The Financialisation of Food and Farming in Australia

Wednesday, July 16, 2014: 5:30 PM
Room: Booth 61
Oral Presentation
Geoffrey LAWRENCE , Social Science, University of Queensland, Brisbane, Australia
Sarah SIPPEL , University of Leipzig, Leipzig, Germany
The ownership of Australian food companies and farm lands by overseas investors has become a national debate in Australia, with some politicians and economists arguing that just as Australia’s past development was assured through foreign capital, so the nation’s future will depend upon continuing (and accelerating) overseas investment. Others are concerned that the present extent – and nature – of the purchases is not in the nation’s best interests. Critics argue that some of Australia’s most iconic and successful agribusinesses will become a vehicle for takeover by hedge funds and private equity firms that can then make decisions that may be deleterious to the national interest. Others consider that when farms are run by external sovereign wealth funds and food is ‘repatriated’, taxes can be avoided: Australia might not derive income from its own productive assets. Finally, it has been observed that the sale of most farmland is going unrecorded: Australians do not know of the extent of overseas ownership and control.                                               

Following a discussion of the current debate about overseas purchases of Australian food companies and farms, the paper deals with the phenomenon of ‘financialisation’. In an era of projected food, water and fuel scarcity, financial entities are seeking investment in agribusinesses that can be harnessed for global profit-making, and farms that can be owned and controlled directly by financial firms. Speculation in land along with opportunities for more secure food production for oil-rich but land-and-water-poor countries, are but two of the motivations for investment. Framed within a political economy perspective, the paper outlines the nature of recent overseas investments in food and farming in Australia, exploring the types of firms investing, along with their motives for investment. The paper concludes by theorizing the sociological ‘meaning’ of financialisation as it affects the Australian agrifood sector.