Interim Results from current agricultural season of the Swedish Agroholdings in Russia and Ukraine

Originally, I wanted to blog about how the current crisis in Ukraine is affecting or not affecting the "Swedish" investments in Ukrainian and Russian agriculture -- such as Black Earth Farming, etc... However their recently posted half year results (see below) do not give an indication of much of anything, and that points to a completely different problematique, i.e. the special problems agricultural firms face in reporting results, which itself can be said to be part of a larger problem concerning the degree to which corporations can optimally conduct farming compared to family (or peasant) owned and operated farms.

The diagram below shows the relationship between net profit/loss as published in the half year results of  four "Swedish" firms between 2006 and 2013 and the final annual result for net profit (Note that data for the entire period 2006 to 2013 was not available for all the firms, for example for Grain Alliance (GA), there was only data for 2013). The x-axis is net half year profit/loss in kr, and the y-axis is net annual profit/loss. BEF posts their results in dollars, while Trigon posts their results in Euro, so I have used the average annual exchange rate from dollar or euro to Swedish kronor, which are published by the Swedish Central Bank. Arrayed on the x-axis in blue are the half-year net profit/loss results for 2014 in kr (annual results for the year have not yet of course been published). Note that Agrokultura has posted an interim net profit of 47.7 million kr, for 2014, which however becomes a net loss of 48 million kr when taking into account the sharp decline in value of the Ukrainian Hryvnia. I have chosen to use the latter figure in this diagram. In any case, as shown in the diagram there is only a loose correlation between half year net profit/loss results and annual profit/loss results (r2 = 0.0305).   

Generally speaking, interim results are a good indicator for annual results, at least according to an article published in 1972 by Reilly, Morgensen and West in the Journal of Accounting. OK, that's a rather old article, but this is just a blog. (It would be interesting to see how agricultural firms compare to non-agricultural firms in terms of the relationship between interim and annual results, and how vertically integrated food processors compare with “pure play” companies such as the Swedish agricultural companies in the former Soviet Union) Obviously firms in sectors that experience a lot of seasonality will see more fluctuation in interim results in relation to annual results, and agriculture is definitely a sector with a lot of seasonality. The problem here however is not the seasonality per se, but the way in which international accounting principles stipulate that crops growing in the field should be valued for the purposes of financial reporting.  IAS 41 Agriculture, which are the international accounting principles that all the Swedish listed firms use, state that, after enough “biological transformation,” the crops should be valued according to “fair value,” less cost of sales, and, importantly, that the fair value of the crops should appear in the income statement as revenue. That is how we can talk about these firms being profitable before they have sold any of the harvest. The problem is that fair value depends on yield and prices, both of which are constantly moving targets. The basis for “fair value” for the first half of the year is generally taken to be the yield estimate and prices on 30 June, but even this close to the harvest of winter wheat, when one should have a good idea of what the harvest will be and what price it will fetch, small adjustments in either can have a big impact on the bottom line. A second factor affecting quarterly results is how slow or fast companies sell their harvest. Generally the largest part of the harvest is sold in Q4 of the year of that harvest, the second largest part of the harvest is sold already in Q3 of the same year and then the third largest part is sold in Q1 of the next year. But depending on storage capacity and what they think future prices will be, companies can keep crops in storage hoping that the prices will be better in the future or they can sell them relatively fast, believing that prices will only go down in the future. The first scenario will make a farming company’s bottom line look worse for the calendar year in which the harvest was gathered, but better during the next calendar year. At times, companies can still be selling crops into the second quarter of the following year. Finally, it has to be mentioned that late summer crops (corn, sunflower, soy) have an increasingly large impact on the annual result -- something that would not be visible in the 1H / 2Q reports because not enough biological transformation has happened to make a fair value assessment. 

