ABSTRACT
In 2008, the US housing bubble burst, setting off a severe national recession whose effects reverberated throughout the global economy. However, not all real estate markets are created equal. While the residential real estate market was stagnating, US farmland markets began to boom. Meanwhile, developing countries throughout Latin America, Southeast Asia, Eastern Europe, and Africa became the target of a rash of large-scale land acquisitions by foreign investors. This “global land grab” (GRAIN, 2008) is taking place on several fronts. The price of basic grains rose throughout 2007 and spiked sharply in 2008, leading several grain producing countries to institute export restrictions and generating fears about food security among food importing countries. Governments in some of these countries, including Saudi Arabia, China, and South Korea, began acquiring land abroad, bypassing markets to ensure a direct link to future food supplies. Meanwhile, the concurrent financial crisis revealed the fragility of financial assets, like the now notorious mortgage-backed security, leading to a search for more concrete investment opportunities. This demand for real assets, combined with continued high grain prices, stimulated an unprecedented interest in farmland among private investors.
