 We have a microphone, we have one question down in the corner, start from there. Hi, thanks for the presentation, fascinating stuff. I had a comment and a question and I realized you only had 20 minutes. In the case of Mozambique, I think it might be important to think also about the counterfactual. I mean, so you're describing a lot of the negative consequences potentially and gotten negative consequences. And I'm sure you're right, but we also want to think about what would be happening to those people in the absence of investment, you know, and what about the possibility for transfer programs if enough income is generated through this investment, which I don't know if it will be. And then in the case of Ethiopia, I'm a little confused, also fascinating, but it seemed like the investment by these guys is in the middle of nowhere in Ethiopia. So worrying about effects on smallholders, I don't quite understand it. And what was the purpose of this investment in the first place? How are these guys planning to make money? Because transportation costs in Ethiopia are really high and couldn't people in urban centers import rice more cheaply than what they'll get from this farm? So I'm just curious about that. Thank you very much. Thank you. May I pick up a few questions? Down at the end? Thank you. My question goes to the Ethiopian study. I'm just thinking this block farming issue, I'm just trying to see the ownership of land you mentioned about state ownership taken over and doing this block farming. Does the land belong to the state or how does it operate the technical security issues? I'm asking in relation to what I know in most part of Africa where land is owned by families and so is a challenge. As much as we want to do block farming, we also are sometimes preventing other families from cultivating their own passes of land to use it for what they would love to do with it. So if you can choose a better light on that, I'll be happy to know. Thank you. Another one down there. Maybe you could identify yourselves as well. Thank you. My name is Samuel from Ethiopia. The Ethiopian program is more or less dependent on the foreign dependence from technology to the markets. The program does not have any link with the domestic economy in terms of market technology and this puts sustainability or fragility questions on the program on the long term. Do you see any feasibility in terms of promoting contract farming or outgrowing schemes to link these companies with domestic? Another one up here. Martin. Thank you. My question was two questions to Ibrahim. The first is there's a whole literature and I've got a lot of concerns about these regressions from the point of view of endogenous placement of infrastructure, community level. This is work going back to paper by Mark Pitt and Mark Rosenzweig back in the early 90s and the literature following that. And you don't mention this problem. It seems like there's somebody working in this literature. This is like the number one problem you have. And the problem is essentially that there are latent household characteristics which are geographically correlated in the sense that people with poor characteristics in some unobserved way tend to live in places with poor infrastructure and what you identify as an effect of infrastructure is not a causal effect of infrastructure at all. It could be entirely due to this latent characteristic that the infrastructure would correlate with the error term. So you've got to be aware of this problem or at least flag the concern. I think without panel data and the Pitt and Rosenzweig solution is panel data and then there's a subsequent literature on that. I can give you references but without recognizing this problem you're going to be vulnerable. The second point is I don't think you can make those conclusions at all when you said that education has more impact on infrastructure because the comparison you're making is not cost neutral. You don't have a cost function. You can't say that just because of the regression coefficients on education are higher if you like than infrastructure or in some sense. It doesn't mean that investing in education is more cost effective than investing in infrastructure. You have to know the costs. Well thank you. We better take a round of replies before we forgot everything. So maybe you could go first. Thank you and thank you for those two observations. Yes, the first one on the indigenous placement of infrastructure within community. I do admit that was an omission. And with regard to the cost I think I was rushing a little bit but I did mention that although we say in the paper we claim to have rates of return we don't have actual information about the cost. So these rates of returns can be overturned if the actual costs are included and in fact the cost might differ in particular geographical regions or might be higher in particular regions than the other even when we had the cost. So in the paper we do admit that this is a limitation despite the fact that we've come to that conclusion. Thank you. Well thank you for your comment. I totally agree it's a biased criticism in the sense that it's focused on the critical parts of the program and sort of my idea is exactly to respond to the way that the formulation of the program has been made so far and to try to emphasize the need from the beginning to build up a framework that takes into account the need to be inclusive which is totally missing from the program so far. And that includes for instance what you mentioned about transfer policies. This is a must in a program like this and it needs to be the discussion on how will the fiscal part be affected. It needs to be in. So this is one of these elements. But yeah you're right all the good sides are the possible good impacts. They are absent. Yeah thanks for the questions. Margaret the motivation of the investor. So the the European government has basically two advisers investors who are capital intensive and not that area intensive to stay in the high land. So that is the floric culture and the vegetable sector mainly. And all the more for those crops who are more area extensive. They give out leases in the low land and it's part of a strategy to develop