Local Ordinances and Land Grabs: Democracy Convention Panels Discuss Food Sovereignty

By: Rebekah Wilce, PR Watch, 9/8/11

Attendees of the Democracy Convention in Madison in late August were treated to panels on a host of different issues, from democratic media to racial inequality. The Center for Media and Democracy was one of the sponsors of the convention, and our own Lisa Graves and Brendan Fischeraddressed democracy activists. At panels on food sovereignty, we heard from a range of experts, including local Wisconsin dairy farmer Jim Goodman, Massachusetts food and farming activist Barbara Clancy and Jim Tarbell of the Alliance for Democracy (publishers of Justice Rising), andRonnie Cummins, leader of the Organic Consumers Association.

Food Sovereignty Defined

At a Friday morning panel on “Using Local Laws to Create Food Sovereignty,” Jim Goodman defined the seven principles of food sovereignty (a term coined by members of Via Campesina, the “International Peasant Movement”) as:

  1. Food as a Basic Human Right, that is, “safe, nutritious and culturally appropriate food in sufficient quantity and quality to sustain a healthy life with full human dignity;”
  2. Agrarian Reform, or ensuring that “the land belongs to those who work it, especially women of color, who grow most of the world’s food but rarely have ownership or control of the land;”
  3. Protecting Natural Resources, “the sustainable care and use of natural resources, especially land, water, and seeds and livestock breeds;”
  4. Reorganizing Food Trade so that “food is first and foremost a source of nutrition and only secondarily an item of trade;”
  5. Ending the Globalization of Hunger “by multilateral institutions and by speculative capital. . . facilitated by the economic policies of multilateral organizations such as the WTO, World Bank and the IMF;”
  6. Social Peace, that is, “freedom from violence, oppression of minorities and racism against peasant farmers,” wherein “food is never used as a weapon;” and
  7. Democratic Control, where “everyone has the right to honest, accurate information and open and democratic decision-making.”

Reorganizing Food Trade: Local Food Ordinances

Barbara Clancy described the successful fight for food sovereignty by several towns in Hancock County, Maine. They established local food governance by means of town ordinances. In this county where all the farms are family farms, and all but one sell all of their food in-state at an average of $20,000 of product a year, these farmers succeeded in passing the “Food and Community Self-Governance Ordinance of 2011” in four towns.

Clancy stressed that Maine is a strong home rule state, with a strong tradition of self-reliance and attachment to local traditions and local governance. Residents feared that the federal “Food Safety Modernization Act,” which President Obama signed into law on January 4th, 2011, could shut down cottage producers of jam and pickles made from backyard garden produce and church pot lucks without these local ordinances to protect them.

Towns that were considering or had passed the ordinance received letters from the state agricultural commissioner informing them that “the ordinance is preempted by state law.” But farmers in Hancock County, Clancy said, are prepared to go to court should the ordinances be challenged.

Agrarian Reform: Overturning Land Grabs

At a Friday afternoon panel entitled “Land and Food vs. Corporate Rights and Dirty Fuels,” Jim Goodman spoke again, accompanied by Jim Tarbell and Ronnie Cummins.

Goodman and Tarbell reminded us that just as the Commons were taken in the Scottish Highland Clearances of the 18th and 19th centuries, corporations are now buying up land in Africa, South America, and Southeast Asia, which was farmed in common and often farmed to produce food for the community, in order to aid corporations’ focusing on selling “biofuels,” like ethanol.  According to Tarbell, this “disrupts economies, taking the land away from the traditional landowners and pushing them out into starvation and poverty.”

Tarbell told of a land lease that had been signed in 2008 in South Sudan, immediately prior to independence. Mukaya Payam leaders had supposedly made a deal granting “a 49-year lease of 600,000 hectares of land to US-based firm Nile Trading and Development Inc. . . . For a sum equivalent to around US$25,000, NTD has full rights to exploit all natural resources in the leased land during this period.” However, post-independence, Mukaya Payam leaders, upon becoming aware of the deal signed in their names and for their land, appealed to Members of Parliament and the president of South Sudan, in a letter that stated, according to the Guardian, “We the chiefs, elders, religious leaders and the youth of Mukaya Payam unanimously, with strong terms, condemn, disavow, or deny the land-lease agreement reached on 11 March 2008 between the two parties.” Confirming the power of the people over corporations, President Salva Kiir responded: “This issue has to be addressed according to your will. You are the government and you have powers.”

