The rise of financial investment and common ownership in global agrifood firms

“…firms relies on large-scale monoculture farming practices that have been associated with high fossil fuel use, climate change, biodiversity loss, water shortages, and chemical run off from the increased application of fertilizers and pesticides (Benbrook, 2016; Foley et al., 2011; Garnett, 2013).”

“…have paid increasing attention to the process of financialization and its political and economic effects across a range of sectors, including food and agriculture, in recent decades (for a review, see Burch & Lawrence, 2013; Epstein, 2005; Krippner, 2011; Schmidt, 2016; van der Zwan, 2014).”

“…has also permeated everyday practices to the extent that states have downloaded the responsibility for managing risk onto individuals who in turn are encouraged by financial actors to utilize new financial products as a way to enhance their own security (Aitken, 2007; Isakson, 2015; Martin, 2002).”

“Shareholders can make their preferences known to firms’ management via direct engagement, threats to sell stock (in the case of actively managed funds), and voting on the board regarding management decisions, including executive pay incentives (Azar et al., 2018; OECD, 2017).”

“In other words, the causes and effects are ‘distanced’ from one another, making political mobilization around the issue challenging (Clapp, 2014, 2015; Princen, 2002).”

“However, these technologies are deeply integrated with the continued promotion of existing genetically modified seeds and associated herbicides (Bronson & Knezevic, 2016).”

“The emergence of real estate investment trusts and other farmland linked investment funds have also attracted large institutional investors (Desmarais, Qualman, Magnan, & Wiebe, 2017; Fairbairn, 2014; Magnan, 2015).”

“J.D. Rockefeller owned significant shares across a range of large firms (Fichtner et al., 2017; Krouse, Benoit, & McGinty, 2016).”

“fossil fuel use, climate change, biodiversity loss, water shortages, and chemical run off from the increased application of fertilizers and pesticides (Benbrook, 2016; Foley et al., 2011; Garnett, 2013).”

“’(2) Patterns of common ownership are on the rise more generally in many sectors, and a growing number of analysts have pointed to the ways in which it can encourage anti-competitive behavior and increase corporate power (Azar, Schmalz, & Tecu 2018; Schmalz, 2018; Elhauge, 2016).”

“This type of financial speculation has been associated with higher and more volatile food prices, which compromises ability of poor people to access food (De Schutter, 2010; Ghosh, 2010; Worthy, 2011).”

“Brooks, Chen, and Zeng (2018) found that there is more likely to be a merger event between firms when they share institutional owners, which can effectively reduce the number of competitors within a sector and increase the market share of each of the firms that remain.”

“These firms are able to influence policy and governance via a number of mechanisms, including lobbying policymakers directly, structural influence over policymaking owing to their significance in the economy, and through the ability to shape discourse (Fuchs, 2007; Ruggie, 2018).”

“…sector, ranging from heightened food price volatility to fragile land rights for farmers, have received attention from global bodies such as the Food and Agriculture Organization, the World Bank, and the G20, to determine appropriate international governance responses (Clapp & Isakson, 2018).”

“…has also permeated everyday practices to the extent that states have downloaded the responsibility for managing risk onto individuals who in turn are encouraged by financial actors to utilize new financial products as a way to enhance their own security (Aitken, 2007; Isakson, 2015; Martin, 2002).”

“In other words, the causes and effects are ‘distanced’ from one another, making political mobilization around the issue challenging (Clapp, 2014, 2015; Princen, 2002).”

“…prices without associated increases in quality or service is potentially much higher in markets that are already concentrated (OECD, 2017, p. 20; Diez et al., 2018, p. 13), and given the high degree of concentration in the agricultural input sector, it is likely that common ownership has…”

“The emergence of real estate investment trusts and other farmland linked investment funds have also attracted large institutional investors (Desmarais, Qualman, Magnan, & Wiebe, 2017; Fairbairn, 2014; Magnan, 2015).”

“actors to utilize new financial products as a way to enhance their own security (Aitken, 2007; Isakson, 2015; Martin, 2002).”

“…financial investment in farmland has led to calls from civil society and many governments for international governance initiatives to protect land tenure rights and ensure responsible land investment, including the UN Voluntary Guidelines on land tenure (Margulis & Porter, 2013; McKeon, 2013).”

“…financial investment in farmland has led to calls from civil society and many governments for international governance initiatives to protect land tenure rights and ensure responsible land investment, including the UN Voluntary Guidelines on land tenure (Margulis & Porter, 2013; McKeon, 2013).”

“…as a form of ‘land grabbing’, and numerous case studies have documented the impact of international land deals on land tenure rights in countries affected by such investments (e.g. Cotula, 2013; Desmarais et al., 2017; Larder, Sippel, & Argent, 2018; White, Borras, Hall, Scoones, & Wolford, 2012).”

“CIFs track the value of a bundle of commodities, including agricultural commodities, and allow investors to buy into the market without having to purchase physical commodities or even commodity futures contracts (Baines, 2017; Ghosh, 2010; Russi, 2013).”

“Much of the investment in farmland in the past decade has been focused on largescale industrial agricultural production, particularly for biofuels (Neville, 2015).”