To go back out to the big picture, firms listed on the stock exchange are obligated to publish interim and annual results (though auditing requirements are stricter for annual results). For agricultural firms, this in turn requires that the firms account for the value of crops growing in the field. Internationally accepted accounting principles state that crops growing in the field should first be valued at cost, but then, after enough biological transformation has occurred, they should be valued at fair value, and posted in the income statement as revenue, despite it being unrealized. This can be and often is the  largest item on the revenue side in interim results. (For more on IAS 41 Agriculture and how fair value is arrived at, see Fischer and Marsh 2013) The firms have not come up with this by themselves, and if anything, we – coauthors and I – have heard a fair amount of criticism about the fair value exercise coming from representatives of these firms in ongoing research we are conducting. Black Earth Farming's 2Q 2014 results are interesting in this regard. In what can only be described as a good faith effort to really arrive at a fair value, they explain in some detail how they are changing their fair value accounting. One of the main points to make about this is this is not something that a family farmer would have to go through. 

Is there another way to tell half way through the year, if it will be a good year? The answer is not really -- because it is too early to  make an assessment of the late summer crops. One can say at this point that, however, just as the spring was favorable in terms of weather in Ukraine and Russia, the fall is shaping up to be hot and dry, so the yield of summer crops will be negatively affected, even as prices, at least according to this article, continue to fall. 

Third quarter results are a better indicator of the final annual result, since as assessment of the summer crop outcome is possible. The diagram below is the same as above, but for 9 month results as reported in the 3Q reports. Note that Agrokultura does not publish 3Q reports, and Trigon did not publish 3Q figures in 2007, so there are a few missing data points. Even here though there is a lot of variation where 9M net result is -60 million kr or more (i.e. from -60 million kr towards 0): at this level of net loss 9 months into the calendar year, annual results have varied from -150 million kr to +50 million kr. So, there are some question marks here as well (and not enough data points).

So we'll have to wait until November, when companies post 3Q results, before we can get a somewhat better sense of how 2014 will be for these companies. This year, probably the biggest impact will be how currency exchange rates affect the bottom line. If I read Agrokultura’s 2Q report correctly, they would have been profitable if the Ukrainian Hryvnia had not lost 50% of value. For the next crop year however, these firms will face tighter credit and more expensive input prices (since many inputs are imported).

Publication in Swedish on Fieldwork in Human Geography

Following our discussion at the Dept. of Human Geography about the characteristics and challenges of extended residential fieldwork outside Sweden, our paper was recently published in Geografiska Notiser. It is titled "Praktiska, metodologiska och emotionella utmaningar i fält – mot ärligare diskurser om fältarbete inom kulturgeografi" and you can find it here.

In the paper we give a brief background about how fieldwork is discussed within the discipline and we then move on to present the results of a short survey carried out within our department. The three elements that emerge are:

- fieldwork is on average 6 months long. This aspect indicates that there is a certain praxis within human geography regarding fieldwork, even though it is not clearly spelled out (as in the case of anthropology that assumes/expects PhD fieldwork to be 1 yr long on average);

- fieldwork has been challenging for PhD candidates at our department. Power relations, security and ethical issues have been brought up in the survey and some quotes are detailed in the article;

-  fieldwork doesn´t end in the field. Issues and difficulties are rarely discussed when back at the department, but they are nevertheless reflected in the uncertainty some of us experience when it comes to coding and analyzing data;

As the title indicates, our work aims at initiating a discussion about fieldwork within Human Geography departments in Sweden in order to recognize strenghts, limitations and possible improvements that can made to facilitate the work of PhD candidates.

Call for Abstracts: Feminist participatory methodologies: Creating spaces of inclusion or exclusion?

We are looking for possible contributors to a special issue on the topic detailed below. We have had preliminary contacts with the editors of The Professional Geographer and Qualitative Research, who expressed their initial interest on the topic and have asked us for an overview of potential papers to be included in the special issue. If you are interested in contributing please send your 200-300 words abstract to us martina@humangeo.su.se and  Yvonne Riano: riano@giub.unibe.ch by Monday 22^nd September. 

