December, 04 2012, 02:24pm EDT
Do You Know What Your Pension Fund is Doing in Africa?
New Report Looks at Private Equity Funds Betting Heavily on Agriculture
OAKLAND, Calif.
Following the 2007-2008 financial crisis and the collapse of the housing market, private equity funds have found a new lucrative soft commodity market to invest in--farmland. In a short period of time, obscured from public view, the flow of private capital into farmland and agriculture has grown dramatically worldwide.
In recent years, the private financial sector has already invested between $10 to $25 billion in farmland and agriculture with little to no oversight; given current investment trends, this amount might double or triple in the coming years. Although agricultural funds are portrayed as positive social investment to help alleviate hunger and the effects of climate change, evidence demonstrates that large land deals are often detrimental to food security, local livelihoods, and the environment--yet little is known about the specific firms and funds driving this investment.
Betting on World Agriculture: US Private Equity Managers Eye Agricultural Returns, a new report from the Oakland Institute (OI), focuses on the private investment vehicles that advertise and manage investment opportunities in farmlands and agriculture for investors including pension funds, university and foundation endowments, and high net worth individuals. Based on months of research, involving literature review, interviews with fund managers, and examination of public as well confidential internal documents, the report casts a light on this hidden trend by profiling private investment vehicles that are either based in the US or aggressively promoting farmland and agriculture in the US.
Asking pointed and value-based questions that go beyond the usual terrain of yields and risks, the new report sheds light on the complex world of funds and investment activity and the ethical obligations involved. By doing so, the report highlights how these funds are managed and the type of investments that are being made in various regions of the world in order to inform concerned citizens, investors, and policy makers about the domestic and international impacts of such investments.
"The large buying power of these groups warrants an investigation into the overall impact of this investment activity on economic development, food production, rights of local communities, and the environment," said Caroline Bergdolt, coauthor of the report. "In addition, for those already promoting social and environmental returns to raise funds and garner special incentives from governments, demonstrating a lasting, meaningful impact should be a must. Yet, a lack of information prevails," she continued.
Considered the next big thing and "[farmland] gold with a coupon,"[1] with some funds aiming to become the "Exxon Mobil"[2] equivalent of the agricultural sector, there is much cause for concern. Within this context, it is particularly troubling that information regarding agricultural and land investments is highly inaccessible, densely layered, and hidden from the public.
In fact, of the 23 intermediaries researched and profiled, including Global Environmental Fund, George Soros, Farm Lands of Africa, and the Westchester Group and Teachers Insurance & Annuity Association - College Retirement Equities Fund (TIAA-CREF), only five responded to requests for direct contact after the Institute's repeated attempts.
"The fund managers are not forthcoming around details of investments and in general operate under a veil of secrecy. Some companies use reverse mergers with video game-sounding entities like 'Kryptic Entertainment' to create US-based public shells as well as onshore-offshore partnerships," said Anuradha Mittal, executive director of the Oakland Institute and coauthor of the report. "At best, fund managers give lip service to the belief that they are contributing to a win-win situation where they can make enormous amounts of money while contributing to food production and poverty alleviation."
One CEO, Mark Keegan of Farm Lands of Africa, went so far as to say to OI researchers:
"I have absolutely no doubt that what we are doing here is 'good' because of the VERY pressing need for food and the poverty. I am unashamed of wanting to make money from it and super confident that the imperative of profit will succeed where aid-driven ventures have failed. Having said that, I am also aware that success will bring social upheaval. I never stop pointing this out to African governments so that they can plan whilst they have time to think about it."[3]
Mittal responded, "Planning for and responding to social upheaval isn't part of the investment strategy or commitment of private equity investing in agriculture. Just like the land deals themselves, it is extremely difficult for concerned citizens, students, teachers, and others to find out about agricultural funds. Public information is limited and fund managers maintain an aura of secrecy. There would be no need to delve into the details of the funds if they weren't having an adverse--and growing--impact on peoples' lives."
