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Responsible Land-Based Investment Project in Kenya

This case study is part of a series highlighting how USAID is partnering with the private sector and local communities to strengthen land tenure and resource governance. 

The series demonstrates that bolstering local land rights and incorporating smallholder farmers into supply chains can be good for both businesses and communities. For companies, it can reduce operational, financial and reputational risks, as well as improve production, environmental and social sustainability, and farmer loyalty. For local farmers, it can incentivize investment into land, help secure a buyer(s) for crops, ensure a more reliable source of income, and increase access to finance. In sum, it can promote economic growth and build local resilience.

The Responsible Land-Based Investment Project in Kenya implemented elements of The Analytical Framework for Land-Based Investments in African Agriculture to address land tenure risks facing The Moringa Partnership, an impact investment firm. Specifically, the project identified legitimate land rights holders and assessed the current and future impact on tenure rights by its Kenyan investee, Asante Capital. The project also recommended mitigation measures for Asante and its growers.

The Challenge

Rural Kwale County lies in Kenya’s southern corner along the Tanzanian border and just below the coastal city of Mombasa. Coastal regions, including Kwale, have different ethnic, religious and cultural heritages from inland areas in Kenya.1 The county has a poverty rate of 75 percent and has historically received relatively little attention from the national government in services and infrastructure.2 Land governance is one aspect where this lack of attention is apparent. Today, less than a quarter of the land in Kwale County has a documented title deed, and only 10 percent of title-holders are women.3

Colonial-era land policies allowed white settlers and local elites to acquire large parcels of land in coastal regions. This displaced indigenous peoples who did not have the same access to the land titling process and created grievances. Much of the land is now held by absentee landlords whose rights to land are often contested. Land with government documentation is more likely to be found in areas adjacent to and within towns, cities and settlements, rather than in rural areas. This adds to tensions between long-settled groups and people who have more recently moved into the area.

To address the land titling issue, the county government has set a target to provide titles to 30 percent of local residents, and an additional 30 percent to outsiders who come to acquire land near the county’s beautiful beaches or for investment. However, it is easier for outsiders to navigate the tilting process due to greater resource access and requirements that are sometimes relaxed. As a result, small-scale farmers and landless individuals often find themselves without documented land rights, which fosters, among other things, insecurity, unsustainable land use practices, and an inability to access credit due to a lack of collateral.

The tensions and historic grievances related to land mean Kwale County is also a site of conflict and violence. This conflict can be exacerbated by private investments if the land rights of local people are not recognized and respected. Family farms face risks of displacement and loss of livelihoods from infrastructure development and large-scale extractive operations. The development of mines is a specific threat to both land and water rights in Kwale County. Prospective investments, whether for mining, agribusiness or tourism, threaten to take more land from local people whose rights are insecure.

When the land rights of rural community members are recognized and respected, it can reduce conflict, promote food security and encourage more diverse livelihoods. This can make communities more prosperous and self-reliant. Under the right conditions, agroforestry—with diverse crop and tree regimes—can provide one such opportunity to transform rural livelihoods. However, trees take years to mature, and insecure land rights may make agroforestry plots vulnerable to seizure by more powerful actors. For farmers to invest in planting and growing trees, they need to believe their land rights are secure. They also need a stable policy environment to ensure their rights to land and trees will be respected over time. Agroforestry firms need the same stable policy environment and secure land rights to be comfortable investing and to be profitable.

1 “Unfinished business: Kenya’s efforts to address displacement and and land issues in Coast Region,” July, 2014, NRC/IDMC/KNCHR, http://www.internal-displacement.org/assets/publications/2014/201407-af-kenya-unfinished-business-en.pdf

2 Kenya County Fact Sheets, World Bank, 2011, http://siteresources.worldbank.org/INTAFRICA/Resources/257994-1335471959878/Kenya_County_Fact_Sheets_Dec2011.pdf.

3 http://www.kwalecountygov.com/index.php?option=com_content&view=featured&Itemid=935https://agriknowledge.org/downloads/08612n57q.

The Innovation

The Moringa Partnership (hereafter Moringa) is a private impact investment firm focused on supporting sustainable agroforestry. The Partnership manages the nearly $100 million Moringa Fund, developed to identify and invest in projects that have the potential to deliver financial returns as well as social and environmental benefits for the local communities at investment sites. Moringa has provided capital and technical assistance to ensure that its investments are profitable and that risks are mitigated over the short and long term.

Moringa uses strict Environmental, Social and Governance (ESG) policies and standards (see the chart below) to select its investees, although these firms vary in their levels of compliance with these standards. Moringa works with investees to strengthen their weaker areas of ESG compliance.

In 2017, Moringa made a minority investment in the Kenya firm Asante Capital (hereafter Asante), a timber and veneer processing company that is also testing the production of moringa powder and ginger oil to determine whether these are viable markets. As a minority shareholder with a significant degree of influence, Moringa is entitled to understand if this investment is aligned with ESG standards and to determine the potential social impact of Asante’s activities and operations.