“Such data is not always easily available and there is an emerging debate regarding the most appropriate methods for analysing that data (e.g. Azar et al., 2018; Elhauge 2018; O’Brien & Waehrer, 2017; OECD, 2017).”

“…controlled 62% of the market (up from a 55% share for the top three firms in 2013), and the top three agro-chemical firms (Bayer-Monsanto, ChemChina-Syngenta, and BASF) controlled 59% of the market (up from a 51% share for the top three firms in 2013; ETC Group, 2015; Mooney, 2018).”

“A small number of private equity firms—mainly Blackrock, Vanguard, State Street, Capital Group and Fidelity—have funnelled vast amounts of equity into publicly listed food and beverage corporations, providing them with access to finance for accelerated global expansion.(219)”

“Delving more deeply and critically into the international political economy (IPE) of artificial intelligence, however, reveals that the vast majority of these apparent gains entail costs for marginalized peoples, distant ecosystems, and future generations – costs that CSR rhetoric and metrics are obscuring from consum…”

“…comes with hidden costs relevant to a whole range of issues in IPE, from market volatility and economic instability of financialization and changing patterns of corporate ownership, investment and market speculation (Clapp, 2018, 2019) to the rise of artificial intelligence (Dauvergne, 2020).”

“[36] The Rise of Financial Investment and Common Ownership in Global Agrifood Firms Review of Int.”

“3D through positive feedback that shows irrigation agriculture as a high-profit business attracting capital from different investors (Clapp 2019).”

“Research has shown that a relatively small number of asset management firms now hold a large proportion of shares across the entire corporate food system and, more broadly, the corporate economy [50, 51].”

“The rise of UPFs is also linked to the rising power of financial actors within food systems, and an increasingly liberal global financial regime that features a rapid increase in marketised securities and greater monetary exchange freedoms (Clapp 2019; Hawkes 2010).”

“…the intense financialisation of land, agriculture and food-related activities (Isackson 2014) and concentration of corporate ownership and control (Clapp 2019); the spread of food retail revolution (Arboleda 2020) and nutrition transition across developing countries (Otero et al. 2018); the…”

“Previous studies have identified that a considerable proportion of the shares of the largest firms in many key sectors of the economy, including the food and drink sector, are held by only a handful of the world’s largest institutional investors [61, 89, 90].”

“…in institutional investment, for example, in index-based funds (that track performance of firms within a sector), which has resulted in a massive influx of capital into some of the world’s largest firms, giving them the funding and leverage to purchase their less well financed rivals (Clapp, 2019).”

“Common shareholder ownership refers to the situation wherein investors, usually institutional investors, own shares in a number of firms active in the same market [84, 85].”

“…food supply chain are to a large extent dominated by the food processing and distribution spheres who shape the external food environment, and influence consumer choices partly through aggressive marketing and nudging strategies (Clapp, 2019; Group of Chief Scientific Advisors, 2020; Howard, 2016).”

“…Nyeleni Europe and Central Asia (Nyeleni 2019 ), the European Coordination Via Campesina (ECVC 2021) and researchers such as the International Panel of Experts on Sustainable Food Systems (IPES-Food 2019 ) that this is already taking place in alternative farming systems in more localized contexts.”

“…is an assembly of property owners, fossil fuel corporations, warmakers, tech giants, media outlets, health care management firms, industrialists, monopolists, state functionaries and, most importantly, financiers (Russi 2013; Clapp 2019), with cultural leadership from some workers and farmers.”

“Such incentives can lead to anti-competitive behavior, mergers and acquisitions, and increased entry barriers into specific industries, resulting in price increases [32].”

“Thirdly, while there is now a growing number of studies which examine the impacts of financial ownership in particular sectors, such as agriculture (Clapp, 2019; Ouma, 2020a, 2020b), real estate (Christophers, 2022; Janoschka et al., 2020; Sanfelici and Magnani, 2023), the fossil fuels and mining…”

“Private spending on agricultural research and development has also become concentrated among the largest firms due to acquisitions and mergers (IPES-Food, 2017; Clapp, 2019).”

“For example, Vanguard and Blackrock have investments in many of the largest firms in the meat, dairy and animal feed sector, and are now buying into alternative protein product development [9, 146], alongside bil-lionaires like Bill Gates and Richard Branson [17, 147].”

“By 2016, the USA’s five largest asset managers had also accumulated combined shareholdings of 10–30% in many major agribusiness corporations (Clapp, 2019).”

“Reindustrialization in this context refers to the corpo-rate-led reinvestment in and restructuring of livestock production practices following the first global financial crisis of this century [45,46].”

“In the aftermath of the 2008 financial crisis, the agri-food sector has emerged as a safe haven (Clapp 2019), prompting investors to seek higher returns in lucrative ventures.”

“Clapp (2019) continues by outlining the trend for the further concentration of an already oligopolistic market of agrifood traders.”

“2011; Clapp 2019).”

“Research from Clapp and colleagues (Clapp, 2019) indicates that a small number of large-scale asset managers (not those included in this study) are significant shareholders in some of the largest global food sector companies (Clapp, 2019).”

