What future for small-scale farmers and their food and seed systems?
Following on from part one, The rise of digital agriculture and dispossession in Africa: implications for smallholder farmers, part two looks at how private-sector interests and motives are driving the financialisation of Africa’s food and farming systems.
Financialisation is the focus on generation of revenue and of profit from an abstracted and increasingly digitalised version of real-world production. This encompasses interest on loans, shareholders returns and commodity and derivative trading.
It is a de facto dematerialisation of the reality of the work undertaken by Africa’s smallholder farmers to produce food for the continent, generate livelihoods and act as custodians to the relationship between people and the land that sustains them.
The consequences of financialisation are growing corporate dominance in all elements of the food chain, reduced funding into the real economy and an increased focus on delivering short-term returns. Real-world systems are ruptured.
This paper describes key financial instruments like futures and derivatives trading markets, and index funds. It also explores the financialisation of climate change and the role of public private partnerships. Significant financialisation actors are identified, such as banks, asset management funds, large institutional investors and philanthropic organisations. Agricultural commodity trading companies are engaged with financialisation instruments like derivatives, as are global energy traders. Digitalisation is an enabler of financialisation. See more on digitalisation of Africa’s agricultural systems in part one.
There is money to be made in the abstraction of agriculture by those who do not participate in the actual production or risk of producing food. This paper explores the consequences of financialisation, which include the marginalisation of human rights, particularly as relating to land access and ownership. It looks into financialisation related to seed breeding and seed-related research and development finding that seeds are increasingly viewed as digital commodities.
There is a ‘distancing’ that happens in the process of financialisation – distancing of revenue generation far from the place of production, distancing of accountability as the entry of many stakeholders unrelated to food and farming obscures responsibility, and distancing (almost erasing) of the physical form of food production, including of those who produce it and their related knowledge.
Please click below to read the briefing paper and the associated fact sheet.