In particular, Moringa sought to learn:

  • How Asante acquired its land;
  • What consultations took place with local land holders;
  • What the implications of timber, moringa and ginger production on local food and water security were; and
  • How Asante planned to address conflicts related to land use or acquisition.

Moringa partnered with USAID to seek the answers to these questions via the adoption and field testing of the Analytical Framework for the Asante investment. Asante has a small-scale processing facility and several timber holdings in Kwale County, including tree plantations, land planted with ginger and an export-processing zone for wood veneer and other goods. The company is hoping to acquire more land to expand its timber holdings and grow its business.

Together with a group of local researchers and experts from Kenya and other countries, USAID Implementing Partner, Indufor North America, was able to dive into the history of the land holdings for both Asante and the growers. Indufor then crafted a nuanced picture of the relationship between land and environmental concerns that might be important for Moringa’s investment into Asante.

“We structured an approach where we very closely aligned ourselves with the Analytical Framework and its five sections. The investment we were looking at had multiple land holdings and a geographic area that was quite extensive. Land was held by growers and contracted to the processor, land was held by the company we were assessing, and land was under consideration for acquisition, so there was a lot of diversity in types of land holdings, the legal structures underpinning them and then the actual users of the land. So unpacking the Analytical Framework for application and testing allowed us to figure out which questions were more important, which were easy to answer quickly, which needed documentation or which required in-the-field interviews with local stakeholders.”

Jeffrey Hatcher, Managing Director, Indufor, North America

With this broader understanding of the on-the-ground realities, Moringa will be better placed to work with Asante to improve its operations and land acquisition policies and practices. This will also enable Moringa to provide targeted technical assistance to the farmers and growers that contribute to Asante’s supply chain and should lead to a more sustainable investment that meets Moringa’s goal: to achieve a triple bottom line.

“We are an impact investment firm. We want to support family farmers by giving them technologies, plans to get technical advice, different kinds of support. Because we are working on agroforestry— tree plantations with crops— there are many issues around tree planting. Sometimes the farmers do not have proper titles. Sometimes they rent to others and there are questions around what they can and cannot plant on this land. We want to give them the right support but need to understand how land tenure impacts the potential for production.”

Clement Chenost,
Director, The Moringa Partnership

Part of Asante’s supply chain consists of farmers who grow moringa trees and ginger on their own parcels of land. Ginger oil and moringa powder production are secondary activities for Asante, who is testing their viability in Kwale County. Asante is working with 22 growers to supply seedlings, extension services and, in some cases, credit for irrigation equipment to local farmers. These farmers, who hold small plots, need consistent and secure land rights to make investments that would allow them to cultivate moringa and ginger and generate a return on these infrastructure improvements. This is particularly important in the case of ginger, a water-dependent crop, that must use irrigation technologies that can be costly to install. Farmers are only likely to make these investments when their land claims are secure.

Project activities focused on:

  • Conducting a thorough land tenure risk assessment of Asante’s land holdings and the land tenure environment in areas where Asante growers are located;
  • Consulting communities to develop strategies to manage any identified land tenure risks;
  • Mapping the location of growers’ farms to better understand where timber supply to Asante originates; and
  • Incorporating an environmental impact assessment of the investment with particular emphasis on water use, access and sustainability.

These activities were designed to help Moringa and Asante identify and mitigate any existing or prospective land-related risks. These risks can take the form of legacy land challenges, intergenerational land transfers and related exposure to risks associated with water access and availability.

The Champions

Esther Mutuma

As CEO, Esther Mutuma has been the public face of Asante and has an important role to maintain relationships between community members, particularly Asante’s local employees, and the organization. This role has made her well-versed in the challenges that growers and other producers face in the areas where Asante works. One of her goals is to identify how different stakeholders might work together in a collaborative way to address mutual concerns such as water resource risks.

Over the next two years, Esther expects Asante to operationalize new processes and procedures around water access and availability. This will allow Asante to incorporate their new knowledge of location-specific water usage and demands. It will also help the company to utilize best practices for site selection and ensure sustainable operations and community water supplies alike. The project has helped to clarify the need for diverse water resource interventions based on Asante’s crops and community needs. Esther and Asante colleagues hope that farmers will be empowered to make decisions and take the lead to propose new solutions. Eventually, Asante would like to establish a permanent source to fund water infrastructure and interventions as part of its corporate social responsibility initiatives. Local knowledge and community buy-in around investor solutions for water and natural resource management can help Investors to increase efficiency and improve the site selection process. It can also help investors to mitigate risks to their operations and ensure equitable natural resource access and use for communities.

Jackson Museye

As local cooperative SCOFOA’s organizing secretary, Jackson educates community members on the benefits of tree planting. He cultivates a number of tree species on his own property. He demonstrates good environmental management through conservation of the natural forest on his land. Jackson also patrols the community to prevent deforestation by other members and replants trees when degradation occurs.

Jackson is the holder of a large parcel of titled land where he has employed technologies, such as solar irrigation. Even though Jackson has a title, he still faces tenure challenges. He is concerned about people coming onto his land to cut down his trees. And while he formally owns his land, others have contested his claim and elevated their case to a Kenyan high court.

