i FARMING AS FINANCIAL ASSET ii ECONOMIC TRANSFORMATIONS Series Editors: Brett Christophers, Rebecca Lave, Jamie Peck, Marion Werner Fundamental to the Economic Transformations series is the conviction that “geography matters” in the diverse ways that economies work, for whom they work, and to what ends. The so-called imperatives of globalization, the promises of development, the challenges of environmental sustainability, the dull compulsion of competitive life, the urgency of campaigns for economic rights and social justice – in all of these realms geography really matters, just as it does for a host of other contemporary concerns, from financialized growth to climate change, from green production to gender rights, from union renewal to structural adjustment. This major new series will publish on these and related issues, creating a space for interdisciplinary contributions from political economists, economic geographers, feminists, political ecologists, economic sociologists, critical development theorists, economic anthropologists, and their fellow travellers. Published The Doreen Massey Reader Edited by Brett Christophers, Rebecca Lave, Jamie Peck and Marion Werner Doreen Massey: Critical Dialogues Edited by Marion Werner, Jamie Peck, Rebecca Lave and Brett Christophers Farming as Financial Asset: Global Finance and the Making of Institutional Landscapes Stefan Ouma Market/ Place: Exploring Spaces of Exchange Edited by Christian Berndt, Jamie Peck and Norma M. Rantisi iii FARMING AS FINANCIAL ASSET Global Finance and the Making of Institutional Landscapes STEFAN OUMA iv © Stefan Ouma 2020 This book is copyright under the Berne Convention. No reproduction without permission. All rights reserved. First published in 2020 by Agenda Publishing Agenda Publishing Limited The Core Bath Lane Newcastle Helix Newcastle upon Tyne NE4 5TF www.agendapub.com ISBN 978- 1- 78821- 187- 1 Open access publication co-funded by the German Research Council (DFG), via the project “The Rise of Agriculture as an ‘Alternative Asset Class’: Global Economies of Financial Economization”, 2017–21; grant number: 363300598; co-funding: University of Bayreuth British Library Cataloguing- in- Publication Data A catalogue record for this book is available from the British Library Typeset by Newgen Publishing UK Printed and bound in the UK by TJ International v CONTENTS Preface vii Acknowledgements ix List of illustrations xi 1 Introduction 1 2 Optic: how do we study the finance– farming nexus? 15 3 History: how old is the finance– farming nexus? 25 4 Numbers: what we know (and do not know) about finance-gone-farming 45 5 States: how are foreign investments in farming regulated and accounted for? 69 6 Value(s): why has the road to “greener pastures” been so bumpy? 93 7 Delegation: what happens inside the agri- investment chain? 111 8 Grounding: what does assetization look like from below? 137 9 Radices: food futures, with or without finance as we know it? 167 Epilogue 181 References 183 Index 205 v vi vii PREFACE This book seeks to unpack a large- scale phenomenon that has sparked a lively debate in the media, among scholars and in activist circles since 2008: the increasing interest of finance capital in all things agricultural, particularly in farmland and farming ventures. My aim in writing has been to enable non- specialist readers to delve into a subject that is often marred with technical jargon and social complexity. Finance and, by implication, how other people’s money is managed are topics too important to be left to specialists, whether they are academics or the finance professionals themselves. “Finance- gone- farming” offers a unique opportunity to study the emergence, evolution and production of a new social space – or “asset class” – through which money is used to create more money on behalf of the “better off” parts of the world, which are able to participate in capital markets. But its study also calls for his- torical depth, as modern finance has a much longer history in the remaking of agricultural landscapes than is often acknowledged in existing debates. What follows has a broad interdisciplinary outlook, speaking to debates in geography, heterodox economics, sociology, anthropology, the social study of finance, agrarian studies and political ecology. Although there is a growing literature on the financialization of food and agriculture, none boasts the empirical grounding and unique field access (down to the level of invested farms) that I have negotiated over seven years of global network building. This book will also be of interest to scholars committed to opening the “black box” of investment chains and the asset/ wealth management industry, as well as to those who have attempted to develop more practice-oriented