https://orcid.org/0000-0002-7376-6213
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ABSTRACT
This paper examines the connections between two global phenomena: land grabbing and financialization of farmland and agriculture. Drawing upon case studies, we analyse the expansion of two large-scale agricultural firms founded in Argentina to the Latin American Southern Cone during the 2000s commodities boom, focusing on their network models and business strategies. Based on a qualitative approach towards financial and productive practices, we unravel some intersections between the financialization of farmland, land grabs, and renewed social relations and patterns of agricultural organization. We propose that financial and productive logics impinge upon each other and that this imbrication entails tensions and contradictions in crucial but differentiated ways.
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No potential conflict of interest was reported by the author(s).
Notes
1 By finance capital we refer to: (a) interest-bearing capital, which makes profits from productive expansion (Fine, Citation2013) and/or financial expropriation (Lapavitsas, Citation2013) and also categorized as credit; and (b) fictitious capital, which makes gains from speculative activities through financial instruments and channels, as a result of asset price inflation.
2 Financialization refers to finance’s increasing penetration and subsumption of economic activities and social life (Christophers, Citation2015; Mezzadra & Neilson, Citation2015).
3 The names of companies, cities and people have been modified.
4 Starting in 1920, the Sanchez family, founders of Nuevo Amanecer, began farming 6-hectares land grant. The García family, descendent of the first settlers during colonial times in today’s Argentinian farmlands, and founder of La Lozada, dedicated to livestock production since more than four generations. Both families initially established in the Pampas, Argentina’s richest agricultural region.
5 Soy was the first GM seed approved by Argentina’s National Advisory Committee on Agricultural Biotechnology (CONABIA) in 1996.
6 Large-scale farming was benefited by neoliberal policies promoting unfettered trade and a ‘business-friendly environment’. Besides the reduction of farm subsidies and the dismantling of agencies that supported family farming, this fostered the concentration of land holdings; large-scale companies made the most of: (a) the massive devaluation of the peso that followed Argentina’s 2001 socioeconomic crisis, (b) inexistent or lax state control of deforestation fostering the expansion of agricultural frontiers (c) financial tools adapted to channel investments to agriculture, (d) tenure acts that allowed one-season contracts, (e) allegiance to large-scale agriculture at provincial levels in land conflicts, (f) State support of agribiotechnologies, including co-funded research between national research institutions and agribusiness corporations. In spite of the significant political differences between the administrations of presidents Néstor Kirchner and Cristina Fernández, on the one hand, and Mauricio Macri on the other, the overall economic and political landscape with regard to commodity production remained unchanged.
7 Between 2013 and 2015 the price of soybeans dropped down to 33% (Cáceres & Gras, Citation2020).
8 While reforms to the Rural Lease Act established a minimum of two years for leasing contracts, they excluded those agreed for one agricultural campaign. Known as accidental contracts, these agreements rapidly expanded and were repeatedly renewed between the same agents over the same plot land (Gras & Hernández, Citation2017).
9 Sowing pools also used mutual funds. These financial tools encouraged nationally based extra-agrarian actors to invest in agriculture between mid-1990s and the first decade of the 2000s.
10 Sowing pools flourished as a flexible way of organizing agribusiness production. Although usually associated to large-scale operations and formal contracts between participant firms, many relied on informal agreements, managed medium-scale operations, and were funded by savings from relatives, friends and acquaintances.
11 The Argentine Chaco is the largest forest and reservoir of biomass in the extra-tropical southern hemisphere. It covers the northern provinces of Salta, Chaco, Formosa, Santiago del Estero and Tucumán.
12 Since 2007, Nuevo Amanecer, together with several private banks, has also issued negotiable securities and, according to Argentinian Central Bank data, in 2013 the company created a Global Program for the Emission of Simple Negotiable Securities for up to US$ 80 million, still in force in 2020.
13 Personal communication with local authority (2014).
14 Data from interviews with farmers (2014). Even Nuevo Amanecer avoided competing in Salmuera: ‘when we offered 100, [La Lozada] offered 180’ (Interview with Nuevo Amanecer’s manager, 2013, Province of Buenos Aires).
