Farmland values rising (again)
A neo-feudal freight train is coming straight for us, but news outlets covering farmland value continue to ponder "where will this all lead?"
Farmland Values Hit Record Highs, Pricing Out Farmers in the New York Times lays out the latest version of a timeless tale: farmland has seen a 12.4% increase between 2021 and 2022. The story then pivots to smashed dreams of the land seekers — the smallholders looking to expand, the migrants looking to relocate, and the renters looking to become property owners.
It is grim for these folks. For the renters, their grand American Dream-y plan of getting onto the (farm) property ladder seems like they were being sold snake-oil instead of a core premise of national identity. What’s more, they have the troubling sense that their landlord may raise the rents at any moment, or find someone else who will pay a premium.
The smallholders, who once may have had an advantage in taking on neighboring parcels to expand their operations, now find themselves competing with well-oiled real estate operations, backed by billion dollar pension funds or philanthro-capital titans.
The migrants, fleeing regional price spikes, find that when farmland becomes a line in a spreadsheet in a diversified asset portfolio, the concept of “location, location, location” is meaningless with regards to their purchasing power.
And while it is important to focus on the losers of this durable trend, the key omissions of stories like these is a serious look at the winners. The title of the story I’d like to read is: “Farmland Values Hit Record Highs, Landed Gentry Rejoices.”
A 12.4% yearly increase in value? The more interesting story here is about those celebrating the massive bump in their investments. If I’m a landed farmer breaking even on my enterprise, I just got a lot richer when I eventually sell up. I can use my new leverage to get a new combine or a loan to buy some more land. If I’m an investment banker who pitched a new farmland portfolio to the boss, I just got a big raise. These stories reveal why the trend of appreciating farmland value persists, and what can be done about it.
And while the NYT article asks the predictable questions of what will happen to the sustainability of farming or who will farm if these trends continue, they frequently miss the answer hidden in plain sight.
The future of farming amidst financialization is set in stone
The NYT article is no exception to trying to sound profound by ending the piece on questions of what this all means for for a food system. But smack in the middle of the article, one of the struggling land seekers quoted for the story gives the answer outright.
The quote from permaculture consultant Nathaniel Bankhead was so clear-headed that it prompted me to write this piece. This was my “I’ve spent years writing academic articles about this stuff and he just said it moment”.
“Places that I have looked at as potential farmland are being bought up in cash before I can even go through the process that a working-class person has to do to access land,” he said. “And the ironic thing is, those are my clients, like I get hired by them to do as a hobby what I’m trying to do as a livelihood […]
“They kind of lock that person to this new flavor of serfdom where it’s, you might be decently paid, you’ve got access to it, but it will never be yours.”
To the New York Times and future writers of similar articles: this is where the food system is headed. This is where the new farmers will come from. They will be the increasingly devalued employees of increasingly few farmland owners. The owners will look more and more like legal entities rather than individuals. And for those who rejoice a 12.4% annual increase in asset value, this is a perfectly fine outcome. In fact, the investment (and pension!) funds that buy farmland are counting on this future control over farmland decision making. They are selling the certainty of Nathaniel’s future to their shareholders.
The farmland? It will still be farmland, coughing out commodities propped up by state subsidies. It will produce lots of food that people need. The serfs will do the labor and the sirs will reap the profits. It is a very resilient model. That’s why Bill Gates owns more and more of it.
But it is a very narrow form of resilience. A one trick pony that if the magic is revealed, it breaks. And while one may be theoretically interested in a food system remade after such a rupture, no one wants the consequences of a failed global food regime.
It’s not about farming, it’s about owning a valuable asset
Recently, the Sustainable Market Initiative’s Agribusiness Taskforce made headlines when it set a priority to expand regenerative agriculture to 40% of global cropland by 2030 in order to contribute to meeting climate targets. The taskforce, comprised of food system giants like McDonalds, Bayer, and Waitrose appeared like unlikely champions of the potentially radical changes to food production that some versions of regenerative agriculture may entail.
But when you take the widespread trends in farmland asset appreciation, the “action plan” from SMI makes perfect sense. It has nothing to do with the model of food production. It has everything to do with keeping control over a lucrative asset. If these mega corporations fear the loss of these assets, they will shift their practices. As long as they get to keep the stuff, the land, the seeds, the tractors, the data, and the control, they are happy. Because they really make their money not on selling wheat but on that 12.4% appreciation.
This is why I worry about an overemphasis on food systems sustainability without an equal attention to land justice and redistribution. The current landowners will be happy to deploy a sustainability narrative. And, as I wrote in my piece about the reemergence of land sparing narratives, there are many cheering fans of large scale efficiency gains to shore up corporate food’s legitimacy. So, a world of sustainability without justice inches closer welcomed by thundering applause.
Land, not food
In the article The problem with growing corporate concentration and power in the global food system recently published in Nature Food, Jennifer Clapp describes three problematic and self-reinforcing drivers of concentration in the food system. These can be applied to think about farmland ownership.
The first is that concentration of land ownership strongly shapes (land) market dynamics. Second, concentration drives technology and innovation pathways. Finally, the policy agenda is shaped by the increasing state on concentrated land ownership.
Concentration in land ownership helps to reinforce a land market that benefits consolidated ownership and incentivized speculative auctions. It shapes what we think of when we think of sustainable production and what we do research on and who we do research with to improve food systems. And finally, the political clout of farmland owners is a force to be reckoned with that resists meddling. As the recent Dutch farmer protests illustrated, state intervention that may threaten the property rights of legacy farmland owners provokes strong backlash.
Clapp offers three strategies to contest concentration. She suggests that Stronger and wider competition polices, more public sector support for alternatives, and measures to curb corporate influence in the policy process are needed to reign in the negative effects of concentration in the food system.
If we apply these directly to the problem of (farm)land concentration, Clapp is using the language of governance to describe land reform. A policy-oriented land reform agenda is the only way to disrupt the never ending farmland-is-getting-pricey news articles. Something like Scotland’s proposed public interest test for large scale land transfers could be applied to agricultural land of meaningful social value. The strong aversion to proposals like this in the policy imagination is, of course, born out of the force on concentrated power in the land market. Thus the task ahead is threading the needle of meaningful non-reformist reforms that don’t result in political defeat.
Concerns about food system sustainability are insufficient to address the market power land ownership affords. Current owners of assets in the food system are not concerned with being labeled as unsustainable. The food system is not weakened by loss of newcomers to scale up or enter the sector. Because a rigid system doesn’t bend. It breaks.