Reorganizing Food Trade: Food vs. Fuel

Ronnie Cummins, National Director of the Organic Consumers Union, discussed the problems of turning food-growing land over to the production of corn for ethanol, which because of inputs, he said, is twice as bad as burning diesel. “Now ethanol-ready corn has been approved by Obama. Even food corporations had urged him not to approve it, because it can get into food supply and has the chemical profile of an allergen. GMO ethanol-ready corn is a sum total of ten percent more efficient than regular corn, so basically, now it will only be 1.9 times as bad as diesel.”

According to Cummins, “the United States is now using forty percent of our GMO, subsidized, energy intensive corn crop for fuel. That’s 4.9 billion bushels, enough to feed 350 million people. But this only amounts to three percent of the total gasoline we use in our cars.

“Scientists tell us we’ll have to reduce fossil fuel use by at least ninety percent by 2050,” he said, but neither corn ethanol nor palm ethanol is an acceptable way to do it. As an alternative, however, Cummins told the story of Vermont organic farmer Will Allen (not to be confused with Wisconsin urban farmer Will Allen ofGrowing Power, Inc.), who grows sunflowers and uses their oil for fuel.

A major difference between these examples is that one is industrial and the other is small-scale. That’s important, Cummins says, because “the number one cause of greenhouse gases in the world (around 35%) is industrialagriculture. . . . But sustainably managed agriculture and forestry lands can sequester carbon and reduce carbon dioxide by fifty parts per million.”

Protecting Natural Resources: Water

Cummins also brought up the importance of water to the future of food sovereignty by telling the story of Saudi Arabia, which briefly grew all its own wheat and was self-sufficient in that area, until agricultural practices dried up an aquifer and they returned to importing wheat.

In India, Cummins said, the melting of the glaciers threatens the regular availability of glacial meltwater. The headwaters of the rivers that now bring this water seasonally are in Pakistan, threatening, he said, a new war over water, especially as India is currently mining its aquifers. What happens, he asked, when the hundreds of thousands depending on fossil aquifers (non-renewable, “with no appreciable modern recharge and which cannot discharge naturally”) and over-pumped aquifers in India and China run out of water?

Because of unsustainable methods of food production by agricultural corporations, Cummins said, there are tremendous amounts of desertification in Mongolia and China. “Both China and India are economic and ecologic time bombs waiting to explode, and we’re indebted to China. When will they come asking for wheat and other commodities?”

Democratic Control: Returning Growing Power to the People

In keeping with the themes of the Democracy Convention, the consensus of these panels was that the solution is to return the growing of food to the realm of real people (not corporate “people”) on small farms and in gardens.

Tools like “Local Food and Community Self-Governance Ordinances” may help some communities fight one-size-fits-all regulations written to advance the bottom line of  large corporate food producers and which sometimes  criminalize home- and community-scale food producers.

If you grow food on a small scale (in your backyard, on your porch, or at a community garden), you can joinVia Campesina, which “defends small-scale sustainable agriculture as a way to promote social justice and dignity. It strongly opposes corporate driven agriculture and transnational companies that are destroying people and nature.”

The food panels at the Democracy Convention reminded all that the fight for food sovereignty is both local and global.

http://www.prwatch.org/news/2011/09/10995/local-ordinances-and-land-grabs-democracy-convention-panels-discuss-food-sovereig

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Got Hay? Wisconsin Farmers Prepare Hay Lift in Solidarity with Struggling Ranchers in Drought Stricken Oklahoma

Update 9/9/11! Several truckloads with over 10 tons of hay have already been delivered to OK and TX, thanks to the generosity of Wisconsin family farmers and Teamster truck drivers, as well as coordination assistance from Farm Aid. More loads are going out this week. Let’s keep the solidarity rolling!

