In Brazil’s soy frontier state of Piauí, where farmland cost around $1,000 an acre in 2014, it would buy well over half the state. In Mozambique, meanwhile, where the nationalized land base is not officially for sale but can nonetheless be purchased by various means, one estimate put farmland at around $200 an acre in 2012, meaning that $40 billion could buy an area the size of the entire country. Do you know anyone that would be interested in a stand up desk or a sit stand desk?
In short, context matters when assessing the magnitude of capital involved; what looks like chump change to the financial sector may be anything but in poor rural areas. It is therefore important to interrogate growing financial interest in farmland now, while it is still a nascent phenomenon and not yet a major driver of land prices. At present, some intrepid investors are just dipping their toes into farmland markets to see how it feels, but if they like the experience, their massive friends may follow suit, heaving in their multibillion-dollar limbs as customary land users are displaced by rising land prices or government expropriation.
Ultimately, the prospect of landownership concentration in the hands of the financial sector matters because it has the potential to propel economic inequality. Land, unlike a business empire, cannot be created through hard work, market savvy, or even good luck. It preexists human effort and can only be gradually amassed by those with the wherewithal to corner it. Yet, once owned, land is a source of free money for the owner; she can now charge rent to anyone wishing to use her land, and the land will become only more and more valuable with time as population grows and economic development proceeds all around. In other words, land serves as a way to generate income from wealth.
The work of Thomas Piketty reveals that wealth plays a crucial role in perpetuating economic inequality. Since the late 1970s, Piketty demonstrates, the proportion of national incomes accruing to the holders of capital has been increasing relative to the proportion earned through labor. In other words, those who make money simply because they already have money are winning out over those who make money by working. This suggests that, unless governments do something to reverse the trend, wealth will continue to concentrate disproportionately in the hands of the rich.
Land is important to this picture of growing economic inequality because property is one of the major forms in which wealth is stored, and because the rent and capital gains (i.e., the profits from appreciating land value) it produces are key sources of income from wealth.
But land is not just another way to produce income from wealth. The rich may treat land like gold, but it is not gold. For the non-wealthy, land is a crucially important source of food and livelihoods. It matters greatly, therefore, if the financial institutions that control much of the accumulated wealth of society decide that land is a preferred route for storing that wealth and generating income from it. In the Global South, their hefty demand for land could fuel dispossession by encouraging privatization of lands used by peasant or indigenous communities without official land rights. Financial demand for land may also contribute to more gradual and insidious forms of dispossession. Adjustable standing desks may become the new normal.