Farming as Financial Asset. Stefan Ouma
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investors” (ibid.) – that is, beneficiary institutions that manage “other people’s money” (Kay 2015) in line with specific performance, risk and maturity goals1 – but in some cases institutional investors may be the ultimate asset owners (for example, institutions representing wealthy families).2 These definitional niceties aside, institutional investors now move a staggering amount of money across the globe and are key makers of space in the early twenty-first century.
In other words, institutional landscapes are an expression of the expansion of a “global return society”, in which the reproduction of the better-off people of the Global North (and, increasingly, the Global South) has become tied to the reproduction of finance capital, both “at home” and abroad. Today a wide range of “things” can become part of institutional landscapes (and thus financial resources or “assets”), but, in this book, it is something most closely associated with the term “landscape”: agriculture. Bereft of a better word, however, this book mobilizes farming as a generic term in order to indicate that finance has become interested in all things related to “the farm” as a production unit (arable crops, livestock, trees, etc.), but also in the pre- and post-farm-gate stages of the agri-food chain. So, although the book heavily focuses on farmland investments, it also repeatedly moves beyond them, and several of its case studies blur the line between production and other domains, with one of them moving beyond it altogether.
In detail, institutional landscapes can be described as follows.
•They sensitize us for the fact that the workings of supposedly higher forces – so-called “financial markets” – are engrained in many things surrounding us.
•They are characterized by their financial asset character, whose realization requires concrete and future-oriented interventions in the world of farming. It is through such interventions that the latter becomes synchronized with the conventions and capital needs of investors, even though this often remains a frictional endeavour.
•They are not a product of nature but of landscaping practices: space-making social activities we can investigate. Institutional landscaping creates distinct socio-natures reflecting the asset character of the targeted agricultural venture.
•They do not simply overwrite the past, but often incorporate and thrive on older agrarian landscapes in order to generate financial value from the human and non-human world. Like other landscapes, institutional landscapes are a palimpsest, a layered product of multiple histories and determinations, including both the visible and the invisible hand of the state.
•They are, eventually, the product of “global value relations” (Araghi 2003) established between multiple places and the operations that link them. In this way, institutional landscapes can never be thought of without the “imperial” needs of those whose capital has been instrumental in bringing them into being in the very first place. Often the roots of this capital lead right back into the “middle of society”.
The book renders institutional landscapes intelligible, unpacks their political contestation and eventually aims at repoliticizing the spatially extensive operations that lurk beneath them. It does so by offering a number of specific entry points into the global economic connections through which such landscapes are produced. These are often taken for granted, reified in popular and professional discourse or mistaken for what they are not. Thus, the journey that follows covers a range of topics that are pivotal for understanding how institutional landscapes emerge, what knowledge we can produce about them, how we situate these historically and geographically and how these are produced and reproduced as “large-scale phenomena” (Schatzki 2016) on the ground. This clearly sets apart what follows from other, more macro-oriented accounts that take a more orthodox, and less geographically attuned, political economy approach (e.g. Russi 2013; Schmidt 2016; Clapp & Isakson 2018).
Grounding agri-investment chains
As this book will show, assets as sources of financial income have become so widespread that it is justified to speak about “the age of asset management” (Haldane 2014; see also Muniesa et al. 2017). Therefore, there is an urgent need to understand how assets come into being. Like a commodity (Callon 1998), something is not born an asset, but turned into one. Assetization inside and outside agriculture often happens through spatially extensive investment chains (Arjaliès et al. 2017; Cotula & Blackmore 2014) involving many players. As expressions of the fact that the original sources of capital (e.g. depositing employees) are often linked via delegation structures with other intermediaries such as pension funds or asset managers (Clark & Monk 2017), these connect different actors, histories, institutional contexts and material realities with each other and often cut through different legal systems. By combining risk-return-effective geographic localizations and specific extraction strategies, global investment chains become arenas for the redistribution of value, besides becoming the enablers of new, sometimes global, commodity chains. We can trace their making, the actors involved, the links they establish and the glue that underpins these – which is exactly what I have done over a period of six years (2012 to 2018), conducting multi-sited research across five continents. The approach adopted here takes us to investment conferences – sites of group making, where agriculture as an asset class is consolidated through narratives and numbers so that investors become confident enough to bet on farming; it takes us to meetings of asset managers, where they give accounts to their investors and try to raise new capital; it takes us to the headquarters of pension funds and asset managers, where capital allocation and investment decisions are being made; it takes us to the agricultural assets themselves and the surrounding communities in frontier regions, such as Tanzania and Aotearoa New Zealand,3 where we will witness how agricultural ventures are restructured in such ways that they meet the models, calculations and requirements of the world of money management; and it takes us to the offices of various intermediaries, such as investment consultants, lawyers and market intelligence providers, who provide crucial business services to investors and asset managers alike, and who play an important role in consolidating “agriculture as an asset class”, as well as the state agencies in the frontiers of the finance-driven land rush, where investments are being facilitated. But it also leads us to sites of resistance, where finance-driven investments in agriculture are being criticized, and alternative visions of agriculture are being propagated (as an interesting side note: if time and resources permitted it, it would also take us to exotic places such as Luxembourg, Guernsey and the Cayman Islands, places that are crucial for optimizing the tax structure of some of the agri-investments discussed in this book).
Obviously, the socio-spatial complexity of agri-investment chains poses a challenge for regulators, as well as for political engagement and research. Yet, once investment chains and their underlying actor constellations have been identified and geographically grounded, different “pressure points” (Cotula & Blackmore 2014: 3) can be identified for regulation or activist engagement (see Figure 1.1). Such an endeavour must always keep in mind that it is “ultimately all of us” (Muniesa et al. 2017: 133) who are linked to global investment chains, and the production of institutional landscapes, via a giant “network of delegation” (ibid.).