Paper short abstract:

Successful contract farming and angry confrontations over land grabs are both occurring in Mozambique, as policy-makers and investors struggle to find development routes that are both profitable and reduce poverty.

Paper long abstract:

Who will use the millions of hectares of underused farmland in Mozambique? Big investors including Brazilian soya farmers, South African sugar producers, and Swedish churches covet the land and offer investment, technology and jobs - but sometimes evict local people. Many peasant producers want to become small commercial farmers, expanding to take most of the available land, but lack capital and technology. The national elite wants both personal profit as well as job creation and poverty reduction. A debate is growing about which way forward, and asking if there is a model in which international agro-business can use less land but support small commercial farming.

Historically, sugar has been the only successful plantation crop in Mozambique. Recent attempts at large-scale timber, biofuels, soya and rice have not been successful - although foreign investors are still pushing for land to try again. But contract farming, with tobacco and cotton linked to foreign corporations, and soya and cashew linked to domestic capital, has been successful. Each has been different, however the key has been guaranteed markets and inputs supplied on credit.

A confrontation is building, with international agro-businesses wanting large tracts of land in Mozambique, while peasants are increasingly organising to resist what they see as land grabs. There is not enough land to satisfy both sets of demands, but our ongoing empirical research provides evidence that suggests with care, the two groups can do business together.