character, the underlying form of value is distinct from a commodity for its income-stream-generating quality. The term “assetization” should also not be used synonymously with “capitalization” (Muniesa et al. 2017) – a set of specific accounting techniques for capitalizing the assumed future value of an asset in the present.
The proliferation of assets has also led to a proliferation of professional asset managers, such as private equity funds and wealth management arms of large international banks (Braun 2015: 8). By the end of 2016 these entities, also known as “shadow banks”, managed US$85 trillion (up from US$60 trillion in 2007), “with around 80 per cent held on the accounts of institutional and retail investors in Europe and North America” (Gabor 2018).1
Investor
Agricultural investment is about investors. Contemporary textbook definitions of the term “investment” as the allocation of capital for the purposes of capital maintenance, revenue generation or capital appreciation distinguish it from “unproductive” economic activities. Thus, today the investor appears as someone (a person, a corporate entity) who is not a speculator (someone who takes high risks in order to achieve high returns), nor a gambler (someone who takes very high risks in order to achieve disproportionately high returns) nor an arbitrageur (someone who exploits interest rate or price differences at the same time in different places for the purpose of profit taking through so-called “carry trades”) but someone who produces real value. In practice, however, investment strategies, especially those in the financial sector, often follow less clear lines and often combine all or several of the economic activities mentioned here.
From a radically different perspective, many of the activities taking place in so-called financial markets today need to be understood as capital placements rather than as investments: “Placement means the purchase of titles to debts or shares, which is financed either from savings, from income or from the proceeds of selling other property. In contrast, investment designates using financial resources for creating capital goods” (Robinson 1956: 8; cited in Zeller 2008: 10).
Even though the production of material output is still an important means to the production of financial value for direct investments into farming ventures, the original sources of capital (such as future pensioners) assume the role of rentiers rather than investors. A rentier is someone (a person, a legal entity) who lives from dividends, asset price appreciation, payments of interest, payments of licences or payments of ground rent, with rentiership being fundamentally about securing, operationalizing and exchanging the rights to future income streams from a now bewildering array of underlying assets. We will re-encounter the ghostly figure of the rentier in Chapter 9.
Private equity
One of the key “flesh-and-blood institutions” (Christophers 2015b: 92) in the money management world that this book deals with is private equity funds. In agricultural capital placements, this investment structure is used for investing in the share (equity) of a farming venture. This company could have been listed on the stock market (a public company) or bought from its existing owners (a privately held company) (Toporowski 2012: 278; Appelbaum & Batt 2014) in order to resell it at a profit. As part of the non-organized capital market (“non-listed”), private equity funds cater for so-called “sophisticated” investors and are thus subjected to less regulation than vehicles serving the organized capital market (“retail markets”). Private equity structures are now so widespread as the new owners of companies across different sectors that observers have spoken of “private equity ubiquity” (Kelly 2012: 199) as a peculiar historical moment.
Private equity companies collect money from institutional investors by setting up a special legal arrangement called the “limited partnership”, in which the original investor assumes the role of the limited partner (LP) and the private equity firm the role of the general partner (GP). The limited partnership is as much an organizational structure for the extraction and capture of value (Appelbaum & Batt 2014) as it is a legal structure through which large institutions such as pension funds can delegate investment risks and decision-making power to specialized third parties, in order to live up to their legal responsibility to act in the very best interests of the original asset holders (the so-called “fiduciary duty”), while at the same time allowing the investor to reap certain tax benefits (Fraser-Sampson 2010).
Conclusion
In this chapter, I have outlined how this book intends to study the finance–farming nexus. As argued, the most tempting way would be to do this from a “financialization” perspective. Although I have acknowledged the insights from work embracing this optic, I have proposed a complementary, more practice-centred approach that allows us to fill in existing gaps in the literature, including the following: being more attentive to history; scrutinizing the concrete practices of institutional landscape making; interrogating the politics of information and data; extending to epistemic margins as sites of empirical investigation; uncovering material and political frictions in agri-investment chains; and addressing the global value relations behind agri-investment chains and their social and ecological footprints. This helps us arrive at an operational account of the production of institutional landscapes without losing sight of the “historically established, structurally stable attributes of the world” (Kleinman 1998: 285). As I have shown, such an account also implies that we critically engage with how we narrate and represent the financial structures that give rise to institutional landscapes. Thus, this book eventually paves a middle ground between work that is engaged with theorizing contemporary dynamics of capitalism and more praxeological accounts of finance’s “empire of values” (Orléan 2014).
1. Global gross domestic product (GDP) stood at about US$75 trillion at that time; see www.statista.com/statistics/268750/global-gross-domestic-product-gdp (accessed 1 January 2020).
History: How old is the finance–farming nexus?
Historically, finance capital has adopted many forms in promoting change in both farm structure and landowning relations.
(Munton 1985: 156)
In September 2014 the Queensland Art Gallery and Gallery of Modern Art in Brisbane hosted an exhibition called “Harvest”, which engaged with the history, geography, production and politics of food in the Australian state. The exhibition featured a collection of photographs by Richard Daintree, one of the first Britons to explore the region. A geologist and photographer, he took some impressive pictures of the region’s landscape (such as Photo 3.1), which he presented, together with geological maps, at the 1862 International Exhibition in London in a bid to attract immigrants and investors to the colony (entry
