Windfall: The Booming Business of Global Warming (20 page)

What little agriculture that existed in South Sudan was mostly small-scale: families with a few cows, tiny plots planted with sorghum and corn. Heilberg imagined the landscape transformed by American-style agribusiness, complete with irrigation and fertilizers and four-hundred-horsepower combines. Other South Sudanese were coming to him with deals, he told me. The king of the Bari ethnic group wanted to sell him some land. A Nuer commissioner in Upper Nile state wanted to sell him some more. We had loose plans to check out the former by jeep, the latter by helicopter—and, Abyei tensions permitting, we hoped to fly over the million acres in Unity by airplane.

Heilberg planned for Jarch to farm the land itself with joint-venture partners, not flip it, and to sell crops here before selling internationally. There was a local market for it: Sudan was in the midst of a long-running famine, neighboring Kenya had an accelerating drought, and aid groups were willing to pay top dollar for food. He hated the aid groups otherwise—they were bloated, he said, and they corrupted the economy by handing out bribes and favors, propping up the Dinkas—but he would gladly sell food to them. This was business. The joint-venture partners could be Israelis, perhaps. “They have experience in Africa,” he said. “They’ve shown an ability to figure out problems.” He liked the idea of bringing in Israelis to farm what some consider Arab land—a way to show his disdain for Bashir. “Do you know what a tefillin is?” he asked. “The box and leather strap you put on during prayers? It’s a reminder of God bringing us out of Egypt or whatever. I always bring mine to Sudan.”

The land Matip had granted him was mostly empty, Phil assured me—mostly unused by local herders and farmers. He hadn’t surveyed it all himself, but he seemed to believe this. A later study by Norwegian People’s Aid of twenty-eight foreign and domestic land schemes under way in ten South Sudanese states would claim that Heilberg’s million acres were among the most densely populated: 24.3 people per square kilometer. His holdings covered 80 percent of a county containing 120,000 people—too many to easily resettle. Sudan scholars pointed to a worrisome precedent: During the height of the civil war in the 1990s, according to Human Rights Watch and other witnesses, Matip’s private militias had brutally cleared civilians from their homes—torching villages, raping women, executing men—to make way for oil drilling.

“There are no white hats here,” Heilberg said. “It’s the Wild West. People get upset when I say you’ve got to go to the guns. Hell, you had to carry a gun back then. You were a cowboy? You would lose all your horses and cows, your women would be raped, and everything you had would be gone. People take their ideals and try to impose them someplace else. That’s colonization to me. I don’t do that. This is what it is. I’m not promoting it or demoting it; I’m just part of the system.”

It was the Dinkas and their Western allies who were writing history, bad-mouthing Matip, Heilberg reminded me. And even they respected power. “This is Africa,” he said. “The whole place is like one big mafia. The general is like a mafia head. That’s the way it works.” Lawlessness had a libertarian upside. “My view is that you want government to be as small as possible,” he said. “I don’t want someone saying, ‘Thank you for your investment, now get out,’” he said. “I want a country that’s weaker. There’s a cost to dealing with strong countries: resource nationalism. People forget that.”

One night, Heilberg had Gabriel take us to meet a key Jarch board member, General Peter Gadet, at an outdoor bar on the banks of the Nile. On the way, we drove down a bumpy dirt road lined with dozens of bombed-out tanks, skeletons exposed by the beams of our headlights, their turrets bent, their tracks missing. South Sudan had new tanks now—including the ones Somali pirates had inadvertently captured in 2009 when they hijacked the Ukrainian cargo ship MV
Faina
. They could help win independence, with or without the referendum.

Gadet, a feared tactician who had rejoined the southern army along with Matip, his fellow Nuer and frequent ally, was then in charge of the south’s air defenses. He sat alone with two bodyguards at a table near the water.

“How long are you in Juba now?” Phil asked him. “And how is your family in Nairobi? And do you have anti-aircraft? You have the anti-aircraft? What about the ones that have the wings that go higher? You have this now? Okay. Good.” Gadet was a devout Christian, Phil had told me. He’d spent nine years in the bush outside Juba before the peace accord, plotting to seize it.

“And the tanks?” Heilberg asked. “Where are the new tanks?”

Gadet pointed across the river toward the bank he’d once prowled during the civil war.

