INTRODUCTION
"Buy land. they ain’t making any more of the stuff."
—Will Rogers (1879–1935)
—Will Rogers (1879–1935)
On the third floor of a stately hotel, investment conference participants were spilling into a buzzing reception area. Long tables draped in white tablecloths held clusters of gleaming silver coffee urns surrounded by a lavish array of refreshments: tropical fruit salad, pastries, giant chocolate chip cookies, tiny crustless sandwiches, the works. The conference attendees—mostly white men between the ages of thirty and seventy, wearing suits in every conceivable shade of the same three colors—chatted in clusters against the walls and around linen-covered cocktail tables, some stalling in conversation before even making it to the coffee. At investment conferences like this, any conversation could lead to a lucrative investment deal or a new business partnership, so the coffee breaks are not really breaks at all. For half an hour, fund managers, corporate executives, and investors rubbed elbows to the sound of teaspoons tinkling against china until eventually a bell rang to announce the coffee break over.....MUCH MORE (232 page PDF)
The attendees gradually trickled through swinging doors into a large ball-room bordered by two tiers of gilded balconies and lit by an enormous crystal chandelier. There they seated themselves at tables facing the stage, where the next speaker was already being introduced. Thus far, the scene probably resembles every investment conference ever, but there was one major difference. The sub-ject being discussed among all this finery was not the future of international banking or the latest in high-frequency trading. It was farming. These well-heeled men were in the market for dirt. The presenter now walking onstage was about to regale them with the particular benefits of buying farms in Ukraine, Australia, Brazil, or the American Midwest. Others at the conference would discuss precision agricultural technology and irrigation systems. Farmland had somehow become an enticing new frontier for capital markets.
In recent years, the financial sector has developed a surprising interest in farms. Institutional investors—pension funds, university endowments, private foundations, and other organizations that manage huge pools of capital—are increasingly incorporating farmland into their investment portfolios. The same is true of those extremely wealthy people who in financial circles are euphemistically termed “high-net-worth individuals.” This investor interest has spawned a host of new asset management companies eager to accommodate and encourage investors’ newfound passion for soil. Promoting shiny new investment vehicles including farmland-focused private equity funds and real estate investment trusts (REITs), these managers promise to shepherd inves-tor capital safely, and often extremely profitably, into plots of farmland the world over. This book examines why and how this transformation is taking place, drawing on several years of research on the global farmland investment industry, with a particular focus on two countries: the United States, which is a source of much investment capital and an established farmland investment target, and Brazil, which is an alluring, more frontier destination for international farmland investors.
In a process often referred to as “financialization,” the financial sector has been deregulated, its profits have swelled, and it has gained unprecedented influence over nonfinancial companies. At the same time, nonfinancial companies are themselves increasingly being guided by financial logics and seeking out sources of financial return. I argue that we are now witnessing a “financialization of farm-land,” in which farms are being targeted for finance-sector investment and increasingly valued for their ability to produce financial profits. I trace the historical roots of this process and expose the institutions and discourses that make it possible.I also argue, however, that farmland does not lend itself easily to becoming the next big financial asset class; the farmland investment industry must contend with moral sanctions surrounding landownership, with the inconvenient material attributes of its investment object, and with nationalistic policies regarding territorial sovereignty. Industry efforts to circumvent these obstacles, as well as the unintended consequences they produce, reveal that land’s incorporation into global circuits of finance capital remains contingent and constrained.
Farmland may be treated like a financial asset class, but it is still very far from becoming one. Still, incipient though the trend may be, growing financial-sector interest in farmland demands our attention; with so many livelihoods and identities dependent upon land, its incorporation into financial portfolios will have effects that reverberate through rural communities worldwide....
Free download at Cornell University Press
HT: farmlandgrab
We last saw Mr. Rogers in May's " Dear China, Please Don't Tug On Uncle Sam's Beard, It's Not A Good Time"
Or as the philosopher put it:
"Diplomacy is the art of saying 'Nice doggie' until you can find a rock."
—Will Rogers
I think I would have liked him.
