4. Financial sector land grabs

Without land for agricultural, forest-based, or pastoral production, billions of people globally would not have a livelihood. If displaced from their lands, these people would be forced to migrate to overflowing slums surrounding cities.71
  

To guard against this threat, in December 2018 the United Nations General Assembly adopted the Declaration on the Rights of Peasants and Other People Working in Rural Areas (UNDROP), recognising “the special relationship and interaction between peasants and other people working in rural areas and the land, water and nature to which they are attached and on which they depend for their livelihood;” and highlighting their “contribution in ensuring the right to adequate food and food security, which are fundamental to attaining the internationally agreed development goals”.  

Against this background, the UNDROP warned of "the increasing number of peasants and other people working in rural areas forcibly evicted or displaced every year." 72
 

Between 2011 and 2021, land grabbing increased, as did the threat of land grabs under the guise of ecological management. Across the African continent, the advance of neoliberalism and the decreasing state control of land opened the way for large-scale land purchases. The US and the EU, alongside their allies the United Arab Emirates and Saudi Arabia, are closely interlinked with northern monopoly capital.74
 

The purchased land produces profitable crops for outside investors, which is nothing new. What is new is the intensity, the scale and the interconnection of corporate mergers, as is the increasing role these mergers play in the financial markets.  

Speculation driving land grabbing 

Since the 2007-2008 world financial crisis, which mainly affected the real estate market, the global financial markets have repurposed their investment portfolios and diversified into new projects. Financial players, such as investment banks, asset management companies, insurance companies and venture capital funds, have now penetrated all sectors of the economy, and the logic of financial markets has been introduced into areas where it was previously absent, such as the agricultural sector.75
This new speculation in commodities has contributed to the rise of global food prices. 

New financial ‘assets’ include land, water, oceans, forests, cities, and biodiversity. The world’s common goods have been transformed into investment portfolios and opportunities, through derivatives or future contracts, entering the speculation market.76
The futures market in food was originally set up in the mid-20th century to allow producers and anyone in the food chain to make a contract with a dealer and ensure a decent price for the food produced. However, the liberalisation of the futures market 20 years ago means that speculators can now make money by betting on foodstuffs via financial operators who are not in the food chain. Banks are also betting on staple food prices in these unregulated financial markets and earning large profits.  

Today, land has become an increasingly popular portfolio investment, and the financialisaton of agriculture has had a huge effect on food prices, through speculation on agricultural futures on international markets.77
Farmland and agricultural activities are increasingly being treated as an ‘investment play’. Between 2005 and 2017, approximately US$45 billion was invested in farmland by institutional investors such as pension funds, endowment funds, insurance companies, and high-net worth individuals.78
Bill Gates, for example, is now the largest farmland owner in the United States.  

In the same period, the number of global investment funds specialising in food and agriculture assets skyrocketed from 38 to 446, with current assets under management surpassing US$73 billion, excluding timber.79
  

The US-based NCREIF Farmland Income Index (National Council of Real Estate Investment Fiduciaries) is one of the few sources of institutional farmland investments focused on US-based investment. This index (Figure 1) increased from US$1.1 billion to US$8.1 billion between 2008 and 2017, with similar upward trends reported from other major crop-producing regions on a global scale. The amount of farmland funds on a global level has also increased dramatically, making it one of the most desired food and agricultural assets for international investors (Figure 2).80

Figure 1: The global land grab: financial markets threatening the right to land

Number and market value of institutionally owned properties in the NCREIF Farmland Property Index, 1991–2018 (Q2).

Figure 2: Evolution in the number of global funds for farmlands

This financialisation of agricultural land threatens the entire basis of farming.  It drives up the global price of farmland and demands that farmers produce what is most profitable, rather than what is most needed. It also threatens the right to land and risks the displacement of peasants and Indigenous communities. 

Elsewhere, concern for biodiversity and conservation threatens further land grabbing in the form of the Half-Earth Project: a plan to set aside half of the planet. Other international proposals call to protect at least 30% of the planet to save the Earth’s biodiversity.82
However, these plans would be hugely harmful to the many land-dependent people currently living on the designated areas if they are not involved in conservation planning. Whether Half-Earth is the appropriate framework for conservation is another question, given the widespread examples of landscape management which meet both biodiversity and human needs, such as the tapestry-like ‘nature’s matrix’ approach.83