these areas. But what the early evidence seems to show and it's just a big Indian investor who seems to collapse and might get his land taken away again by the government caraturi is the name of the investor is that it's very very difficult to get land operational in those remote corners and even this investor the Saudi star guy had difficulties doing that. The motivation of the investor I mean they showed me some initial calculations and they said OK we're going to reach seven to ten years after after being operational break even. I'm not sure if that is a realistic figure because they they had plans to already be operational now on about 4,000 hectares and they only operating 300 because there was problems. So the but yeah I mean they they calculated the market price and let's see ownership of land in Ethiopia. It's a bit different in the different regions but in general all land is owned by the government and local people have a use right and they can inherit the use right and in some areas they can already transfer it freely and others only limited parts of the land in this area as I indicated land per se is not scarce so there's not until now no land market. So it's a bit different for many other parts in Africa where you have high population density. This is a low population density setting where such investments might be a good way to promote growth but you still should carefully look at the size at which you promote them. I think a lot of them are too big to be operational. Samuel thanks for the good question on fragility and lacking link to the local economy. I totally agree I think that the investments are not paired with local strategies for the area as well as they could but I mean we talk about developing countries with limited resources so it's also difficult to do things on the ground. On the feasibility of contract farming in the case of rice in the Uganda case they tried to do contract farming and it worked for some years but as soon as there is a site market where local farmers can sell the rice which is the case nowadays in Uganda the schemes collapsed because the farmers would sell it on the site where they got better prices so it's a problem of enforcement and of contract costs and also lack of trust the relations between the investor and the local community so if that is not good the contract farming becomes very difficult to enforce and a lot of investors don't consider that it might pay off to invest in good trust relation to the local communities initially. They come with the title and go there and say we got it from your government so we should get it. For the questions up front. Thank you. A couple of questions to Isabella. I'm Amrukwam from UNDP working in Tanzania. We have a very similar initiative in Tanzania called Southern Agricultural Goals. I don't know whether it's a kind of replication of what you have been doing there but it's very much similar but one problem we have there is that although it is a big initiative under the agricultural first initiative introduced by the President himself it didn't get off the ground as expected because investors have some concerns about especially on two policy issues one is the agricultural taxation and the other one is land issues. At a very recent meeting it was revealed that even the few investors that have been attracted are of low quality and these are the reasons that have been attached to that. Now in this case of course there is no clear policy signal from the government on these two particular issues. How these two particular issues are addressed in this particular case in Mozambique and Brazil. The second issue relates to contract farming. This is also one of the concerns we also have in Tanzania. If the big firms come and invest without having a great impact on the poor communities there it is not guaranteed although the government says it is going to be how it is ensured in there in that program whether it is reflected in the more use between the private firms and the government how it is done. The contract farming, how it is enforced whether it is reflected in the more use or the contracts between the government and the firms to ensure that the out-drawers are reflected in the system. Hello, I'm Sylvia from University of Ghana. My question or comment actually pertains to the one on contract farming. The concern that I have is considering the fact that most of these farmers are illiterate if they actually do understand the contracts that are signed because the case is for Ghana where there is a scheme for oil palm plantation farmers actually stopped participation because they felt cheated they didn't understand the contract from the onset and when deductions were made from what were due them they couldn't understand the tender and they felt cheated and they were like no we are not being part of this any longer. So how do you think in your case these contracts are being explained to farmers because it is a very long document which is kind of legally binding. Thank you. I'm Karl Poe from Ifbury and Malawi. Also a question for Isabella, an easy one. From the Malawi side we are certainly aware of the Nakala corridor I mean you are building the railway straight through our backyard but I don't know if there are any concerted efforts for the two countries to kind of collaborate and maybe bring Malawi farmers on board as well to kind of become part of this value chain. Malawi has a new strategy called the National Export Strategy also value chain approach in contract farming in the works. I mean you'd think it would be obviously potentially mutually beneficial for both countries if they could collaborate. I don't know if you know of any such efforts. It's Baumgarten. Sorry I'm Maggie from Ifbury and Tufts. So what you said second in response to my question is more sort of consistent with what I know about Ethiopia. So now I'm going to ask you why are you evaluating this project if it doesn't even seem like it's financially viable because I've heard a lot about investors who are speculating in land there who have these huge land holdings but maybe they're just holding on to them to see if the price goes up and so forth. So you understand my question, right? Thank you. Moabo