Despite this, Jackson has used these challenges as an opportunity to educate others on the purpose and benefits of being part of the cooperative and a supplier to Asante. He has encouraged his neighbors to join the group and has de-escalated some of the tensions in his community regarding land rights as a result.

Investor support for community-owned organizations and cooperatives like SCOFOA can help to mitigate the risk of conflict and encourage proactive, peer-to-peer conflict resolution. Additional benefits of the SCOFOA-Asante partnership that Jackson has communicated to members include improved market access, a sense of hope around future outcomes, enhanced community inclusion and motivation to plant and conserve trees.

The Impact

By clarifying on-the-ground realities, the Responsible Investment Project in Kenya demonstrates the value of enhanced due diligence related to land and environmental risks. A thorough due diligence process provided Moringa with critical information about land and environmental issues that have the potential to impact the supply of timber, ginger and moringa to its investee, Asante Capital. At the same time, this assessment enabled Moringa and Asante to identify where their growers are located and what information and assistance they need to be more productive and self-reliant. It also provided Moringa and Asante with the opportunity to engage in a more targeted manner with stakeholders and suppliers. The project showed that the process for investing responsibly is not easy. It takes the commitment of staff and resources to gather and analyze this sometimes “hard to reach” data.

As a result of the project, Moringa was able to:

  • Identify the potential for land risks in Kwale County that might impact Asante Capital and its growers;
  • Understand resource concerns and constraints that might impact production over time, particularly access to dependable water supplies for ginger production;
  • Clarify legal provisions and regulatory requirements with regard to land acquisition and use in Kwale County;
  • Work with Asante Capital to strengthen due diligence processes for future land acquisitions, including developing stakeholder engagement procedures; and
  • Define the kinds of technical assistance that growers may need to improve productivity.

For Asante, the project highlighted gaps that need to be addressed, including:

  • Improved community engagement and consultation with local land holders during any land acquisition process;
  • Development of a formal grievance mechanism to address conflicts with growers and other local stakeholders including neighboring land holders;
  • Clarity on county-level permits the company requires, which include permission to grow ginger and to convert agricultural land into processing facilities;
  • Clarity on national-level permits the company requires; and
  • Greater understanding of where growers are located and prospective sites for future expansion.

In addition, the project generated lessons learned for Asante related to water resource management and the importance of a thorough analysis of water resource availability prior to engaging in land use activities. The project has encouraged Asante to better understand the productive requirements of its fields and plantations to improve future site selection processes. Asante will also consider how to capture water during the wettest times of the year to safeguard their investments in the dry season.

Local growers and members of SCOFOA seem optimistic about future opportunities to work with Asante Capital. These stakeholders hope to:

  • Diversify production towards higher-value timber, moringa and ginger;
  • Gain access to extension services and technical assistance to improve water resource management and irrigation technology;
  • Increase community-level cooperation around shared water resources; and
  • Foster a culture of tree-planting moving forward to help increase resilience to a variety of natural shocks, as planting local tree species in particular can be an important tool in combating inefficient water use.

The Responsible Investment Project in Kenya demonstrates the benefit of an enhanced due diligence process to mitigate land-based risks for companies. Further, by working closely with growers in rural communities, the project was able to improve land and water management and recognize the land rights of family farmers. Taking steps early in an investment process can help avoid or mitigate problems that could contribute to conflict, negatively impact supply chains and operations, and limit the potential for longer-term growth for firms and communities.

Investors can reduce the significant risks associated with unclear ownership to land in developing economies. Guidelines and implementing tools can be the essential building blocks to help the private sector to create sustainable investment projects from the ground up. Partnering with local farmers to strengthen land rights, even in the absence of national government partnership, can be a practical step toward creating long-term and mutually beneficial investments.

Through project activities, USAID and partners are using innovative solutions to make private sector investment more responsible by respecting local land rights and building communities’ self-reliance.

Responsible Land-Based Investment Project in Ghana

This case study is part of a series highlighting how USAID is partnering with the private sector and local communities to strengthen land tenure and resource governance. 

The series demonstrates that bolstering local land rights and incorporating smallholder farmers into supply chains can be good for both businesses and communities. For companies, it can reduce operational, financial and reputational risks, as well as improve production, environmental and social sustainability, and farmer loyalty. For local farmers, it can incentivize investment into land, help secure a buyer(s) for crops, ensure a more reliable source of income, and increase access to finance. In sum, it can promote economic growth and build local resilience.

The Tenure and Global Climate Change project in Ghana implemented elements from The Analytical Framework for Land-Based Investments in African Agriculture. In Ghana, the project sought to address land tenure risks facing Hershey Corporation and their cocoa supplier ECOM’s production. Specifically, the project supported a participatory mapping process, as well as co-management and rehabilitation of cocoa farms. Additionally, the project sought to reduce pressures on cocoa producers who have historically expanded their farms into forested areas when cocoa trees become less productive.

