Fields of Gold

Front matter

FIELDS.

“GOLD

Financing the Global Eand Rush*,

Conclusion

Notes Bibliography Index xiii

149 177 203

Acknowledgments

Although I cannot name them here, I would like to begin by thanking the many farmland investors, government officials, and activists who granted me interviews for this research. I am also deeply grateful to the investment conference organizers who allowed me to attend their events. This research would not have been possible without their generosity with time and information. I would also like to thank the many people who gave me permission to use their data and images in this book, including Jackie Tighe, Oliver Williams, Brandon Wu, and Bruce Sherrick, as well as representatives of Fquare, GMO, Savills Research, SLC Agricola, NCREIF, and Preqin.

This research was also made possible by a number of grants and fellowships: a Graduate Research Fellowship from the National Science Foundation; an International Dissertation Research Fellowship from the Social Science Research Council; a Dissertation Completion Fellowship from the American Council of Learned Societies and the Andrew W. Mellon Foundation; a Louis and Elsa Thomsen Wisconsin Distinguished Graduate Fellowship from the College of Agricultural and Life Sciences at the University of Wisconsin—Madison; an Evelyn T. Crowe Fund Pre-dissertation Research Support Grant from the Community and Environmental Sociology Department at UW-Madison; a Scott Kloeck-Jenson Pre-dissertation Travel Grant from the Global Studies Program at UW-Madison; and a Nave Short Term Field Research Grant from the Latin America, Caribbean, and Iberian Studies Program at UW-Madison. I greatly appreciate this generous financial assistance.

This book grew out of research conducted during my time in the Community and Environmental Sociology Department at the University of Wisconsin— Madison. There I benefited from the mentorship of Jack Kloppenburg and Gay Seidman. Jack is a role model for what a public intellectual can be—a brilliant thinker and writer whose ambitions extend well beyond thinking and writing. His unshakable and frequently expressed faith in my abilities was a marvelous gift. Gay’s penetrating intellect, thoughtful feedback, and friendship were likewise indispensable. I wish that I could still workshop my articles over tea and cookies at her house. I am also deeply grateful to Jane Collins and Jess Gilbert, who both provided me with ideas that would become absolutely central to my thinking. I am also fortunate to have had Phil McMichael as an inspiring and x ACKNOWLEDGMENTS supportive presence in my intellectual life since my days as an undergraduate at Cornell University and continuing throughout my graduate studies.

My research in Brazil was made possible by Bastiaan Reydon. In addition to sharing his broad expertise on Brazilian land markets, he housed, fed, and entertained me, enlivening my time in Brazil with his generous spirit and humor. In Brazil I would also like to thank Ana Karina Silva Bueno for friendship and hospitality, Vitor Bukvar Fernandes for research assistance, John Wilkinson for thoughtful feedback on my work, and Sérgio Sauer for generous advice while I was conducting research in Brasilia. Before heading to Brazil I spent time researching the land rush in Mozambique, which helped shape my perspective. This research was kindly facilitated by David Stanfield of the Terra Institute and Calisto Ribeiro and Lourenço Duvane of the Rural Association for Mutual Support (ORAM).

Many others have supported me intellectually over the years in which this book took shape. Brett Christophers, Loka Ashwood, Keli Benko, and Mike Levien kindly read and provided feedback on earlier versions of this manuscript. Mike did so, heroically, over the winter holidays while working frantically toward a deadline of his own. Katy-Anne Legun and Zenia Kish, my tireless writing group, have read more versions of this than any of us can count. Many others have provided advice or intellectual stimulation along the way: Oriol Mirosa, Leland Glenna, Ryan Isakson, Oane Visser, Stefan Ouma, Geoff Lawrence, Jun Borras, and Kathryn De Master, to name a few. I am, of course, very grateful to the academic editors of the Cornell University Press Series on Land—Nancy Peluso, Wendy Wolford, and especially Michael Goldman—for agreeing to publish my work and to Jim Lance and Jennifer Savran Kelly for shepherding the book through the publication process. Two anonymous reviewers also provided me with tremendously thoughtful and constructive feedback.

