Farmland Investment in Africa: What’s the Deal?

We present a dynamic stochastic programming model that re‡ects the typical bargaining situation concerning large land deals in Africa. The model allows assessing the e¤ect of market- and country-speci…c risks and taxation. It shows that commodity price volatility increases the value of the land development option, but slows down the land development process. Furthermore, it shows that host country attempts to negotiate …xed commitments to the speed of project development may run counter to the structure of economic incentives at the project site. Finally, the applicability of the model is demonstrated for a recent 10,000-hectare cotton project in Ethiopia.


Issue Date:
2014-08
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/182806
Total Pages:
12




 Record created 2017-04-01, last modified 2017-08-27

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