Feminist epistemology aims to subvert the power-loaded research relationships by engaging in a process of knowledge co-production between researcher and participants (Maynard 1994). This point is also addressed by post-colonial critics, who raise the question of how researchers represent the studied "other", and with what consequences (Tuhiwai Smith 1999). Despite an intense theoretical discussion on these issues, the literature on how to operationalize the former principles is quite limited. Arora – Johnson states (2014; 11): “feminist participatory research that has sought to collaborate with local communities has brought about meeting spaces that have shown to make a difference and have given rise to new questions” However, we ask: how do we carry out a socially responsible research that aims at "investigating with the participants rather than about theresearch subjects" (Riaño 2012)? What forms of inclusionary spaces can be created to co-produce knowledge with the research participants? These are the crucial challenges for contemporary feminist scholars and post-colonial critics that we would like to address in our special issue.
Participation and dialogue have become buzzwords and they have come to mean many different things (Chilvers, 2009). Dialogue, in social science, is conceived as communication among participants that sparks the process of collaborative process of knowledge co- production. Communication is not intended as a one way street from the researcher to the research subject. It is rather the main trigger of a process of co-determination where an array of contingent and experiential types of knowledge is discussed in order to create an inclusive space which reflects all subjectivities involved. This process has the potential to empower both the individual and the group and can lead to a more balanced relation between power and knowledge (Phillips et al. 2013).

Whereas a corner stone of feminist critical thinking is that knowledge is not objective, scientific validity is still an ideal which we strive forward. To be able to reach this goal we must be clear about the unspoken procedures that we as researchers put in place to create participation (Baxter & Eyles 1997). How do we ensure transactional validity through participation (Cho & Trent 2006)? Scientists turn into facilitators (Chilver 2009), but continue to enact power in an attempt to prompt collaboration among participants. However, often participation remains an ideal: scientists in fact hold power over knowledge production in the writing process and participants are not acknowledged as co- authors. Moreover, a space aimed at mutual learning and co-determination can be encompassed by conflicting interests and can set off tensions. The “co” part of co-production, co-determination, and collaboration can constitute a space of frictions and strains (Kristiansen and Bloch-Poulsen 2013). Research partners and gatekeepers are however, not "powerless" as they control access to the field and are able to negotiate the conditions of their participation (Riaño 2012). How do we as scientists, facilitators and participants enact counter – power? How do we resolve these challenges through collaboration? And most importantly, in which ways and in which levels do we perform disruptive change in our research milieu?

In this spirit, we invite conceptual and empirically grounded papers on new emerging approaches, tools and methods intended to build dialogue, communicative interaction, trust, mutual learning, and co-determination, giving “an accurate reflection of reality (or at least, participants ‘construction of reality)” (Cho and Trent 2006: 322) while at the same time facilitating a less hierarchical relationship between the researcher, the gatekeepers, and the research participants (Riaño 2012).

New publication on researcher, assistant and participant subjectivities

Situated knowledge in cross-cultural, cross-language research: a collaborative reflexive analysis of researcher, assistant and participant subjectivity 

Martina Angela Caretta 

This article analyzes situated knowledge through the lens of the author and her three field assistants. This work is written self-reflexively and is based on geographical fieldwork in Eastern Africa. It seeks to capitalize on the personal and professional relationships of the researcher and her field assistants to improve both research outcomes and working arrangements. Reflecting on episodes of failure, anxiety and misunderstanding, it disentangles the power geometry of situated knowledge and sheds light on the vital role played by the assistant/interpreter and by his/her positionality ‘in the making’ of cross-cultural, cross-language research. Grounded in a feminist epistemological perspective, this article shows that methodological reflexivity should engage not only the researcher or the participants but also the field assistants. This praxis is crucial to enhancing the validity of studies conducted in a cross-cultural, cross-language environment across social science.

Read the full article here doi:10.1177/1468794114543404

Frosty and cold winter .. . .

July 11th  at 0730. A frosty morning the Witwatersrand University research station at Komati Gorge.

