Farming as Financial Asset. Stefan Ouma
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href="#litres_trial_promo">2015b: 92) in the money management world that this book deals with is private equity funds. In agricultural capital placements, this investment structure is used for investing in the share (equity) of a farming venture. This company could have been listed on the stock market (a public company) or bought from its existing owners (a privately held company) (Toporowski 2012: 278; Appelbaum & Batt 2014) in order to resell it at a profit. As part of the non-organized capital market (“non-listed”), private equity funds cater for so-called “sophisticated” investors and are thus subjected to less regulation than vehicles serving the organized capital market (“retail markets”). Private equity structures are now so widespread as the new owners of companies across different sectors that observers have spoken of “private equity ubiquity” (Kelly 2012: 199) as a peculiar historical moment.
Private equity companies collect money from institutional investors by setting up a special legal arrangement called the “limited partnership”, in which the original investor assumes the role of the limited partner (LP) and the private equity firm the role of the general partner (GP). The limited partnership is as much an organizational structure for the extraction and capture of value (Appelbaum & Batt 2014) as it is a legal structure through which large institutions such as pension funds can delegate investment risks and decision-making power to specialized third parties, in order to live up to their legal responsibility to act in the very best interests of the original asset holders (the so-called “fiduciary duty”), while at the same time allowing the investor to reap certain tax benefits (Fraser-Sampson 2010).
Conclusion
In this chapter, I have outlined how this book intends to study the finance–farming nexus. As argued, the most tempting way would be to do this from a “financialization” perspective. Although I have acknowledged the insights from work embracing this optic, I have proposed a complementary, more practice-centred approach that allows us to fill in existing gaps in the literature, including the following: being more attentive to history; scrutinizing the concrete practices of institutional landscape making; interrogating the politics of information and data; extending to epistemic margins as sites of empirical investigation; uncovering material and political frictions in agri-investment chains; and addressing the global value relations behind agri-investment chains and their social and ecological footprints. This helps us arrive at an operational account of the production of institutional landscapes without losing sight of the “historically established, structurally stable attributes of the world” (Kleinman 1998: 285). As I have shown, such an account also implies that we critically engage with how we narrate and represent the financial structures that give rise to institutional landscapes. Thus, this book eventually paves a middle ground between work that is engaged with theorizing contemporary dynamics of capitalism and more praxeological accounts of finance’s “empire of values” (Orléan 2014).
1. Global gross domestic product (GDP) stood at about US$75 trillion at that time; see www.statista.com/statistics/268750/global-gross-domestic-product-gdp (accessed 1 January 2020).
History: How old is the finance–farming nexus?
Historically, finance capital has adopted many forms in promoting change in both farm structure and landowning relations.
(Munton 1985: 156)
In September 2014 the Queensland Art Gallery and Gallery of Modern Art in Brisbane hosted an exhibition called “Harvest”, which engaged with the history, geography, production and politics of food in the Australian state. The exhibition featured a collection of photographs by Richard Daintree, one of the first Britons to explore the region. A geologist and photographer, he took some impressive pictures of the region’s landscape (such as Photo 3.1), which he presented, together with geological maps, at the 1862 International Exhibition in London in a bid to attract immigrants and investors to the colony (entry in field diary 2014). Across the Tasman Sea, some 40 years earlier, whaling and shipping interests began to pitch Aotearoa New Zealand as a new frontier for British colonization. A proposal for a military colony in the North Island from 1823 sketches a promising investment case, highlighting its “delightful climate … uncommon fertility of soil, [which gives] … all the necessaries and most luxuries of civilized life … [T]here is no country on earth more favourably circumstanced for the operations of agriculture than New Zealand” (McAloon 2013: 86). Back then, pictures and some text were enough to mobilize capital for agricultural ventures from abroad.
Photo 3.1 Imperial landscape in Queensland
Source: Richard Daintree, England/Australia 1832–1878, “Volcanic downs country” (no. 7 from “Images of Queensland” series), c.1870
These snapshots can be juxtaposed with the investment prospectuses of capital-raising agricultural fund managers some 150 years later. Speaking to potential investors, these similarly pitch promising landscapes across a range of geographies, albeit now backed up with hard figures and fancy graphs. When placed into that historical lineage, a phenomenon that many media, research and activist reports have hyped as the outcome of the financialization of the economy starting in the 1970s (Harvey 2007; McMichael 2012), suddenly appears less novel. Metropolitan finance has a long history of helping to transform nature into property in different parts of the world, producing and reshaping agrarian landscapes via the provision of both debt and equity capital. As David Graeber (2011: 346) puts it in his historical masterpiece Debt: The First 5,000 Years,
Starting from … [the] baseline date of 1700, then, what we see at the dawn of modern capitalism is a gigantic financial apparatus of credit and debt that operates – in practical effect – to pump more and more labour out of just about everyone [and everything: my addition] with whom it comes into contact, and as a result produces an endlessly expanding volume of material goods.
Such a longue durée perspective (Edelman et al. 2013: 1528) on expansionist moments in metropolitan finance suggests that the coupling between finance and farming is less “unnatural” (Gosh 2010) than many existing accounts admit. Industry players are quick to even argue that farmland was the “oldest asset class in the world” (Lapérouse 2016: 4), which is a claim we should critically scrutinize but which nevertheless reminds us of the need to employ a broad historical optic.
The problem of many existing takes on the financialization of farming is not just that they often employ a narrow historical view (Christophers 2015a). Even the accounts more attuned to history are carried away by the presumably spectacular fact that finance now increasingly asserts direct ownership (via the acquisition of equity stakes in agricultural ventures) over the agricultural