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A Retirement Built Upon Exploitation

Small farm house in cerrado region, Chapada da Piteira, Brazilian Highlands, Goias, Brazil
Small farm house in cerrado region, Chapada da Piteira, Brazilian Highlands, Goias, Brazil

Above: People I do not want to oppress in order to retire comfortably

Like a lot of academics, I have TIAA-CREF managing my retirement funds. There’s no real decision made there–I may have other options but I don’t spend much time thinking about this. Maybe when I actually pay off my student loans I can think seriously about retirement, a mere theoretical construct since I can’t imagine ever having enough money saved to do so. But still, TIAA-CREF, other than keeping both the Postal Service and American paper industry alive through its endless thick mailings, has a reputation of social responsibility. So you can imagine, as a labor and environmental history and writer on global exploitation, how excited I was to hear that my retirement is being built on stealing land from farmers and cutting down forests.

But documents show that TIAA-CREF’s forays into the Brazilian agricultural frontier may have gone in another direction.

The American financial giant and its Brazilian partners have plowed hundreds of millions of dollars into farmland deals in the cerrado, a huge region on the edge of the Amazon rain forest where wooded savannas are being razed to make way for agricultural expansion, fueling environmental concerns.

In a labyrinthine endeavor, the American financial group and its partners amassed vast new holdings of farmland despite a move by Brazil’s government in 2010 to effectively ban such large-scale deals by foreigners.

While the measure thwarted the ambitions of other foreign investors, TIAA-CREF pressed ahead in a part of Brazil rife with land conflicts, exposing the company and its partners to claims that they acquired farms from a shadowy land speculator accused of employing gunmen to snatch land from poor farmers by force.

The documents offer a glimpse into how one of America’s largest financial groups took part in what some in the developing world condemn as land grabs. Responding in 2010 to surging international interest in the country’s land, Brazil’s attorney general significantly limited foreigners from carrying out large-scale farmland acquisitions.

Investors sometimes view such deals as a way to diversify their portfolios. But some government officials and activists contend that they uproot poor farmers, transfer the control of vital food-producing resources to a global elite and destroy farming traditions in exchange for industrial-scale plantations producing food for export.

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

Some of the findings are in a new report by researchers from Brazil’s Social Network for Justice and Human Rights, and Grain, an organization based in Spain that tracks global land purchases.

TIAA-CREF’s disclosures show that its farmland holdings in Brazil climbed to 633,391 acres at the start of 2015, up from 257,877 acres in 2012, around the time when it began ramping up deals through a venture formed with Cosan, a Brazilian sugar and biofuels giant.

Grain’s report tracks how TIAA-CREF and Cosan appear to have acquired several farms controlled by Euclides de Carli, a shadowy business figure described by Brazilian legislators, scholars and uprooted farmers as one of the most powerful “grileiros,” or land grabbers, in the states of Maranhão and Piauí.

Grileiros, a term that roughly translates as “cricketeers,” are known for their bureaucratic sleight-of-hand, fabricating land titles by placing them in insect-filled bins to make them seem antique. Some grileiros also force people off their land in a variety of ways, including intimidating land-rights activists and even killing poor farmers.

In Mr. de Carli’s case, Brazilian scholars have described how he pushed dozens of families off their farms, using tactics like destroying crops and burning down the home of a community leader. A prominent legislator in Maranhão has also accused Mr. de Carli of orchestrating the killing of a rural laborer over a land dispute.

This is pretty disturbing. I confess I’m not entirely sure what to do here. But certainly I think we should figure out ways to pressure TIAA-CREF to have more transparency to its members on where the money is going. I know I don’t want my retirement built on oppression.

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  • NobodySpecial

    I know I don’t want my retirement built on oppression.

    Well, the only way you’re gonna get that is to bury it in a place where the worms don’t go. Between the child and general labor exploitation underpinning modern capitalism, the inevitable damage done with future resource wars, and the way rich governments seem to have no problem fucking over poor countries to elevate the standard of living, there is no such thing as a oppression-free investment. You might as well wish for a moon base powered by unicorn rainbow farts.

    • Perhaps. But just giving up hope is also counterproductive. One can make choices based upon lesser degrees of exploitation at the very least.

      • Brett

        If you could get a group of academics at a couple of universities to start publicly organizing and speaking out about this, it might actually get them to back off and pull their investments in this. They’d probably care a lot more about universities pulling their retirement funds versus whatever returns they’re getting from major land thieves in Brazil.

        Maybe a petition for signatures? It could get the ball rolling.

  • Lee Rudolph

    TIAA-CREF had definitely turned to the bad side (or further to the bad side, perhaps) by 2006, in more than one way.

