Conference Agenda

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Session Overview
207R: New actors, global narratives, and renewed goals shaping farmland investment decisions
Wednesday, 24/Apr/2019:
11:15am - 12:45pm

Session Chair: Dilini Abeygunawardane
Session Chair: Angela Kronenburg García
Session Chair: Mairon Giovani Bastos Lima
Location: MB-106
Main Building, 1st floor, east wing, 78 seats
Session Topics:
What do people want from land?

Session Abstract

In today’s commodity frontiers, not all key actors driving land use change are farmers and their interests are not entirely production-driven. The investment trend that followed the 2007-08 food and financial crises has spurred a new set of powerful actors such as development finance institutes, institutional and retail investors and an emergent group of fund managers. Farming is only one of their interests among others that may also include assetization of farmland, generating environmental services, or contributing to development. Furthermore, their decisions are now shaped not only by distance to market, productivity, or access to resources but also by the global narratives of business, development, and environmental protection. Understanding land use dynamics thus calls for a broader research scope encompassing new actors beyond the direct land users, global narratives that shape land use goals beyond the production of goods, and new modes of decision-making.

This session takes a closer look at the evolving global landscape of farmland investments (including forestry) that are not often farmer-led or entirely production-driven. We welcome submissions based on both empirical and theoretical work contributing to a stimulating discussion on new and emerging dynamics of farmland investment shaping today’s commodity frontiers, its actors, their goals, and the global narratives modeling their decision space. This, in turn, will provide a foundation to revisit land use theories and to rethink contemporary commodity frontiers.

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Full talk
ID: 731 / 207R: 1
207R New actors, global narratives, and renewed goals shaping farmland investment decisions
Keywords: Commodity frontiers, investment decision making, land rent, Development Finance Institutes (DFI), Southern and Eastern Africa

Development financiers: The new agents driving African commodity frontiers

Dilini Abeygunawardane1, Angela Kronenburg García1,2, Patrick Meyfroidt1,3

1Université catholique de Louvain, Belgium; 2University of Eduardo Mondlane, Maputo, Mozambique; 3F.R.S. - FNRS, Brussels, Belgium

We investigated the investment decisions of transnational agricultural and forestry companies who have invested in multiple locations across emerging frontiers in Southern and Eastern Africa. Our sample included over 30 transnational companies investing in agriculture or forestry in Mozambique, Zambia, Tanzania, Ethiopia, and South Africa. We conducted >90 semi-structured interviews covering the entire chain of managers in a company from the farm or the plantation managers, to the country and regional managers, to those responsible for and shaping the decisions at the highest level, including CEOs, shareholders and investors in Africa and Europe. We collected data on the company profile, business model, existing and upcoming portfolios, agro-ecological, socio-economic, political and institutional characteristics of the different operation sites, perceived opportunities, constraints, and potential benefits of investing in different locations, the influence of these factors on past investments decisions, and sources of finance. We used a Bayesian Belief Network to model the effect of visions, existing ventures, and place-based suitability assessments on the investment choices of different investors. Our results highlight the importance of a group of actors, the development financiers, who are largely absent in land systems research. They are playing a key role in shaping the African commodity frontiers, by offering financing solutions in regions where they constitute the dominant, if not the only, source of capital. In a market environment otherwise unfavourable for commodity agriculture, these financing solutions create and sustain a higher rent. The findings suggest that land rent theories used in explaining frontier development may benefit from a deeper understanding of how and why distinct groups of actors, whose objectives extend beyond maximising production and profit, shape the rent conditions for agricultural development on the frontier.

Full talk
ID: 369 / 207R: 2
207R New actors, global narratives, and renewed goals shaping farmland investment decisions
Keywords: Soy, Cerrado, Land, Brazil, Speculation

