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🚜Generational Transition of Farmland: The Elephant in the Room
Note: This is my final article for The Regeneration Weekly. I’d like to thank Lew and Ed for the opportunities they’ve given me at Soilworks. I’m proud to have been a part of their noble effort to scale regenerative animal proteins and look forward to seeing what they continue to build. If you’d like to keep in touch, you can find me on LinkedIn.
Moving forward, Meg Chatham will take over as the writer of The Regeneration Weekly and as a venture associate at Soilworks. I’ll eagerly await her piece every week in my inbox.
Looking back on my writings over the past year about U.S. agriculture, I’ve spent substantial time meditating on three key questions:
How can we make land stewardship more compelling than it already is in terms of quality of life, economic opportunity, and community?
How can we maximize a positive environmental impact on the land using novel technologies and known approaches while producing nutrient-dense and ethical foods?
What does an equitable, and thus more resilient, rural America look like?
I’ve written about everything from how carbon credits materially impact the livelihoods of ranchers and their families to how regenerative ag should address farmworker welfare to the potential of agritourism and the role of easements and other legal structures in promoting land stewardship. However, one big looming question remains to be addressed: who will own farmland and what should and will happen at this moment of rural land transition? As Civil Eats put it in an important 2020 piece, nearly 400 million acres will change hands this decade. A Farm Journal survey of farmers found that 80% hope to transfer their operation to the next generation, but only 20% are confident in their succession plan to achieve said goal. It will change hands either across familial generations or in selling to investment funds, high net worth individuals, and strategic corporate investors. Situations include the development to satisfy creeping urbanization, the breaking up of a large familial property into numerous smaller ones, and meeting other competing interests.
Many of said investors are touting regenerative agriculture as their modus operandi, yet it also perhaps presents a compelling enough vision for a generation raised in farmland to return and steward generational lands. One of the most compelling narratives I’ve seen on this topic comes from a documentary series by the National Grazing Lands Coalition focused on ranchers.
Like other younger land stewards (and let’s remember the average age of a farmer in the U.S. is 57.5 years old, though the average age of a starting farmer is 46 years old), Ellis’s vision of rural America is one of defending against external interests to regenerate the biodiversity, natural capital, and inherent beauty of her land for future generations. This is mirrored by the trend we’re seeing of regenerative farmland as an emerging asset class with consistent streams of income and a strong uncorrelated hedge against inflation and the fall of traditional asset classes. Various startups and investment trusts are giving retail and/or institutional investors access to organic farmland ownership, including FarmTogether, Iroquois Valley Farmland REIT, and Farmland LP. These are quite thoughtful companies that emphasize values like soil health and rural communities. However, the key question I’m thinking about here is: how can we empower a generation of land stewards like Ellis?
Building the infrastructure for the next generation of American farmers and farmland owners will require a system-wide approach from both the public and private sectors. In particular, flexible, mission-driven capital structures from the private sector and technical and legal support in the transition from the public sector can lead to a just and fruitful transition. I’m quite hopeful of the work that lending platforms like Steward (which I profiled here) can do to bring capital to specific ranch and farm issues at a large scale, along with investment funds like Biome Capital Partners, who are explicitly focused on the tension of familial transition of farmland and invests in the farm manager, the infrastructure, and the land itself.
Additionally, organizations like the American Farmland Trust and Agrarian Trust are lucidly banging the drum on this issue, particularly with regard to equity and the entry of new, younger farmers. It’s an established fact that aspiring farmers and farmland owners struggle to access affordable farmland, even if they intend to be productive stewards of the land for their life. As of right now, 98% of farmland owners are white, though over 60% of farmworkers are people of color. However, 40% of all Asian and 36% of all Hispanic producers are new and beginning, though only a quarter of white farmers are new and beginning. When we take into consideration the historical exclusion of African American and Native American producers through decades of political discrimination and informal legal structures like heirs’ property that have cost producers of color nearly 80% of land once owned by them since 1910, it becomes apparent that this generational transition is a moment for true reconciliation.
The AFT recently received a USDA grant for a Beginning Farmer and Rancher Development Program which provides grants to organizations for education, mentoring, and technical assistance initiatives for beginning farmers or ranchers. Agrarian Trust, on the other hand, supports land access for new farmers and ranchers by basically pooling capital into a trust and removing it from the open market.
These are great initiatives that will make a dent in the generational shift to come. Steward and Agrarian Trust are banking on crowdfunding, which could prove sustainable over time given the collective interest in the space. However, systematic change is required. As long as a system of agricultural overproduction buoyed by perverse subsidies persists, the generational land transition question will not be solved. Though regenerative agriculture is more profitable in the long run, it requires running through a maze of certifications, new infrastructure investments, processing partnerships, and go-to-market strategies. Public policy needs to be aligned across the whole value chain to make this process easier - and more profitable - and create pathways to land ownership and stewardship for regenerative farmers. Oftentimes, extension agents are cited as the best resource for folks grappling with land transitions. The government would do well to follow their ethos and do away with a “get big or get out” mentality. If they do, we could have over 300 million equitably owned and regeneratively operated acres in the United States in the coming decade.
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