15 Funding mechanisms for farmers expanded in the context of increasing interest rates on agricultural loans offered by banks and cooperatives, a process that gained momentum after the economic crisis of 2001 (Gras & Hernández, Citation2014; Gras & Sosa Varrotti, Citation2013).
16 Interview with Jacare Partners’ former partner (São Paulo, 2015).
17 Information collected in the mainstream media (2013) and during interviews with Nuevo Amanecer’s managers (2013).
18 Interview with Jacare Partners’ former partner (São Paulo, 2015).
19 Interview with La Lozada’s high executive (São Paulo, 2015).
20 This is one of the development financial institutions participating in the transnational land investment web of corporate and state actors and institutions analysed by Borras et al. (Citation2020).
21 Fairbairn (Citation2014) describes this investment operation as an own-lease out scheme.
22 Personal communication (São Paulo, 2015).
23 Interview with La Lozada’s manager (Mato Grosso, 2015).
24 Information collected on the official Website of the Labor Public Ministry (Ministério Público do Trabalho, 2010) and during an interview with a Brazilian journalist (Cuiabá, 2015).
25 In the case of Brazil, ‘these stricter regulations purportedly resulted in divestment by foreigners from land and agribusiness in the Cerrado, but large-scale agricultural investments in various links of agricultural production chains continue to take place’ (Oliveira, Citation2013, pp. 75–76)
26 La Lozada sold its biggest operation in Argentina in 2014 for US$50 million and 67,000 hectares in Uruguay for US$120 million, and moved its headquarters to Brazil. Export taxes, inflation, local currency devaluation, and legal norms restricting transactions in foreign currency are major factors explaining this decision, in addition to political confrontation between Cristina Kirchner’s administration and both farmers’ organizations and agribusiness corporations.
27 Source: Adams (Citation2010). Nonetheless, many foreign agribusiness investments continued to be financed by the Brazilian state. Since 2015, foreign capital has benefit from the flexibilization of frontier land regularizations established by law n° 13.178 (Perdigão de Castro & Sauer, Citation2015, pp. 14–15). Other important changes were introduced by other laws, such as Law 13.465 (2017). This law recognizes private ownership over public and ‘vacant’ land (or ‘terras de voltas’, which is land not under private domain nor destined for public use) of up to 2500 hectares, which can be sold at market prices. According to GRAIN (Citation2019), this law has allowed the market formula historically promoted by the World Bank to regularize land.
28 Furthermore, grilagem techniques (title falsification traditionally used to claim for public land) allows properties’ certifications to be pleaded by the grileiro, who can then access public funding for grain production (Gayoso da Costa, Citation2012, p. 178). Since 2019, the Bolsonaro administration is driving the so-called ‘Grilagem Laws’. The most recent provisory measure under discussion is the PL 2633/2020, which gave raised contestation from the Brazilian population, as well as the European Union (Souza Ramos, Citation2020), for legalizing land appropriation by grileiros, further threatening the already deforested Amazon. Moreover, in December 2019, congressional commissions approved bill 2963/2019, which facilitates the acquisition of land by foreign individuals and legal entities (Irajá, Citation2019).
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Andrea P. Sosa Varrotti
Andrea P. Sosa Varrotti is Postdoctoral researcher at the National Scientific and Technical Research Council (CONICET). Member of the Rural Studies and Globalization Program (Programa de Estudios Rurales y Globalización, PERYG) at the Institute of Higher Social Studies, National University of San Martín (IDAES-UNSAM), Argentina. Lecturer at UBA. She specializes in financialization of agriculture, land grabbing, entrepreneurial practices and discourses, and business models. Her research is currently focusing on green grabbing and agroecological transitions.
Carla Gras
Carla Gras is Senior Researcher at the National Scientific and Technical Research Council (CONICET), Argentina. Coordinator of the Rural Studies and Globalization Program (Programa de Estudios Rurales y Globalización, PERYG) at the Institute of Higher Social Studies, National University of San Martín (IDAES-UNSAM), Argentina. She is currently researching dynamics of land access and control and technological innovation, focusing on the intersection of powers (regulation, market, scientific knowledge) that legitimate and/or dispute industrial agriculture as a socially and politically desired development project.