Land Rights

Issue Overview

Inadequate and insecure land rights are leading to conflicts over land, environmental degradation and overall exploitation of farmers. About two-thirds of agricultural land deals by foreign investors between 2000 and 2010 were in countries with serious food security problems, and two-thirds of foreign land investors in developing countries plan to export everything they produce. These trends can cause wide-ranging social disruption, including loss of land title which limits farmers’ ability to pledge land as collateral and reinvest in their farms to raise productivity over time.

International land acquisitions are increasing, with governments and private firms investing in or purchasing large tracts of land in other countries, sometimes in situations where local land rights are ignored.

Farmers that lack land tenure are reluctant to make long term investments in their farms (or may be unable to access credit), which can result in higher price volatility and lower productivity.

In regions where land rights of indigenous or local communities are not documented or recognized, local people are at risk of being evicted or wrongfully displaced during the acquisition of land or conversion of forests to make way for commercial agriculture operations. The livelihoods of forest-dependent communities are further disrupted when natural forests are replaced with managed tree plantations, which provide a much narrower range of services (such as food, fuel, medicine and wildlife habitat) than the original forest. Companies that do not respect the land rights of local people may face financial and reputational risks stemming from protests, work stoppages or damaging social campaigns.

Commodity Exposure to Land Rights Issues

Business Risks Associated With Land Rights Impacts

Reputational

Nestlé report highlights that legal and other, often violent, disputes on rights to land and natural resources are increasing in some countries. The report confirms that companies must recognize and clarify rights to land and natural resources, through an inclusive and equitable process, to further sustainable agricultural development.

IMPACTS

  • Brand equity damaged due to consumer concerns and advocacy campaigns
  • Costs of complying with human rights and labor certifications

Litigation

A federal prosecutor in Brazil told Bunge in 2011 to stop sourcing sugarcane from Jatayvary, because of a land rights dispute with an indigenous community. The company insists that it will only consider breaking its contracts once the land is fully demarcated, and officially signed by the President.

IMPACTS

  • Legal fees and monetary settlements for violating local laws and regulations

Priority Commodities

Among the most commonly sourced commodities profiled in Engage the Chain, impacts related to land rights may be significant in the production of beef, fiber-based packaging, palm oil, and sugarcane. The following summarizes how the production of beef and palm oil contribute worldwide to impacts on land rights. It is important to consider that the scale of the impacts depends on the practices used by individual producers, as well as regional and local conditions.

Beef

In regions with unclear or unenforced property rights, subsistence farmers and indigenous communities have been displaced by beef cattle expansion. Brazil, a hotspot for cattle driven deforestation, lags behind many areas in providing secure property rights. In remote forested areas of Brazil, enforcing property rights in forests can be challenging, which results in land rights insecurity. Research shows a strong link between deforestation and dysfunctional property rights.

Palm Oil

In regions where property rights are unclear or not enforced, indigenous peoples and local communities may be wrongfully displaced during the acquisition or conversion of forests. Studies of the social implications of palm oil development highlight the conflicts between communities and plantation developers when customary land rights are not recognised.