The Challenge

Ghana is the world’s third largest cocoa producer. However, unclear rules between farmers and customary landowners as to who has the right to replant trees has led to insecure land rights. This is considered a primary reason for why farmers are not rehabilitating their cocoa crops and has taken a toll on the country’s cocoa production since the 1990s.

According to the Ghana Land Commission, an estimated two percent of farmland in the country is formally documented and registered. The rest is accessed through a complex web of agreements between customary officials and farmers.

Up to 90 percent of cocoa in Ghana is produced by family farms. Tenant farmers agree to clear the land and plant cocoa trees. In return, the tenant receives half of the newly cleared and planted land once the trees mature. A landlord will then provide investments in the land and additional labor, while retaining the right to reclaim the land when it is not actively used for cocoa. Some landlords argue that if a tenant farmer replaces old and diseased cocoa trees, then they forfeit their rights to the land and must renegotiate the terms of the tenancy.

However, tenant farmers argue that their rights include replacing old and diseased cocoa trees. This disagreement produces an impasse, underming cocoa yields and putting pressure on farmers to clear forests for cocoa production rather than rehabilitating the land. Indeed, ever since cocoa arrived in Ghana 140 years ago, it has been a key driver of deforestation.

A study by Hershey Chocolate found that 96 percent of their farmers in Ghana rely on trees that are diseased or so old that they are well-past their productive years. This has led to a sharp decline in their yields and farmers’ abilities to earn a living.

Few can afford the cost of rehabilitating a cocoa farm. The farmers who have the means to rehabilitate worry about losing their land and are less likely to invest in long-term improvements. But foregoing such improvements can often trap farmers in poverty and leaves chocolate companies without a reliable supply chain.

In this environment, farmers hold their land tenuously. This is particularly true in areas with population increases or large-scale land-based investments. This lack of security has long term consequences for how farmers work their land and for the cocoa sector at large.

The Innovation

The project came out of the interests of Hershey’s, ECOM and USAID to marry the needs of the cocoa sector with those of family farmers in a supply chain that encourages forest conservation and is able to produce cocoa far into the future.

With an understanding of the challenges that cocoa farmers’ face, the project has worked to strengthen their land rights and help finance the costly rehabilitation of farms.

“We know about agriculture. If there is a pest, we can identify it and advise farmers on how to treat it. But when the problem is land rights? We couldn’t have done this by ourselves. We needed USAID’s help.”

Olga Gormalova, General Manager, ECOM Agroindustrial’s Sustainable Management Services Ghana & Nigeria

The project:

  • Mapped 190 farms and their historical land use in a document certified by the traditional chief—37 percent of these farms are owned by women;
  • Rehabilitated 71 farms by replacing old, unproductive cocoa trees to increase productivity over the next five to 10 years;
  • Developed three model tenure templates based on customary norms for mapped farms;
  • Trained chiefs to mediate land disputes and advocate for farmers;
  • Instructed extension agents in agroforestry and tenure;
  • Financially and technically assisted farmers to cut old trees and replace them with more productive cocoa seedlings and other cash crops to improve farmers’ household income and food security.

These activities were designed to help cocoa farmers overcome the challenges that have prevented them from rehabilitating cocoa farms and to use secure documented land rights as a catalyst to increase cocoa yields, improve the livelihoods of farmers and reduce deforestation pressures.

The Champions

“This is a completely new idea. We are reaching so far into farms, managing farms, this is really something quite new. We were established as a supplier of cocoa. Then we became a supply chain manager, certifying cocoa as sustainable on behalf of the brands we work with. Now, this project has us working to deliver services to farms and farmers.”

Olga Gormalova, General Manager, ECOM Agroindustrial’s Sustainable Management Services Ghana and Nigeria

“We see this as model for the cocoa sector. Before, land tenure was something we thought we couldn’t do anything about. This project broke it down for us and made us realize that it is something we can engage on.”

Tawiah Agyarko-Kwarteng, Hershey’s West Africa Sustainable Sourcing Director

The Impact

190
farms mapped and documented
37%
owned by women
71
farms rehabilitated
5-10
years to increased productivity

The project outcomes show that secure land and tree tenure can benefit local communities and investors.

For Hershey’s and ECOM, the project provided a way to directly engage with communities and customary officials at the local level to secure land rights. ECOM is able to encourage farm rehabilitation that will secure higher yields of cocoa over time and develop a stronger supply chain for Hershey’s.

The project can also help both the government of Ghana and Hershey’s to meet their sustainability goals by reducing deforestation pressures in the cocoa sector.

“There is a solid business case for creating prosperity in rural communities. Land rights definitely need to be tackled. They are a necessary layer in our business model.”

Olga Gormalova, General Manager, ECOM Agroindustrial’s Sustainable Management Services Ghana and Nigeria

For local communities, the project addressed two key challenges that had discouraged cocoa farmers from investing in their farms to improve their harvests: insecure land rights and access to capital. By removing these hurdles, farmers are more likely to invest in their existing farm and boost their yield without cutting down the forest.

“When my husband died, I worried that someone would come and take my land. Thanks to this project, now my land has been mapped and I feel secure. I can continue to farm and support my five children.”

