Foreign investment into agriculture: Investment Treaties and the ability of governments to balance rights and obligations between foreign investors and local communities.

By Mahnaz Malik

A number of countries are offering large tracts of farmland to foreign investors as demand for arable land soars. These countries are driven by a desire to attract foreign investment in an increasingly important resource, agricultural land. The investors, however, are seeking an even scarcer resource: long term access to water rights. While the host states also hope that the foreign investment will bring greater yield of food produce through better farming techniques both for the domestic and foreign markets, the investors often seek guarantees of low labour and operating costs and the right to repatriate all of the production, a significant portion of which may be for biofuels.

The presentation will share experiences from Pakistan, where spiraling food prices and a desire to promote foreign investment has prompted the government to offer large tracts of land to foreign investors. At the same time, the country’s growing population of over 180 million people faces water scarcity, low crop yield and food inflation, raising critical issues on whether this foreign investment in agriculture land and water rights will contribute to development or lead to additional conflict? What happens when the government’s ability to balance rights and obligations between foreign investors and local communities is restrained by international law obligations?