For Immediate Release:

Fri. Aug. 19th, 2011

Contacts:

John Kinsman Family Farm Defenders #608-986-3815

Randy Jasper, Family Farm Defenders #608-553-2203

Joel Morton, Farm Aid #617-354-2922

Lorette Picciano, Rural Coalition #202-628-7160

Willard Tillman, executive director, Oklahoma Black Historical Research Project Farmers Co-op #405-201-6624

Ralph Paige, executive director, Southern Federation of Cooperatives #404-765-0991

Oklahoma is in the grips of its worst drought since the 1920s, and in response Family Farm Defenders, with support from Farm Aid, Rural Coalition, the International Brotherhood of Teamsters, and the Southern Federation of Cooperatives, are organizing an emergency Midwest hay lift.

This rapid response mirrors earlier solidarity efforts which delivered over a dozen Wisconsin tractors to Federation farmers in Mississippi and Louisiana following the destruction of Hurricanes Katrina and Rita.

Wisconsin farmers were compelled to take action after hearing first hand accounts of parched farmland and starving livestock from their Oklahoma colleagues attending the Farm Aid Concert in Kansas City, KS this last weekend.

“If we can get enough hay to some of these farmers to save their animals it may help to save their farms. Desperation sales of livestock are usually a disaster. In the past farmers from other parts of the country rushed hay shipments to help Midwest farmers suffering from a drought. When other farmers face the prospect of being driven off the land we need to do something in solidarity,” said John Kinsman, president of Family Farm Defenders.

“Oklahoma family farmers, and especially, African American and American Indian producers, are very grateful for the support of the producers of Family Farm Defenders and other groups who have stepped up to save our farms in this time of need,” said Willard Tillman, Executive Director of Oklahoma Black Historical Research Project, who is coordinating distribution in OK in cooperation with Randall Ware of the Kiowa Nation.

Livestock auctions in Oklahoma are being overwhelmed as ranchers get rid of their animals before they starve, and these desperation sales are hurting prices for other livestock producers nationwide. Predictions of depressed crop harvests across the Panhandle are also wreaking havoc in the commodity markets.

Teamster truck drivers are being recruited to deliver the hay to Oklahoma from Wisconsin as soon as tractor-trailer trucks can be secured. Hay and other feed supplies will be delivered to 2620 Coltrane Rd. in Oklahoma City.

Any type of quality hay – small bales or large round/square bales – is welcome. Those wishing to donate hay should contact John Kinsman #608-986-3815 or Randy Jasper #608-553-2203 for the exact time and location for drop off.

Financial contributions are also welcome to support the hay lift effort. Send checks to: Family Farm Defenders, P.O. Box 1772, Madison, WI 53701 with “hay lift” in the memo line. FFD is a registered charitable organization so any gift is also tax deductible.

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Farmers’ fate determined by corrupt markets and speculators as Justice Department sleeps

By: JOHN E. PECK, executive director, Family Farm Defenders
Captimes (Madison, WI) – Sunday, August 14, 2011

Joel Greeno gets up early each morning to milk his 48 cows in the rolling hills near Kendall, Wis. He’s a young farmer by U.S. standards, still in his 40s, with a new baby, a small daughter and a wife who also works off farm to help make ends meet. He’s proud to be his own boss and works hard to preserve his independence, grazing his cows on pasture as much as possible to limit feed costs and rejecting synthetic chemicals and expensive biotechnology that would contaminate his milk and the land.

Like every farmer, Joel worries about the weather. But an even larger force beyond his control that threatens to destroy his life every day is the unprecedented market power of agribusiness and the reckless commodity speculation that occurs behind closed doors.

Just 250 miles southeast of Kendall, a small trading elite also heads to work each day in Chicago — their job: trying to beat the market on everything from soybeans and carbon credits to fertilizer and timber. Founded in 1898 as the Chicago Butter and Egg Board, the Chicago Mercantile Exchange (CME) has since grown into the world’s largest privatized trading clearinghouse. In 2002 the CME began issuing its own stock, and by 2007 acquired the Chicago Board of Trade (CBOT) for $8 billion as one of its designated contract markets (DCMs).

Within a year, the CME Group bought out another rival, the New York Mercantile Exchange (NYMEX) for $8.9 billion, and later absorbed the Dow Jones Indexes. By the end of 2008, the CME was posting over $2.5 billion in annual revenue, handling over a billion contracts worth $1,000-plus trillion dollars.