Afi Vida, Cocoa Farmer

92 percent of farmers who received documentation through the project thought it was worthwhile.

The project helped farmers to improve their understanding of cocoa farming techniques in order to increase productivity. And to improve household incomes, the project helped farmers to diversify their cash crops instead of relying almost exclusively on cocoa.

Lessons learned from this project combined with best practices from the Analytical Framework for Responsible Land-Based Agricultural Investments can provide corporations with a powerful tool to meet sustainability commitments and implement international guidelines for responsible investment. What’s more, this project demonstrates that companies can respect and strengthen land and resource tenure rights, a consideration that may not have been a part of their manageable interest previously. Risks can be mitigated, governance strengthened and sustainability achieved.

The Implications

This project has illustrated how USAID is transforming the traditional donor-recipient aid model with one in which USAID acts as a development catalyst. It also has demonstrated how USAID partners with the private sector, civil society and other local actors to accelerate the journey to prosperity.

The private sector does not need to forgo investments in emerging markets because of risks associated with weak land tenure systems. Guidelines and implementing tools can help corporate actors navigate riskier climates. Investors and corporations can partner with communities to strengthen land rights, even in the absence of national government partnership, as a first step toward creating sustainable and mutually beneficial long-term investments.

While the project’s impact on deforestation will not be known for years to come, it did help demonstrate that community-based natural resource management can reduce pressures on farmers to encroach on nearby forested land. This could help to bring about forest regrowth. The project also improved communities’ awareness of the importance of shade trees and forest coverage, which will help make their cocoa crops be more sustainable.

Through the project activities, USAID and partners are using innovative solutions to mitigate land-based risks for both investors and communities and to achieve responsible investments that bring long-term and robust benefits.

Responsible Land-Based Investment Project in Mozambique

This case study is part of a series highlighting how USAID is partnering with the private sector and local communities to strengthen land tenure and resource governance.

The series demonstrates that bolstering local land rights and incorporating smallholder farmers into supply chains can be good for both business and communities. For companies, it can reduce operational, financial and reputational risks, as well as improve production, environmental and social sustainability, and farmer loyalty. For local farmers, it can incentivize investments into land, help secure a buyer(s) for crops, ensure a more reliable source of income, and increase access to finance. In sum, it can promote economic growth and build local resilience.

The USAID partnership with Illovo Sugar Africa (pty) Ltd. (Illovo), a multinational agricultural commodity producer and Africa’s biggest sugar producer, helped the company’s Maragra Sugar Estate in Mozambique and its suppliers adopt global best practices by implementing elements of The Analytical Framework for Land-Based Investments in African Agriculture to address land tenure risks. Specifically, the project supported a participatory mapping process of agricultural land near Maragra and the development of a local grievance mechanism for Illovo to address land-related and other concerns among local community members and growers.

The Challenge

In the aftermath of a 17-year civil war, Mozambique’s 1997 Land Law sought to support rural community land rights and lay the foundation for private investment and development. Often hailed as one of Africa’s most progressive land laws, it established “the right of land use and benefit of land” – commonly referred to as a DUAT, an acronym of the Portuguese term Direito de Uso e Aproveitamento de Terra. A DUAT can be attributed to people by the state, and documented with an official title. A DUAT can also simply be acquired by communities and individuals through their good faith or customary occupation of land, in which case the right exists even without formal documentation. 1 

More than 90 percent of land in Mozambique is used under unregistered good faith occupancy and customary tenure arrangements.2 While these rights are recognized under the 1997 law, in practice land tenure for millions of rural residents has remained insecure.

A man harvests sugarcane in his fields. Credit: Sandra Coburn.
A man harvests sugarcane in his fields. Credit: Sandra Coburn.

Moreover, the majority of Mozambique’s millions of rural residents lack the financial resources and technical support necessary to protect their land rights. Women are particularly vulnerable; they are often less educated, poorer and have limited decision-making power over land compared to men. In addition, many women continue to face discriminatory inheritance practices and eviction from their marital land by the families of their deceased spouses. These conditions make it difficult for communities and individual landholders to defend their land rights against third parties, make long-term investments in their land, or meaningfully engage in negotiations with the private sector.

“We know how important it is to have our land legalized. We have been wanting to legalize our land for a long time, but we have not had the resources…. we know the value of having a DUAT for our land.”

– Female, Northern Pilot Area

Increasing pressure on land in Mozambique from medium- and large-scale investments in agribusiness, extractives and infrastructure has led many individuals and communities to turn to the formal DUAT titling process to obtain documentation for their land.4 However, the process is cumbersome, time-consuming and prohibitively costly for many. The national program, Terra Segura, was initiated in 2015 with a target of 5 million DUAT titles; so far, it has produced just over 1 million titles. The process involves high application fees and time and resources to travel to the appropriate land administration offices, often on multiple occasions. At the same time, the institutional capacity of local land authorities to survey land and register DUAT title applications is limited.5 Technical problems mean that some provincial governments, such as in Zambezia, have been unable to produce titles for more than two years. As a result, the majority of land in Mozambique has remained unregistered, and customary tenure holders are invisible on official maps or land registries.

