Family farm and financial asset : external land ownership and family agriculture on the Swedish Plains

Abstract: In Sweden, the potential deregulation of the land market has been discussed in recent years, motivated by the increasing demand for external capital in agriculture. Corporate entities’ are currently restricted from purchasing farmland by the Swedish Land Acquisition Act. In this thesis, I have wanted to look at a case of this type of landowner, to investigate what consequences its land ownership has on agrarian structures. This study is as such centered around the case of the Uppsala University Endowment Management (UUEM), an institution which owns around 15.000 hectares of farmland in mid-Sweden as part of its larger financial portfolio. The institution manages this agricultural land with the explicit aim of achieving the highest possible returns on investment. The results of this qualitative study, which is based on semi-structured interviews with twelve informants, indicate that the economic benefits of keeping land for this type of long-term, production-oriented land investor derives from the extraction of land rents, and the capital gains made when land or real estate is decoupled from agricultural production as a consequence of urbanization or the consolidation of farmland. While the profits made from owning agricultural land are relatively modest, owning farmland as an asset is still attractive for the UUEM as it is a way to lower the institution’s total portfolio risk, seeing as the relatively high risks associated with agricultural production are externalized to the farmers leasing its land. Even as the land is leased out, the UUEM was found to be exerting management control over farms, notably through the top-down consolidation of land and (re)configuration of units, the layout and infrastructure of which comes to be designed in a way which favors capital-intensive, large-scale production. The institutional landowner can as such be said to steer agricultural production into a certain matrix, and limit the farm development paths which can reasonably be pursued by farmers on its land. Many interviewed lessees viewed the corporate entity’s land ownership in a positive light, seeing it to be providing tenants with the possibility of keeping up with the increased capital requirements of agriculture in a region where farming is increasingly intensive and large-scale. Rapid land appreciation, land concentration, and the subsequent growing separation between labour and ownership over the means of production was not politicized by these informants, who seemed to view this as more or less a natural process. By contrast, a few lessees questioned the increasing concentration of land, in some cases expressing a preference for a land use and ownership pattern characterized by less large-scale, autonomous family farms. As the capital intensity of agricultural production increase, agrarian structures are impacted, with the family farms in the investigated case seemingly having ceded some power over farm development and reproduction to the landowner. At the same time, farmers maintained considerable freedom when choosing what to produce and how, and there were indications that the increasing financialization of land also opened up new possible avenues of action for large-scale agricultural producers. The proposal to deregulate corporate entities’ land ownership in Sweden has been motivated by the advantages of scale in agriculture. This type of agrarian development however also contributes to a loss of livelihoods and an increased concentration of land, among other things, which is a reason why this deregulation and its effect on land use and ownership patterns deserves to be debated.