While some bidding is still done by humans in the “pit,” over 70 percent of CME trading is now quietly conducted by algorithms through its Globex electronic platform. Craig Donohue, the current CEO of the CME, took home almost $44 million in compensation over the last five years, which — according to Forbes — places him among the wealthiest 400 Americans.

To make matters worse, not just agriculture commodities, but farm land itself has become the latest “hot” commodity for these speculators. In fact, investments in farm land since the 1970s have yielded higher average returns (12 percent plus) than the S&P 500, which is why hedge fund managers, carbon credit traders, and other financial carpetbaggers are flocking to gobble up farmland in the U.S. and across the globe. According to a June 2011 expose by GRAIN, even U.S. pension funds like TIAA-CREF and CalPERS are now jumping on the land-grabbing bandwagon. The retirement of a rural school teacher will soon depend upon bankrupting the future of the farm kids in their own classroom.

Century-old legislation such as the 1890 Sherman Anti-Trust Act and the 1922 Capper Volstead Act have much to say about racketeering and other unfair market practices, but are seldom enforced in a setting like Chicago. In fact, who has ultimate authority over the CME appears rather murky. The Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CTFC), the U.S. Dept. of Justice (DoJ) and the Illinois attorney general all have a regulatory finger in this lucrative pie. The CME, though, remains first and foremost a private corporation with its primary interest being to its shareholders — and these shareholders enjoy much political influence within the hallways of Washington, D.C.

According to the U.S. General Accounting Office (GAO), on any single day just two traders account for two-thirds of the CME spot market for block cheddar, which accounts for less than 2 percent of the total cheddar cheese output in the U.S. Yet this CME cheddar trading is used by the USDA to determine the fluid milk price for Joel and every other dairy farmer in the country. In economic terms this is a “thin market” and an ideal scenario for profiteering. Within the black box of the CME, the tail literally wags the dog, affecting the lives of billions of farmers and consumers across the globe.

Back in 2008, the Commodity Futures Trading Commission found Dairy Farmers of America (DFA) and its two top CEOs guilty of manipulating U.S. milk prices through the CME cheddar market, and fined them $12 million. And in 2009 the DoJ blocked Deans Food’s buyout of Foremost Farms, arguing it would create a quasi dairy monopoly in Wisconsin and other parts of the upper Midwest. Other ongoing investigations of insider trader shenanigans at the CME have languished in limbo for years.

Which is why last year hundreds of family farmers, consumer advocates and others testified at a series of workshops hosted by the U.S. Dept. of Justice and the U.S. Dept. of Agriculture (USDA), focusing on creeping corporate control of the U.S. food system. Joel Greeno was among those who spoke out against Monsanto’s seed monopoly in Ankeny, Iowa, on March 12, 2010, and again about price rigging by the dairy giants (Deans Food, DFA, Kraft, Land O’Lakes) in Madison on June 25, 2010.

Despite a rising epidemic of farm foreclosures and even some farmer suicides blamed on chronic below cost of production prices, the DoJ and USDA have yet to take any substantive action based upon all the compelling evidence they gathered.

Like the “vulture funds” that have long preyed upon economic crises in poorer countries of the global south, the same predatory financial tactics have now come home to roost in America’s heartland. As long as federal regulators and elected officials remain asleep at the wheel and allow commodity speculators to profit from rigged markets at the CME, the hope of Joel Greeno and many other family farmers for a fair price for their hard work will remain but a cruel daydream.

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Fight Over 5,000 Cow Factory Farm Moves to Court

Hundreds of local residents packed Adams meeting room to tell DNR of Richfield CAFO’s impact on environment and quality of life

Media Contacts:

John Peck, Family Farm Defenders, [email protected]. 608-260-0900
Bob Clarke, [email protected]. 608-296-1443

FOR IMMEDIATE RELEASE
July 26, 2011

MADISON, Wis. – Less than a week after hundreds of local residents packed an Adams, Wis., meeting room to voice their objection to a factory farm’s efforts to bring 5,000 dairy cows to a small parcel of land, neighbors intensified their efforts to prevent the establishment of the Richfield CAFO (Concentrated Animal Feeding Operation) by moving the fight into the legal realm.

