Aison Alejandro Sy Garcia Philippines aisongarcia@gmail.com

Aison Alejandro Sy GarciaPhilippines

aisongarcia@gmail.com

Increase of Private Investments in Agriculture

Most first world countries and going to third world countries for agricultural land for supply for food and raw materials

Increasing instances of landlessness and displacements due to “commoditization“ of land

VGLT, UNIDROIT and RAI are mainly voluntary

42 years of Agrarian Reform ◦ land redistribution

Average of 1 hectare farm owned by a family Multinational investors for agriculture are

coming in but there is a farmland ownership ceiling of 5 hectares per individual

Not all farmers are capacitated to negotiate on equal footing which resulted to iniquitous agribusiness arrangements

How to sustain inclusive development in rural areas?

Unfair contracts (no voice, skewed distribution of income)

Provisions of the contracts are not understood

Problematic implementation No recourse to an effective dispute resolution Lack of capacity of Government and NGOs to

support the farmers in agribusiness contracts

Agrarian Reform = (LTI+SSD) x SIBS

Where:  LTI – Land Tenure Improvement

SSD – Support Services DeliverySIBS - Social Infrastructure Building and Strengthening

Pre formulated provisions with “fine prints” “Take it or leave it” Pressure and undue influence Divide and conquer

Parties have full information and they freely decide on it

Reasonable Term, Price, Delivery and sharing of profit

Sustainable

Ensuring Good Faith in negotiation (incentives?)

International standards on responsible agricultural investments

Information Access vs. Trade Secrets Legal and Economic Empowerment Government’s investment in infrastructure

adds value to the smallholders produce

Rule of law and Strengthen Relationship Correcting bargaining/starting positions strengthens the bargaining and negotiating

position of smallholders to enter into agribusiness contracts

Preparatory activities to ensure good faith contracting (due diligence, contract review, etc.)

Empowering smallholder to negotiate

Enterprise Lawyering Teams 72 provinces with 3 members in each

province 2 trainings 41 female, 47 male (only 30% are lawyers)

Industry Profile and Value Chain Negotiation Entering into Contract and crafting the

provisions Dealing with problematic contracts Dispute Resolution

Success factor: sharing of best practices from industry players and government intervention

Better contracts, empowered farmers, happy investors

“Checkered” Farms◦ Started with lease agreement and negotiated for a

growership with a price of 2.5 $ per box◦ Renegotiated because economic conditions have

changed and got 4$ per box “at packing plant” contract◦ Able to build their packing plant and operate a profitable

banana business Sumifru Contracts

◦ 4.5$ per box

Buy-in from the stakeholders◦ 1. smallholders◦ 2. lawyers ◦ 3. Other government offices◦ 4. Non-government organizations

Strengthening capacity of the current “Enterprise Lawyering” Teams

Legal framework for smallholder agriculture is lacking◦ Juridical entity, taxation, incentives, technology

Formulate Legal and Policy Framework for Smallholder Agribusiness incorporating relevant international principles and standards

Strengthen negotiation fundamentals of smallholders by conducting more “enterprise lawyering” trainings and creation of IEC materials

Create an office on responsible agricultural investments which reviews agribusiness contracts and provides enterprise lawyering services to both investors and farmers

aisongarcia@gmail.com, +63-998-378-1199