The Rise of Agriculture as an "Alternative Asset Class": Global Geographies of Financial Economization
Final Report Abstract
Embracing a relational-comparison between agricultural investments in emerging (Tanzania) and consolidated markets (New Zealand), the approved research project pursued three objectives: First, it sought to contribute to a more nuanced understanding of the global evolution of farmland/agriculture as an alternative asset class and its internal architecture and relational dynamics. In the tradition of global ethnography, the proposed project sought to develop an in-depth understanding of practices of financial actors and intermediaries that are shaping farmland/agriculture as an alternative asset class. Specifically, this called for the detailed examination of the concrete actors and institutional relationships that make up the farmland/agriculture class as a financial subsector, as well as identifying the practices of knowledge production, calculation and sense-making that shape investment structures/strategies and operational models in use among financial market players. A particular focus was put on institutional investors, asset management companies and advanced business services (ABS) firms. The latter are crucial intermediaries in financial markets. The assumption was that rather than treating “financialization” as something pregiven, it is something that needs to be accomplished across space. In other words, what is to be explored is how the financial economization of farmland/agriculture is structured as a sociospatial process. This component partly mined industry intelligence to achieve its objective (e.g. Preqin Data). The second objective is to explore how agri-focused (global) financial networks operate within concrete agrarian, economic and political-institutional contexts. The project followed selected investment networks into the Tanzanian and New Zealand agriculture. Tanzania was selected because it is one of the prime emerging market frontiers of the financedriven land rush. Such markets are associated with particular risks that may keep off large Western institutional investors, and only attract more risk-taking fractions of capital. New Zealand was selected because it is considered one of the prime agricultural investment frontier globally. Together with the US, Brazil and Australia has accounted for much of the current and targeted value of investments globally. By examining how relational investment networks intersect with the territorial structures (agrarian, economic, political-institutional) of target regions, research objective 2 responded to the call in the land rush literature to study concrete investment arrangements, their agrarian, economic and political-institutional embeddedness, and their regional variations. Employing on-farm organizational ethnographies, the third objective of the project was to explore how agricultural production is organized practically so that it meets the investment goals and strategies of investors and asset managers. The assumption was that agricultural investments are often frictional undertakings. On the one hand, this is due to unruly nature of agricultural production, which often faces a number of market/commodity, environmental and management risks. On the other hand, investments in farmland/agriculture are inherently political. The three objectives outlined above translated into three thematic research clusters, with each containing a set of research questions.
Publications
- (2018) Opening the Black Boxes of Finance-Gone-Farming: A Global Analysis of Assetization. In: Bjørkhaug H, Lawrence and Geoffrey, Magnan, Andrew (eds) Financialization, Food Systems and Rural Transformation. London: Routledge, pp. 85–107
Ouma S
(See online at https://doi.org/10.4324/9781315157887-5) - (2018) Rethinking the financialization of ‘nature’. Environment and Planning A: Economy and Space 50(3): 500-511
Ouma S, Johnson L and Bigger P
(See online at https://doi.org/10.1177/0308518x18755748) - (2019) Investor. In: Brunner J, Dobelmann A, Kirst S and Prause L (eds) Wörterbuch Land- und Rohstoffkonflikte: Bielefeld: Transcript, pp. 159–16
Ouma S
(See online at https://doi.org/10.14361/9783839444337-023) - (2019) Zur nationalen Regulation globaler Agrarinvestitionen. Das Beispiel Aotearoa Neuseeland. In: Mießner M and Naumann M (eds) Kritische Geographien ländlicher Entwicklung: Globale Transformation und lokale Herausforderungen. Münster: Westfälisches Dampfboot, pp. 162–176
Klinge TJ and Ouma S
- (2020) Commodities. In: Knox-Hayes J and Wójcik D (eds) The Routledge Handbook of Financial Geography: Routledge. London, pp. 208–231
Ouma S and Klinge TJ
(See online at https://doi.org/10.4324/9781351119061-12) - (2020) Farming as Financial Asset: Global Money and the Making of Institutional Landscapes. Newcastle: Agenda Publishing, ISBN: 9781788211871.
Ouma S.
- (2020) This Can(`t) be an Asset Class: The World of Money Management, “Society”, and the Contested Morality of Farmland Investments. Environment and Planning A: Economy and Space 52(1): 66-87
Ouma S
(See online at https://doi.org/10.1177/0308518x18790051) - (2020) Transformationen des Ländlichen: Land und Landwirtschaft in der Globalen Marktgesellschaft. In: Gebhardt H, Glaser R, Radtke U, Reuber P and Vött A (eds) Geographie: Physische Geographie und Humangeographie. Berlin, Germany: Springer, pp. 905–915
Vorbrugg A and Ouma S
- (2021) Foreign investments in New Zealand’s agricultural sector and their regulation, 2001–2017. Globalizations 18(4): 533–550
Klinge TJ
(See online at https://doi.org/10.1080/14747731.2020.1795427)
