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E-book Farming as Financial Asset : Global Finance and the Making of Institutional Landscapes

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Penilaian

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Finance has gone farming. Since the financial and food price crises of 2007/ 8, the world has seen a stark rise in financial investments in farmland and agri-cultural production by investment banks, sovereign wealth funds, pension funds, private equity funds, insurance companies, family offices, endowment funds and high- net-worth individuals (HNWIs). Indeed, finance has been identified as one of the main drivers of the so- called “global land rush” (Grain 2008; McMichael 2012; Fairbairn 2014; Ouma 2014), in which non- financial entities, such as state- run or parastatal companies or other types of corporate entities, also play a central role. As a result of declining or negative returns on mainstream assets in the wake of the global economic meltdown, a fear of rising levels of inflation caused by counter- cyclical interventions, money printing and quantitative easing in “core countries” such as the United States, low returns on savings and a rise in general distrust in complex financial products, investors searched for new “alternatives” within their “investment universe”. What was suddenly in demand was less “financial engineering” and more “real things”. Farming seemed a perfect match, with parts of the financial industry starting to make a strong case for the sector as an “alterna-tive asset class” that was sustained by a set of strong market fundamentals. A growing world population (passing 7 billion people by the end of 2011); changing dietary preferences towards meat and protein in emerging markets such as China and Indonesia; a rising demand for agrofuels (and carbon sinks) in the light of peak oil and climate change; the limited availability of agricultural land (“peak soil”); and stagnant, or even decreasing, productivity levels in core production regions and climate- change- induced crop failures all seemed to make farming a safe financial bet. The financial industry quickly determined that these factors would shape future demand–supply dynamics along the agri- food chain in crucial ways.In light of these dynamics, a standard narrative has evolved, which emphasizes that investments in agricultural operations and the underlying farmland should guarantee stable returns on capital invested. In addition, their “value” is likely to appreciate when growing demand meets growing resource scarcity. Unlike gold, a favourite during times of financial crisis, agricultural production and the underlying land store and produce capital. Additionally, investments in farmland and agriculture are said to enhance portfolio diversification and efficiency, thereby increasing the robustness of investment portfolios with regard to external shocks. These promises, which go hand in hand with the relatively low complexity of farmland investment instruments and the tax allowances granted on farmland investments in many countries, have made agriculture a space of “other investment”, rendered as exceptionally secure in a turbulent world. As The Economist puts it, “No matter how bad things get, people still have to eat” (The Economist2009).

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Ketersediaan

Informasi Detail

Judul Seri

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No. Panggil

332 OUM f

Penerbit

London : Agenda Publishing Limited., 2020

Deskripsi Fisik

222 hlm

Bahasa

English

ISBN/ISSN

9781788211871

Klasifikasi

332

Tipe Isi

text

Tipe Media

computer

Tipe Pembawa

online resource

Edisi

-

Subjek

Financial Economics, Finance

Info Detail Spesifik

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Pernyataan Tanggungjawab

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Versi lain/terkait

Lampiran Berkas

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