Land deals and local political economy

An investment fund-backed plantation in northern Mozambique, founded using land acquired from local villagers, learns the hard way what happens when not everyone is happy with the land acquisition:

But about a year after Chikweti’s launch, reports of arson and uprooted saplings began to emerge. Chikweti estimates that between 2007 and 2012, the company lost US$1 million to fires – 60 percent of these fires are thought to have been criminal and the remainder accidental. The highest number of fires to date occurred in 2012.

A September 2012 report by the human rights group FIAN said, “In April 2011, peasants from Licole and Lipende uprooted and cut down some 60,000 pine trees on an area of 12 hectares with machetes and hoes, and destroyed some [company] equipment.” Several people from the local community were subsequently arrested.

The answer? The plantation starts paying for some local public goods, such as schools. For the arson, an incentive scheme:

As part of the fund’s terms, the community receives $5 for each hectare that is not burned or vandalized.

“The fires are not always started by people in the communities where we work; it can be done by neighbouring communities in order to harm people they are upset with or because of jealousy,” Bekker said.

I would be interested in knowing how they settled on $5.