Pension funds' investments threaten food sovereignty

Carmelo Ruiz Marrero

05/06/2012

Opinión

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Researchers and development NGO's warn of a disturbing trend that does not bode well for food sovereignty: the seizure of vast extensions of agricultural lands in the global South by emerging states and private investors.

GRAIN, a Europe-based non-governmental organization, maintains an online database of 416 major land grabs in 66 countries that cover a total of 35 million hectares. It shows that the lands of Mozambique, one of the world's poorest and most underdeveloped countries, are targeted by investors from Brasil, China, India, Singapore, France, Italy, Portugal, Sweden, England and South Africa. And the most fertile lands of Ethiopia, a country that is sadly famous for its famines, are being seized by companies from another country famous for its famines: India. Indian companies such as Almidha, ARS Agrofoods, BHO, Chadha Agro, Karuturi, Neha, Rashtriya Kissan Sangathan, Shapoorji Pallonji & Co. and Sannati Agro, among others, are using Ethiopia's finest farm lands to produce export crops, from soy, tomatoes and wheat, to rice, cotton and corn. Ethiopia has also received similar investments from the United States (B&D Food Corp.), Saudi Arabia (Al Amoudi), China, Egypt, Germany (Acazis AG), and the Netherlands (Africa Juice).

South America is also a major destination for the new land grabbers. The Argentina-based Cresud corporation has 142,000 hectares in Paraguay, where it produces mostly sunflower and soy. It also controls over 620,000 hectares in Brazil- mostly for soy and cattle- through its controlling stake in the Brasil Agro corporation.

In Peru there's South Korea's Ecoamerica, which has 72,000 hectares for the production of lumber and beef, and the US-based Maple Energy, which makes ethanol from sugar cane. In Uruguay, farm land is being grabbed by investors from Argentina, Denmark, France, United States (George Soros' Adecoagro), and Singapore (Olam). And Colombia's lands are the object of investments from Argentina, Brazil, China, Israel (Merhav Group), Spain (Grupo Poligrow), and the United States (Black River Asset Management).

One of the most surprising and little known aspects of this land grab phenomenon is the important participation of pension funds. Worldwide, pension funds manage $23 trillion dollars, of which $100 billion are believed to be invested in commodities, and of that, $5 to $15 billion goes into the purchase of farm land. This last figure is expected to double by 2015.

According to 2010 figures, the world's largest pension fund is that of the Japanese government ($1.31 trillion), followed by the Norwegian government's ($475 billion). The world's top ten list includes two funds from California. The state employees' CalPERS is #6 on the list, with $198 billion, and the public school teachers' fund CALSTRS is in eighth place, with $130 billion. The ranks of the global top twenty include funds from Canada, the Netherlands, South Korea, Denmark (ATP), South Africa (GEPF), Malaysia, New York City, New York State, and that of the employees of General Motors. Some of the top pension funds are already known to be investing in land grabs.

CalSTRS was the object of a 2010 campaign led by The Tri-State Coalition for Responsible Investment and the Interfaith Center on Corporate Responsibility, which urged the fund not to make a planned $2.5 billion investment in commodities markets, which would include investments in farm land. After listening to the campaigners' concerns that investments in commodities exacerbate world hunger, CalSTRS' managers decided to reduce the funds' investment in commodities by almost 95%, to $150 million.

“Such divestment campaigns – which could aim at ensuring that pension funds do not buy into agricultural land overseas – are clearly within reach and could make a difference”, stated GRAIN, commenting on the CalSTRS. “And they can add their weight to the broader momentum under way in so many of our countries to rethink two vital matters: food and agricultural policies, which require constructive investment strategies; and retirement systems in general. There is too much at stake not to seize these opportunities.”

But much work remains to be done on the pension fund front. Sweden's AP2, which has a $34.6 billion endowment, announced in 2011 a venture with the TIAA-CREF retirement fund to jointly invest at least $500 million on agricultural real estate in the USA, Australia and Brazil. TIAA-CREF has investments in 400 farms in various locations worldwide, including South America and Eastern Europe.

CalPERS has $1.2 million invested in Black Earth Farming, a Russian firm identified as a notorious land grabber, and also in other companies involved in land grabbing, like Golden Agriresources, Indofood, IOI Corp, Olam, Sime Darby and Wilmar. Also in California, the Sonoma County Employees' Retirement System Association is investing in the UBS Agri Invest Farmland Trust.

For more information on the global land grab issue: http://farmlandgrab.org/

- Carmelo Ruiz-Marrero is a Puerto Rican author and investigative reporter. He is a fellow of the Oakland Institute and a research associate of the Institute for Social Ecology.

SOURCES:

GRAIN. “Pension funds: key players in the global farmland grab” http://www.grain.org/article/entries/4287-pension-funds-key-players-in-t...

GRAIN. Land grab database. http://www.grain.org/article/entries/4479-grain-releases-data-set-with-o...

http://stopgamblingonhunger.com/our-dialog-with-calstrs/

https://www.alainet.org/en/articulo/158496