Engagement dynamics in large-scale investments in farmland and implications for smallholder farmers – evidence from Zambia

Abstract

The recent increase in farmland investments in developing countries by private equity funds, large multinationals and sometimes foreign governments has attracted widespread attention and strong emotions from various interest groups. A major criticism of such investments is how they often marginalise smallholder farmers, as it is often not part of the investment plans to engage with these farmers. There is, however, little empirical evidence to support such claims. Using evidence from three large-scale farmland investors in Zambia, this paper provides an in-depth analysis of different types of engagement dynamics and linkages between large-scale farmland investors and smallholder farmers, and employs the propensity score-matching method to estimate the impact of such engagement on the production outcomes of smallholder farmers. The results indicate that farmers who are deliberately engaged by investors perform better in terms of hybrid seed and fertiliser usage, and subsequently have a higher gross value per hectare of crops than those who are not.