The secrets of soy and farmland investments in Brazil’s last Cerrado frontier

Mairon Giovani Bastos Lima

Chalmers University of Technology, Sweden

The cultivation of soybeans, the world’s most traded agricultural commodity, has been expanding at astounding rates in South America. Brazil, in particular, placed itself as the top global producer and exporter of the crop in 2018. If soy occupied about 1.3 million hectares (Mha) of cropland in the country in 1970, that had grown to 33Mha by 2016 and is still expected to increase to 45Mha by 2025. This is to happen mostly in the Cerrado biome, Brazil’s highly-biodiverse savannah ecosystem, over degraded pastures but also over native vegetation. After establishing itself as the dominant crop in Brazil’s Center-West Region, soy now expands over the last remaining portions of the Cerrado, a region that has been dubbed as MATOPIBA – after the initials of the four states that compose it (Maranhão, Tocantins, Piauí and Bahia). While the private sector – and a mostly supportive government – argue that soybean expansion helps provide for global food security, local development and Brazil’s economy through exports, most civil society organizations point to the social and ecological damages inflicted by soybean expansion. Some important elements of this land conversion, however, have been mostly absent from either narrative. Based on key-informant interviews in Brazil and Europe, this study shows how both land assetization and price speculation have played a pivotal role in soybean’s expansion in the country. Far from being simply a story of agriculture or food production versus ecosystem conservation, the picture reveals to be far more complex, involving the financialization of agriculture, hidden but important actors, and crucial lessons for the governance of sustainable land use.

Flash talk
ID: 854 / 207R: 3
207R New actors, global narratives, and renewed goals shaping farmland investment decisions
Keywords: farmland investments, institutional investors, farmland assetization, investment decisions, non-agricultural investors

The evolution of farmland investments by institutional investors

Anna Hajdu1, Oane Visser2

1IAMO Leibniz Institute of Agricultural Development in Transition Economies, Germany; 2International Institute of Social Studies (ISS), Erasmus University Rotterdam

There is currently a common understanding that the 2007-2008 food and financial crises spurred the investment decisions of non-agricultural investors, such as institutional investors, in farmland as a financial asset. At the same time, investors were motivated by the boom in commodity and food prices for a “rediscovery” of the agricultural sector (Deininger 2011; Edelman and Leon 2013). The year 2007 is conceptualized as the watershed food crisis year that prompted a land rush everywhere across the globe. For this reason, in the land grab literature, Edelman and Leon (2013) point to the need of analyzing land deals from a historical perspective, to understand the context and background on which new land interests occur.

The historical evolution of institutional farmland investments has not been analyzed so far in the academic literature. Based on desk research we identify that institutional farmland investment emerged as early as the 1970s in the US and gradually developed until present. Institutional farmland investments evolved as institutional structures in the US changed or, in the framing of the land grab literature, as the result of earlier social and material processes, pre-existing social formations and local and regional particularities (Edelman and Leon 2013). As such, the spaces in which new farmland investments occur have a historical and social imprint.

Results from forty interviews conducted by the author in Romania in the period 2015-2017 confirm that certain categories of non-agricultural investors emerged with the food and financial crises but that different other categories of non-agricultural investors emerged as early as the 1990s. This paper shows that the conceptualization of 2007 as the watershed food crisis year that prompted a land rush everywhere across the globe is incomprehensive as it neglects further historical and institutional development factors that may influence the unfolding of farmland investments in a certain country.

Flash talk
ID: 878 / 207R: 4
207R New actors, global narratives, and renewed goals shaping farmland investment decisions
Keywords: Soy, Frontier, Commodity, agro-industrial trader

The new Paraguayan frontier: How agro-industrial traders have shaped Paraguayan soybean expansion

James Henderson

University of Bonn, Germany

Modern South American agricultural frontiers are increasingly shaped by the sourcing and investment decisions of agro-industrial trading companies. These actors facilitate the globalized production to consumption systems of agricultural commodities, which in turn, result in localized socio-environmental and land use changes in production regions. However, the role that agro-industrial traders play in shaping agricultural frontiers and the impacts that their heterogeneous sourcing and investment decisions have on production regions are opaque and poorly understood. Furthermore, traditional theories of agricultural frontier expansion focus on the dynamics of agricultural frontiers shaped by smallholders, offering little insight into the dynamics of contemporary agro-industrial commodity frontier expansion. This study advances current theories of commodity frontier dynamics by applying the case of Paraguayan soybean expansion between the years 2007-2016 to a recent conceptual framework that combines political economy and neoclassical economics to identify contemporary drivers of commodity frontier expansion. We then review how these contemporary drivers and incentives impact the sourcing and investment decisions of agro-industrial traders in Paraguay by applying a spatially explicit material flow analysis of soybean production to consumption via agro-industrial trader, and reviewing these drivers with yearly changes in sourcing and expansion by individual trading companies, in addition to field interviews of trading companies and other relevant actor groups. Our goal is to better understand the drivers and dynamics that have shaped contemporary soybean expansion in Paraguay, to understand the role heterogeneous agro-industrial traders have played in this expansion, and to understand which drivers have had the most impact in their sourcing and investment decisions. This study seeks to help create a better understanding of contemporary soybean expansion dynamics, in order to identify cost effective sustainability intervention opportunities to mitigate negative externalities of Paraguayan soybean production and trade at a local level.