I am also deeply indebted to my colleagues in the Environmental Studies Department at the University of California, Santa Cruz, including (but by no means limited to) Stacy Philpott, Carol Shennan, Deborah Letourneau, Jeff Bury, Sikina Jinnah, Daniel Press, and Andy Szasz. I have also greatly benefited from working with Emily Reisman, Halie Kampman, Allyson Makuch, Monika Egerer, Robin Lovell, Esteli Jimenez-Soto, Aysha Peterson, and the other brilliant graduate students of the UCSC agri-food working group. At UCSC I am particularly grateful for the friendship and inspiration provided by Julie Guthman and Margaret FitzSimmons, both of whom kindly read portions of this manuscript. Their intellectual fingerprints are all over my work—or at least the good parts of it. In a manner typical of her generous spirit, Margaret worked hard when she retired to ensure that her remaining research funds would be transferred to my name. It was this gift that allowed me to make the digital version of this book open access.

ACKNOWLEDGMENTS xi

Finally, I wouldn’t have completed (or even begun) this project without my family. I am grateful to my parents, Hannah and Neil, whose own intellectual curiosity never seems to diminish; my sister Catharine, who supplies ample laughter and commiseration as we forge our parallel academic journeys; and my babies Arthur and Edith, who have never known life when I wasn’t writing this book and yet seem to love me anyway. Most of all I am grateful to my husband, Robbie. Doreen Massey and Alejandrina Catalano end the acknowledgments to their 1978 book Capital and Land with a tongue-in-cheek sentence: “Neither of us has a ‘wife’ to thank for solace and self-effacement.” This commentary on the gender relations behind academic production, though undoubtedly still relevant, is happily inapplicable in my case. Thank you, Robbie, for the child rearing, the housecleaning, the hot meals, the graphic design help, the solace, and the self-effacement. I really am going to stop working on weekends soon.

Abbreviations

AAIMC ABA CFS CLT CNA FAO FOE US GDP GMO ha HAIG INCRA IPO IRR MEI MIGA MPT MST NCREIF OCERS OTC PGIM PRAI

PRI PT rai

REIC REIT TIAA TIMO VGGTs

American Agricultural Investment Management Company Inc. Agrifirma Brasil Agropecuária Ltda.

Committee on World Food Security of the FAO

community land trust

Agriculture and Livestock Confederation

Food and Agriculture Organization

Friends of the Earth, US

gross domestic product

Grantham, Mayo, and van Otterloo

hectares

Hancock Agricultural Investment Group

National Institute for Colonization and Agrarian Reform initial public offering

internal rate of return

Indefinite Exploitation Module

Multilateral Investment Guarantee Agency

modern portfolio theory

Landless Workers’ Movement

National Council of Real Estate Investment Fiduciaries

Orange County Employees Retirement System over-the-counter

Prudential Global Investment Management

Principles for Responsible Agricultural Investment that Respects Rights, Livelihoods, and Resources

Principles for Responsible Investment

Workers Party

Principles for Responsible Agricultural Investment in Agriculture and Food Systems

real estate investment cooperative

real estate investment trust

Teachers Insurance and Annuity Association

timberland investment management organization

Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security xiii

Portuguese Terms bancada ruralista cartório

cerrado estrangeirização grilagem jeitinho brasileiro laranja latifúndio quilombo sesmaria rural caucus that represents large landowners in Brazilian Congress

public registry office

Brazilian tropical savanna

foreignization

land grabbing via document fraud, often accompanied by violence

the “Brazilian way” of getting around difficulties

front man, figurehead

large plantation

communities descended from escaped slaves

Portuguese colonial land grant

XV

FIELDS OF GOLD

INTRODUCTION

Buy land. They ain’t making any more of the stuff.

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 linencovered 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.

The attendees gradually trickled through swinging doors into a large ballroom 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 subject 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 investor 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 farmland,” 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.

The Global Land Rush

The investment conference scene described above captures just one dimension of a multifaceted rush for land that began slowly building steam around 2006 or 2007. This land rush first burst into the global spotlight in November 2008, when it was reported that the government of Madagascar had promised 1.3 million hectares (ha) of farmland—over half the arable land in the country, by some estimates—to the South Korean company Daewoo Logistics. The land, reports stated, was granted for a ninety-nine-year lease period and would be used to grow maize and palm oil for export to South Korea. That the government of this food-insecure country would grant such a large slice of its natural resource base to help feed and fuel a richer nation provoked concern among the international development community and outrage among the Malagasy people. In fact, this proposed land concession may have contributed to the success of a coup several months later; in one of his first official acts after taking office, the new president canceled the deal.!