For a Swede it does not really make sense to leave for 25 degrees South and 1600 m above sea level in the middle of July, when summer finally has come to the northern hemisphere. But the attraction, in spite of cold mornnings and cold lecture halls, is the combination of a meeting in Komati Gorge and surrounding Bokoni area with the network "African Farming: an interdisciplinary pan-African perspective on farming" and the long row of papers presented on the "Farmers" session of the combined meeting in Johannesburg of The 14th Congress of Pan African Archaeological Association for Prehistory and Related Studies & The 22nd Biennial Meeting of the Society of Africanist Archaeologists. Four papers and two poster presentations report on work in the interdisciplinary Bokoni research programme, where one component has been the cooperation (2010 to 2012) between South African archaeologists and Swedish geographers under Swedish-Research Links programme.  New to me this time were the commendable efforts to make Bokoni sites accessible for the general public and to cooperate with local communities in this. This webpage is an example of this. It provides a good overview of the fascinating history of the Bokoni people and their system of intensive and terraced agriculture.

Hydropatriarchies and landesque capital.

2014 is the Food and Agriculture Organization of the United Nations’ year of family farming.Moreover, the African Union designated 2014 the year of agriculture and food security. Family farming, and hence food security, in Africa would not be possible without the contribution of women, who make up for circa 50% of small holder farmers. The majority of agricultural production in Africa is in fact in the hands of smallholders. Nevertheless, women´s role in agricultural production is still somehow not at the forefront of the debate on food security, as it should be. Continue here...

This is the blog post I wrote on the RGS-IBG journals blog Geography Directions to advertise my recent publication on The Geographical Journal titled 

Hydropatriarchies and landesque capital: a local gender contract analysis of two smallholder irrigation systems in East Africa

Here is the abstract: 

Water is a natural resource whose control for productive purposes is often in the hands of men. Societies grounded on such unequal gender relations have been defined ‘hydropatriarchies’. Against this background, this paper presents a gender analysis of landscape investments, conceptualised as landesque capital in smallholder irrigation farming in East Africa. Based on the analysis of how local gender contracts are negotiated, I argue that as processes of landesque capital formation are often explicitly gendered, attentiveness to gender dynamics is required to fully understand such practices. Moreover, as investments in landesque capital, for example, irrigation, terracing and drainage systems, have primarily been conceptualised as the result of men's systematic work, this study highlights women's contributions to the creation of landesque capital, taking smallholder irrigation as an example. Findings show that a distinction between ‘incremental’ and ‘systematic’ change (Doolittle 1984; Annals of the Association of American Geographers 74 124–37) is central to understanding the gender dynamics of landesque capital investment, but it is not sufficient. As women's work processes are typically not systematic, possibly promoting incremental change, they contribute to the production of landesque capital by supporting and facilitating men's work. However, the work of women is, as a rule, homogenised and stereotypically rendered as reproductive and secondary, due to the underlying cultural norms that limit, control or exploit women. This conceptualisation, or rather lack of, I argue, risks leading to a gender-blind analysis of land use intensification processes. Building on the gendered and symbolic nature of landesque capital, I propose a local gender contract analysis that integrates the cultural, symbolic and physical dimensions of the local gender division of labour into agricultural work and landscape change processes.

Read the full article here

Reading suggestions for the summer

The summer is approaching and (hopefully) you will have enough time available to read some popular/fictional literature. Here comes my suggestion! 

I just finished reading the memoir One day I will write about this place by Binyavanga Wainaina a Kenyan writer who is a contributor to several international magazine as the Guardian and has been recently nominated by the TIME as one of the 100 most influential people in 2014. With both parents from Uganda in his memoir Wainaina writes about growing up in Nakuru and recalls the political development of his country - and to some extent of South Africa where he attended university - from the Moi regime until the 2010 elections. I found it a fascinating and illuminating piece of work reflecting both on personal and national struggles. It gives an insider look on Kenyan societal issues in the last 30 years, but it also contains great descriptions of landscapes: personal favorites the bus trips he took to Pokot and Uganda. 

Now, going back to the more academic focus of this blog and adding to the reading suggestions: check out the blog post I recently got published in the London School of Economics and Political Science "Field research lab" blog about member checking!