Full talk
ID: 636 / 207R: 5
207R New actors, global narratives, and renewed goals shaping farmland investment decisions
Keywords: large-scale land acquisition, anti-politics, commons, Corporate Social Responsibility, development discourse

The drama of the grabbed commons: CSR as anti-politics machines and local responses

Jean-David Gerber1, Tobias Haller2

1Institute of Geography, University of Bern, Switzerland; 2Institute of Social Anthropology, University of Bern, Switzerland

In the current debates on large-scale land acquisitions (LSLA), the promise of material benefits through integration in global markets, land titling, as well as accompanying compensation measures – in particular voluntary Corporate Social Responsibility (CSR) initiatives – hides the fact that LSLA are not the win-win undertakings depicted by prevalent neoliberal development discourses. We use James Ferguson’s Anti-Politics Machine to critically interrogate the development discourses used to promote LSLA. LSLA are expected to lead to the conversion of some kinds of resources (land, water, biodiversity, wind…) into others (high-value crops, monetary resources or infrastructures…). While some commons disappear (pastures, forests, hunting grounds…) other are created through CSR measures (infrastructure, irrigation channels, special community funds, classrooms or dispensaries).

This paper explores the nexus between LSLA, anti-politics and CSR. Focusing on the public and private actors involved in – or impacted by – LSLA, we recount the drama of the grabbed commons. Combining approaches of New Institutionalism and Political Ecology, we ask: how is the access to resources impacted by the dissolution of existing commons, recognizing that many dimensions of power operate in an investment project, including gender, migration background, social status, age and lineage? Do new commons created by LSLA compensate for the loss of old commons? If the new commons do not compensate for the loss of old commons, why are people not raising their voices to preserve them?

Our empirical evidence from detailed case studies in Ghana, Malawi, Morocco, and Tanzania shows that, under the promise of development, a growing number of land users are deprived from access to commons; at the same time local to global elites are increasingly interested in assuring high returns of capital investment. Powerful discourses of development, women empowerment, wasteland productivity increase, etc. serving as anti-politics machines hide increased state control and asymmetric power relations.

Full talk
ID: 301 / 207R: 6
207R New actors, global narratives, and renewed goals shaping farmland investment decisions
Keywords: foreign investment in agriculture, domestic investment in agriculture, agricultural expansion, inequality, flex-crops

Inequality, investment and agricultural expansion in tropical regions: the effect of domestic versus foreign capital

Michele Graziano Ceddia

University of Bern, Switzerland

Agricultural expansion remains the most important proximate cause of deforestation in the Global South, particularly in tropical areas. Over the last ten years there has been increasing attention to the role of foreign investments in processes of large scale land acquisitions in the Global South, which in turn may have spurred agricultural expansion and deforestation. Moreover, it has been pointed out that after the 2008 global financial crisis and the consequent decline in financial returns, investments in land (including both agricultural and urban uses) have become increasingly attractive. In this context, extremely wealthy individual may have played a significant role by diverting their investment from the financial sector towards land and other real assets. This in turn suggests a potential effect of rising inequality in stimulating demand for land. In this paper I address these issues by looking at 21 countries in Latin America and South East Asia, two regions heavily affected by large-scale land acquisitions, agricultural expansion and deforestation. I deploy a number of multivariate statistical models to assess: a) the drivers of domestic and foreign investment in agriculture, with a particular interest to the role of inequality and rates of return and b) the impact of domestic and foreign investment (alongside a number of other explanatory factors) on agricultural expansion, with a particular focus to the expansion of flex-crops area. With respect to the former point, the underlying hypothesis is that investment in agriculture is increasing in the level of inequality and in the rate of returns to agriculture. With respect to the second point, I hypothesize that both domestic and foreign investment play a role in driving agricultural expansion. The preliminary results suggest that domestic investment is positively correlated with domestic inequality, while exerting a significantly larger impact on agricultural expansion than foreign investment.

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