The lack of registered landholdings in Mozambique is a key source of land tenure risk. As a result, local governments and investors often fail to adequately recognize community land rights and uses, leaving both communities and investors at risk.6

“At the end of the day, any conflict related to land where sugarcane is growing, it comes back to us… so we hope the project will assist us in ensuring the reputational risk to Illovo related to land conflicts is mitigated.”

– Antonio Matavale, Illovo Sugar Africa Ltd.’s Risk Control Manager

In Mozambique, land disputes are relatively common in rural areas where concessions have been granted to investors.7 Insufficient accounting of community land rights and uses can impose significant costs on investors’ objectives, including costly delays, work stoppages, protests and even violence. Investors can also face supply chain risk, legal actions and suffer financial or reputational harm. Communities can be left substantially worse off as a result of decreased access to land, and local people may be much less willing to engage with the private sector in the future.8

1 Nielsen, Robin L. Focus on Land in Africa. Mozambique’s Innovative Land Law. Accessed from http://www.focusonland.com/countries/mozambiques-innovative-land-law/

2 Balas, Marisa et al. “A Fit for Purpose Land Cadastre in Mozambique” Paper prepared for presentation at the 2017 World Bank Conference on Land and Poverty. March 2017.

3 LANDac. 2016. Food Security and Land Governance Factsheet: Mozambique. Accessed from http://www.landgovernance.org/assets/20160608-Factsheet-Mozambique.pdf.

4 Van Den Brin, Rogier J. E. “Land Reform in Mozambique.” World Bank Agriculture & Rural Development Notes, Issue 43, World Bank, Washington, DC, December 2008.

5 USAID. 2011. Mozambique—Property Rights and Resource Governance Profile. Accessed from https://www.land-links.org/wp-content/uploads/2011/02/USAID-Land-Tenure-Mozambique-Profile-FINAL.pdf.

6 USAID. 2011. Mozambique—Property Rights and Resource Governance Profile. Accessed from https://www.land-links.org/wp-content/uploads/2011/02/USAID-Land-Tenure-Mozambique-Profile-FINAL.pdf.

7 USAID. 2015. Operational Guidelines for Responsible Land-Based Investment. Accesses from https://www.land-links.org/tool-resource/operational-guidelines-for-responsible-land-based-investment/.

8 First, through the Responsible Land Investment Project and then through the Integrated Land and Resource Governance Programme.

The Innovation

Illovo Sugar Africa Ltd., a multinational agricultural commodity producer, collaborated with USAID in a partnership to develop and test new approaches to improve local tenure security in areas surrounding Illovo’s 6,500 hectare Maragra Sugar Estate in Mozambique to mitigate operational, financial and reputational risks.

At the same time, securing land tenure among communities can foster resilience and increase opportunities for social and economic empowerment.

Responsible Land-based Invesment Pilot in Mozambique. Credit: Sandra Coburn

The Maragra Sugar Estate procures sugarcane from hundreds of growers working on approximately 5,000 ha of surrounding land. To guide the procurement of sugarcane, Illovo launched its “Group Guidelines on Land and Land Rights in 2015”. The Guidelines commit the company to respect the legitimate land rights of its local stakeholders and only contract with cane outgrowers who can demonstrate documentation of their land rights.

In the past, conflicts over land often arose among farmers due to a lack of land documentation. The lack of documentation also limited Illovo’s ability to effectively engage with local growers, and contributed to uncertainty in their global sugarcane supply chain.

Between 2017 and 2020, USAID and Illovo worked together to:

  • Map 2,917 parcels for growers and local landholders in six areas surrounding the Maragra Estate through a participatory approach;
  • Deliver cooperative-issued certificates of documented land rights to 2,116 distinct title holders, 762 men and 1,354 women;
  • Facilitate the formal DUAT registration process for these 2,116 landholders; and
  • Develop a new grievance mechanism for Illovo to address land-related and other concerns among local community members and growers.

These activities were designed with the dual purpose of strengthening local tenure security and informing and complementing Illovo’s efforts to verify and respect legitimate land rights in areas where they operate according to the Illovo Group Guidelines on Land.9  Illovo helped local communities delimit their land in collaboration with sugar growers’ cooperatives, which then produced Declarations of Land Rights, certifying their land use rights over the parcel. These declarations subsequently formed the basis upon which cooperative members contracted with Illovo to supply sugar.

The partnership was also designed to align with and support the Government of Mozambique’s Terra Segura initiative, launched in 2015, which aims to register 5 million parcels and map the boundaries of 4,000 communities over a 5-year period. By testing USAID’s flexible, participatory process to map and record land rights, known as Mobile Applications to Secure Tenure (MAST), the partnership demonstrated an innovative method for engaging local governance systems that could help the Government achieve these ambitious goals.

Xavier Lucas. Credit: John Dwyer.

“The data that we’re producing with this project will update the database of our government […] With this project, we are going to demarcate this area and the final product will also be sent to the provincial database, so it will improve the situation […] in terms of land legalization because it’s a big challenge.”

