Asian Agribusiness Investment and the Global Sugar Supply Chain: Insights for Food Regimes

Monday, 16 July 2018: 17:45
Oral Presentation
Kiah SMITH, U. Queensland, Australia
Geoffrey LAWRENCE, University of Queensland, Australia
According to GRAIN, agribusiness expansion – increasing vertical and horizontal supply chain integration - has replaced agricultural land as the main focus for current and future financial investment into Australian agriculture. In this paper, we explore the intersection of finance and agribusiness strategic investments from Asia into the North Queensland sugar sector, thus contributing an empirical case study of the ways that agribusiness companies are positioning themselves to capitalize upon an increasingly financialised Third Food regime. The firms seek to profit by pursuing vertical integration of asset ownership (land, mills, transport, processing and manufacturing), commodity ‘flexing’ (sugar, fuel and feed) and controlling commodity trading and marketing. Sugarcane production is of particular interest for its capacity to generate profits via both real asset trading (i.e. sugar), capital appreciation (land, infrastructure) and futures speculation.

In this paper, I illustrate the consolidation of economic power through an examination of the financial vehicles involved in three recent foreign acquisitions of sugarcane-producing land in North Queensland, Australia, since 2010: Wilmar (Singapore), COFCO (China) and Mitr Phol (Thailand). Each of these agribusinesses combines a mix of Northern and Southern finance actors, with varying logics to owning and managing assets in the sector, in Australia and overseas. Each company has also met with very different public perceptions of its impacts and responsibilities for the sector, surrounding communities, and environments. In keeping with a ‘food regimes as methodology’ approach, our research presents evidence of contradiction, crisis, historical conjuncture, identifiable moments and capital accumulation, and considers the role of the state, corporate-social movement contestation, and public/private regulation. By ‘following the money’ from parent companies to Australian subsidiaries, via joint ventures and direct investment, this case study also illustrates the deep reach of the agribusiness giants ADM, Bunge, Cargill and Dreyfus.