Residents joined with Family Farm Defenders (FFD) to file a request for a contested case hearing with the Wisconsin Department of Natural Resources, and a petition for review in Dane County Circuit Court. On June 24, 2011, the Water Division of the WDNR had given statutory approval to the plans and specifications for the Richfield CAFO, owned by MilkSource Inc.

“We are not pleased with the statutory approval,” said Arlene and Hiroshi Kanno, board member of FFD and one of the parties who are bringing the complaint.

The legal filing questions the factual accuracy surrounding the factory farm’s bid to locate in central Wisconsin, taking issue with the impact that 5,000 cows and their manure will have on water and air quality for residents of nearby towns in an area that has been known as a tourist magnet recognized for clean waters and quality fishing.

But an equally important factor is the impact that factory farms are having on individual farmers.

“We are told that the DNR must expedite and limit conditions in these permits because it is good for the dairy industry. It may be good for the owners and investors in these CAFOs and good for dairy processors, but it is not good for other dairy farmers in the state,” said Sarah Lloyd, who farms with her husband and his family outside the Wisconsin Dells. “I don’t need 5,000 cows’ milk dumped on my market and I don’t need the increased land rent prices we are seeing as land competition grows because of these large farms.”

Many CAFOs around the country have been cited or fined for violating their water discharge permits. This includes MilkSource, in the case of their Rosendale and Tidy View CAFOs, with manure-spreading violations. (A CAFO generates the same amount of waste as a small city but, unlike a city, is not required to process or treat its sewage.)

“MilkSource was cited in Rosendale for spreading too close to a private well and again at Tidy View by spreading on a field not included in the Nutrient Management Plan or approved by the DNR,” said Coloma landowner Bob Clarke , one of the parties challenging the DNR and Richfield. In both cases, the violations became known to the DNR through citizen complaints.

In a letter to the DNR, neighbors of the Rosendale CAFO describes what has happened to their community since the factory farm moved in.

“We who live near the dairy or in areas surrounding spreading fields are experiencing health problems and wrongful loss of outdoor celebrations. Neighbors are suffering from migraines, asthma, pounding headaches, and chronic stress. When spreading occurs near neighboring gardens, some have taken to wearing a respiratory face mask for weeks in order to work in their own gardens. Hydrogen sulfide and ammonia are toxic emissions that now invade our breathing space. There has been absolutely no action from Rosendale Dairy in response to citizen complaints. We have simply been told it’s not going to get any better.”

The danger to the water supply is even greater.

“To us, the risk of polluted groundwater is too high, especially in the sandy soils in this area,” the Kannos said. “We also are extremely concerned with the unsustainable levels of pumping from the aquifer, and the possible drying of neighbors’ wells.”

MilkSource has estimated that it would use 52.5 million gallons of water per year, yet it proposes wells with the capacity to draw 525 million gallons from local aquifers. A decade ago, local residents defeated a bid by Perrier and Nestle to situate a water bottling facility in the area.

The Central Sands area includes the Necedah National Wildlife Refuge whose inhabitants include two endangered species, the whooping crane and the Karner Blue Butterfly. It’s also the home of the Ice Age Trail.

“What makes this area special – the Central Sands, the land of Aldo Leopold and John Muir – is that this is family farm country,” Clarke said. “But make no mistake – the Richfield CAFO is not a family farm.”

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Pension Funds Key Player in Global Land Grab – Grain 6/29/11

Large scale agricultural land acquisitions are generating conflicts and controversies around the world. A growing body of reports show that these projects are bad for local communities and that they promote the wrong kind of agriculture for a world in the grips of serious food and environmental crises. 1 Yet funds continue to flow to overseas farmland like iron to a magnet. Why? Because of the financial returns. And some of the biggest players looking to profit from farmland are pension funds, with billions of dollars invested.

Pension funds currently juggle US$23 trillion in assets, of which some US$100 billion are believed to be invested in commodities. Of this money in commodities, some US$5–15 billion are reportedly going into farmland acquisitions. By 2015, these commodity and farmland investments are expected to double.
Pension funds are currently juggling US$23 trillion in assets. Some US$100 billion of this is believed to be invested in commodities. Of this, some US$5–15 billion is reportedly going into agricultural land acquisitions. By 2015, these figures are expected to double.

