In 2014, the organisation GRAIN revealed that small farms produce most of the world’s food in its report Hungry for land: small farmers feed the world with less than a quarter of all farmland.
The report Small-scale Farmers and Peasants Still Feed the World (ETC Group, 2022) confirmed this.
Small farmers produce up to 80% of the food in the non-industrialised countries. However, they are currently squeezed onto less than a quarter of the world’s farmland. The period 1974-2014 saw 140 million hectares – more than all the farmland in China – being taken over for soybean, oil palm, rapeseed and sugar cane plantations.
GRAIN noted that the concentration of fertile agricultural land in fewer and fewer hands is directly related to the increasing number of people going hungry every day. While industrial farms have enormous power, influence and resources, GRAIN’s data showed that small farms almost everywhere outperform big farms in terms of productivity.
In the same year, policy think tank the Oakland Institute released a report stating that the first years of the 21 century will be remembered for a global land rush of nearly unprecedented scale. An estimated 500 million acres, an area eight times the size of Britain, were reported bought or leased across the developing world between 2000 and 2011, often at the expense of local food security and land rights.
Institutional investors, including hedge funds, private equity, pension funds and university endowments, were eager to capitalise on global farmland as a new and highly desirable asset class.
This trend was not confined to buying up agricultural land in low-income countries. Oakland Institute’s Anuradha Mittal argued that there was a new rush for US farmland. One industry leader estimated that $10 billion in institutional capital was looking for access to this land in the US.
Although investors believed that there is roughly $1.8 trillion worth of farmland across the US, of this between $300 billion and $500 billion (2014 figures) is considered to be of “institutional quality” – a combination of factors relating to size, water access, soil quality and location that determine the investment appeal of a property.
In 2014, Mittal said that if action is not taken, then a perfect storm of global and national trends could converge to permanently shift farm ownership from family businesses to institutional investors and other consolidated corporate operations.
Why this matters
Peasant/smallholder agriculture prioritises food production for local and national markets as well as for farmers’ own families, whereas corporations take over fertile land and prioritise commodities or export crops for profit and markets far away that tend to cater for the needs of more affluent sections of the global population.
In 2013, a UN report stated that farming in rich and poor nations alike should shift from monocultures towards greater varieties of crops, reduced use of fertilisers and other inputs, increased support for small-scale farmers and more locally focused production and consumption of food. The report stated that monoculture and industrial farming methods were not providing sufficient affordable food where it is needed.
In September 2020, however, GRAIN showed an acceleration of the trend that it had warned of six years earlier: institutional investments via private equity funds being used to lease or buy up farms on the cheap and aggregate them into industrial-scale concerns. One of the firms spearheading this is the investment asset management firm BlackRock, which exists to put its funds to work to make money for its clients.
BlackRock holds shares in a number of the world’s largest food companies, including Nestlé, Coca-Cola, PepsiCo, Walmart, Danone and Kraft Heinz and also has significant shares in most of the top publicly traded food and agriculture firms: those which focus on providing inputs (seeds, chemicals, fertilisers) and farm equipment as well as agricultural trading companies, such as Deere, Bunge, ADM and Tyson (based on BlackRock’s own data from 2018).
Together, the world’s top five asset managers – BlackRock, Vanguard, State Street, Fidelity and Capital Group – own around 10–30% of the shares of the top firms in the agrifood sector.
The article Who is Driving the Destructive Industrial Agriculture Model? (2022) by Frederic Mousseau of the Oakland Institute showed that BlackRock and Vanguard are by far the biggest shareholders in eight of the largest pesticides and fertiliser companies: Yara, CF Industries Holdings K+S Aktiengesellschaft, Nutrien, The Mosaic Company, Corteva and Bayer.
These companies’ profits were projected to double, from US$19 billion in 2021 to $38 billion in 2022, and will continue to grow as long as the industrial agriculture production model on which they rely keeps expanding. Other major shareholders include investment firms, banks and pension funds from Europe and North America.
Through their capital injections, BlackRock et al fuel and make huge profits from a globalised food system that has been responsible for eradicating indigenous systems of production, expropriating seeds, land and knowledge, impoverishing, displacing or proletarianizing farmers and destroying rural communities and cultures. This has resulted in poor-quality food and illness, human rights abuses and ecological destruction.
Post-1945, the Rockefeller Chase Manhattan bank with the World Bank helped roll out what has become the prevailing modern-day agrifood system under the guise of a supposedly ‘miraculous’ corporate-controlled, chemical-intensive Green Revolution (its much-heralded but seldom challenged ‘miracles’ of increased food production are nothing of the sort; for instance, see the What the Green Revolution Did for India and New Histories of the Green Revolution).
Ever since, the IMF, the World Bank and the WTO have helped consolidate an export-oriented industrial agriculture based on Green Revolution thinking and practices. A model that uses loan conditionalities to compel nations to ‘structurally adjust’ their economies and sacrifice food self-sufficiency.
Countries are placed on commodity crop production treadmills to earn foreign currency (US dollars) to buy oil and food on the global market (benefitting global commodity traders like Cargill, which helped write the WTO trade regime – the Agreement on Agriculture), entrenching the need to increase cash crop cultivation for exports.
Today, investment financing is helping to drive and further embed this system of corporate dependency worldwide. BlackRock is ideally positioned to create the political and legislative framework to maintain this system and increase the returns from its investments in the agrifood sector.