ABSTRACT
This chapter explores an overlooked role of external investors for financing investments in land development to improve agricultural productivity in settings where investors could be repaid with funds earned by renting or selling parcels for family farming, once the land is developed. Promising policy options provide incentives for investment in the land development phase and open opportunities to in situ smallholders or immigrant settlers to take on the subsequent farming operations. Land development efforts in frontier areas often involve significant economies of scale and specialized knowledge that favor large-scale external investors. Investors in land development may find it more profitable to subdivide parcels and rent out the land or sell it off to family farmers, who are more efficient in the operational phase. Conceptually separating the land development phase from the operational phase opens a space for private investors, which has not been sufficiently recognized to date.
