Agriculture Reference
In-Depth Information
in the name of debt repayment (via export revenues and rural development), and in
the service of local patronage networks. Recent plans are for Brazil to replace 10 per
cent of the world's fossil fuels by 2025 with sugar ethanol; Malaysia and Indonesia
are expanding oil palm plantations to supply 20 per cent of EU bio-diesel needs; In-
dia plans 14 million hectares of land for jatropha plantations, and Africa 400 million
(Holt-Giménez, 2007a; Vidal, 2007, p3).
Suh a biofuels complex deepens exploitation of Southern resources (land, water,
labour combined with industrial fertilizers and pesticides) to supplement fuel con-
sumption by high-energy consumers with heaper forms of ethanol and biodiesel,
and without reducing the total amount of emissions. In the name of rural develop-
ment - and foreign-debt repayment - indebted states embrace biofuel (and food) in-
vestments, facilitating a 'global land-grab' that compromises previous land reform
commitments made, for example, at the 2006 International Conference on Agrarian
Reform and Rural Development (de Shuter, 2010).
The agrofuels project is symptomatic of the phenomenon of financialization,
3
whereby investors prefer to hold capital in liquid (rather than illiquid/asset) forms.
Arrighi (1994) has argued that 'financialization' signals declining hegemony, as a
lead state's productive capacity loses its competitive edge in international political-
economy, and its industrial capitalists swith investment from ixed capital into in-
ancial hannels. his liquidity preference has encouraged securitization (consolidat-
ing and selling debt), mergers (including firm acquisition by private equity compan-
ies that unbundle unprofitable units for financial gain) and general financial specu-
lation.
4
Financialization has been associated with a global decline in productivity outside
of the information and communications tehnology sectors, as inancial gains have
been more atractive - particularly during an era in whih production has relocated
to Southern regions whih provide heap land and labour through subcontracting
systems. Meanwhile, for a time, Northern consumption of suh ofshore products
was sustained by the banking revolution, involving profligate mortgage lending and
rising consumer debt. By the twenty-first century, however, the decline in industrial
productivity, combined with the collapse of the financial derivatives market, resul-
ted in an accumulation crisis. One notable consequence has been the decisive shift of
investment capital into speculative ventures in land, food and biofuels. For example,
between 2004-07, venture capital investment in biofuels increased by 800 per cent
(Holt-Giménez, 2007, p10).