Xavier Lucas, a member of the project team, has worked with the Mozambican government on land issues since 2001 and has worked to raise awareness and teach communities about Mozambique’s Land Law.

This innovative partnership ensured that local land rights were secure enough for Illovo to responsibly do business with the community, for individuals to invest in their own land and for the government to record and recognize boundaries. The MAST process made it possible for local governments to more easily register formal DUATs. It also helped Illovo to verify ownership of land, without requiring the more costly formal titling process. Moreover, individuals who wanted to continue the formal land registration process were closer to their goal of receiving a land title.

9 See: https://www.illovosugarafrica.com/Group-Governance/Group-Guidelines-on-Land-and-Land-Rights.

The Champions

Emmanuel Malai. Credit: John Dwyer.

“One outcome I hope for is to see the communities protected from land grabbing. I also hope to see communities developed. Because they have land use rights certificates, they will have more financial opportunities. I also hope to see future generations having an opportunity to use the land that belonged to their ancestors.”

Emanuel Malai worked as a field team supervisor, supporting the teams carrying out delimitation to ensure that the local implementers followed the agreed-upon processes and guidelines and resolved conflicts as they arose. He also supported training and communication between Illovo and the enumerators who mapped, recorded and certified land rights and worked with landholders directly.

Local enumerators Cacilda Xerinda, Carlos Mujovo, Armando Zuana Jr. and Raquel Xavier Ambasse document community boundaries. Credit: Sandra Coburn.

Local enumerators. Fifteen local enumerators were trained to educate and sensitize community members on the partnership’s activities. The enumerators work with farmers to demarcate and register plots of land using USAID’s Mobile Applications to Secure Tenure (MAST) with equipment such as tablets and GPS devices.

Andrew Cochrane is the Group Head of Grower Agriculture for Illovo Sugar Africa Ltd. Andrew has noted that a wide range of stakeholders in Mozambique benefitted from the partnership. The partnership provided certificates to individual landholders, whether they supplied sugarcane to Illovo or grew other crops, and supported local government stakeholders who are committed to the Government of Mozambique’s goal of certifying 5 million DUATs.

“It really is beneficial, not only to you as a company to have that peace of mind that the suppliers that are supplying to us are all coming from recognized land rights, but even to the community that we’re operating in, to encourage them to invest more in their land and the equality that comes with that around registering male and female land rights as well as vulnerable people who might even lose their land rights in some other process.”

Andrew Cochrane. Credit: Sandra Coburn

The Impact

2,917
Parcels mapped for 2,116 landowners
1,354
Land rights certificates issued to women
762
Land rights certificates issued to men
1
New grievance mechanism

The partnership’s outcomes show that helping landholders near investment areas map and register their land can be beneficial to investors, local communities, and host country governments.

From Illovo’s perspective, the partnership has contributed to the company’s efforts to:

  • Reduce land conflict between Illovo, local communities and growers;
  • Accurately estimate cane supply from growers;
  • Obtain information on areas surrounding the Maragra Estate necessary for sustainable land use planning;
  • Develop a new grievance mechanism to address land-related and other concerns among local community members and growers, which can be adapted for use across its six facilities in sub-Saharan Africa;
  • Operationalize the Illovo Group Guidelines on Land; and
  • Increase the understanding of, and ability to mitigate, land tenure risk among Illovo’s operational staff.

Three years after the final documentation process, the company and farmers are seeing lasting benefits. For Illovo, working with farmers whose land rights are documented has decreased supply chain risks and mitigated land use conflicts with local communities. The company has found the land certificates produced through the partnership to be a helpful alternative for local farmers who have had trouble obtaining DUAT titles from the government. According to Paulo Silveira, Illovo’s Director of Agriculture for the Maragra Estate, “When we are signing contracts with cane suppliers, we need some evidence that the person has rights to use the land. The small-scale farmers can have a hard time getting this documentation. The land declarations issued under the project make us more comfortable that the farmer actually has rights to the land. The declarations are more formal, they show details of the farmer and witnesses, and a map with the location of the field.” The partnership has thus helped Illovo expand its supply base around the Maragra Estate, and improved relations with the local communities, who are grateful for the company’s help in documenting their DUAT rights.

Lurdes Armando Matlula. Credit: Sandra Coburn.

“The first thing that came to mind when I was approached about the project was, ‘I was really waiting for a project like this…The project is helping many people who were feeling that no one was looking [out] for them, no one could protect them. But they feel like they are protected now, they are safeguarded.”

Lurdes Armando Matlula is a female farmer living on and cultivating land surrounding the Maragra Sugar Estate. As a result of the USAID-Illovo partnership, Matlula established the boundaries of her land. Over 63 percent of certificate holders are women: the partnership helped over 1,354 women map and document their land. With more secure land rights women can increase their resilience and become more self-sufficient. It also can enhance women’s opportunities for social and economic empowerment.

