Since the global food crisis of 2008, there has been a massive wave of private sector investment in agriculture. More money flowing into agriculture means more innovation and modernisation, more jobs and more food for a hungry planet, say the G8, the World Bank and corporate investors themselves.

But does it?

Looking at the investments made by Indian billionaire Chinnakannan Sivasankaran – one of the most active private sector players in the global rush to acquire farmland – a worrying picture emerges of what happens when speculative finance starts flowing into food production.

Since 2008, the Siva Group and its myriad subsidiaries have acquired stakes in around a million hectares of land in the Americas, Africa and Asia, primarily for oil palm plantations. On paper, he's now one of the world's largest farmland holders.

A new wave of investment threatens to push peasant farmers off the land and erode food sovereignty. But Sivasankaran's also a land grabber and tax avoider. Like the majority of transnational investors in agriculture, his investments are channeled through a web of shell companies based in offshore tax havens. The companies he holds shares in are engaged in dubious land deals and kick back schemes, and seem more concerned with funnelling generous payments into the pockets of their directors than with producing food.

The alarming side effect of this type of investment is the commodification of land and the marginalisation of communities that rely on it. Wherever the Siva Group and its like go, they secure title to vast parcels of land by any means necessary – often without the meaningful consent of the affected communities. They then leverage these landholdings for cash and credit to turn still more deals.

Governments have so far done little, if anything to protect their people from this new wave of predatory investment. Their efforts have focussed more on providing investors with safeguards and incentives, while proposing only voluntary guidelines to keep corporate responsibility in check. The door is thus wide open for financial players like Sivasankaran to grab lands and make quick profits, undermining food systems and the livelihoods of farmers in the process.

PLAYING THE COMMODITIES SUPERCYCLE

Sivasankaran made his fortune, estimated at US$4 billion, from mobile phone networks, broadband internet services, and sales of discounted PCs in India. But these days he's more concerned with commodities.

He believes in a commodities supercycle, in which population and economic growth will drive increasing demand for natural resources and agricultural commodities, pushing up global prices. And he thinks Africa will be the main source of raw and processed materials to feed this growing demand. So that's where he's pouring most of his money – buying up shipping lines, oil and gas reserves, mines and plantations.1 [2]

When it comes to agriculture, Sivasankaran's bought up olive farms in Argentina's Catamarca Province and started contract gherkin production in India, but his main focus is palm oil.2 [3] As the world's cheapest vegetable oil, it is always in high demand to produce such things as processed foods, cosmetics and biofuels. Demand is particularly strong in Sivasankaran's home country, India, which, in a mere decade and a half, has gone from being a marginal consumer to the world's largest palm oil market.3 [4]

Sivasankaran began investing in oil palm plantations shortly after the food price crisis of 2007-8. He started by buying shares in several Indian vegetable oil processing companies, like Ruchi Soya and KS Oils, that were making forays into oil palm plantations. Then he set up his own oil palm company and got decidedly more involved.