of the expertise from both departments. However, research showed that a cross-fertilization between experts and these different departments remains highly fragmented. Conflict-experts with their expertise in fragile states and private sector experts very easily misunderstand each other in terms of approaches, terminologies or concepts. Improving the communication and interaction between the different departments is therefore key in order to make agribusiness partnerships in fragile contexts work.

Conclusion and way forward
The two contrasting pictures above illustrate two different world views. Picture one is from the NGO Global Witness highlighting the negative impacts of palm oil in Liberia and demonstrating that this is how ‘development’ looks like. Picture two is from the International Finance Corporation, the largest global development institution focused exclusively on the private sector in developing countries. With more than $156 million invested in 28 private sector related projects in Liberia, the IFC believes, as picture 2 illustrates, that reviving the private sector of a post-conflict country like Liberia is the way to create opportunities.

It is hard to argue that both pictures illustrate a reality and a truth. However, while it is very likely to expect that agricultural investments in fragile states will continue to rise, alternative investment models should ensure these stimulate responsible agriculture. It is here where NGOs like Oxfam have a key role to play in helping business act more responsible not just for beautiful written policies and standards on their headquarters but more so on the ground where they operate.

To do so, according to this research, NGOs should focus on organisational structures to avoid expert silo’s in which humanitarian oriented assistance remains dominant in fragile states and private sector related assistance remains dominated in stable regions. Instead, NGOs should foster the cross-fertilization between those traditionally separated departments and their expert knowledge. Only then, could partnerships between agribusiness and NGOs in fragile states materialize.

This article was written by Joris Baars,  Intern Conflict, Resource Governance and Private Sector. Read more about Joris here!

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