Forgotten landscapes: where do investments flow in Kenyan landscape restoration?

For the last 5+ years, I worked as a landscape scientist on the CGIAR flagship program on Water, Lands and Ecosystems (WLE) focusing on landscape restoration, finance and governance. These are some reflections from that period.

During the last 5 years, I've attended many local, national and global strategy planning events to learn about African landscape restoration and share my experiences. I gave presentations and facilitated a few discussions at Global Landscape Forum (GLF) events and African Forest Landscape Restoration Initiative (AFR100) meetings, I led projects to build capacity for Land Degradation Neutrality (LDN) baselines. I also published a few scientific articles on land degradation mapping, gender aspects of restoration and discourse analysis of restoration finance.

One surprising element in these meetings is the widely varying perspectives on what constitutes a "landscape", the different interpretations of "restoration", and most importantly, how we perceive the roles of communities in these landscapes. I am often surprised, for example, when restoration models propose a neatly carved up landscapes of zones like conservation area, mixed-use zone, and production and living zones. It is nearly impossible to re-arrange African landscapes to fit our imaginations of optimal design.

Leaving a discussion of definitions aside, I will focus on different business models for restoring agricultural landscapes that I have come across. Specifically, I am looking at cases where landscape restoration can be driven through some form of capital investment in agricultural intensification. I am trying to answer the following question: is it possible to attract investors to set up revenue generating agro-enterprises within degraded landscapes that are profitable (to investor) and simultaneously invest in soil and water conservation practices (thus ensuring sustainability of the enterprise) and local capacity building. I presented a blueprint for such a model called "LandscapeCPR" to the Climate Finance Lab in 2019, which I will discuss in a future post. For now, I keep the focus on where finances flow in African landscape restoration.

The parameters that differentiate landscapes, and therefore determine investment risk and return on investment (ROI), can be grouped into the following: the people living on the land, do these people have land title or some other form of security, suitability for crop production which includes existence of a water source, soil quality and average slope (which also tells us how prone the land is to physical degradation), existing infrastructure (e.g. power and roads), and size (which can either attract or deter investors). The illustration below describes four types of landscapes where investments flow.

The Opportunist is the most common type of investor I have come across. They look for large land size, preferably state-owned thus avoiding having to deal with communities. They are almost always interested in establishing mono-crop tree plantations that guarantee a return in as little as 5 years. They need good infrastructure to get lumber to an existing market.

The Committed is similar to The Opportunist but requires less land to set up intensive farms. They also require land that is not occupied and preferably community-owned. This model needs skilled labor and agricultural inputs and good market access. It carries greater risk but has greater returns that start flowing after the first growing season. The Opportunist and The Committed attract most investor financing. A variant of this model is Mtakuja, a community farm where plots are managed individually while the irrigation is managed collectively. I describe the Mtakuja model in the short video below.

The Dreamer is an impact investor looking for small to medium land size that is not occupied and can therefore be managed as one contiguous farm, even if parcels are individually owned. This is rare model that I have only come across once. Cinch Markets, Ltd. operates a farm nestled between Mount Kenya and the Aberdares on the Nyeri-Laikipia border. The model was possible because land was leased from hundreds of smallholders who, as internally displaced peoples (IDPs), were recently granted title to small plots by the Kenyan government but do not live on the land (yet). By managing smallholder plots as one farm, Cinch can use mechanized practices. The risk for The Dreamer is greater than for The Committed because land owners can discontinue their lease while the model carries all other risk that come with agriculture.

What little investment capital remains for agricultural intensification in smallholder agricultural landscapes, goes to the Unbankables. They constitute a majority of smallholder farmers in East Africa but receive the least funding from investors. These are landscapes where people are living on small plots sizes with depleted soils and where people occupy the land but still lack title, although they usually have some type of customary security to the land. These can be hilly and often lack good infrastructure while human capital is low with youth migrating to nearby towns or cities. They require patient blended capital to support business models that are co-developed with communities. They must also be willing to fail and learn.

Komaza is an example of a company that combines the low risk Opportunist approach of tree planting with the less attractive high risk of working with individual smallholder farmers who otherwise remain Unbankable. The company, based in the coastal town of Kilifi, uses an outgrower model by providing inputs and training to local households who then manage the tree seedlings until these are ready for harvest after 5 years. This model has proven very successful and Komaza has repeatedly raised capital. From a landscape perspective, their model raised questions about inter-household gender relations with regard to division of labor and distribution of benefits. In such schemes, women often do the additional work but men receive payment at time of harvest. It would be interesting to have more insight into expected and achieved environmental benefits at the landscape scale.

In the influential 2013 article "Ten principles for a landscape approach to reconciling agriculture, conservation, and other competing land uses," the authors state the following: "Landscape processes are dynamic ... adaptive collaborative learning [are] practical approaches to this process ...". The authors further argue that a landscape approach should move away from "top-down engineered solutions towards more bottom-up negotiated actions that emerge from a process akin to muddling through". Those are scary words to investors and one of the main reasons why smallholder landscapes remain unbankable.

A final note. All of the models that I have presented only have the potential to aid in landscape restoration. Most people would argue that tree plantations or mechanized farms will only lead to ecosystem degradation. I would reason however that this is certainly possible but if we empower local communities and have the right measures and institutions in place, it can also attract investors and lead to increased community resilience and landscape restoration. The Dreamer, for example, can be considered a model for landscape restoration if it implements sustainable land management practices and if it has a program that actively engages with local communities to implement soil management practices such as water harvesting and tree planting.

This piece focused on my experience with investors' interests in smallholder African landscapes. Next, I will take a more critical look at some of the challenges with an increasingly market-oriented capitalist model of landscape restoration, what some have termed The New Restoration Economy.