Investing for profit, investing for impact: Moral performances in agricultural investment projects

Abstract

The recent global boom in agricultural investment has spurred much normative critique of “land grabbing,” but amidst this critical scrutiny investor morality has remained a black box. This article examines the role of ethical narratives in advancing the financialization of nature by comparing how agricultural investment projects are pitched and implemented among two different groups of investors: mainstream agricultural investors and impact investors. We analyze the different discursive strategies used by these distinct financial communities to position themselves as ethical investor-subjects while also showing that, within both groups, some form of moral performance is necessary to maintaining legitimacy and profitability. Mainstream agricultural investors, we argue, perform morality primarily through economic and agricultural productivity, while explicit claims of socially or environmentally responsible investing serve mostly to mitigate reputational risk and preempt the value destruction of potential bad publicity. For impact investors, on the other hand, moral storytelling is essential to value generation. Their solicitation of capital involves persuading potential investors of both the value of their individual projects and the ethical framework guiding the entire sector. Finally, we present two case studies—a large-scale farmland acquisition in Mozambique and an impact investment farming project in Ghana—which demonstrate how moral performances can falter when put into practice. These case studies shed light on the co-creation of economic and moral value in markets by demonstrating how—beyond formal evaluative metrics—the everyday moral narratives of investors play a pivotal role in expanding the financial penetration of nature.

Introduction to symposium ‘Reimagining land: materiality, affect and the uneven trajectories of land transformation’

“…For example, scholars have started to unpack the intersections between farming and finance-initially often portrayed as the 'big bad wolf' hungry for farmland (Ouma 2014, p. 163)-and have argued that turning land into a financial asset class is not a smooth pathway but requires active work on land's 'investability' and is pursued by a host of actors with different interests, motivations and underlying moralities (e.g. Li 2018; Williams 2014; Ouma 2016; Kish and Fairbairn 2018;Sippel 2018). Similarly, scholars have critically investigated the role of China as another supposed 'key driver' of the land rush and have argued that Chinese investments are not as dominant and different from 'Northern' investments as is often suggested, as well as neither necessarily state-led or food security driven (Bräutigam and Zhang 2013; Oliveira 2018; Böhme 2020b).…”

Reflecting on neoliberal natures: An exchange

“…Kay (this issue) shows that de/re-regulatory moves and an interest in real assets have led financial investors to acquire land as a more flexible and adaptable asset, able to produce value through a range of commodities or through asset appreciation depending on prevailing conditions, both environmental and economic. Driven by recognition that climate change will put significant downward pressure on agricultural yields, the upheaval in commodity prices alongside the global financial crisis, and cliché observations about land like, ‘they’re not making any more of it’, ‘ag space’ is a significantly more mainstream investment class than it was a decade ago (Kish and Fairbairn, 2017). While monetary flows are notoriously difficult to track down in agricultural investment (Ouma et al., 2018), farmland acquisition funds raised around US$500 million in 2009, then grew to US$3.9 billion in 2015 (Meyer, 2016).…”

Development impact bonds to overcome investors-services providers agency problems: Insights from a case study analysis

“…Several scholars have adopted the case study methodology to examine the impact of investments in developed and developing countries. Among others, Kish and Fairbairn (2017), when they explored how the moral performance of investors affects impact projects in Africa, Verrinder et al 2018, when they investigated three African interventions by adopting the Theory of Change (ToC) framework, Bhatt and Ahmad (2017), when they researched how India's venture capitalists adopted re-conceptualized venture financing for the Indian social context. Agrawal (2018) also used a comparative case study to describe how impact investors work in India.…”