The new report looks specifically at intermediaries--venture capital firms, traditional private equity funds, large investment firms with specialized boutique firms or divisions, hedge funds that are evolving into more diverse investment firms, as well as billionaires, large agribusinesses and public pension funds with their own private investment structures--that advertise and manage investment opportunities.
The Oakland Institute has gained a reputation for taking on difficult areas in issues related to land investment after publishing a series of reports and briefs in the last three years. The OI's findings of further political destabilization, impoverishment, and environmental devastation as a result of these investments has led to this new study on private funds and their outsized consequences and lack of accountability.
With a preface by Dan Apfel, executive director of Responsible Endowments Coalition, this report is clearly responding to a call from citizens who want to know more about where their money is, and what it is doing.
According to the Institute, "We believe that more often than not, when given a choice, and armed with better information, people prefer that their funds are invested elsewhere and not in short-sighted endeavors that have long-term and devastating effects."
Read the Frequently Asked Questions about this research
___
[1] Chris Erickson, managing director at HighQuest Partners, an agribusiness consulting firm. Reuters, March 13, 2012.
[2] Joseph Carvin, Hedge Fund Manager, Altima.
[3] Mark Keegan, Director, CEO Farm Lands of Guinea, in email correspondence with OI.
The Oakland Institute is a policy think tank whose mission is to increase public participation and promote fair debate on critical social, economic and environmental issues in both national and international forums.
LATEST NEWS
Senate Dems Want to Cancel All Student Lunch Debt—A 'Term So Absurd That It Shouldn't Even Exist'
U.S. Sen. John Fetterman said the aim of the bill is to "stop humiliating kids and penalizing hunger."
Sep 25, 2023
As children across the United States have started a new academic year over the past month, many families have had to contend with federal lawmakers' refusal to guarantee universal free meals and the resulting "lunch shaming"—which three U.S. Senate Democrats hope to partially combat with new legislation to cancel student lunch debt nationwide.
"'School lunch debt' is a term so absurd that it shouldn't even exist," Sen. John Fetterman (D-Pa.) declared in a statement Monday. "That's why I'm proud to introduce this bill to cancel the nation's student meal debt and stop humiliating kids and penalizing hunger."
"It's time to come together and stop playing political games with Americans' access to food," he added. "September is Hunger Action Month and I'm proud to be introducing this bill to help working families now, while we work to move our other priorities to combat food insecurity in our nation."
Fetterman—who chairs the Senate Committee on Agriculture, Nutrition, and Forestry's Subcommittee on Food and Nutrition, Specialty Crops, Organics, and Research—is leading the fight for the School Lunch Debt Cancellation Act with Sens. Sheldon Whitehouse (D-R.I.) and Peter Welch (D-Vt.).
"No child in Rhode Island—or anywhere in America—should be penalized for not being able to afford school lunch. It's that simple," asserted Whitehouse. "Our legislation will eliminate lunch debt in schools, supporting every child's access to a healthy meal and positioning them for long-term success."
Welch agreed, saying: "Our students shouldn't have to worry about how they're paying for lunch—full stop. I'm proud to partner with my colleagues Sen. Fetterman and Whitehouse on this commonsense bill, and urge my colleagues to stand with us."
Congress initially responded to the Covid-19 pandemic by enabling public schools to provide free breakfast and lunch to all 50 million children nationwide, but Republicans blocked the continuation that policy last year. Instead, lawmakers passed the Keep Kids Fed Act, a bipartisan compromise that increased federal reimbursement rates for programs serving low-income students. However, as Common Dreamsreported in January, only around a quarter of districts that responded to a survey from the School Nutrition Association said those levels are sufficient, and 99.2% had concerns about raised rates expiring.
Further burdening American families trying to feed children amid food companies' price gouging, congressional Republicans and right-wing Sen. Joe Manchin (D-W.Va.) also killed the pandemic-era expansion of the child tax credit—a move that contributed to the U.S. child poverty rate more than doubling in 2022 compared with the previous year, according to data released this month.