  • Chuchundra

    According to the report, the lands were acquired by TIAA-CREF Global Agriculture LLC (TCGA). As long as you don’t allocate any of your retirement money to that fund, you’re probably OK as far as this particular concern.

    I don’t see a real reason to stray from a vanilla index fund for retirement purposed. TIAA-CREF also has a social choice fund which probably takes some of your other concerns into account

    The fund’s investments are subject to certain environmental, social and governance criteria. The evaluation process favors companies that are strong stewards of the environment; devoted to serving local communities; committed to higher labor standards; dedicated to producing high-quality and safe products; and those managed in an exemplary or ethical manner.

    You should be able to allocate your retirement money to this fund going forward.

    • Well, that means I actually have to spend time on this sort of thing, which is distasteful to me. It might be what I can personally do though. I will note that my retirement funds being in the same company as the one stealing land from farmers but just in a different set of funds is not exactly effective activism, even if you believe in individual consumerism as activism.

      • Chuchundra

        A few things here.

        First of all this is your money and it behooves you to think about it at least a little bit so as not to be unpleasantly surprised when it comes time for you to retire. There are people at my institution whose job it is to help me with this stuff. I’m sure there are similar people at yours.

        And it’s not like this stuff is very difficult. There’s a nice web interface where you can log in and allocate your money. Ten minutes and you’re done.

        I would argue that consumerism is activism. Buying the least harmful product does make a difference. TIAA-CREF is like a store, some products are better than others. Do you feel bad for shopping at your local grocery because they carry some products that you find questionable?

        And lastly, if this was something that really concerned you, you could do something about it. You and I are shareholders. You can organize other shareholders and get a proposal put on the agenda to drop this fund. Then get even more shareholders to vote their proxies and pass the proposal.

        • Yes, yes, I should think about these things, etc., etc. But I probably won’t in so far as taking the time to deal with it. I just assume I will never be able to retire or that the position of history professor won’t be around in 30 years.

          On the consumer activism thing–it can be effective though it’s far more effective when it is actively connected to a movement on the grassroots, which would not be the case in this sense. I don’t think buying power means very much unless there are alternatives and I don’t think I have an alternative to TIAA-CREF.

          What I am going to do about it is bring it up to my union and see if we can work together on this.

  • Hogan

    TIAA started out as a Carnegie Foundation for the Advancement of Teaching program. Maybe they’re just getting back to their roots.

  • Troll

    Troll comment deleted

  • Pat

    Maybe when I actually pay off my student loans I can think seriously about retirement, a mere theoretical construct since I can’t imagine ever having enough money saved to do so.

    Not planning on having any kids?

  • BiloSagdiyev

    Two horses? Luggshury!

  • patrick II

    Socially responsible investing grows up

    The intangible rewards of being a do-gooder are a priority for SRI-oriented managers, but returns are equally so. Recent research has found that investing in companies with solid ratings in environmental, social and governance areas actually can be as good as or better for your bottom line than conventional investing.

  • Anna in PDX

    Well this is a bummer and a good wake-up call. Like Erik, I like having indexed funds and not thinking too hard about where my retirement and other savings are invested. I have a 529 college savings account for my two grandkids with TIAA-CREF that I just left up to their indexing magic, now I’ll have to get all involved over how it is invested. *sigh* I am both lazy and not investment savvy.

    I am already involved in trying to make sure my Voya (used to be ING) retirement account is invested ethically, but I didn’t even think about the 529 accounts.

  • Joseph Slater

    Sometimes I’m tempted to start up some sort of Old Folks Actually Might, No Really, Sometimes Have Useful Stuff to Say to Young Progressives thing. Then I realize nobody would pay any attention. With that said. . . .

    Even if you’re not planning on having any kids, eventually you will get old enough to retire and you will want money for a basically middle-class retirement. I know that seems impossibly far away, and maybe embarrassingly bourgeois. But barring some unlikely calamity, it will happen. And what they say about it being better to start thinking about that when you are younger is really true. The good news is that you have a job with actual retirement benefits. If you really think you’re not going to be a history prof in 30 years, that’s even *more* reason to deal with retirement issues while you still have such benefits.

    If there is any silver lining to the the general transfer from defined benefit plans to defined contribution plans (I assume you have the latter), it may be that people like you have have strong feelings about certain types of investments can actually make some choices about their investments. Yes, you will always be dealing with capitalist enterprises, but there is no way to avoid that (stashing money under a mattress doesn’t earn interest, and you need to earn interest).

    One thing I love about the blog is its consistent, emphatic message that the perfect is the enemy of the good. Some funds/companies/investments are better on various issues than others. You can set up an appointment with a TIAA-CREF rep that will take an hour or less and you can direct your funds into areas that have less bad environmental impact. You won’t save the world doing this, but if enough people do, it could have an impact at the margins.

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