From Claire Kelloway <[email protected]>
Subject The Financier Farmland Rush is Bad for Racial Equity and the Environment
Date July 8, 2021 8:33 PM
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The Financier Farmland Rush is Bad for Racial Equity and the Environment

Food & Power presents the first article in a three-part series examining the influence of farmland investing on equity and the future of food. This series is written by Humon Heidarian [[link removed]], a food policy professional with a focus on racial equity and a master’s degree in public administration from the University of Vermont.

Banks [[link removed]], retirement funds [[link removed]], retail investors [[link removed]], boutique asset managers [[link removed]], and even some nonprofits [[link removed]] and universities [[link removed]] are doubling down on farmland investments. Bill Gates bought his first farm [[link removed]] in 2013 and now owns nearly 270,000 acres across 18 states [[link removed]], making him the largest private owner [[link removed]] of U.S. farmland. Leading pension fund TIAA went from owning no agricultural land in 2007 to controlling $8 billion of global farmland [[link removed]] by 2017. Even the University of Alabama has partnered with a private firm to become an absentee owner of farmland.

This buying spree is making it challenging for younger people to own farmland unless they inherit it, pushing many young farmers to rent. This particularly excludes Black, Indigenous, and other farmers of color, who are less likely to inherit land due to historic land loss [[link removed]] and less likely to receive loans [[link removed]] for renting or buying land, compared to their white counterparts. These investments have also been deeply harmful to rural communities and the environment.

“[This trend results] in the loss of land access and sovereignty,” says Holly Rippon-Butler, land campaign director for the National Young Farmers Coalition. “Stewards of the land [are] becoming further separated from that line of work, and there is the potential of knowledge and community resources being lost.”

Financiers have taken a particular interest in buying farmland since the 2008 recession because it is a tangible asset that steadily appreciates over time. Farm real estate prices doubled between 2000 and 2010 to $2,140 an acre [[link removed]], according to the U.S. Department of Agriculture, and have remained high. In 2020, U.S. farmland values averaged $3,160 per acre. Over the past two decades, agricultural investments have done better than the S&P 500. [[link removed]]

Farmland also produces steady income [[link removed]], unlike other tangible assets such as gold, in the form of rents from farmers who work the land, livestock, and crop sales. Altogether, in 2014 the National Council of Real Estate Investment Fiduciaries found that farmland returned an average of 12.5% a year and timberland returned 8.3% [[link removed]] over a 20-year span.

Corporate investment in U.S. farmland is happening on an international scale. In 2009, about 5% of California’s total farmland was owned by [[link removed]] foreign investors. A review [[link removed]] by the Midwest Center for Investigative Reporting found that the amount of agricultural land held by foreign investors doubled from 13.7 million acres to 27.3 million acres between 2004 and 2014. In 2016 [[link removed]], foreign investors acquired at least 1.6 million acres of U.S. agricultural land. That is an area roughly the size of Tennessee and Delaware combined.

American investors are also buying up millions of hectares [[link removed]] of farmland in Africa, Central America, and Eastern Europe. Dr. Stephen J. Kobrin, a professor at the Wharton School, argues that foreign investment in farmland is a new form of colonialism [[link removed]], as large areas of land are controlled by firms that do not live on the land but hire many locals and receive rent from them.

Although corporate investment is increasing, nonfarming landlords are not new. Corporations and trusts (which include some non-investor entities) controlled just 10% of U.S. farmland in 2014 [[link removed]] and, moreover, a small handful of nonfarming landlords have controlled and rented out roughly 30% of all U.S. farmland since at least the 1990s [[link removed]], likely longer. Historically [[link removed]] these landlords have been retired farmers or nonfarmers who inherited farmland. But as these landlords and farmers alike begin to pass on their land, investors stand to grab a growing portion of farmland and hold onto it for the foreseeable future. In the next 10 years, as more farmers reach retirement age, about 400 million acres [[link removed]] will enter the market.

Investors do not always manage farmland with environmental stewardship in mind. Most want to maximize their returns quickly. As a result, they prioritize harmful chemical fertilizers and pesticides, and major tilling, while investments in soil health, biodiversity, or erosion control [[link removed]] take a back seat. On an international scale, investors could alter global food production patterns [[link removed]] by emphasizing profitability over nutrition.

In the 19th century, U.S. policy led to the distribution of vast land grants to railroad corporations [[link removed]] and to white homesteaders [[link removed]] — and the displacement and exclusion of Indigenous people and people of color. Trends toward farmland financialization move us farther away from righting these wrongs and moving to a more equitable farm economy. The next story in this series will dive deeper into how corporate investing harms Black and Indigenous farmers, specifically.

Find and share this story originally published on [[link removed]] Food & Power [[link removed]] . [[link removed]]


At a White House briefing Tuesday, press secretary Jen Psaki said that a forthcoming executive order [[link removed]] will direct the USDA to issue new rules to better protect poultry and livestock farmers under the Packers and Stockyards Act (PSA). The order will also urge USDA to reform “Product of USA” labeling standards and order the Federal Trade Commission (FTC) to increase farmers’ right to repair their equipment [[link removed]], among several directives to revive antitrust enforcement across the economy.

This order echoes actions taken in recent weeks by the USDA and FTC. On June 11, the USDA announced [[link removed]] intentions to issue new PSA rules that will regulate tournament payment systems in poultry, strengthen and clarify definitions of unfair and deceptive practices by meatpackers, and ensure that farmers do not need to prove harm to industrywide competition in order to pursue a PSA violation. Last Thursday, the FTC finalized a rule [[link removed]] that will crack down on “Made in the USA” labeling fraud by requiring all marketers to prove that “all or virtually all” of their product was indeed made in the United States. Shortly thereafter, the USDA congratulated [[link removed]] the FTC on this rule and announced its own “top-to-bottom review” of “Product of USA” labels. Farmer groups praised the move [[link removed]] as a critical step to close loopholes allowing foreign-raised meat packaged in USDA facilities to carry “Product of USA” labels.

What We're Reading

Smithfield Foods agreed to pay $83 million [[link removed]] to settle pork price-fixing allegations. (Reuters)

As record-breaking heat sickens and kills [[link removed]] farmworkers in the Pacific Northwest and increases wildfire risks, the Washington Farm Bureau is lobbying against [[link removed]] a bill that would protect workers from wildfire smoke. (The Counter)

Shortly before he became agriculture secretary, Sonny Perdue bought a grain plant from commodities giant Archer-Daniels-Midland [[link removed]] for a fraction of its estimated value. Last week, Senate Agriculture Committee Chairwoman Debbie Stabenow called on [[link removed]] the Office of Government Ethics to review the deal. (The Washington Post/Press Release)

About the Open Markets Institute

The Open Markets Institute promotes political, industrial, economic, and environmental resilience. We do so by documenting and clarifying the dangers of extreme consolidation, and by fostering discussions of ways to reestablish America’s political economy on a more stable and fair foundation.

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Written by Humon Heidarian

Edited by Claire Kelloway, Phil Longman, and LaRonda Peterson.

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