Financialisation in South African agriculture: two firm-level case studies

Abstract

The past decade has seen increasing attention given to the process termed ‘financialisation’ within the socio-political and economic literature. Despite the existence of robust macroeconomic literature, there is still a deficiency of firm-level studies on how financialisation takes root, particularly in developing countries. This paper contributes here by examining two agricultural firms within South Africa. South Africa is of particular heuristic value as it has a very advanced financial industry comparatively, and its agricultural industry has undergone very dramatic changes since the adoption of free-market policies in 1994. The study finds that the experience of financialisation remains variegated in South African agriculture. It does not support the view that financialisation is simply the ‘return of the rentier class’, instead illustrating how the changing role of the financial industry has had varied, though not insignificant effects on individual firms. It also confirms microeconomic linkages between liberalization and financialisation (previously identified on a macroeconomic level) as well confirming the importance of banks and ownership structures in facilitating financialisation.