Pension funds are supposed to be working for workers, helping to keep their retirement savings safe until a later date. For this reason alone, there should be a level of public or other accountability involved when it comes to investment strategies and decisions. In other words, pension funds may be one of the few classes of land grabbers that people can pull the plug on, by sheer virtue of the fact that it is their money. This makes pension funds a particularly important target for action by social movements, labour groups and citizens’ organisations.

The size & weight of pensions

Today, people’s pensions are often managed by private companies on behalf of unions, governments, individuals or employers. These companies are responsible for safeguarding and “growing” people’s pension savings, so that these can be paid out to workers in monthly cheques after they retire. Anyone lucky enough both to have a job and to be able to squirrel away some income for retirement probably has a pension being administered by one firm or another. Globally, this is big money. Pension funds are currently juggling US$23 trillion in assets. The biggest pension funds in the world are those held by governments, such as Japan, Norway, the Netherlands, Korea and the US (see Table 1).

Table 1: World’s top 20 pension funds (2010)
Rank Fund Country Total assets (US$ millions)
1 Government Pension Investment Japan 1,315,071
2 Government Pension Fund–Global Norway 475,859
3 ABP Netherlands 299,873
4 National Pension Korea 234,946
5 Federal Retirement Thrift US 234,404
6 California Public Employees US 198,765
7 Local Government Officials Japan 164510
8 California State Teachers US 130,461
9 New York State Common US 125,692
10 PFZW (now PGGM) Netherlands 123,390
11 Central Provident Fund Singapore 122,497
12 Canada Pension Canada 122,067
13 Florida State Board US 114,663
14 National Social Security China 113,716
15 Pension Fund Association Japan 113,364
16 ATP Denmark 111,887
17 New York City Retirement US 111,669
18 GEPF South Africa 110,976
19 Employees Provident Fund Malaysia 109,002
20 General Motors US 99,200

Source: Pensions & Investments, 6 September 2010, P&I/Towers Watson World 300

Pensions – both the institutionally managed and individually held retirement accounts – were hit hard by the recent financial crisis, particularly in the West. As a consequence, provident funds and pension managers are seeking to rebuild long-term holdings for their clients. Farmland is a big attraction for them. They see in farmland what they call good “fundamentals”: a clear economic pattern of supply and demand, which in this case hinges on a rising world population needing to be fed, and the resources to feed these people being finite. Fund managers see land prices relatively low in places such as Australia, Sudan, Uruguay, Russia, Zambia or Brazil. They see those prices moving in sync with inflation (and, importantly, wages) but not with other commodities in their investment portfolios, thus providing a diversified income stream. They see long-term pay-offs from the rising value of farmland and the cash flow that will in the meantime come from crop sales, dairy herds or meat production. If you were holding on to money that had to be paid out to workers 30 years from now, you too could see the logic.

Scale is one factor that makes the role of these funds important. Pension funds started investing in commodities, including food and farmland, only recently. 3 With both commodities and food prices so steeply on the rise (see Graph 1), agriculture is one clear and unmistakable source of pay-off for institutional investors. 4

Graph 1: Making money from agriculture – trading on commodity exchanges (L) and food prices (R) both surging

Sources: Bank for International Settlements (L) and UN Food and Agriculture Organisation (R)

According to Barclays Capital, some US$320 billion of institutional funds are now invested in commodities, compared to just US$6 billion ten years ago. Hedge funds account for an additional US$60–100 billion. These figures are expected to double in the next few years. 5

Within this panorama, pension funds are said to be the biggest institutional investors in both commodities in general (US$100 billion of the US$320 billion indicated above) and farmland in particular. 6 According to numerous surveys within the industry, pension fund managers are seeking to invest in farmland – a new asset class offering annual returns of 10–20% – as never before. 7 This won’t surprise anyone who has been monitoring the big “ag investment” seminars being held in posh hotels from Zurich to London to New York to Singapore over the last three years. Take the Global AgInvesting Conference held at the Waldorf Astoria in Manhattan just last month: the conference attracted about 600 investors, from Bunge to Deutsche Bank. Collectively, this group represented holdings of US$10.8 billion in agricultural assets worldwide, with plans to raise those holdings to US$18.1 billion (up 67%) over the next three years. Farmland is at the centre of the acquisition strategy for many of these firms. Nearly one-third (30%) of them were pension funds.