"Prior to the pandemic, some schools had resorted to tactics that embarrassed kids, such as stamping their hands to remind parents of unpaid bills and substituting cold cheese sandwiches for hot meals," Civil Eatsreported Monday. "Sometimes meals were thrown out in front of the children. And while experts say that fewer districts have resumed these practices—often dubbed 'lunch shaming'—they haven't gone away entirely either."
Crystal FitzSimons, director of school and out-of-school time programs at the Research and Action Center (FRAC), told the outlet, "Schools, families, and states really did not want to go back to having the complicated school nutrition operations where some kids have access to free meals and other kids do not, and they have to struggle with unpaid debt."
The families of almost half a million food insecure children in Pennsylvania collectively owe nearly $80 million in public school lunch debt, according to Fetterman's office. Nationally, more than 30 million kids can't afford their school meals and the total debt is $262 million annually.
California, Colorado, Maine, Massachusetts, Michigan, Minnesota, New Mexico, and Vermont have all guaranteed universal free school meals, and Nevada has a policy in place for the 2022-23 school year only. While lawmakers in other states are working to pass similar bills, advocates have called for federal legislation to ensure all schoolchildren are fed.
In addition to the new debt cancellation bill, Fetterman is among the co-sponsors of the Universal School Meals Program Act, reintroduced in May by Sen. Bernie Sanders (I-Vt.) and Rep. Ilhan Omar (D-Minn.).
"It is downright cruel that we are letting our children in America go hungry," Fetterman said at the time. "No child in America should be worried about if they are going to be able to get breakfast, lunch, or dinner. I am proud and honored to co-sponsor this bill that will finally make sure that our children are fed."
Keep ReadingShow Less
US High Schoolers Launch Green New Deal for 'Our Schools and Our Futures'
"Public schools belong to us, and we know we deserve better," said a Sunrise Movement organizer and the youngest school board member in Idaho.
Sep 25, 2023
In the face of right-wing attacks on public schools—including climate education—more than 50 high schools nationwide launched the Green New Deals for Schools campaign Monday.
The campaign, organized by the youth-led Sunrise Movement, is demanding that school boards and districts act to provide buildings powered with renewable energy; free, healthy, local, and sustainable meals; support for finding well-paying, unionized green careers; plans for extreme weather events; and instruction about the climate crisis.
"The Republican Party knows that they don't have the youth vote," Aster Chau, who organizes for Green New Deal for Schools while attending the Academy at Palumbo in Philadelphia, Pennsylvania, said in a statement. "They've spent the last few years antagonizing students and teachers—eroding trust in public education—in order to distract from all of the problems they've created in our society. Today, we say no more—these are our schools and our futures."
The push comes as lawmakers in Republican-controlled states have increasingly attempted to mandate what can be taught in the classroom. In Georgia, for example, a "divisive concepts" law prohibits teachers from discussing nine race-related topics. This would include the unequal impacts of the climate crisis, The Guardian pointed out, and has had an overall chilling effect on educators' willingness to raise political issues in the classroom.
"We don't learn about climate change at all," 16-year-old Summer Mathis, who studies at North Cobb High School in Kennesaw, Georgia, told The Guardian.
In Texas, meanwhile, education officials are imposing their views on climate science textbooks, and in Idaho there is an ongoing dispute over whether or not the climate crisis can be included in the curriculum at all. Florida under Gov. Ron DeSantis has approved the use of PragerU Kids materials, which include climate denying and pro-fossil fuel talking points.
"It's really scary knowing that I'm underage, and can't vote to elect the people making these big decisions about our futures."
Beyond curriculum building, there are many things that schools in all states can do to better prepare for and fight the climate crisis.
Currently, public elementary, middle, and high schools use around 9% of the energy consumed by commercial buildings in the U.S., Lisa Hoyos, the national climate strategy director for the League of Conservation Voters, wrote in an op-ed for The Progressive Friday. Switching them all to renewable energy would have the same impact as removing 18 coal plants from the grid.
Schools can also do more to prepare for extreme weather events. In Philadelphia, for example, Chau started school during a heatwave in a building that lacked air conditioning, they told The Guardian.
