The New Land Rush: The Selling Out of America’s Farmers?

Via The PPJ Gazette, a pointed opinion piece detailing the dismay with which some Americans regard the purchase of American farmland by overseas investors:

“The economy continues its slide.  Unemployment remains high, more manufacturing moves overseas with each passing day, the rate of home foreclosures makes the news every hour.  But there is a seemingly bright spot—farm land values have increased 58 percent from their 2000 levels on both a national and global scale.  Because of this, arable land is attracting wealthy investors all over the world.  They hope to profit by either producing crops or leasing the land to farmers.  Mutual funds specializing in the acquisition of agricultural land have been formed to capitalize on the rapidly rising land values, allowing even small investors to reap a share of the rising land values.  In one way, and one way only, this is a good thing.  Beleaguered farmers have ready buyers if they must sell out and may actually realize a profit from the sale of their farms.  But the problems this will cause to society far outweigh any benefits.

Absentee Owners

Agricultural land that is not cared for by people with love and knowledge is doomed to failure.  Investors know nothing about farming—in fact, according to the World Bank, only one-fifth of the land acquired in these deals has seen actual farming.  In many of these deals, the purchased land is being consolidated into giant megafarms.  These farms, because of their economies of scale, will be ruled by the prevailing technologies of the day.  In effect, these tracts will become experimental laboratories for the entire world, with results to the environment unknown.

If the land is leased for production, a new form of tenant farming will appear.  These farmers will not be in a position to demand living wages, nor will they be able to make wise decisions to safeguard  themselves against the use of pesticides or other dangerous materials.  The tenant farmer, at the whim of wealthy, absentee investors, will be working as a virtual slave, easy to replace, with their owners interested only in turning a profit.

The high cost of agricultural land is preventing young people from going into farming.  Idealistic young people who still want to live on and work the land, instead of realizing their dreams of independence, could easily become the tenant farmers of tomorrow.

Asset Bubbles

As prices rise and investors clamor, farmland in the United States could become the next asset bubble. Sheila Blair, chairman of the Federal Deposit Insurance Corporation, said that it was important to monitor farmland values for signs of instabilities.  “A sharp decline in farmland prices similar to the early 1980s could have a severe adverse impact on the nation’s 1,579 farm banks,” Blair stated.  If a bubble forms, then bursts, there will be disastrous consequences for both investors and small communities.  The instability of food supplies caused by this could provide disastrous consequences for society as well.

Losses to the Countryside

When there are no farmers to visit small towns, purchase goods and take part in community affairs, these towns will die, and a time-honored way of life will die with them.  The hollowing out of the countryside will come at a cost to society as a whole as local people lose their ability to enforce environmental of social protections.  This is already being seen in states like Montana, where local ranchers are in constant battle to retain their rights against wealthy and often irresponsible owners of enormous tracts of land.

Partly because of their large population, it is no secret that the Chinese are running out of arable agricultural land.  According to Greyson S. Colson, “China’s farmland has disappeared at an alarming rate and the country may no longer be able to self-produce its food supply. Between 1997 and 2007, roughly 755,000 hectares were lost each year to development, erosion, and desertification. Farmland that is lost to development or erosion is difficult to recover and put back into crop production.”

According to the Financial Times, “Chinese companies will be encouraged to buy farmland abroad, particularly in Africa and South America, to help guarantee food security under a plan being considered by Beijing.”  If the Chinese acquire large tracts of land here in the United States, food grown will be for import.  This will threaten not only our own independence, but will cause distortions in our food supply and put an end to the local food movement as well.

Our farmland is a precious asset.  It’s not a commodity to be traded to the highest bidder, but rather a treasure to be nurtured, protected and preserved.”

This entry was posted on Thursday, October 28th, 2010 at 9:27 pm and is filed under Uncategorized.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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About This Blog And Its Author
Seeds Of A Revolution is committed to defining the disruptive geopolitics of the global Farms Race.  Due to the convergence of a growing world population, increased water scarcity, and a decrease in arable land & nutrient-rich soil, a spike of international investment interest in agricultural is inevitable and apt to bring a heretofore domestic industry into a truly global realm.  Whether this transition involves global land leases or acquisitions, the fundamental need for food & the protectionist feelings this need can give rise to is highly likely to cause such transactions to move quickly into the geopolitical realm.  It is this disruptive change, and the potential for a global farms race, that Seeds Of A Revolution tracks, analyzes, and forecasts.

Educated at Yale University (Bachelor of Arts - History) and Harvard (Master in Public Policy - International Development), Monty Simus has long held a keen interest in natural resource policy and the geopolitical implications of anticipated stresses in the areas of freshwater scarcity, biodiversity reserves & parks, and farm land.  Monty has lived, worked, and traveled in more than forty countries spanning Africa, China, western Europe, the Middle East, South America, and Southeast & Central Asia, and his personal interests comprise economic development, policy, investment, technology, natural resources, and the environment, with a particular focus on globalization’s impact upon these subject areas.  Monty writes about freshwater scarcity issues at and frontier investment markets at