from Kenya. I'll ask the presentation. How did you compute the chance of prices of labor and land? Thank you. Does it work still? Yeah it does. Sorry. So the first question relating to taxation and the issue how it's being dealt by the Mozambican government. Well land issues in Mozambique is quite special because the land is formally owned by the state and the peasants they have the right to use it. They have a title that allows them to use it for a certain period. There is a lot of debate over the land issues in Mozambique but one positive side you can say of this system is that everybody has a reasonable equal access to land and the very bad side of this is that it's very easy to displace people. So what happens in the case of Mozambique is that it's typical in the case of the mining explorations in that province for instance where it was the process of displacement it's really easy to be done well the process of changing people from place to place it's quite fast there in Mozambique. Regarding taxation there is foreigners once they get the right to use the land for a certain period which is usually around 30 years they have to pay a tax over land which is extremely low in the case of Mozambique and this is something that national academic sense is starting to pressure a lot to exactly to avoid the same type of advantages that have marked the MAGA projects the large scale MAGA projects that are taking place most of them are taxed, they have huge tax exemptions. The second question about contract enforcement it's a huge problem for the schemes that are already taking place in the country. Both companies, firms and farmers they complain about it about the lack of enforcement and farmers they feel that they are always being cheated and companies they always complain that contracts are never being followed. This is a problem not only in Mozambique this is a problem all over different countries where you have problems of both contract enforcement and at very high illiterate levels some people have been suggesting for instance that quality assurance which is an important thing in contract farming schemes they need to have for instance pictures or some type of visual characterization that can make possible for the farmer to understand what he is signing and what something more or less full of pages but more visual. Another crucial thing is to have mediators in this process either NGOs, governmental fissures and local farmers organizations they need to be in place in order to assure that they understand the contract and they don't feel cheated. Even in the case of more long term schemes that are taking place like in cotton production for instance that happens in Mozambique in contract farming for over 20 years now and you have very strong farmers organizations they always feel that they are being cheated still because of price manipulation in contracts and so forth and also the huge imbalance in terms of access to information that they have for instance these farmers organizations in the case of cotton they are very well organized the leaders are very illiterate but for instance they don't have internet access in their base so they cannot follow the prices so when it comes to negotiate price they never know what the firm is saying is true or not so you really have a huge need for mediators in these situations. Then fourth about Malawi no there is no in terms of a prosavana it's out there is nothing relating to Malawi actually all the zoning that has been done doesn't come as so close to Malawi border and from the program itself so far there is no thinking of collaborating in that sense although the negotiation between Vali and the Malawi government went pretty smooth and they were able to make that but so far there is no collaboration going on thanks for the two questions the shadow prices well if you have the optimization model I showed briefly that there is seven different activities and the number of inputs are allocated to these activities according to the highest payoff and then at some point some of these inputs are limited so they become constraining the activity levels and then the model tells you if you would have one additional unit that would be the value of it that would be the value generated and that's how I derived those case selection in Ethiopia and why at all Ethiopia I mean yes you could argue if you want to understand free market economic impacts of these investments then Ethiopia probably is not the ideal case but Ethiopia was one of the countries and still is who was giving out a lot of land to foreign and domestic investors and when I was starting to select cases in 2010 I was going to Addison was trying to find data on what is actually like I was trying to validate the media data which was around and looking at cases I thought it's interesting to see what happens when such an investment starts and then I was also relying on an investor who would allow me to do the research on the ground and so I had narrowed down to a number of cases which were there and then this Kambela area is an area where a lot of investments happened recently so that's why I selected this case speculation of land I'm actually not so sure to what extent the investors can speculate because they get a lease over the land which is normally 50 years but they're not supposed to sub-lease it or pass it on and yeah the payments are very low but I haven't seen anything of that and they can't, I mean it's not that they're buying land they're leasing on an annual rent and the rental scheme has been revised already two years after the initial phase so the government has adjusted it has put it a bit higher it's still very low but depending where you are 10 to 15 dollars per year per hectare so it's not very expensive but in the center it's a bit more expensive but in the periphery so that is a reaction thanks a lot okay this is a key important issue investment and investment in infrastructure and agriculture are really important for Africa and we've certainly got to hear a lot more about it in the future and we had three good presentations here on these issues which we'll take home and think more about so thanks a lot and let's give a big round of applause for the audience