Food and agribusiness survey
Respondents are divided whether regulation of foreign ownership of land is necessary: 54 per cent are against it and 32 per cent in favour. The data contrasts with our 2012 survey, which had 39 per cent against more regulation and 50 per cent in favour. This suggests that there is growing scepticism around regulation of foreign ownership.
"I would be cautious to advocate heavy regulations but I think there need to be some safeguards in the developing world because of the effect it has in terms of reducing access to land for indigenous people."
Nick Von Westenholz, Chief executive, Crop Protection Association
Respondents think that foreign investment is important for the development of the industry in less developed jurisdictions and regions. They also recognise that a balance needs to be struck between countries having a certain level of protection for local economic interests, whilst creating an attractive environment for foreign investment. Respondents acknowledge that many local producers do not have the means or expertise to expand their output unaided.
Many respondents also express concern for the protection of the rights of indigenous populations as the industry develops in emerging markets.
Respondents acknowledge that land grabbing can be a serious problem and that foreign investors should be incentivised to use the land productively or lose their rights to it. Land grabbing in Africa is thought to be a particularly difficult issue. Respondents believe that some jurisdictions are too hasty in allowing passive foreign ownership of land and that this has led to large areas of potentially fertile land not being used for intended agricultural purposes. One survey participant suggests that the World Trade Organisation (WTO) should look closely at common rules for ownership, so that investors and countries engaged in land transactions can have a transparent and open market.
Water rights and access to water should be regulated, in the view of 72 per cent of respondents. This is very much in line with responses to our 2012 survey.
Respondents note that water is becoming a progressively scarcer resource, particularly with rising consumption caused by urbanisation and growing populations.
Respondents point to the difficult question of whether water is a social or an economic commodity. There is a consensus that water access is a key human right and that safeguards are necessary to protect this right. However, respondents believe that coordinated global regulation is virtually impossible to implement or enforce. They also note that in some areas it is difficult to regulate water given that it is a resource shared regionally.
Respondents express a sense of frustration towards the fragmented application of laws and regulations around the world. Almost half (47 per cent) think it is important that laws and regulations are better coordinated across the globe, with a further 18 per cent believing this issue is absolutely critical.
Many respondents are sceptical about whether it is feasible to synchronise laws and regulations at a global level, noting that there is too wide a gulf in the approach to laws and regulation from region to region and jurisdiction to jurisdiction. Some respondents point to the challenges that even the EU has faced in finding a common regulatory approach. The difficulty in initiating a worldwide response to the global financial crisis is just one illustration of how states and governments can struggle to implement a unified response to global challenges.
Nevertheless, respondents recognise that harmonisation of laws and regulations is increasingly important given the constant rise in cross border trade. For free trade to flourish, respondents believe that a level or near level playing field needs to exist.
"It is part of business life."
Gustavo Oubinha, Managing director and head of corporate and structured finance, Banco Rabobank International Brasil SA
Respondents are largely comfortable with providing confidential information to regulators. Only 25 per cent indicate that this is something that they are concerned about. Of these, many are anxious about the potential loss of intellectual property to a competitor, or at the thought of the results of R&D work being leaked into the public domain.
Most respondents are now accustomed to sharing information with regulators, although in some regions (such as in Asia and South America) they are less at ease.
26 per cent of respondents are concerned that regulators may use or share their confidential information, particularly in certain emerging markets. Even so, respondents understand that to engage in cross-border trade and investment, this risk is one that may have to be accepted.
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