“Right here?” Heilberg exclaimed. He peered into the darkness.

“How are all your bullet wounds?” he continued. Gadet had been shot twenty-eight times during the war. “You don’t need a bulletproof vest. You know who’s on your side.” He pointed to the heavens. “Always missing the vital areas—that’s good. Soon, south will be independent.

“I don’t think any war will last long,” Heilberg said.

“Short war,” Gadet said.

“Short war. I agree.”

“Yeah, the war good for them.”

 • • • 

IN NEW YORK AND LONDON,
I met other investors who, like Heilberg, were stepping away from the paper world. A banker who had told me about Ukrainian farmland-for-vodka deals had me over to his apartment, an airy corner loft in Tribeca, and talked on the condition of anonymity. “Here’s the trick,” he told me. “All these collective farms collapsed once they decollectivized them, because they had no capital—the guys couldn’t afford tractors.” This was why vodka and a few months’ worth of grain went so far. Via a long-haired middleman he nicknamed Jesus, his investment bank, one of Wall Street’s big three, pursued not only thousands of acres of prime farmland but ostrich farms, a chocolate factory, and a Ukrainian pornography channel. The bankers flew through the countryside in a massive, double-rotor Soviet helicopter, landing in fallow fields and peasant villages, and helped introduce a crop of genetically modified, drought-resistant sorghum first developed on an Israeli kibbutz. “You massively raise production and all that,” the banker said, “but it was basically a big rip-off of peasants.” The Ukraine deal had ultimately fallen through—Jesus had demanded bigger and bigger cuts—but climate change was an area of endless growth. When Europe launched its emissions-trading scheme, doling out carbon permits to coal plants and power utilities, the same banker had helped them “massively overrepresent” their emissions, then helped them sell the excess for hundreds of millions of dollars. “I was actually doing the carbon deals,” he said. “All that kind of shit. That was a big scam, too.”

The savviest farmland buyers saw global warming as a double boon. In the short term, it was a push factor, fueling droughts that destroyed entire harvests in China, Australia, and the American Midwest and causing food prices to spike. In the longer term, it was creating a pull: Higher-latitude countries like Ukraine, Russia, Romania, Kazakhstan, and Canada are becoming more productive, not less, as the climate heats up. “You don’t need to be a rocket scientist to suggest that production belts in the Northern Hemisphere are shifting northwards,” said Carl Atkin, the head of agribusiness research at the British real estate behemoth Bidwells, when I met him in London.

One of the many interested firms that called Heilberg after news of his South Sudanese land deal broke, Bidwells had its London offices in a narrow building down a narrow alley off Hanover Square. In a bright fourth-floor conference room, with skylights and hardwood floors, Atkin showed me a world map depicting soil qualities—the USDA’s Inherent Land Quality Assessment—with the richest areas shaded in green. “You’ve got a splotch in North America,” he said. “A splotch in South America. Pockets in the U.K. But the main interest is this black soil going up through Russia and the Ukraine: some of the best soil in the world.” Environmental factors—frigid winters and short growing seasons—had conspired with political factors to keep prices low; a hectare of black earth in Romania was a fifth of the price of a hectare in England. Overlay a climate-change map on the soil map, Atkin said, maybe add population data, and you could make a fortune. He himself had just returned from Ukraine, and Bidwells had been bringing financial clients to Romania for five years, doing what Atkin called parceling—a plot-by-plot approach to big land purchases. “We reaggregate small plots that were reallocated to everybody post-Communism,” he said. “You’re getting loads of villagers in a room with the mayor, and the mayor is saying, ‘All right, who wants to sell their plot, and who doesn’t?’”

As climate change pushed farming to higher latitudes, the money followed. Two of the most visible farmland investors—the British-run Landkom and the Swedish-run Black Earth Farming—had invested hundreds of millions of dollars in agricultural operations in Ukraine and Russia. BlackRock, the world’s largest asset manager, invested $250 million in British farmland, France’s Pergam Finance sunk $70 million into former ranches in Uruguay and Argentina, and Calgary-based Agcapita put $18 million into Canada’s future corn belt. After Saskatchewan land prices jumped 15 percent in 2008—the largest increase on record—Agcapita began raising its next $20 million. But it was One Earth Farms, a sprawling grain and cattle venture on tribal lands in the Prairie Provinces, that would soon be Canada’s biggest farm. With funding approaching $100 million and investors ranging from the former prime minister Paul Martin to the agribusiness giant Viterra, one of Deutsche Bank’s climate-fund picks, it was forming partnerships with more than forty First Nations tribes who controlled more than two million acres across Alberta, Manitoba, and Saskatchewan.