"Being a youth right now is really scary," Chau said. "It's really scary knowing that I'm underage, and can't vote to elect the people making these big decisions about our futures, not having a say in that."
The new campaign is partly a way to change that.
"For too long, students have been left out of the decision-making spaces within our schools," Shiva Rajbhandari, a Sunrise Movement organizer who is also the youngest school board member in Idaho, said in a statement. "Students are the most important constituents of our school boards, and they deserve to call the shots for their own education. Public schools belong to us, and we know we deserve better."
The campaign comes out of a camp that the Sunrise Movement ran this summer to train hundreds of high school students to advocate for themselves and their communities.
The young people have older allies as well. This week Rep. Jamaal Bowman (D-N.Y.) and Sen. Ed Markey (D-Mass) will reintroduce their Green New Deal for Public Schools Act with hundreds of students present, according to The Guardian.
"Our generation is on the frontlines of this fight," 17-year-old campaign leader Adah Crandall said in a statement, "and it's time for our school districts to take real action."
Keep ReadingShow Less
New Poll Shows Public Support for UAW Strikes Is Growing
"Compared to the week before, when we asked the same question just after the announcement of the strike, support for the UAW strikes has risen from 55% to 62%," Data for Progress found.
Sep 25, 2023
Survey data released Monday shows that the United Auto Workers strikes have grown in popularity with U.S. voters since they kicked off 10 days ago.
A Data for Progress poll of 1,229 likely U.S. voters conducted on September 20-21 found that 62% of all voters support the UAW strikes, which expanded last week to every General Motors and Stellantis parts distribution facility in the country.
Nearly half—48%—of Republican voters support the strikes, according to Data for Progress, along with 79% of Democratic voters and 59% of Independent and third-party voters.
"Compared to the week before, when we asked the same question just after the announcement of the strike, support for the UAW strikes has risen from 55% to 62%, while opposition has dropped from 35% to 29%," noted Lew Blank, a communications associate at Data for Progress. "Notably, we find a seven percentage point increase in support among Independents and a 10 percentage point increase in support among Republicans."
Data for Progress also asked voters whether they trust President Joe Biden or former President Donald Trump more to support labor unions.
Forty-four percent of all likely voters said they trust Biden and 29% chose Trump, while 21% said they trust neither.
"More than 2 in 5 Independents (42%) report that they trust neither figure more or that they don't know which one they trust more, indicating that the Democratic Party has a considerable opportunity to bolster support among Independent voters by standing alongside UAW workers," Blank wrote.
The new polling comes a day before Biden—who is seeking reelection in 2024—is set to join striking UAW members on the picket line in Michigan, a historic show of support for the union's fight for major contract improvements.
Trump, for his part, is scheduled to speak to around 500 current and former union members on Wednesday night in Clinton Township, Michigan, skipping the 2024 Republican presidential debate.
"If Trump is a friend of workers, why did his administration repeatedly do what corporate lobbyists asked for instead of what worker advocates wanted?"
With his Michigan visit, Trump—the GOP front-runner—is attempting to posture as a champion of the working class, running radio ads in Detroit and Toledo, Ohio that praise autoworkers and claim he has "always had their back."
Steven Greenhouse, a veteran labor reporter, called that narrative "appalling poppycock" in an op-ed for The Guardian on Monday.
"During Trump's four years as president, he and his administration did far more to stab workers in their backs," Greenhouse wrote. "Trump didn't lift a finger to increase the federal minimum wage, which has been stuck at a pathetically low $7.25 an hour since 2009. And he certainly didn't have workers' backs when he scrapped [former President] Barack Obama's move to expand overtime coverage, thereby denying 8 million workers the ability to receive time-and-a-half overtime pay."
"If Trump is a friend of workers," Greenhouse asked, "why did his administration repeatedly do what corporate lobbyists asked for instead of what worker advocates wanted?"
Keep ReadingShow Less
Most Popular
Independent, nonprofit journalism needs your help.
Please Pitch In
Today!
Today!