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US Pension Fund TIAA-CREF Involved In Brazil Land Grabs

U.S. educator pension fund TIAA-CREF has promulgated a reputation of upholding socially responsible values, and even goes as far as highlighting its role in drafting UN principles of transparency, environmental sustainability and respect for land rights in farmland purchases.

However, it turns out that the U.S. pension fund titan and its partners may have done some naughty things in a country which lately seems rifle with corruption. TIAA-CREFF is alleged to have bought hundreds of millions of dollars of farmland in the cerrado, the area on the edge of the Amazon rain forest where wooded plains are being converted to agriculture. The scale and the rapidity of the transition to farmland in the cerrado has led to an outcry from environmentalists.

According to a November 16th report from the New York Times, TIAA-CREF and its local partners somehow bought massive tracts of farmland despite laws passed in 2010 to ban such large-scale land deals by foreign businesses.

TIAA-CREF
Via S&P CapIQ

More on TIAA-CREF buying up Brazilian farmland

Regulatory filings from TIAA-CREF show that farmland in Brazil grew to 633,391 acres at the start of 2015, up from a mere 257,877 acres three years prior.  That was around the time the pension fund it began making farmland deals through a venture with Cosan, a well-known Brazilian sugar and biofuels firm.

TIAA-CREF spokesperson Stewart Lewack would not discuss the fund’s farmland acquisitions on the record. He did facilitate discussions with executives at Cosan, which is controlled by Rubens Ometto, a Brazilian billionaire whose family has been in the sugar industry for four generations.

“Cosan has a 70-year history managing farmland in Brazil and is committed to high standards of responsible investing through the entities it controls,” a spokesperson for Cosan commented in a statement.

Given the 2010 laws limiting foreign investment in land in Brazil, TIAA-CREF and its partners created a new financial venture to purchase farmland. The pension fund has a 49% stake, with Cosan owning the other 51%.

Financial industry analysts point out that major funds often make land deals in order to diversify their portfolios. Many government officials and local activists argue that these “land grabs” uproot poor farmers, and transfer the control of important food-producing land to foreign corporations. They say these land grabs destroy  long-standing national farming traditions to create industrial-scale plantations that produce food for export and profits for the global elite

“I had heard of foreign funds trying to get around Brazilian legislation, but something on this scale is astonishing,” commented Gerson Teixeira, the president of the Brazilian Association for Agrarian Reform and an adviser to members of Congress, after he reviewed documents concerning TIAA-CREF’s recent farmland acquisitions in Brazil.