Monday, March 24, 2014

The Financial Elite and the Global Land Grab

New Eastern Outlook
Eric Draitser 
March 24, 2014

43543The global financial crisis, which began in 2008, has significantly altered the way many speculators and financial institutions invest. Rather than taking huge risks with dodgy derivatives like credit default swaps and mortgage-backed securities, both of which have proven to be particularly volatile, many speculators have instead begun to invest in the most tangible asset of all: land. By doing so, financial institutions, and many governments, have engaged in “land grabbing” – a process by which large amounts of capital are invested in the purchase of land for large-scale agricultural production, while the farmers who have worked the land for generations are displaced and/or become renters on land that was once their own.
This worrying trend is part of a global shift, a consolidation of land and resources in ever fewer hands, while the mass of workers and peasants are made dependent on corporations and governments. Spurred on by the financial crisis and the exponential growth of food and commodity speculation, financiers and their investment institutions (hedge funds, big banks, sovereign wealth funds, etc.) are gobbling up the most fertile land around the world, leading many to wonder what the future of food production and land distribution will look like.
It should be further noted that this trend is not only affecting the poor of the Global South, but also the independent farmers of the so called “developed world.” As such, landgrabbing has become a global phenomenon, one that must be addressed by farmers and working people internationally, with broad-based coalitions and organizations mobilizing resistance and educating the people. Only comprehensive solutions to such a global problem can possibly hope to protect the land, and all of us who depend on it.
Financiers Shall Inherit The Earth? 
It has become increasingly clear that speculators, and the financial elite more broadly, have been making a concerted effort in recent years to acquire as much fertile as possible, intending to use it as a major revenue source against the backdrop of global economic crisis. A recent Oakland Institute study noted:
An estimated 500 million acres…was reported bought or leased across the developing world between 2000 and 2011, often at the expense of local food security and land rights. When the price of food spiked in 2008, pushing the number of hungry people in the world to over one billion, the interests of investors spiked as well, and within a year foreign land deals in the developing world rose by a staggering 200 percent. Today, enthusiasm for agriculture borders on speculative mania. Drive by everything from rising food prices to growing demand for biofuel, the financial sector is taking an interest in farmland as never before.
At the most basic level, such staggering numbers indicates the degree to which financiers have turned to land speculation as merely the latest in a string of “bubbles” – an investment that they feel can turn a massive profit in a short amount of time. Again, it is critical to note the unmistakable connection between their interest in land, and the speculation in food commodities on the global market.