In Brazil, the British-run Agrifirma, partly owned by Lord Jacob Rothschild and headed by Jim Slater—who came to fame writing an investment column for the
Sunday Telegraph
that he signed “The Capitalist”—had spent $20 million to buy or option 170,000 acres and survey another 6 million. The seed money for Agrifirma had come from the Brits’ previous venture, Galahad Gold, which had made 66 percent annual profits by flipping a uranium and molybdenum venture in melting Greenland. Brazilian agriculture would be relatively protected from the ravages of climate, Slater wrote, because the country has “about 15 per cent of the world’s recoverable water supply—90 per cent more than its nearest rival.”

Banks with prominent climate-change funds, including Deutsche Bank and Schroders, also had separate farmland funds, and in 2011 it was revealed that university endowments, including Harvard’s and Vanderbilt’s, were invested in London’s Emergent Asset Management, run by the Goldman and J. P. Morgan alumni Susan Payne and David Murrin. “Climate change means some places in Africa will be drier and others will be wetter,” Murrin told Reuters. “We’ll be looking to take advantage of that.” In his 2011 book
Breaking the Code of History,
Murrin prophesied a global-warming-fueled commodities crisis that would help push a declining West and a rising China into armed conflict. Africa would be the linchpin, and Emergent’s funds, including its African farmland fund and a new climate-change fund focused in part on water projects, were apparently the best way to profit in the meantime. By one rough estimate, Emergent had sunk more than $500 million into agriculture projects everywhere from Mozambique and South Africa to Zambia.

Heilberg was a bit player in comparison, and his holdings in South Sudan were not quite as fertile as those in Ukraine, Argentina, or South Africa: a splotch of blue on Atkin’s global soil map, a shade away from perfect green. But Sudan, already buffered from drought by the Nile, may be one area that gets wetter: While climate models for semiarid Africa are notably inconsistent, under some of them Sudan’s precipitation will rise. Warming could be good in general, Heilberg thought. “Maybe it means we can live in the Arctic,” he told me one morning. “The Nordic countries seem to have a good balance. Maybe we can have Greenland—there’s a lot of land there.” On his laptop, he kept a file on Greenland. It wasn’t about farmland. He knew Greenland was rich in minerals, and he’d heard it had a secession movement of its own.

 • • • 

THREE DAYS PASSED IN JUBA,
and it began to look as if nothing would happen. No new land deals. No overflights or jeep tours. No meetings with Salva Kiir. Heilberg sat for hours in the air-conditioning at the Sahara Resort, smoking cigars and playing Texas hold ’em on his BlackBerry, waiting for word that the president or a minister was ready to see him. He read the book he’d brought along on the trip:
Sailing from Byzantium: How a Lost Empire Shaped the World
.

“Let’s go see Dad,” he exclaimed when Gabriel loped into the hotel one morning. Gabriel told us that the Matip family compound in Unity state had just been attacked by a longtime rival, part of the bubbling tension as the south inched toward independence. A guard had been captured and beaten. The general, already stressed about Abyei, was too angry to see anyone, his blood pressure dangerously high. “He is feeling some pain here,” Gabriel said, pointing to his stomach.

“When things aren’t going well, he internalizes it,” Heilberg said softly. “Everybody’s looking to him for responsibility. I think it eats at him.”

“Okay, so what’s the plan for today?” he asked Gabriel. “Have you found anyone for the agriculture?”

“The minister isn’t available,” said Gabriel. The upcoming Abyei decision was distracting everyone, he apologized.

“Okay, so that’s tomorrow,” Heilberg said, turning the conversation to new land acquisitions. “So we’ll find out about the Bari? What about Upper Nile?”

Soon, there was little more business to discuss. We sat in the lobby and talked about life. Heilberg told us that he’d given up his favorite diet cherry Pepsi—he worried the artificial sweetener would give him Alzheimer’s. He told us about the really hot personal yoga instructor he’d had, a point of domestic tension: “I’m in my living room doing my yoga, and my wife flips out!”