Retired U.S. Military Normal and NATO Supreme Allied Commander Wesley Clark penned a 2011 article about agriculture’s significance to our nationwide safety.
“We should maintain the skinny inexperienced line,” Clark wrote within the Kansas Metropolis Star. “If we can not feed, gasoline, and dress ourselves, then we can not defend ourselves.”
His warning is particularly poignant at present amid world meals provide disruptions and worth spikes brought on by conflict, inflation, and the pandemic. To not point out the truth that the planet’s inhabitants surpassed 8 billion individuals on Nov. 15, in response to the United Nations.
Sadly, the variety of U.S. farms and farmland wanted to supply reasonably priced meals for all these hungry mouths are declining.
Fewer than 220,000 farms — most of which are household operations — now produce 80 p.c of the nation’s agricultural output, in response to the U.S. Division of Agriculture. And America now has simply 1.2 acres of farmable land per particular person, in response to the World Financial institution, which is down from 1.5 acres in 2000 — as a result of farmland is being misplaced to growth, transportation networks, and different makes use of.
So, what could be finished about it? Individuals can’t be anticipated to stop their desk jobs to turn out to be farmers, and as soon as farmland is transformed to a different use, it nearly by no means returns.
However we are able to reap the benefits of agriculture’s distinctive supply-and-demand traits, the place meals demand is rising as farmland is declining, to draw outdoors cash into the trade and assist drive farm productiveness.
As somebody who has spent a lot of his life in agriculture, I believe giving on a regular basis Individuals a chance to put money into farmland and, by extension, put money into agriculture’s success is a giant step in the appropriate path.
When Individuals from coast to coast have a real monetary stake in agriculture’s success, they’re extra more likely to educate themselves in regards to the enterprise and advocate on its behalf. Misconceptions about modern-day agriculture dwindle, the rural-urban divide shrinks, and consensus builds to arm farmers with instruments and authorities insurance policies wanted to drive productiveness and mitigate threat.
That’s why I’ve been stunned to see some individuals advocating in opposition to farmland traders, which comprise a small sliver of the general market.
Such antagonists aren’t merely concentrating on traders from enemy states with nefarious agendas.
They’re speaking about making it more durable for sincere U.S. traders to personal land that’s rented again to farmers — a technique that might drive a wedge between Principal Road and Wall Road and require farmers to shoulder extra debt from lenders to purchase land and scale operations.
At a time when rates of interest are on the rise, shouldn’t we be on the lookout for methods to get extra fairness capital infused into rural America as a substitute of leaving farmers beholden to debt capital? I can’t think about any trade, together with agriculture, that advantages from much less outdoors funding.
Such anti-investor — and albeit anti-farmer — solutions are usually not unprecedented and play into populist tendencies. A handful of states banned company possession of farmland a long time in the past within the identify of serving to farmers, successfully locking funding automobiles and retirement funds out of these markets.
I don’t imagine these legal guidelines have helped farmers, made land cheaper for younger growers, or benefitted retiring farmers or members of the family seeking to promote. And I concern that emulating these legal guidelines in different states or on a nationwide stage can be a mistake.
That’s as a result of these legal guidelines have traditionally harm market transparency and competitors and elevated worth volatility the place enacted — all whereas doing little to curb farms being bought off for housing developments, procuring facilities, and even billionaires seeking to enhance their private landholdings.
It’s additionally created an setting the place farmers are sometimes caught with much less subtle landlords who lack the talent or funds wanted to make significant enhancements within the land.
Traders are incentivized to extend asset values by bettering farm productiveness, which is why our firm typically invests in irrigation, drainage programs, and on-farm grain storage services to assist farmers maximize profitability. And we regularly lease farms again to the identical farmer who bought the land, serving to them keep on the household farm and unlock fairness.
Farmland funding automobiles additionally usually set the worth flooring, not the ceiling, in farmland transactions. That’s as a result of now we have shareholders to reply to, so we’re cautious to not overpay. Farmers, then again, have farming operations to assist cashflow larger bids.
Putting off-limits indicators on America’s farmland and shouldering farmers with extra debt won’t feed a rising inhabitants. If something, agriculture wants extra on a regular basis Individuals investing in its future and changing into financially taken with conserving the skinny inexperienced line from getting thinner.
Paul Pittman is Chairman and CEO of Farmland Companions Inc. (NYSE: FPI), the nation’s largest farmland actual property funding belief (REIT) by acreage. The corporate owns and/or manages roughly 195,000 acres in 19 states.
