American agriculture is both romanticized and targeted by stereotypes. When you read the word “farm” or “farmers,” what image comes to mind? “Farmers market poised for big summer with eased restrictions” alerts you to warm and fuzzy good news ahead. “Farmer” makes you think of the industrious woman at the farmers market who smiles as she hands you a bunch of hand-dug fresh carrots.
Or your thoughts might be sent to the dark side, manipulated by the headline “Study: Emissions from farms can be deadly,” referring especially to large-scale industrialized hog operations and unrelated to the majority of U.S. farms. That’s another kind of stereotype, and a headline with an agenda begging for context.
It probably doesn’t bring to mind Bill and Melinda Gates, owners of America’s largest portfolio of private farmland. Their 2018 purchase of 14,500 acres of irrigated cropland in the Horse Heaven Hills known as the 100 Circles was just another asset transfer between multibillion-dollar players with diversified portfolios.
Outside ownership is not a new phenomenon. There’s always been a lot of land up for lease in agriculture, but most people tend to lease to family or neighbors, with some connections going back generations. Typical dryland operations in Eastern Washington may be two-thirds to three-quarters leased land.
Investment and management companies are happy to sell small shares in a farmland holding company to anyone or to manage that piece of land purchased on the advice of your financial planner. In some arrangements, the suitcase farmer (as such investors were once called during the Dust Bowl) collects a cash rent up front while the farmer takes the risks of weather and crop prices. Other arrangements give a return on investment based on a share of the crop profits for the year. And just like Bill Gates, such “farmers” will likely never set foot on the land.
Frank Lyall, of Grandview, Washington, is an orchardist and port district commissioner in Yakima County with a longtime interest in the effect of land ownership patterns in agricultural communities. “Outside investment is a double-edged sword,” said Lyall. “It brings in capital but people who live and work in the community are more likely to be concerned about the health of the community and the people who live there.”
Competition from outside investors seeking to diversify their retirement accounts creates a barrier to entry for new and beginning farmers and ranchers. “It has become very difficult if not impossible to start a small farm and have the capital to make it a successful operation, let alone expand it,” said Lyall.
He pointed to the story of the Broetje Orchards near Prescott, Washington. Ralph and Cheryl Broetje started small in the late 1960s and built the largest contiguous orchard in the world along the Snake River. The farm was recently sold to a Canadian investment firm representing the Ontario Teachers Pension Plan. It’s a path that would be nearly impossible to follow today.
Who owns the land should not just be a concern for rural communities but a matter of national sovereignty and food security. One difference in American law, according to Lyall, is that “foreign nationals can buy a U.S. farm lock, stock and barrel.” While there are American companies farming in China, Chile, Brazil and Mexico, they can’t buy the land or have a majority controlling interest. The only state with a law about foreign ownership is Iowa. Given the importance of our agricultural sector, Lyall wonders, “why not Washington?”
Regulatory and economic pressures on agriculture are pushing out the middle, farmers who do their own work on their own property. “The middle class of American agriculture seems to be in decline, ignored or looked upon as not a valid way forward, and that’s been disastrous for the health and well-being of agricultural communities, ” said Lyall. He sees a significant increase in social dysfunction over the last 30 years in rural areas of Washington state as the number of owner-occupied properties has decreased and larger operations increased. “Society is healthier when there are many in the middle with fewer at either extreme.”
And there’s another kind of pressure when the farmer is no longer the individual who walks the land and is intimately familiar with its idiosyncrasies and opportunities. When an investor has been promised a certain rate of return, trying a new crop or an experimental practice becomes more difficult to navigate. We’re losing the craftsmanship in farming and the freedom to innovate. It’s a complex conversation and one requiring a deep dive behind the stereotypes and the headlines.
Contact Sue Lani Madsen at email@example.com.