Agriculture as an asset class: reshaping the South African farming sector

Abstract

According to portfolio managers, agriculture in general, and farmland in particular, can be considered an emerging asset class. Specialized financial vehicles, such as private equity and mutual funds, are emerging and competing to attract potential investment in this asset class. In recent years, there has been significant development of such vehicles targeting South Africa's farming sector. These innovations are led by a group of market intermediaries (e.g. asset managers or consultants) who endeavour to “re-shape” South African farmland as an opportunity for institutional investors. These “pioneers” engage in a multifaceted mediation process between global financial investors on one hand, and the South African agricultural sector on the other. Drawing upon an empirical study of such intermediaries in South Africa, this paper analyses the concrete mechanisms that facilitate this particular form of commodification. The paper presents and compares the intermediaries, giving particular attention to their structure, governance mechanisms and asset allocations within this “market in the making”. It describes how intermediaries develop different paths of asset valorization to unlock the “financial value” of South African farmlands (i.e. “liquifying”, standardizing, neutralizing, and depoliticizing agriculture as an asset). But, it also highlights some of the difficulties faced in the process of translating between international investors and local managers, questioning the “land-asset fiction” that is materializing through the subordination of farmland to the needs of financial society. (Résumé d'auteur

Situating global finance in the Land Rush Debate: A critical review

“…Even work that explores the financialization of farmland/agriculture in more detail (Dixon, 2013;Fairbairn, 2014;Gunnoe, 2014;McMichael, 2012;Sommerville, 2013) often does not escape this analytical gaze and usually makes use of a narrow range of authors (Arrighi, 2010(Arrighi, [1994; Epstein, 2005;Harvey, 2006Harvey, [1982; Krippner, 2005), whose take on financialization is largely compatible with a more structuralist political economy perspective. Many intriguing perspectives on money, finance, or the making of new markets in the fields of heterodox economics, cultural economy, the social studies of finance, the social studies of markets, economic geography and sociology have received little to no recognition in the existing literature (but see Ducastel and Anseeuw, 2014;Ouma, 2014;Williams, 2014). For instance, Fairbairn (2013Fairbairn ( , 2014, one of the pioneering authors, argues that, despite the claim of financial actors that investing into 'real things' sustained by market fundamentals represented a break with the practices of 'financial engineering' which had created the global economic turmoil (Colvin and Schober, 2012), the logics of financialization as practiced elsewhere were now simply being extended to farmland and agriculture (see also Russi, 2013).…”

“…Strong concepts such as 'food security', 'accumulation by dispossession' or 'new enclosures' indicate such an orientation. This has been accompanied by a limited engagement with actors from the financial industry themselves (but see Ducastel and Anseeuw, 2014;Fairbairn, 2014), who may have something interesting to say, are often convinced they do good by contributing to global food security, and, as my own research has shown, are frequently distancing themselves from a ''Wall Street mentality'' applied to farming. This lack of engagement has resulted in grand narratives on 'bankers-turnedfarmers', without any more situated fieldwork -be it interviews or ethnography -sustaining them.…”

“…Buck-Morss, 1995;Goede, 2005), these are conceived as already-in-place, with the former imagined as an entity that confidently, effectively and relentlessly appropriates the latter. However, both work on financialization more generally (Aitken, 2010), as well as first accounts of its agrarian variant (Ducastel and Anseeuw, 2014;Li, 2014;Williams, 2014) show that both 'capital' and 'resources' are a matter of organization and require extensive discursive, sociotechnical and even legal work. 3 The praxis of capitalizing farmland/agriculture might encounter obstacles, be contested or fail to complete its mission as envisioned by the protagonists.…”

“…While we have seen first attempts to do so (Ducastel and Anseeuw, 2014;Ouma, 2014;Williams, 2014), we have to further advance this project without losing sight of the category of 'capital' itself. We need to treat 'green capital' as a practical accomplishment rather than a pre-given entity; we need to follow its far-flung associations that emerge and are being worked upon in particular sites (Porter, 2013) -circulation starts somewhere; we need to join these dots to imagine and write about finance, whatever form it takes, in a different way (Pryke, 2012), we need to unscrew the big finance leviathan (Callon and Latour, 1981).…”

Neoliberalisation from the Ground Up: Insurgent Capital, Regional Struggle, and the Assetisation of Land

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