Role of Governments
Chapters: 61, 62, 63, 64, 65 and 66
Marcos Fava Neves
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Exercise Role of Governments
• Lets imagine that we were just elected to be a Governor of a
poor place in a country. We need to atract international
investments to bring development as soon as possible.
• 1 – When we atract international investments, what a
transnational company (TNC) can bring to us?
• 2 – What can we do to regulate the international investments,
building a institutional framework that takes the advantages
and avoids the risks that comes with these investments
• 3 – At the end, how can we build a sequence of steps to have a
plan to promote strategic developments?
2
What are the impacts
that International
Investments and
Transnational Companies
may cause in local
communities?
3
Impact of TNCs on local
community
Technical
Assistance
Management
Assistance and
Service
Provisions
Input Supply
to Farmers
Resources
of TNCs
Financial
Investments
and Expertise
Help Farmers’
Organizations
Provide Market
Access
Neves, 2014
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Impact of TNCs on local community - Resources
1 - Financial
Investments
and Expertise
2 - Input Supply to
Farmers
3 - Technical
Assistance
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Providing investments (capital);
Opening credit lines giving the needed guarantees for farmers;
Access to government official credit;
Knowledge of credit operations and bureaucracy;
Access to international credit;
Inward investments contribute to a good reputation for the region;
Foreign currency generation through the increase of exports;
Employment generation
Seeds;
Machinery;
Genetics;
Fertilizers and chemicals
“How to do package”;
On farm support;
Support on sustainability policies and sustainable practices;
Execution of research and development;
Support on standards (ISO, etc.)
Transferring of skills;
Supply of higher standard products within the internal market.
Impact of TNCs on local community - Resources
4 - Management
Assistance
and Service
Provisions
5 - Market Access
6 - Farmers’
Organizations
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Assistance on economical/financial controls;
Training and farming management;
Transportation and storage;
Communication;
Certification;
Results/profit of the farm;
Support to demands on public investments in logistics and infrastructure.
Arranging sale contracts;
Providing access to marketing channels;
Access to niche markets – organic/fair trade/others;
Providing information on market trends, helping farmers decide
what to grow, and enabling reduction on price volatility
Establishment of local organizations;
Stimulating the arrangement of cooperatives;
Networks of local producers;
Incentives to cooperation.
What are the public
policies needed to
regulate these
international
investments?
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Suggestions for public policies regarding foreign
investments in agribusiness
Environmental
Protection
Human
Resources
Governance
structure
Joint Actions
for Farmers
Policies on
Market Access
Neves, 2014
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Public
Policies
Financing
and Public
Resources
Taxes
Research and
Development
Suggestions for public policies regarding foreign investments
in agribusiness
8 Major Topics
1 - Governance
Structure
2 - Environmental
Protection
3 - Human Resources
(people and labor)
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How direct investment will take place and sorts of assets ownership (land, industry
etc.)
Entrance conditions of resources (money flows);
What the promotion policies for FDI will be;
What the safeguards for the protection against risks (invasion, expropriation, fees,
etc) will be;
What the stimulus package for investments (energy, logistics and other related to
infrastructure) will be and how to remove obstacles to attract investments.
Policies on water use;
Policies on agricultural practices (soil conservation, harvesting, among others);
International standards and certifications that will be required;
Policies on pollution control;
Sanitary policies;
Policies on conservation and rights over biodiversity.
Rural labor and wages;
Working conditions;
Benefits;
Community relations;
Child labor;
Corporate social responsibility;
Ethics and codes of conduct;
International labor.
Suggestions for public policies regarding foreign investments
in agribusiness
8 Major Topics
4 - Tax Policies
5 - R&D
6 - Joint Actions for
Farmers and
Suppliers
7 - Financing and
Public Resources
8 - Policies on Market
Access
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Structure and tax policies;
Export and tax policies;
Purchase and compensation taxes;
Temporary tax incentives
Development of local knowledge and incentives for local R&D;
Property rights and other protection forms, licensing contracts and royalties;
Linkages with local organizations/institutions as an incentive
Linkages to local organizations;
Incentives for coops/associations formation and sustainability;
Prepare farmers/co-ops/organizations for the relationships;
Sustainable supply contracts;
Dispute mechanisms and private arbitration
Access to public sources of financing;
Access to state banks and credit lines
Government purchasing policies and access to investors;
International agreements for market access;
General competition policies;
Food safety policies for market access.
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Is it possible to
have a sequence
of steps to
organize
Government’s
role?
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A Framework for Governments in Attracting International
Investments
1
Raise Strategic Areas and Business for Investments
2
International (TNC) Investments Strategic Analysis (
Positive x Negative)
3
4
5
6
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Analysis of the Possible Resources of TNC
Design the institutional Framework
(policies/regulations)
Agreement
Monitoring
Post Contractual
Obrigado
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Gracias a los amigos!
www.markestrat.org/agribusiness
E-mail: [email protected]
Facebook e LinkedIn Marcos Fava Neves
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