Though this was an extreme case, it quickly became clear that it was not an isolated one. Large-scale land deals were occurring all over the world, a trend that activists, media, and scholars alike quickly dubbed a global “land grab”? These land deals were highly varied. The actors acquiring land included national governments and state-owned enterprises concerned about food security, as well as private corporations, investment firms, and wealthy individuals motivated solely by profit. The land was acquired through a variety of legal mechanisms; in countries with private property markets, land can be purchased outright, whereas in many African countries, land is owned by the state and must therefore be transferred via very long-term leases.’ Ethiopia alone agreed to lease 2.5 million ha—an area almost the size of Belgium—to foreign investors, including 14,000 ha leased to the Saudi government—backed agribusiness Saudi Star for use in cultivating rice and 100,000 ha to Karuturi Global, an Indian company that proposed to grow cut flowers for the international market.

Africa was a major target for land acquisitions, but so were many other parts of the globe. Investment funds and farming companies flocked to the highly fertile Black Earth region of Russia and Ukraine, known for growing wheat and sunflowers. Indonesia, Laos, and other Southeast Asian countries saw expanding oil palm and rubber plantations, while Brazil, Argentina, Paraguay, and other South American countries drew investments in large-scale production of soy, sugarcane, and more.” The amount of land changing hands is very difficult to calculate; the initial flurry of corporate press releases and newspaper articles about planned land deals included many that were ultimately canceled (like Daewoo's deal in Madagascar) or rapidly failed.º As of 2016, the Land Matrix—an independent monitoring initiative—reported that successfully completed land deals encompassed 57 million ha, while deals involving an additional 20 million ha were planned.’

The land rush was catalyzed, in large part, by an international food crisis. Already in February 2007, thousands of Mexicans gathered to demand relief from steep increases in the cost of corn-based tortillas. By 2008, the food crisis was global. In Senegal, police beat and teargassed protesters who could no longer afford rice. In Egypt, resentment toward the government was fueled by rising food costs, and the military was set to baking bread in the hopes of appeasing public anger. Grain prices decreased somewhat throughout 2009 and 2010, only to peak once again in 2011 and remain elevated through 2014. These high crop prices had many causes. A sharp rise in global oil prices greatly increased the costs of agricultural production—including the costs of fertilizer, for which oil is a major input—and of transporting agricultural goods after harvest. At the same time, an extended Australian drought and other weather-related shocks led to production shortfalls, particularly of wheat. Additionally, government policies encouraging the use of biofuels created a food-fuel nexus in which basic food crops such as corn and soybeans became substitutes for fossil fuels. This forged a link between food and energy markets globally and heightened demand for land to grow both.

However, food was not the only factor involved. Demand for agricultural land was also driven by concerns about water scarcity. By outsourcing agricultural production, arid countries like the Gulf States can increase their consumption of “virtual water” —the water that goes into producing consumer goods such as agricultural crops'°—while conserving their own scarce water resources. At the same time, commercial demand for other types of natural resources led to large-scale land acquisitions for mining projects and even “green grabs” of forested lands for use as conservation areas and carbon sinks."

This rush for land and the natural resources it harbors has set off alarm bells within the international development community and among human-rights activists. In many parts of the Global South, the land rights of the poor receive only the flimsiest of legal protections, making them susceptible to abrogation when a foreign investor begins making attractive overtures to their political representatives. Where governments own the land base, they can easily allocate large tracts to investors, dispossessing the peasant or indigenous communities that have traditionally depended on that land for their food and livelihoods.” To many governments, displacing poor rural people from their customary homes seems a relatively small price to pay for the agricultural jobs and economic development investors promise. In countries with private landownership, meanwhile, deep-pocketed investors constitute a new competitor for small farmers already struggling to afford land. The concern among critics of this land rush is that adding a sudden demand for land among rich states and corporations into agrarian contexts already characterized by deep inequalities could lead to the further marginalization of many rural peoples.

The pace of the land rush has subsided, particularly since 2014, when grain prices dropped from their historic highs. Yet while the peak of the land boom seems to have passed, its effects linger; in addition to the dispossession and deforestation cited by critics, I will argue that it has given rise to new institutional arrangements and changed the way that whole groups of actors think about land—changes whose effects are yet to be seen.

The Financial Sector Discovers Farmland

My research homes in on just one aspect of this resource race: a growing interest in farmland on the part of the financial sector. 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 (then known as TIAA-CREF) suddenly began acquiring enormous tracts of farmland as part of the investment portfolio it manages on behalf of retired teachers and other professionals. With hundreds of billions in assets under management (at the time; its assets have now surpassed a trillion dollars), this investment behemoth had the capital and the human resources to acquire an enormous portfolio of agricultural land rapidly. By 2012, just five years later, 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. In the same year, TIAA announced the closing of a new fund, TIAA-CREF Global Agriculture LLC, with $2 billion in capital from third-party investors. This meant that TIAA was now not only buying farms for its own portfolio but also acting as an asset manager for other institutional investors, including Sweden’s Andra AP-fonden pension fund and the Canadian financial institution British Columbia Investment Management Corporation. In 2015 TIAA added a second fund, this time with $3 billion in capital under management. 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.

