by David Robinson
The Lord drew my eye to a report by Reuters today, which seems to have come in under the radar. Something to watch and pray as it develops… and it will develop as an issue!!!
Many firms in Wall Street’s financial district invest in things you can’t touch: currency futures, index options, credit derivatives and so on. Some have, so far, ploughed more than $1 billion into actual farmland, mostly in the United States. Investment Groups are currently wagering serious money, if not quite betting the farm, on corn, soybeans and other crops.
It is among many large and small private equity firms, hedge funds, asset managers and other investment groups hoping to harvest long-term profits from the soil.
In Wall Street terms, the heartland is “hot”. Increasingly, big-city investors emerging from a bruising economic downturn sparked by the collapse of esoteric financial products are putting money into Illinois corn fields, California cranberry bogs and Brazilian sugarcane. Overseas, African farms, as well as ones in Australia and Eastern Europe, have emerged as financial opportunities. Australia is favoured not just for the land but also for the vast amount of underground water stored in the Artesian Basin. Water is too becoming a valuable world commodity.
One investor said “Interest has been growing; in the age of derivatives and evaporating valuations, farmland is Gold with a cash flow.”
Investment groups say that agriculture has seldom been more appealing.
The World Bank and the United Nations Food and Agriculture Organization (FAO) cited the trend in a report in January, noting a “sharp increase” in agricultural investments the world over. Such private investment could offer “significant benefits to the sector — not to mention the human race — by helping modernize farming tools and techniques”, the agencies said.
….How nice and thoughtful of them, for a moment there, I thought they were manoeuvring themselves in a ruling position, in case ‘world food and water’ runs out!
Not everybody is thrilled by Wall Street’s “speculating”, however. Some critics address the implications of the trend, calling it a “modern-day land rush”. They worry in particular about what they label an unfair transfer of valuable land and water resources from the poor to the wealthy.
There really is nothing new under the sun, is there?
Investment groups counter that their dollars are key to transforming a diminishing amount of arable land around the world into high-yielding, efficient food factories. And they don’t see financial interest ebbing any time soon. “We want to go after the key factor in production — the land,” said one investor. “The end product is food, which is essential for human life.” …Human Life?, yes, I remember that… it’s the ultimate “commodity”.
Industry estimates put the assets of global farmland for investors at $15 billion in equity spread among about 40 different institutional players globally. But the amount is likely much larger if you take into account government-linked companies such as sovereign funds, individual entrepreneurs and wealthy families.
South America is a particular draw. Investors there are hoping for 20 percent-plus returns from Brazilian soybean and sugarcane fields, which are key suppliers of food, livestock feed and ethanol.
What’s driving the market there and elsewhere is staggering Chinese demand for soy products. With an abundant supply of arable land but still undercapitalized farmland in the region, investors hope to generate profits by modernizing equipment, improving farming practices and using better seeds and chemicals that will ultimately yield higher crop production.
Africa, the world’s poorest continent, is another hot spot as investments in infrastructure, fertilizer and equipment have long been lacking and are expected to make a big difference in productivity.
Worried about the need to feed a huge and booming population, Chinese interests are working in some African countries to help raise food and bio-fuel production. Water-poor Middle Eastern and Gulf nations are also looking to secure food supplies as the world population is forecast to rise from 6.9 billion to more than 9 billion by 2050 and experts fear that feeding so many people could prove difficult.
Unlike derivatives and other less tangible financial products, farms can arouse nationalistic passions. The moves in Africa in particular have engendered some criticism, with charges of neo-imperialism.
In a statement co-sponsored by more than 100 organizations from around the world, the organisation “GRAIN”, is calling for protection of community-oriented food and farming systems based on “local people’s control over land, water and biodiversity.”
A spokesman said “the investments in farmland by large investors undercuts small farmers who cannot compete to buy ever higher priced land, essentially putting investors in a position of profiting from hunger.”
GRAIN, along with the groups from Africa, Asia, Europe and elsewhere, said in a statement that the “current farmland grab… will undermine peoples’ self-determination, food sovereignty and survival as never before.” The groups said the “multi-functionality, and ecological, social and cultural values of land are being negated” as land is being re-valued on purely economic terms. Investors seem undeterred by the controversy.
“There has been reaction, yes. But I personally don’t believe we have a chance of feeding the world without large scale farming,” said Hunt Stookey, managing director of HighQuest Partners strategic consulting group. ” This sector has been underinvested for decades.” This is a fair point as the reality is, investment often has to happen, in order bring more investment; the bi-product of which can be better living standard for inhabitants.
The concern with all this, is, will the earth and it’s resources, end up in the hands of the few? Is this the potential beginning of a new global feudalism? The return of the mediaeval land lords? But with Squires, Surfs and Peasants having no choice but to serve the global “elite”?
The earth is The Lords, and everything on it is His. We all are His tenants and Stewards of His creation! Jesus Christ is our true Land Lord.
Lord, please help us. Please come back soon! Amen.
