FINANCE AND FARMLAND
Land acquisitions have been on the rise since 2008, when rising oil prices and an international food crisis dramatically increased demand. Changing ownership patterns have the potential to influence not only the terms of agricultural supply chains, but the structure of political power in economies across the Global South.
A new book by MADELEINE FAIRBAIRN analyzes the trajectory of global land grabs, focusing especially on the expanding role of the financial sector.
From the introduction:
"The giant US pension fund Teachers Insurance and Annuity Association (TIAA), one of the largest players in the emerging farmland investment sector, illustrates how recently financial interest in farmland has emerged—and how rapidly it has grown. In 2007, TIAA suddenly began acquiring enormous tracts of farmland as part of the investment portfolio it manages on behalf of retired teachers and other professionals. By 2012, it already controlled $2.8 billion worth of farmland in the United States, Australia, Brazil, and Eastern Europe, making it one of the largest farmland owners and managers in the world. This included more than four hundred individual farm properties totaling 600,000 acres, most of them leased out to tenant farmers and operating companies. By the end of 2017, less than a decade after its first farmland purchase, TIAA—a firm created to manage the retirement accounts of teachers—had come to control over 1.9 million acres of farmland worldwide.
The amount of financial-sector capital so far invested in global farmland markets is fairly paltry. But financial-sector spittle has the potential to buy a lot of land. In Iowa, where farmland cost an average of $7,943 per acre in 2014, $40 billion could buy slightly over 5 million acres—approximately a sixth of the state’s farmland. In Brazil’s soy frontier state of Piauí, where farmland cost around $1,000 an acre in 2014, it would buy well over half the state. Ultimately, the prospect of landownership concentration in the hands of the financial sector matters because it has the potential to propel economic inequality. It matters greatly if the financial institutions that control much of the accumulated wealth of society decide that land is a preferred route for storing that wealth and generating income from it."
Link to the book.
- "We devised a new methodology for uncovering corporate organization and actors who benefit from farmland investment through an analysis of creditors and proprietors." Loka Ashwood, John Canfield, Madeleine Fairbairn and Kathryn De Master draw on county-level tax parcel data to analyze corporate land ownership structures in Illinois. Link.
- International investment law, which construes land as a commercial asset, can facilitate access to land for foreign investors and impose discipline on the exercise of regulatory powers in land matters. But shifts in the political economy that underpins international investment law can create new opportunities to reflect the non-commercial relations within which land rights remain embedded in many societies." Lorenzo Cotula's 2013 article on the legal underpinnings of global land acquisition. By the same author, a 2013 book looks at landgrabs across Africa. Link, link.
- Another new book by Stefan Ouma presents an ethnography of agricultural-focussed asset management, through case studies of New Zealand and Tanzania. Link.