Though TIAA has thrown itself into the world of farmland investment with unparalleled vigor, it is not lacking for company. The farmland rush piqued the interest of many finance-sector investors, and a nascent industry grew up to cater to their needs. Agriculture- and farmland-focused investment conferences, which had barely existed in the past, suddenly proliferated and began drawing big crowds. Agricultural investment consultants started churning out reports on how and where to buy farms. The financial press marveled at farmland purchases by celebrity investors including Warren Buffett, George Soros, and Lord Jacob Rothschild.'4 News articles appeared with headlines like “Corn Farms Are Hotter Than New York Lofts,” “Hedge Funds Muck in Down on the Farm, »15

Hot Money Turns from Stocks to Farmland,” and “Betting the Farm.

Finance-sector investors were drawn to farmland partly for the same reasons as everybody else—crop prices are high, ergo it pays to own a farm—but they also had their own reasons. The year 2008 saw not only a global food crisis but the worst financial meltdown since the Great Depression. As stock prices plummeted and venerable financial institutions teetered on the brink of collapse, farmland, along with other “real assets,” took on a new luster in the eyes of investors. Real assets include such physical investments as real estate, infrastructure, art, and precious metals—in short, assets whose value stems from their substance or functions. This is in contrast to “financial assets”—those intangible assets whose value derives from an underlying contractual claim, such as stocks, bonds, certificates of deposit, and futures contracts. During economic downturns, when the value of financial assets can go up in a puff of smoke, worried investors often buy real assets. Reflecting this motivation, the financial headlines quoted above were joined by others that employed a common metaphor—“The New Black Gold: U.S. Farmland,” “More Precious Than Gold? Farmland Has Glowing Appeal,” “Fields of Gold: Investors Discover Lucrative Haven in Britain’s Farmland.” Those promoting farmland investment, meanwhile, often claim that it is like “gold with yield” or “gold with a coupon.”’* In general—in good economic times and bad—farmland has a reputation as an antidote for economic uncertainty. Because farmland prices are not highly correlated with the prices of stocks and bonds but do tend to increase with inflation, investment in farmland is used to reduce overall portfolio risk and hedge against inflation. Like gold, farmland is seen as a safe haven for capital.!”

Farmland is so good at storing wealth in part because, as a finite asset, it tends to appreciate over time. The amount of potential farmland is limited by the earth’s surface, and so growing human demand for food (not to mention fiber and fuel) tends to put upward pressure on land prices. Land price increases can be particularly dramatic on urban outskirts and in places where economic growth is causing rapid urbanization.'* My focus in this book is on a growing investor demand for farmland qua farmland, not for the purposes of urban development, yet—as I will argue—the allure of increasing property values is still by no means incidental to its appeal.

Financialization and the Agri-food System

In recent decades, finance has increasingly become the gravitational center of economic life. In the process of financialization, financial actors and financial motives have taken on a greater role across economic sectors.” The rise of finance can be traced, at least in part, to the economic policy shifts associated with neoliberal restructuring, particularly the deregulation of the US financial sector.” Until the 1970s, finance was viewed as playing a supporting role to productive economic activity; banks, for instance, provided the important services of converting deposits into business loans, supplying short-term liquidity to business, and vetting the creditworthiness of loan applicants.”! Government regulations sought to constrain finance, allowing it to facilitate the circulation of capital and therefore economic activity, but restricting financial concentration and risk taking. Beginning in the 1970s, however, many long-standing financial regulations were repealed. Limits on credit card and other interest rates were removed, as were restrictions on bank mergers and prohibitions on cross-industry activity that had formerly prevented banking, insurance, and investment activities from taking place within the same firm.” During this time, there was also an enormous increase in global capital mobility, beginning in 1971 with the end of the Bretton Woods system of fixed exchange rates and continuing throughout the 1980s and 1990s as the International Monetary Fund pressured developing countries to liberalize their capital markets.” Formerly constrained to a supporting role, with these changes finance increasingly became the main act.