The Lord drew my eye to a report by Reuters today, which seems to have come in under the radar. Something to watch and pray as it develops… and it will develop as an issue!!!
Many firms in Wall Street’s financial district invest in things you can’t touch: currency futures, index options, credit derivatives and so on. Some have, so far, ploughed more than $1 billion into actual farmland, mostly in the United States. Investment Groups are currently wagering serious money, if not quite betting the farm, on corn, soybeans and other crops.
It is among many large and small private equity firms, hedge funds, asset managers and other investment groups hoping to harvest long-term profits from the soil.
In Wall Street terms, the heartland is “hot”. Increasingly, big-city investors emerging from a bruising economic downturn sparked by the collapse of esoteric financial products are putting money into Illinois corn fields, California cranberry bogs and Brazilian sugarcane. Overseas, African farms, as well as ones in Australia and Eastern Europe, have emerged as financial opportunities. Australia is favoured not just for the land but also for the vast amount of underground water stored in the Artesian Basin. Water is too becoming a valuable world commodity.
One investor said “Interest has been growing; in the age of derivatives and evaporating valuations, farmland is Gold with a cash flow.”
Investment groups say that agriculture has seldom been more appealing.
The World Bank and the United Nations Food and Agriculture Organization (FAO) cited the trend in a report in January, noting a “sharp increase” in agricultural investments the world over. Such private investment could offer “significant benefits to the sector — not to mention the human race — by helping modernize farming tools and techniques”, the agencies said.
….How nice and thoughtful of them, for a moment there, I thought they were manoeuvring themselves in a ruling position, in case ‘world food and water’ runs out!
Not everybody is thrilled by Wall Street’s “speculating”, however. Some critics address the implications of the trend, calling it a “modern-day land rush”. They worry in particular about what they label an unfair transfer of valuable land and water resources from the poor to the wealthy.
There really is nothing new under the sun, is there?
Investment groups counter that their dollars are key to transforming a diminishing amount of arable land around the world into high-yielding, efficient food factories. And they don’t see financial interest ebbing any time soon. “We want to go after the key factor in production — the land,” said one investor. “The end product is food, which is essential for human life.” …Human Life?, yes, I remember that… it’s the ultimate “commodity”.
Industry estimates put the assets of global farmland for investors at $15 billion in equity spread among about 40 different institutional players globally. But the amount is likely much larger if you take into account government-linked companies such as sovereign funds, individual entrepreneurs and wealthy families.
South America is a particular draw. Investors there are hoping for 20 percent-plus returns from Brazilian soybean and sugarcane fields, which are key suppliers of food, livestock feed and ethanol.
What’s driving the market there and elsewhere is staggering Chinese demand for soy products. With an abundant supply of arable land but still undercapitalized farmland in the region, investors hope to generate profits by modernizing equipment, improving farming practices and using better seeds and chemicals that will ultimately yield higher crop production.
Africa, the world’s poorest continent, is another hot spot as investments in infrastructure, fertilizer and equipment have long been lacking and are expected to make a big difference in productivity.
Worried about the need to feed a huge and booming population, Chinese interests are working in some African countries to help raise food and bio-fuel production. Water-poor Middle Eastern and Gulf nations are also looking to secure food supplies as the world population is forecast to rise from 6.9 billion to more than 9 billion by 2050 and experts fear that feeding so many people could prove difficult.
Unlike derivatives and other less tangible financial products, farms can arouse nationalistic passions. The moves in Africa in particular have engendered some criticism, with charges of neo-imperialism.
In a statement co-sponsored by more than 100 organizations from around the world, the organisation “GRAIN”, is calling for protection of community-oriented food and farming systems based on “local people’s control over land, water and biodiversity.”
A spokesman said “the investments in farmland by large investors undercuts small farmers who cannot compete to buy ever higher priced land, essentially putting investors in a position of profiting from hunger.”
GRAIN, along with the groups from Africa, Asia, Europe and elsewhere, said in a statement that the “current farmland grab… will undermine peoples’ self-determination, food sovereignty and survival as never before.” The groups said the “multi-functionality, and ecological, social and cultural values of land are being negated” as land is being re-valued on purely economic terms. Investors seem undeterred by the controversy.
“There has been reaction, yes. But I personally don’t believe we have a chance of feeding the world without large scale farming,” said Hunt Stookey, managing director of HighQuest Partners strategic consulting group. ” This sector has been underinvested for decades.” This is a fair point as the reality is, investment often has to happen, in order bring more investment; the bi-product of which can be better living standard for inhabitants.
The concern with all this, is, will the earth and it’s resources, end up in the hands of the few? Is this the potential beginning of a new global feudalism? The return of the mediaeval land lords? But with Squires, Surfs and Peasants having no choice but to serve the global “elite”?
The earth is The Lords, and everything on it is His. We all are His tenants and Stewards of His creation! Jesus Christ is our true Land Lord.
Lord, please help us. Please come back soon! Amen.
