southern sudan sustainable ag-for fund: human rights and profit in sudan
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Southern Sudan Sustainable Ag-For Fund: Human Rights and Profit in Sudan. Greg Carlson Sergio Ibarra Bolanos Justin Overdevest. The International Land Grab Story. Playing the Land Grab…. Since 2004, 6.5 million acres and growing…. Geographic Focus: Southern Sudan. - PowerPoint PPT PresentationTRANSCRIPT
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Southern Sudan Sustainable Ag-For Fund: Human Rights and Profit in Sudan
Greg CarlsonSergio Ibarra Bolanos
Justin Overdevest
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The International Land Grab Story
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Since 2004, 6.5 million acres and growing…
Playing the Land Grab…
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Geographic Focus: Southern Sudan
• Human Rights & Potential Partnerships• Agricultural Opportunity: Ag Land + Potential • Changing Governance
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• Land and Agriculture• Carbon• Water
Opportunity: Crossing the Chasm
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Market Opportunity
• Focus: Long-term viability and sustenance of the land and its people rather than short term extraction
• Inefficiencies– Market: this land grab strategy has inherent
ecological, social, and political risk – Information: Both an inefficient as a market and
lack of credible and important information. As well most land grab players have no ag experience
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Investment Vehicle: Starts with Structure
Land Trust
Priority 1: Develop Land TrustDonations provide necessary capital for community membersInvestor funds go to accessing lands for agro-forestry products
• Local Mkt. %• Farmer Equity• + Community Impact• Agro-forestry
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MFI
non-MFI
MFI
non-MFI
Returns Model Builds off of StructurePriority 2: Develop Returns ModelCo-operative Formed in Community + MFI
Co-op
Individual Farmers
Land Trust
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40%
40%
15%
5%
Layering Value: Aligning Values and Investors
Agriculture
Timber
Wildlife
Carbon
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2009: Southern Sudan Investment Promotion Act
• For the first time, an Investment Authority has been established in Southern Sudan that provides “investment guarantees and incentives .”– Particular Investment Focus: Agriculture
• “Indeed, the Southern Sudanese are very eager to attract investment and if a company comes with plans to invest, they will rarely be turned away.”
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Investors
• Institutional:– Pension Funds (TIAA-CREF
Global Microfinance Investment Program)
– Socially-driven Funds (Threshold, Heirs Ltd., Root Capital)
• Individuals• Foundations • Charitable Trusts
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Partners
• NGOs – Coordination on the ground– Farm Africa (Rehabilitation of Agricultural Livelihoods
in Southern Sudan)– Oxfam (Extensive history of NGO Collaboration to
fight poverty and injustice)– USAID (FARM project: Agricultural infrastructure
development in Southern Sudan)• MFIs – Local Financial Expertise– BRAC (Global Network)– SUMI (Sudan Microfinance Institution)
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Currency Spectrum
Layered StructureBlending Investment Motivations and Financial Returns
Impact First Financial First
NGOs Charitable Trusts Foundations
MFIs Pension FundsBanks
Impact Investors
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68%15%
11%
6%
Southern Sudan MFI In-vestments
Trade and Service
Agriculture and Livestock
Manufacturing
Other
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MFIs in Southern SudanMFI # Borrowers Portfolio Avg. Loan
Loans Past Due (>30
Days)
Non Performing Loans (>90
Days)
BRAC SS 10,402 $1,422,729 $137 2.65% 1.96%
Sudan Microfinance
Institution (SUMI)
8,657 $1,650,946 $191 6.15% 1.90%
• World Bank: “Overall, the MFIs in Southern Sudan experience a low default rate.
• But, only 1% coverage of potential market in Southern Sudan• Constraint to the provision of microfinance: Access to Funds
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Land Acquisition
• Avg. Investment in Community Land = 271,000 ha• Avg. Investment in Government Land = 8,250 ha
98%
2%
Land Investment Breakdown
Community-Owned
Government-Owned
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Land Availability
• 58,337,800 ha of total available land• 3,785,000 ha of available land in Green Belt region• Large potential for responsible land investment
Agro-Ecological Zone
Area (ha) Area Covered by Investments (ha)
Available Land (ha)
Green Belt 5,050,000 1,265,000 3,785,000Nile and Sobal
Corridor 7,900,000 1,010,000 6,890,000
Floodplains 32,700,000 720,000 31,980,000
Ironside Plateau 13,300,000 160,000 13,140,000
Hills and Mountains 845,000 12,200 832,800
Arid Belt 1,710,000 0 1,710,000
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Lease Structures
• Lease periods : Some up to 99 years• Terms:
– Yearly Payments (Green Resources)– Lump Sum (Eyat Oilfield Services)– Combinations w/ royalty deposits (Central Equatoria Teak)
Government Land
Community Land
0 10 20 30 40 50 60 70 80 90 100
Average Lease Periods (years)
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Target Structure
• Work with communities AND involve government from onset
• Strive for maximum possible lease• Examples
• 99 yr. Lease of 179,000 ha • $12,500/yr. payments to local communities• Local Development Goals• Community and Government Engagement!
