Preamble

Agriculture has always been at the center of human life. It is today the intersection of challenging issues between growth of the world population, soil erosion, and arable land scarcity on the one hand and trade finance after the 2008 crisis, competition for land with the mining industry, new towns and cities in developing countries, competition for water with other industries such as shale gas fracking or oil sands, or between neighboring countries on the other. Small farmers try to stay competitive in the presence of big investors who can afford better machinery and infrastructure. Governments struggle to find the proper way to provide small farms with the right form of subsidies, be they fertilizers, seeds or minimal prices. International institutions like the World Bank face another type of choice: letting weak economies struggle to feed their population, or helping them and destroying the incentive of self-sufficiency. The same difficult dilemma holds for infrastructure such as water sanitation and distribution.

In this complex picture, commodity trading houses – some of which have existed for more than 160 years – continue to be active in their role of ‘origination’ with local farmers around the world while financial players or ‘speculators’ provide liquidity to producers and agrifood companies needing to hedge their price exposure. In contrast, we have seen over the last decade the arrival (and partial departure) of new players in ‘agricultural finance.’ The ...

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