The stock market and the steppe: The challenges faced by stock-market financed, Nordic farming ventures in Russia and Ukraine

Situated in the global discussion on large-scale land acquisitions, this paper examines the poor performance of Nordic owned, publicly traded, very large-scale farms (agroholdings) in Russia and Ukraine. In depth study of concrete examples of this emerging farm organization is still rare. This paper investigates the impact of the financialization of agriculture on the performance, agricultural and otherwise, of such farm companies, which is also an emerging field of inquiry. In other words, this paper seeks to go beyond discussion of “land-grabbing” and return to an older question concerning large-scale farming in developing country settings: is it even successful? In unique, exploratory research, the authors have gone “inside” these companies through interviews and attending shareholder meetings. Also, the authors have examined the discourse found in press accounts and corporate documents, the latter an underutilized source in research on corporate mega-farms. We find that finance, usually asserted as an advantage for such large-scale farms, proved in important respects to be incompatible with farming in the investigated companies, as it led to the initial prioritization of short-term speculative strategies over longer-term production-oriented strategies. We further find that investors initially failed to appreciate the unique climatic and other local challenges presented by agriculture, compared to other economic endeavors. Finally we note that these corporations are struggling to demonstrate economies of scale. Our results suggest that, unless conditions change, stock market financed large-scale farming companies are unlikely to play an important role in future direct food production in the region.