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The super-rich and cropland expansion via direct investments in agriculture

Nature Sustainability volume 3, pages 312–318 (2020)Cite this article

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Abstract

Cropland expansion represents an important cause of tropical deforestation, contributing to the loss of ecosystems’ functions. Flex-crops (for example, oil palm, soy and sugar cane) account for an increasing share of cropland and contribute considerably to carbon emissions and biodiversity loss. Various forms of inequality have been shown to affect agricultural expansion, yet the effect of wealth concentration among the super-rich is understudied. Here I show how, over the period 1991–2014, the large amount of wealth in the hands of high-net-worth individuals (HNWI) stimulated foreign direct investments in agriculture in Latin America and Southeast Asia. This, in turn, drove the expansion of flex-crops areas. The combination of these two effects implies that a 1% increase in the wealth of HNWI generated an expansion of the flex-crops area share of up to 2.4–10%. The results point to the urgency of addressing wealth inequality to protect the remaining forests.

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Fig. 1: Elasticity of FDIA with respect to amount of wealth in the hands of HNWIs.
Fig. 2: Elasticity of PFLEX with respect to the inflow of FDIA and to the re-investment of domestic agricultural capital surplus (PAVA).

Data availability

All the data were sourced from public databases. The datasets used in the analysis, alongside the Stata code, have been deposited on a publicly accessible repository and are freely available (https://doi.org/10.5061/dryad.xsj3tx9bc).

Code availability

The Stata code for the econometric analysis and the data used are freely accessible (https://doi.org/10.5061/dryad.xsj3tx9bc).

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Acknowledgements

The author acknowledges the core funding provided by the European Research Council under the European Union’s Horizon 2020 research and innovation programme (grant no. INCLUDE 681518).

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  1. Centre for Development and Environment, University of Bern, Bern, Switzerland

    M. Graziano Ceddia

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Correspondence to M. Graziano Ceddia.

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Supplementary results, Tables 1–25 and Figs. 1–5.

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Ceddia, M.G. The super-rich and cropland expansion via direct investments in agriculture. Nat Sustain 3, 312–318 (2020). https://doi.org/10.1038/s41893-020-0480-2

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