For local communities, participation in the project was an opportunity to:

  • Obtain community-validated land documentation;
  • Secure their land for future generations, particularly among women;
  • Protect land from encroachment and outside investors; and
  • Increase economic opportunities, such as contracting with Illovo to sell cane, growing other agricultural products, and obtaining credit.

Farmers noted that the inclusive mapping process and issuance of land rights certificates significantly reduced threats to their land claims. Previously, many people had their land sold to third parties due to informal land tenure arrangements. This threat has diminished because now people have documents to prove their rights to the land. “The project was intended to improve people’s security of tenure, and it worked,” said Gregório Xerinda, Illovo farmer, secretary of Hluvukani Cooperative and member of ASSAM farmer association. “No one had papers, anyone else could show up and claim their land. Now people have papers, local authorities know that they have registered their land. This really improves our tenure security. There is a lot less conflict compared to before the project.” As a result, many nearby farmers are now eager to register their DUAT rights.

Margarida Dimande shows off her newly delimited plot, for which she received documentation under the USAID-Illovo partnership. Credit: Sandra Coburn.

“My field is 3.44 hectares. I have owned it since 1997 but only from this project did I get my documentation. At one point, someone went into my field and tried to steal over a hectare, so I had to really fight them. Eventually they gave up and went away. Since the mapping, I haven’t had any more problems. Before, there were a lot of conflicts, but now it’s quiet, everyone can do whatever they want on their land.”

– Margarida Dimande, Illovo farmer, vice president of Hluvukani Cooperative and president of Eduardo Mondlane Cooperative

Farmers continue to report that the land certificates they received through the project have been used to sign farming contracts with Maragra Sugar Estate. The certificates have even helped expand financial inclusion in the area. According to Jose Catarino, Illovo farmer and president of Hluvukani Cooperative and ASSAM growers association, “The document is really useful because I can show it to anyone, government or even if I’m asking for a loan, to prove that I have a field of X hectares in exactly this location.”

“Mapping with the cooperative and Maragra was really important. Maragra buys our cane from those fields. Before, we couldn’t sell to them; now that we have the Declarations, we show Maragra so that they are sure that we are the actual owners and we can sign a contract. I was able to put in my cane, even as an old lady, I planted and was successful. I bought a car with the money.”

– Margarida Dimande, Illovo farmer, vice president of Hluvukani Cooperative and president of Eduardo Mondlane Cooperative

The Implications

Through partnership activities, USAID and Illovo used innovative solutions to build communities’ self-reliance, make private sector investment more sustainable and strengthen land governance in Mozambique.

For USAID

Local enumerator Cacilda Xerinda shows a community member her name on the parcel registry. Credit: Sandra Coburn.

This partnership demonstrated how USAID extends its traditional development approach by working hand-in-hand with the private sector to achieve shared goals of strengthening property rights for all, especially women. This reduced men and women’s vulnerability to a variety of risks and advanced economic opportunities and local resilience. At the same time, it demonstrated the value of addressing land issues to companies’ bottom line and long-term sustainability.

For Private Sector Partners

Partnerships like this help Illovo meet its human rights and social safeguard commitments, strengthen its supply chain, and avoid the potential operational, financial, or reputational costs of land disputes or other land-related issues. The outcomes of the partnership highlight the importance of participatory mapping and documentation activities to increase the success and sustainability of land-based investments; increase opportunities for local communities to engage with the private sector in ways that are mutually beneficial; and help support government land administration initiatives. In addition, with a new grievance mechanism in place, Illovo, its cane suppliers and neighbors now have a way to air and address issues or complaints that helps build trust among all stakeholders.

The private sector need not forgo investments in emerging markets because of risks associated with weak land tenure systems. Guidelines and implementing tools can help corporate actors navigate riskier climates. Investors and corporations can partner with communities to strengthen land rights, even in the absence of national government partnership, as a first step toward creating sustainable and mutually beneficial long-term investments.

For Government Partners

Local enumerator Armando Zuana Jr. shows a community member where her parcel is on the community boundary map produced under the USAID-Illovo partnership. Credit: Sandra Coburn.

Partnerships like this can help nations like Mozambique improve their land rights and governance environment, protect citizens, and fulfill commitments. In this case, the USAID-Illovo partnership has helped to demonstrate a scalable and participatory method to map, record and administer land rights and strengthen tenure security, which may serve as an additional option to help the Government of Mozambique meet its ambitious goals under the Terra Segura initiative.

“Certainly with our local government participants/stakeholders, we are also saying that we see this process as something that is supporting what the government is doing. The government has this priority of wanting to issue 5 million DUATs to Mozambican citizens, so we see that this is actually a support role to what government is doing.”

– Andrew Cochrane, Illovo Sugar Africa Ltd. Group Head of Grower Agriculture

For Communities

Building partnerships with private sector companies can help communities secure their land use rights. By working directly with the private sector, communities can clarify informal tenure arrangements and protect their land from encroachment by outside investors. This additional security incentivizes them to make investments in their plots. Farmers can use these land rights documents to help negotiate farming contracts with private sector firms, who – like Illovo – may be more likely to work with farmers with land documentation.