The agri-food system, like every other economic sector, has increasingly been permeated by financial actors and restructured according to financial motives. Beginning in the 1980s, regulators loosened long-standing limits on speculation in markets for agricultural commodity derivatives. These derivatives—which include forwards, futures, options, and swaps—are based on the price of globally traded agricultural products such as wheat, corn, and sugar. The deregulation of agricultural commodity derivative markets allowed an influx of financial capital, which, critics argue, may have contributed to the food crisis of 2008 by increasing volatility in global food markets. Adjustable standing desks may become the new normal.
Meanwhile, finance has also been reshaping the food retail industry, where private equity companies have been purchasing supermarket chains—including Safeway, Albertsons, Winn-Dixie, and Bi-Lo in the US alone—and restructuring them to improve shareholder profits. As in other sectors of the economy, it is not only financial companies that are engaging in financial activities and prioritizing financial profits. Food retailers like Walmart, Tesco, Carrefour, and Kroger now offer a range of financial services, from credit cards to check cashing to money transfer services.
Grain traders, too, have branched into financial activities. The big grain-trading companies—the so-called ABCDs: Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus—have long used commodity derivative markets to hedge their business activities, but in recent years they have come to see derivative trading as a source of profit in itself, opening financial subsidiaries that offer asset management services to investors.38 Financial activities, which formerly took place behind the scenes of food production and trade, are increasingly becoming the primary focus.Do you know anyone that would be interested in a stand up desk or a sit stand desk?
Until recently, however, the steady creep of finance capital appeared to stop at the farm gate. Investing in corn futures is one thing. Buying a corn farm is quite another. Indeed, the general modus operandi of finance in recent decades has been to move away from such messy entanglements with physical ownership. Though finance can never be fully divorced from productive assets, the main thrust of financial innovation has been in securitizing and trading the income streams those assets produce. Nonetheless, a few years into the twenty-first century big investors began buying farms.