Volume 45, June 2016, Pages 199–217
- a Department of Human Geography, Stockholm University, 106 91 Stockholm, Sweden
- b International Institute of Social Studies, Kortenaerkade 12, 2518AX, The Hague, Netherlands
- Received 1 October 2015, Revised 3 March 2016, Accepted 12 March 2016, Available online 14 April 2016
Highlights
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- This paper reviews history of public Nordic owned farms in Russia and Ukraine.
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- Key investors are identified and original expectations detailed.
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- Performance of companies shows tensions between stock market and farming.
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- Investors underestimated the challenges of agriculture in this region.
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- Stock market link to agricultural production is problematic with current conditions.
Abstract
Situated
in the global discussion on large-scale land acquisitions, this paper
examines the poor performance of Nordic owned, publicly traded, very
large-scale farms (agroholdings) in Russia and Ukraine. In depth study
of concrete examples of this emerging farm organization is still rare.
This paper investigates the impact of the financialization of
agriculture on the performance, agricultural and otherwise, of such farm
companies, which is also an emerging field of inquiry. In other words,
this paper seeks to go beyond discussion of “land-grabbing” and return
to an older question concerning large-scale farming in developing
country settings: is it even successful? In unique, exploratory
research, the authors have gone “inside” these companies through
interviews and attending shareholder meetings. Also, the authors have
examined the discourse found in press accounts and corporate documents,
the latter an underutilized source in research on corporate mega-farms.
We find that finance, usually asserted as an advantage for such
large-scale farms, proved in important respects to be incompatible with
farming in the investigated companies, as it led to the initial
prioritization of short-term speculative strategies over longer-term
production-oriented strategies. We further find that investors initially
failed to appreciate the unique climatic and other local challenges
presented by agriculture, compared to other economic endeavors. Finally
we note that these corporations are struggling to demonstrate economies
of scale. Our results suggest that, unless conditions change, stock
market financed large-scale farming companies are unlikely to play an
important role in future direct food production in the region.
Keywords
- Financialization;
- Agriculture;
- Ukraine;
- Russia;
- Farmland
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