The world is fast losing farms and farmers to the rich and powerful land speculators and agribusiness corporations.
In 2014, the Oakland Institute found that institutional investors, including hedge funds, private equity and pension funds, are eager to capitalise on global farmland as a new and highly desirable asset class. Financial returns are what matter to these entities, not food security. The September 2020 report on the grain.org website ‘Barbarians at the barn: private equity sinks its teeth into agriculture’ shows that there is no morality where capitalism’s profit compulsion is concerned. These funds tend to invest for a 10-15 year period, resulting in handsome returns for investors but can leave a trail of long-term environmental and social devastation and serve to undermine local and regional food insecurity.
Private equity funds – pools of money that use pension funds, sovereign wealth funds, endowment funds and investments from governments, banks, insurance companies and high net worth individuals – are being injected into the agriculture sector throughout the world. This money is used to lease or buy up farms on the cheap and aggregate them into large-scale, US-style grain and soybean concerns. The article outlines how offshore tax havens and the European Bank for Reconstruction and Development (EBRD) has targeted Ukraine.
Consider Ukraine. That country contains one third of all arable land in Europe. The organisation Grain found that in 2014 small farmers operated 16% of agricultural land in that country, but provided 55% of agricultural output, including: 97% of potatoes, 97% of honey, 88% of vegetables, 83% of fruits and berries and 80% of milk. It is clear that Ukraine’s small farms were delivering impressive outputs. Reforms mandated by the EU-backed loan to Ukraine in 2014 included agricultural deregulation intended to benefit foreign agribusiness. Natural resource and land policy shifts were being designed to facilitate the foreign corporate takeover of enormous tracts of land.
Frederic Mousseau, policy director at the Oakland Institute, stated at the time that the World Bank and IMF were intent on opening up foreign markets to Western corporations and that the high stakes around the control of Ukraine’s vast agricultural sector, the world’s third largest exporter of corn and fifth largest exporter of wheat, constitute an overlooked critical factor. He added that in recent years, foreign corporations had acquired more than 1.6 million hectares of Ukrainian land. In June 2020, the IMF approved an 18-month $5 billion loan programme with Ukraine. According to the Brettons Wood Project website, the government committed to lifting the 19-year moratorium on the sale of state-owned agricultural lands after sustained pressure from international finance. The World Bank incorporated further measures relating to the sale of public agricultural land as conditions in a $350 million Development Policy Loan (COVID ‘relief package’) to Ukraine approved in late June. This included a required ‘prior action’ to “enable the sale of agricultural land and the use of land as collateral.”
Frederic Mousseau recently stated:
“The goal is clearly to favor the interests of private investors and Western agribusinesses… It is wrong and immoral for Western financial institutions to force a country in a dire economic situation amidst an unprecedented pandemic to sell its land.”
The world’s biggest companies, Cargill, which is involved in almost every aspect of global agribusiness. Still run as a privately held company, the 155-year-old enterprise trades in purchasing and distributing various agricultural commodities, raises livestock and produces animal feed as well as food ingredients for application in processed foods and industrial use. Cargill also has a large financial services arm, which manages financial risks in the commodity markets for the company. This includes Black River Asset Management, a hedge fund with about $10 billion of assets and liabilities.
A recent article on the Unearthed website accused Cargill and its 14 billionaire owners of profiting from the use of child labour, rain forest destruction, the devastation of ancestral lands, the spread of pesticide use and pollution, contaminated food, antibiotic resistance and general health and environmental degradation.
The web that global capitalism weaves in a quest to seek out new profits, capture new markets and control common resources is destroying farmer livelihoods, the environment and health under the bogus claim of ‘feeding the world’. Those farmers who survive the profiteering strategies of dispossession are to become incorporated into a system of contract farming dictated by global agri-food giants tied to an exploitative food regime based on market dependency and corporate control. A regime that places profit ahead of biodiverse food security, healthy diets and the environment.
From an article by Colin Todhunter on the Countercurrents website