“In examining how managerial logics have infiltrated participatory mechanisms in the domain of food, this paper offers an adjacent contribution to existing IPE work on food and agricultural systems (Clapp, 2019; Margulis, 2018; McKeon, 2014).”

“New fi nancial vehicles, too, have intensi fi ed the already high concentration of corporate power in agriculture (Clapp 2019).”

“Less detectable, racial agrarian capitalism here had already built-in the monopolistic and plutocratic tendencies of neoliberal globalization, and therefore did not require the kind of deeper structural transformations that occurred in many other places (Howard, 2009; Clapp, 2019).”

“These patterns raise concerns that they increase incentives for industry consolidation and anti-competi-tive behaviours (Clapp 2019).”

“1 3 AFS' competitive advantage by combatting food system consolidation (Clapp 2019; Graddy-Lovelace and Naylor 2021).”

“Greater corporate control over specific aspects of the agricultural supply chain is a major concern especially when a handful of corporations are controlling significant global market share in all major crops (Clapp, 2019; Howard, 2016).”

“In this sense, in times of deep globalization with capital movements (Clapp 2019), specifically foreign direct investment (Bargoni et al. 2022; Chen 2017; Manning and Baines 2004), the availability of useful information for the formulation, monitoring, and evaluation of investment and governance…”

“Concerns have been raised, for instance, about how the increase in size and concentration of asset manager investments in publicly listed corporate equity likely drives a form of hidden concentration in diverse markets and industries (Posner et al ., 2017; Azar et al ., 2018; Clapp, 2019).”

“Companies are thus incentivized to prioritize short-term returns, often with negative consequences for employees (Labban, 2014), local communities and environments (Clapp, 2019), and sometimes entire economic sectors (Bowman, 2018), although shareholder activism can push businesses to improve their environmental and s…”

“…capital can mitigate the risks associated with the adoption of new technologies, diminish the risk perceptions of investors in agriculture-related sectors, and disperse the concentration of risks inherent in the rural industry integration process, thereby fostering its progression (Clapp, 2019).”

“Prominent topics are market concentration, powerful actors and potential negative effects on society or the environment, for example market power in agri-culture and food industry that limit the potentials of food cooperatives or structural transformation (e.g. Clapp 2019; Wood 2013).”

“personalities in a cut-throat business world (Amman 2009, Kelly 2014, Blas & Farchy 2021), political scientists and economists have especially concentrated on the financialization of commodity trading, the societal effects of increasing volatility in foodstuff, the role of commodity traders in the trade of conflict mi…”

“As transformações atuais envolvendo o setor do agronegócio, conforme apresentado por Clapp (2019), revelam o vínculo entre o monocultivo e a financei - rização.”

“…scales (Clapp, 2023), including through ‘mega-mergers’ of trade and retail companies (Clapp, 2018), the rise of ‘common ownership’ of assets through large institutional investment firms (Clapp, 2019), or even from efforts by companies to govern environmental impacts (Alger et al., 2021).”

“Given the statutory definition, it emerges that agricultural firms must acquire the necessary capital to carry out the activity, manifesting medium and long-term financing needs for the acquisition of land, buildings and agricultural production equipment (Koloszko-Chomentowska & Sieczko, 2016; Clapp, 2019; Szymańska e…”

“For instance, Clapp (2014, 2019) shows that parcels of the food system have recently become increasingly transformed into assets and submitted to financial rationality.”

“At the firm level, shareholder capitalism may incentivize companies to prioritize asset appreciation and capital returns, potentially at the expense of ecological stewardship [11, 13].”

“…ownership among U.S airlines (Azar et al., 2018), numerous empirical studies have analysed the impact in specific sectors, among which agrifood (Clapp, 2019; Backus et al., 2021a; Torshizi and Clapp, 2021), airlines (Kennedy et al., 2017; Azar et al., 2018; Schmalz, 2018; Dennis et al., 2022),…”

“Ultimately, efforts to promote more sustainable, healthy and equitable food systems must contend with the vested interests that pull the financial strings and drive ever-growing corporate consolidation(20).”

“However, given the large investments and increases in, for example, farm size in other agricultural sectors (see e.g., Clapp, 2019; Sexton, 2013), it is likely that differences between primary producers in other sectors are enhanced as well.”

“…environments, dietary patterns, and human health; an emerging body of literature highlights the often unseen yet powerful role of the financial sector in steering both the food environment and the behaviour of the food industry (Fuchs et al. 2013, Clapp 2019, Isakson et al. 2023, Wood et al. 2023).”

“…foodways), and most of all, the power of corporate food actors to define food production, distribution, marketing, sales and governance in their favour, also known as the commercial determinants of health (Alkon & Agyeman, 2011; Clapp, 2019; DuPuis & Goodman, 2005; Spagnuolo, 2021).”

“Secured through social forces such as financializa-tion, scale, and centralization, the ‘UPF regime’ influences public perception and policies in their favour, in ways that diminish the quality of people’s diets and, in turn, their health (Clapp 2019, Lacy-Nichols and Freudenberg 2022).”