Pension funds may be one of the few classes of land grabbers that people can pull the plug on, by sheer virtue of the fact that it is their money.

Today, commodities like farmland make up, on average, 1–3% of pension funds’ portfolios. 8 Yet by 2015, strategy decisions being taken now are expected to boost this to 3–5%, the “new optimal”. 9 While figures of one, three or five per cent may sound terribly small, these are huge funds, where one per cent may amount to several billion dollars. Table 2 tries to go a bit deeper and examine some sample farmland portfolios of pension fund managers. But, as so often, the data are opaque and hard to come by.

Table 2: Examples of pension funds investing in farmland (2010–2011)
Fund Total assets under management (AUM) Global farmland investment portion…(% of AUM) …and its status
AP2 (Second Swedish National Pension Fund) SEK220 billion
[US$34.6 billion] US$500 million in grain farmlands in US, Australia and Brazil (1.4%) Planned joint venture with TIAA–CREF.Firstforays into farmland investing were in 2010
APG (administering the National Civil Pension Fund), Netherlands €220 billion
[US$314 billion] €1 billion (0.5%)
[US$1.4 billion] A planned increase
Ascension Health, USA US$15 billion Up to US$1.1 billion (7.5% target) Looking to invest in farmland for the first time, to help meet a real assets target of 7.5% that is currently underachieved
CalPERS (California Public Employees’ Retirement System), USA US$231.4 billion About US$50 million (0.2%):
– US$1.2 million directly invested in Black Earth Farming
– US$47.5 million invested in agribusiness firms with huge int’l farmland holdings: Golden Agriresources, Indofood, IOI Corp, Olam, Sime Darby, Wilmar Current
Dow Chemical, USA
not revealed Farmland addedrecently. Aimed annual returns on US holdings: 8–12%
New Zealand Superannuation Fund NZ$17.43 billion
[US$14.2 billion] NZ$500 million (3%)
[US$407 million] The 3% allocationhasbeenmade at the Fund’s strategy level. First purchases into domestic farmland have started, to be followed by overseas farmland holdings
one US “state teachers fund” (CalSTRS?)
US$500million–US$1billion
PGGM (Pension Fund for Care and Well-Being), Netherlands €90 billion
[US$128 billion] not revealed Mayraise farmland allocation in 2011
PKA (Pensionskassernes Administration), Denmark US$25 billion US$370 million (1.5%) ByApril 2012. In June 2011, made a first placementof US$50 million in SilverStreet Capital’s Luxembourg-based Silverland Fund, targeting primarily Zambia
some “national government employees pension fund”
US2–5 billion Plannedsoon
Sonoma County Employees’ Retirement System Association, USA

Expected to allocate 3% toUBSAgrivestFarmlandFund
TIAA–CREF (Teachers Insurance & Annuity Association – College Retirement Equities Fund), USA US$426 billion US$2 billion in400 farms in North and South America, Australia and Eastern Europe (0.5%) Current. They claim annual returns of 10%

Calling them down

The big picture shows that:

1. the largest institutional investors are planning to double their portfolio holdings in agricultural commodities, including farmland;
2. they are reportedly going to do it very soon;
3. the new surge in money will push up global food prices;
4. high food prices will hit poor, rural and working-class communities hard.

It may not be easy to influence pension fund managers themselves. After all, they have no objective other than to make money – including their own cut – with the funds handed to them. But surely labour unions, employee-benefits planning bodies, pension boards, governments, and others who are responsible for strategy decisions about how pensions should be invested and grown can and should be persuaded to divest from farmland and other agricultural commodities.