At the same time, a major shift was taking place in the relationship between corporations and their investors. Beginning in the 1970s, “shareholder value” became the new shibboleth of corporate management; this principle dictates that a company’s value is defined not by the number of people it employs or the amount it produces but by its ability to generate returns for its shareholders. Corporations, which had once been masters of their own domain, were now expected to prioritize making money for their investors above all else.” To ensure that they took this lesson to heart, corporate managers were increasingly compensated in stock options, aligning their financial interests with those of their shareholders. During the 1980s, companies that failed to deliver impressive returns found themselves vulnerable to a hostile takeover by “corporate raiders” from the financial sector. In the decades that followed, corporate buyouts were continued, albeit in friendlier form, by private equity companies, which use investor capital to acquire companies, restructure them, and resell them at a profit. Corporations were encouraged to be lean, achieving high returns while owning as few tangible assets as possible; any “underutilized assets” were seen as an invitation for private equity to take over the company and sell them off.? Critics of the shareholder value revolution argue that it has fostered a pervasive short-termism, with corporations sacrificing long-term investment in productive capacity in pursuit of impressive quarterly earnings reports and frequent payouts to shareholders.”°

This period also saw a proliferation of increasingly creative and complex financial assets for investors to choose from. There has been, for instance, explosive growth in markets for financial derivatives—financial assets whose value is derived from fluctuations in the value of underlying assets, which could be commodities, interest rates, currencies, or any manner of other things. Another font of novel financial instruments is “securitization,” a process in which the cash flow from a pool of underlying assets is aggregated into a single income stream that is then used as collateral in issuing bonds to investors.” Almost anything that produces income can be securitized, from student-loan payments to overdue parking fines to revenues from old Italian films, and the search for ever more unorthodox asset streams to securitize is one of the hallmarks of the financialization era.” The downside of all this financial ingenuity became evident in 2008, when the shaky financial edifice composed of mortgage-backed securities and their associated derivatives came tumbling down, triggering a financial crisis.”

Though the changes associated with financialization are diverse, they share a common theme: the growing centrality of financial income in the form of earned interest, dividends, and capital gains on investments relative to the productive income earned by actually making and trading commodities. In fact, Greta Krippner defines financialization as “the tendency for profit making in the economy to occur increasingly through financial channels rather than through productive activities.” The ascendancy of financial over productive income, she argues, is occurring on two fronts. First, the profits made by financial sector firms such as banks and asset management companies have been steadily growing as a proportion of the economy as a whole. Second, even nonfinancial firms that previously made their money from production or trade have become increasingly dependent on the portfolio income they generate from financial activities. Rather than just selling cars, auto companies increasingly make money by financing car loans; rather than just selling plane tickets, airlines increasingly make money by investing in energy derivatives.”! Even regular individuals increasingly embrace the pursuit of financial income. Instead of putting money in a savings account and leaving it there untouched, middle-class households in the Global North are now active participants in their own wealth management, constantly fiddling with their stock portfolios and refinancing their homes, with their ability to take a vacation, or even retire, increasingly tethered to the vagaries of the stock market.

The agri-food system, like every other economic sector, has increasingly been permeated by financial actors and restructured according to financial motives.” Beginning in the 1980s, regulators loosened long-standing limits on speculation in markets for agricultural commodity derivatives. These derivatives—which include forwards, futures, options, and swaps—are based on the price of globally traded agricultural products such as wheat, corn, and sugar.** The deregulation of agricultural commodity derivative markets allowed an influx of financial capital, which, critics argue, may have contributed to the food crisis of 2008 by increasing volatility in global food markets.” Meanwhile, finance has also been reshaping the food retail industry, where private equity companies have been purchasing supermarket chains—including Safeway, Albertsons, Winn-Dixie, and Bi-Lo in the US alone—and restructuring them to improve shareholder profits.*

As in other sectors of the economy, it is not only financial companies that are engaging in financial activities and prioritizing financial profits. Food retailers like Walmart, Tesco, Carrefour, and Kroger now offer a range of financial services, from credit cards to check cashing to money transfer services.’ Grain traders, too, have branched into financial activities. The big grain-trading companies—the so-called ABCDs: Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus—have long used commodity derivative markets to hedge their business activities, but in recent years they have come to see derivative trading as a source of profit in itself, opening financial subsidiaries that offer asset management services to investors.” Financial activities, which formerly took place behind the scenes of food production and trade, are increasingly becoming the primary focus.

Until recently, however, the steady creep of finance capital appeared to stop at the farm gate. Investing in corn futures is one thing. Buying a corn farm is quite another. Indeed, the general modus operandi of finance in recent decades has been to move away from such messy entanglements with physical ownership.” Though finance can never be fully divorced from productive assets, the main thrust of financial innovation has been in securitizing and trading the income streams those assets produce.“ Nonetheless, a few years into the twenty-first century big investors began buying farms.