New Eastern Outlook
Eric Draitser
March 24, 2014
The
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.
Eric Draitser
March 24, 2014
The
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.