One recent experience in the US, recounted by Sarah Anderson of the Institute for Policy Studies, gives a good example:

A coalition of family farm, faith-based and anti-hunger groups, along with business associations, have initiated a campaign to persuade investors to pull out of commodity index funds. Their first target: CALSTRS, the California teachers’ retirement system, which had been considering shifting $2.5 billion of their portfolio into commodities. In response to the divestment campaign, the CALSTRS board decided on November 4 to adopt a different strategy. Instead of $2.5 billion, they will invest no more than $150 million in commodities for 18 months, while further studying the potential problems. 10

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. 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

Going further

The website farmlandgrab.org is regularly updated with articles and news about pension funds going into farmland. Seehttp://farmlandgrab.org/search?query=pension+fund&sort_order=date for a direct view. It also provides a wealth of contacts and reports of people’s experiences in dealing with the global rush to get control over farmland, in the context of the current food crisis.

Watch a presentation by Jose Minaya of TIAA-CREF at the World Bank’s land conference in April 2011: http://vimeo.com/23314644

Endnotes

1 See the materials from the international conference on Global Land Grabbing held on 6–8 April 2011 at the Institute for Development Studies, University of Sussex, UK, http://www.future-agricultures.org/index.php?option=com_content&view=category&layout=blog&id=1547&Itemid=978. See also John Vidal’s reports for the Guardian(http://www.guardian.co.uk/world/2011/mar/21/ ethiopia-centre-global-farmland-rush); Alexis Marant’s film Planet for Sale(http://farmlandgrab.org/post/view/18542); the studies on land deals in Africa being released by the Oakland Institute (http://media.oaklandinstitute.org/land-deals-africa); the Dakar Appeal against land grabbing, drawn up by participants at the World Social Forum in February 2011 and presented to the G20 agriculture ministers in June 2011 (https://viacampesina.org/en/index.php?option=com_content&view=category&layout=blog&id=23&Itemid=36); and the collective statement against “responsible” agricultural land investments launched by La Via Campesina, FIAN, LRAN, WFF and GRAIN in April 2011 (http://www.grain.org/nfg/?id=767).

2 Sovereign wealth funds, by comparison, hold about US$4 trillion in assets.

3 Commodities are basic goods and services that are bought and sold in bulk – such as oil, gold, rice, coffee, copper or beef. “Basic” means that they can be used, like raw materials, to make other goods or services. And “in bulk” means that the item can be pooled from various sources, with a high level of uniformity. Thus a sack of rice or a barrel of oil may be composed of rice or oil coming from various fields or pumps, as long as they have similar basic qualities. Commodities, following the breakdown used by onValues Investment Strategies and Research in a recent report for the Swiss government, are often traded today in the form of futures contracts, physical stocks, so-called “real” assets (like land) and equity in firms that hold productive assets. See Ivo Knoepfel, “Responsible investment in commodities: the issues at stake and a potential role for institutional investors”, project co-sponsored by the Swiss Confederation, PRI and Global Compact, Zurich, January 2011, p. 3 (available athttp://farmlandgrab.org/post/view/18339).

4 Though some still try to deny it, many people – from investment bankers to civil society organisations (CSOs) – have argued and shown how commodity investors are in fact fuelling the current food-price hikes, particularly since the financial meltdown of 2008. Some recent accessible CSO analysis on the matter include the World Development Movement’s work on food speculation (http://www.wdm.org.uk/food-speculation) and material prepared for Oxfam’s GROW campaign (http://www.oxfam.org/en/grow).

5 See Ivo Knoepfel, op. Cit., p. 2.

6 Ibid., p 16.

7 Many of these land deals are not investments in any productive economic sense. Rather, they are financial schemes to generate returns on capital in the form of rent. See the analysis by Hubert Cochet and Michel Merlet, “Land grabbing and share of the value added in agricultural processes. A new look at the distribution of land revenues”, paper presented at the international conference on Global Land Grabbing at the Institute of Development Studies, University of Sussex, UK, 6–8 April 2011,http://www.future-agricultures.org/index.php?option=com_docman&task=doc_download&gid=1174&Itemid=971

8 Some of the biggest funds allocate as much as 7% of their portfolios to commodities.

9 Knoepfel, op. cit., p. 14.

10 Sarah Anderson, “Food shouldn’t be a poker chip”, IPS, Washington DC, 15 November 2010, http://www.ips-dc.org/articles/food_shouldnt_be_a_poker_chip. For more information, see “Stop gambling on hunger”, http://stopgamblingonhunger.com/?page_id=838

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