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Agriculture as an asset class: reshaping the South African farming sector

Author

Listed:
  • Antoine Ducastel

    (CIRAD
    University of Pretoria)

  • Ward Anseeuw

    (CIRAD
    University of Pretoria)

Abstract

According to portfolio managers, agriculture in general, and farmland in particular, can be considered an emerging asset class. Specialized financial vehicles, such as private equity and mutual funds, are emerging and competing to attract potential investment in this asset class. In recent years, there has been significant development of such vehicles targeting South Africa’s farming sector. These innovations are led by a group of market intermediaries (e.g. asset managers or consultants) who endeavour to “re-shape” South African farmland as an opportunity for institutional investors. These “pioneers” engage in a multifaceted mediation process between global financial investors on one hand, and the South African agricultural sector on the other. Drawing upon an empirical study of such intermediaries in South Africa, this paper analyses the concrete mechanisms that facilitate this particular form of commodification. The paper presents and compares the intermediaries, giving particular attention to their structure, governance mechanisms and asset allocations within this “market in the making”. It describes how intermediaries develop different paths of asset valorization to unlock the “financial value” of South African farmlands (i.e. “liquifying”, standardizing, neutralizing, and depoliticizing agriculture as an asset). But, it also highlights some of the difficulties faced in the process of translating between international investors and local managers, questioning the “land-asset fiction” that is materializing through the subordination of farmland to the needs of financial society.

Suggested Citation

  • Antoine Ducastel & Ward Anseeuw, 2017. "Agriculture as an asset class: reshaping the South African farming sector," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 34(1), pages 199-209, March.
    • Handle: RePEc:spr:agrhuv:v:34:y:2017:i:1:d:10.1007_s10460-016-9683-6
    DOI: 10.1007/s10460-016-9683-6
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    References listed on IDEAS

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    Cited by:

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    2. Alexandra Langford & Geoffrey Lawrence & Kiah Smith, 2021. "Financialization for Development? Asset Making on Indigenous Land in Remote Northern Australia," Development and Change, International Institute of Social Studies, vol. 52(3), pages 574-597, May.
    3. Jennifer Clapp & S. Ryan Isakson, 2018. "Risky Returns: The Implications of Financialization in the Food System," Development and Change, International Institute of Social Studies, vol. 49(2), pages 437-460, March.
    4. Marc C. A. Wegerif & Arantxa Guereña, 2020. "Land Inequality Trends and Drivers," Land, MDPI, vol. 9(4), pages 1-23, March.
    5. Stefan Ouma, 2020. "This can(’t) be an asset class: The world of money management, “society†, and the contested morality of farmland investments," Environment and Planning A, , vol. 52(1), pages 66-87, February.
    6. Hershaw, Eva & Sauer, Sérgio, 2023. "Land and investment dynamics along Brazil’s ‘final’ frontier: The financialization of the Matopiba at a political crossroads," Land Use Policy, Elsevier, vol. 131(C).
    7. Abeygunawardane, Dilini & Kronenburg García, Angela & Sun, Zhanli & Müller, Daniel & Sitoe, Almeida & Meyfroidt, Patrick, 2022. "Resource frontiers and agglomeration economies: The varied logics of transnational land-based investing in Southern and Eastern Africa," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 51(6), pages 1535-1551.
    8. Madeleine Fairbairn & Jim LaChance & Kathryn Teigen De Master & Loka Ashwood, 2021. "In vino veritas, in aqua lucrum: Farmland investment, environmental uncertainty, and groundwater access in California’s Cuyama Valley," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 38(1), pages 285-299, February.
    9. Sarah Ruth Sippel, 2018. "Financialising farming as a moral imperative? Renegotiating the legitimacy of land investments in Australia," Environment and Planning A, , vol. 50(3), pages 549-568, May.
    10. Jing Han & Mengying Jiang & Xupeng Zhang & Xinhai Lu, 2021. "Knowledge Mapping Analysis of Transnational Agricultural Land Investment Research," Land, MDPI, vol. 10(12), pages 1-15, December.
    11. Sarah Ruth Sippel, 2023. "Tackling land’s ‘stubborn materiality’: the interplay of imaginaries, data and digital technologies within farmland assetization," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 40(3), pages 849-863, September.
    12. Emma Tyrou & Guillaume Soullier & Mamadou Coulibaly, 2023. "Unpacking policies for the development of agricultural growth poles in West Africa," Post-Print hal-03983251, HAL.

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