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.