understandings of “financialization” and its social and ecological consequences. Previous work loosely informing this book is listed in the reference list. Chapter 6 in particular draws heavily on parts of that work (Ouma 2020). A last technical remark. To ensure anonymity, I have changed the names of certain protagonists, withheld the sources of some quotes and slightly altered certain quotes. In all cases, an asterisk is used to indicate this. vii viii ix ACKNOWLEDGEMENTS The fieldwork informing this book took me to many different corners of the world: the United States, the United Kingdom, Germany, Tanzania, Singapore, Australia, Kenya and Aotearoa New Zealand. This journey reflects the globe- spanning networks of modern money management, which touch many sites at once, ever keen to carve out value from a place and redistribute it else- where. The connections that made my encounters possible were dependent on the generosity of many people, who, in one way or another, all facilitated my research, the production of the book or a critical review of parts of it. Many people in the money management industry (asset managers, farm operators, different service providers, pension fund representatives) have shared their scarce time for interviews or field visits, and most of those approached were remarkably open about such requests. Although not all of them may agree with some of the arguments made in this book (which them- selves have evolved over time), I hope they gain something from reading it. Among the many asset and farm managers interviewed, a few individuals in Tanzania, Aotearoa New Zealand, Australia, Germany and Singapore were extraordinarily generous with their time, and deserve special thanks. They know who they are. I also wish to thank many other people who contributed to this pro- ject. Peter Lindner of Goethe University (Frankfurt) has been supportive throughout my career, ever since we started working together in 2007. My colleagues Julian Stenmanns, Iris Dzudzek, Alex Vorbrugg, Tim Brückmann and Mara Linden have provided critical feedback on various parts of this book. In the United States, a number of people were very helpful in facilitating my research, including Professor Bruce Sherrick at Illinois State University. Many insights related to my Aotearoa New Zealand case studies bene- fited enormously from discussions with Nick Lewis, Richard Le Heron, Matt Henry, Mike Roche, Russel Prince, Christina Stringer, Ann Pomeroy, ix newgenprepdf x Acknowledgements Christina Berneheim and Wendy Larner. Harvey Perkins and Geoff Lawrence were both extraordinarily generous, providing feedback on several of the draft chapters at an early stage. Tobias Klinge, now a PhD student at the University of Leuven, conducted excellent research on the regulation of foreign investments in Aotearoa New Zealand forestry and agriculture as part of a master’s study supervised by me at Goethe University in 2018. His work informs several parts of this book. In Tanzania, Mangasini Katundu of Moshi Cooperative University, a partner in the project funded by the German Research Council that partly informs this book, particularly assisted with fieldwork. Dennis Malele of the same institution provided additional findings on one of the Tanzanian case studies. Many other people had their fair share in facilitating my research there, including Emmanuel Sulle, Brian Cooksey, Martina Locher, Hazel Gray, Andrew Coulson, Faustin Maganga, Esther Towo and the great team at COSTECH. This book would also not exist without the “technical” support of Frieda Gresch, Petra Turba, Elke Alban, Thea Fechner, Alexander Melchert, Julia Blauhut, Ian Copestake and Susan Askvik. This technical support also includes some quite “big players”. Market intelligence providers Savills (London) and Valoral Advisors (Luxembourg) kindly shared data on the “AG investment” space with me, and Preqin (London) and Agri-Investor (London), two other data service providers, gave me special subscription deals within the range of my research budget. That I had this budget at all is thanks to the German Research Council, which funded a part of the underlying research between 2017 and 2020 (grant no. 363300598). Other sources of financial support were the Centre of African Studies, via the support of Marc Boeckler at Goethe University and the chair of economic geog- raphy at the same institution (again, thanks to Peter Lindner!). I am also glad that some investment conference organizers had mercy on me and let me take part at their events at reduced rates. Finally, I would like to thank the team at Agenda, Steven Gerrard and Alison Howson, and two anonymous reviewers, as well as the editors of Agenda’s Economic Transformations series: Jamie Peck, Brett Christophers, Rebecca Lave and