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The Co-op: Where to Plant
Agro-Ecological Zone
Area (HA)Number of
Foreign Investments
Number of Domestic
Investments
Area Covered by
Investments
% of Ecological
Zone Covered
Green Belt 5,050,000 7 - 1,265,000 25%Nile and
Sobat Corridor7,900,000 4 - 1,010,000 13%
Floodplains 32,700,000 2 9 720,000 2%Ironstone
Plateau13,300,000 2 - 160,000 1%
Hills & Mountains
845,000 1 - 12,200 1%
Arid Belt 1,710,000 - - - 0%
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The Co-op: Where to Plant
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The Co-op: Where to Plant
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The Co-op: What to PlantCurrent Crops
Crop World Price MarketSorghum $289/mt World
Millet $311/mt AfricaMaize $265/mt World
Green Grams $1,422/mt Africa/SE AsiaPumpkin $1,148/mt World
Other crops include beans, sesame & tobacco
YieldAfrica 1.14 t/HaSudan 1.01 t/Ha
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MFI: A Comparison
Global
Average Loan Balance $535.40Number of Institutions 1,934 Gross Loan Portfolio $64.8 BillionBorrowers 90.8 MillionDeposits $27 Billion
Africa Global
Average Loan Balance $356Number of Institutions 434Total Assets $8.5 BillionBorrowers 7.9 MillionDeposits $5.2 BillionNumber of Depositors 20.5 Million
Sudan
MFIPortfolio (Gross)
Active Borrowers
Avg. Loan Balance
BRAC - SS 2,189,739$ 14,889 147$ Finance Sudan 548,663$ 1,332 412$ PASED 1,398,984$ 4,687 298$ TOTAL 4,137,386$ 20,908 198$
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ReturnsArea of Investment 125,000 HaLease Cost / Ha 2.00$ Investment in Land 250,000$
MFI Investment: 3,000,000$ Population Impact: 15000Avg. Loan Balance: 200$ Avg. Cost/Borrower 86$ Portfolio Mgmt. Cost 1,290,000$ Avg. Rate of Return: 30%Total Cycle Return 2,610,000$ Avg. Cycle Time: 5 Months
Total Investment 3,250,000$ Yearly MFI Return 2,250,000$ Population Impact +20,000
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Agricultural Risk
% Ag. Corruption
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Country Risk
• Voiding of leases by government• Land disputes• Conflict• Community Opposition
• Mitigation: Community and Government Involvement ; Partnerships are key!
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Impact: Environmental• Reduced land degradation through sustainable
farming
• Food and Natural Resource Security• Wildlife Preservation
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Impact: Societal• Community Land Protection
• Avoided Landgrab and Community Displacement
• Human Rights Assurance
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Impact: Economic• Local Economic Development
• Labor-Intensive Farming• Thriving Agricultural Industry
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Moving the Needle
• Potential impact is enormous: Sudan, Africa and the World– Bringing sustainable land management to post-
CPA Southern Sudan– Developing a thriving economy not based solely
on oil revenue• Scalability: 58 Million ha of available land with
favorable investment climate
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Moving the Needle
• “I urge investors worldwide to come and invest in Southern Sudan. In terms of agriculture, it will be the breadbasket of the region and the world.”– President Salva Kiir, Southern Sudan
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Sources• “The New Frontier: A baseline survey of large-scale land-based investments in Southern Sudan.”
Norwegian People’s Aid, 2011.• “Expanding the Provision and Impact of Microfinance in Southern Sudan.” Melody Atil, World
Bank, 2009.• “Government Woos Investors to South Sudan.” Juma John Stephen, 2009. www.gurtong.net.• Oxfam: http://www.oxfam.org.uk/resources/learning/landrights/intro.html
http://www.oxfamblogs.org/fp2p/?p=4793• International Land Coalition:http://www.commercialpressuresonland.org/research-papers/
unravelling-land-grab-how-protect-livelihoods-poor• Bloomberg:
http://www.bloomberg.com/news/2011-03-24/foreign-investors-grab-land-in-southern-sudan-norwegian-aid-group-says.html
• Cotula, Lorenzo. Land Grab or Development Opportunity?: Agricultural Investment and International Land Deals in Africa. London: IIED, Food and Agricultural Organization. 2009. Print.
• Green, Duncan. From Poverty to Power: How Active Citizens and Effective States Can Change the World. Oxford: Oxfam International, 2008. Print.
• Yahoo News: South Sudan land grab threatens rights: report http://news.yahoo.com/s/afp/20110322/wl_africa_afp/sudansouthlandrights_20110322181349
• Farm Land Grab. “Jarch doubles its Sudanese empire” http://farmlandgrab.org/post/view/2960
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Sources (Cont.)• agricommodityprices: http://www.agricommodityprices.com/• The 50 Top Microfinance Institutions, Forbes
http://www.forbes.com/2007/12/20/microfinance-philanthropy-credit-biz-cz_ms_1220microfinance_table.html
• Microfinance Information Exchange http://www.mixmarket.org/• Agriculture.com http://www.agriculture.com/• (2009). Expanding Agriculture and Food Security Activities in Southern Sudan. Juba, Sudan: United
States Agency for International Development. Retrieved May 15th, 2011, from http://pdf.usaid.gov/pdf_docs/PNADQ841.pdf.
• World Corruption Index http://www.worldaudit.org/corruption.htm