Agricultural Finance: From Crops to Land, Water and Infrastructure

Chapter 1Physical and Financial Agricultural Markets

‘You should buy land, they don't make it anymore.'

Mark Twain

1.1 Agriculture and the Beginning of Human Sedentarization

Commodities have been produced and exchanged throughout history and trade is an integral part of human civilization. In fact, one can argue that the rise of the latter has its origin in organized commodity production and distribution. As nomadic men settled on land to cultivate crops and graze their cattle, an agriculture-based economy came to existence, while some became carpenters, ironsmiths, goldsmiths, and shipbuilders. Goods were provided by the producers of diverse crops and livestock products in exchange for services. Farmers would bring their excess crops to a central location where they were carefully weighed – interestingly, the existence of weights can be traced back to several millennia before our era. The crops were then stored in a public building, which was the first form of a warehouse.

It was the emergence of barter and soon-emerged bazaars and markets that today still defines the centers of towns and villages. Trading merchants and artisans were organized into ‘guilds’ as early as the fourth century CE. From the first century CE, gold coins, wine, wheat, and linen were traveling east from the Roman Empire; ivory, silk, and precious stones were sent from India. As civilizations spread over the world, vessels started carrying goods, spices, and silks across the oceans. Indian literature ...