Behind the farm succession crisis stands rising asset prices from real estate to retirement funds, which have remade the global economy over the past 50 years.
Behind the farm succession crisis stands rising asset prices from real estate to retirement funds, which have remade the global economy over the past 50 years.
December 15, 2021
We’re in the middle of what people in the agriculture world call a farm succession crisis. Farmers are retiring and passing away, and younger farmers aren’t replacing them. Farmland is getting paved over, and farm businesses continue to consolidate their ownership. The average age of farm owners continues to rise, and so does the price of farmland. There are some farms and farmers who are doing pretty well in this environment.
These are, for the most part, “conventional” farms—large estates that supply the global commodity market, intensifying their production with chemical fertilizers and concentrated animal feedlots. Meanwhile, the kinds of farms many of us pin our dreams on—sustainable, local, worker-owned, owned by people of color, and small to medium scale—are all struggling to continue. Every year, well-funded NGOs, private philanthropists, and the U.S. Department of Agriculture (USDA) spend millions trying to remedy this problem by training new farmers, offering them grants and loans, and connecting them to land purchase or rental opportunities. These institutions have made my own farm possible.
I’m a 29-year-old, first-generation farmer, and I am trying to make a living growing vegetables on one acre of rented land. Everything, from my education to my land lease, has come from nonprofits tasked with solving the farm succession crisis. As a product of this system, I have bad news: It’s not enough. Farmland will likely continue to go fallow or get bought up by developers and large farms looking to grow larger. It’s a structural problem that can’t be solved one farm at a time; it requires structural solutions.
This is not to say that programs working to support new farmers aren’t necessary. But they’ve been tasked with solving massive, world-economy-sized problems without the right kind or amount of resources. As a result, beginning farmers across the country find themselves at a thousand different dead ends—unable to live without working three jobs, expand our markets, buy land, hire consistently, or pay off our student loans.
Success stories are real, but skew toward the low-hanging fruit of whiter, wealthier, and better-inherited farmers. Yet policies promoting “market access” haven’t overcome the inequalities baked into the market. This isn’t a story about individual nonprofits failing their missions. Rather, it’s a story about land, housing, labor, and retirement, and how the pursuit of rising asset prices has remade the global economy over the past 50 years.
For young farmers, the story goes like this:
Our elders are retiring and rely on either a land sale or family willing to take over the farm to secure their comfort in retirement. Where I live in Washington State, a medium-sized farm, including housing, typically sells for $500,000 to $1 million. Like most homeowners, these farmers have often spent their whole careers investing in their land, in the hope that its value increases over time. If family, an apprentice, or a management company is able to keep the farm’s assets running profitably, a farmer can retire on the farm. Otherwise, they’ll need to sell it at market rate in order to afford a condo, medical care, and hopefully pass on an inheritance.
But few millennials have the income or inherited wealth to afford a market-rate farm, and millennial farmers even less so. We’re also saddled with increasing debt-to-income ratios, largely from student debt, and our cost of living has increased steadily over our lifetimes. A few can purchase farms by exiting high-income professions or by using inheritances; the rest of us rent small plots of land, making it a challenge to earn any real money. Food prices, crop subsidies, and tax policy are all geared toward wealthy farmers earning on-paper losses, leveraging their agricultural wealth into nearly passive income and avoiding taxes.
“Few Millennials can afford a market-rate farm; some can purchase farms by exiting high-income professions or by using inheritances; the rest of us rent small plots of land, making it a challenge to earn any real money.”
The commodity market—by far the largest portion of the food system—is built for this kind of farmer. The rest of us rely on small, crowded markets—luxury restaurants, community supported agriculture (CSAs), and farmers’ markets. It takes large plots and more stable land to make a higher income, and a higher income to secure more land. It’s hard to imagine, let alone plan, a family, a retirement, or a career when you’re caught in this catch-22.
What retirement portfolios, housing, and farms all share is their status as assets, as tradeable storehouses of future value. Asset prices everywhere have been increasing, and this is by design. U.S. policymakers since at least the 1940s are increasingly tied to policies that promote the growth and interests of real estate and finance, and that means keeping asset prices rising. Scholars like Keeyanga Yamahtta Taylor and Samuel Stein have charted this development in the U.S. since World War II. They tell a story of our post-industrial asset economy, remade through the politics of homeownership, from Nixon’s Fair Housing to George W. Bush’s “ownership society.”
Against programs like public housing, these administrations put forward the “market-based solutions” of their day, using government to subsidize certain real estate markets. These policies served insurance and finance as well, and the combined “FIRE” sector has dominated U.S. politics since the 1970s. We’re living in their world. Interest rates are low, the state aggressively controls inflation, and policies like quantitative easing prop up asset markets without growing the real economy. Ordinary people are promised middle class comfort only through inclusion into debt and asset ownership, whether it’s housing, retirement accounts, student loans, or pyramid schemes.
This asset economy was, from its very beginning, a contradictory project. On one hand, the expansion of home ownership relied on structures that Yamahtta Taylor has termed predatory inclusion. In her example, African American homeowners who had long been subject to segregation were convinced to take on mortgages by banks now backed by Department of Housing and Urban Development cash. Through practices like subprime lending, African American borrowers were nearly guaranteed their eventual foreclosure and displacement. Banks and policy makers built an “inclusive” but racially discriminatory housing market, using racialized disinvestment to sustain investment in white suburbs.
While home ownership promised affluence, that affluence required that some neighborhoods fall apart, and some people grow more desperate. On another hand, the pool of rising middle-class homeowners was guaranteed to dwindle. As sociologist Lisa Adkins writes: “Measures that bring property ownership in reach for some (e.g., lower interest rates) simultaneously work to push prices up further and to put them out of reach for aspiring homeowners.” Each new round of inclusion into homeownership has pushed the price of housing higher, locking out future homeowners.
These contradictions are just as much a part of agriculture. Ag land prices in many regions have been soaring, accompanied by the last 40 years of nonstop farm consolidation. As land prices have gone up a farm land grab, driven by wealthy investors, has kicked into high gear since the 2008 financial crisis. Pension funds like TIAA, cannabis industry speculators, and aspiring demiurge Bill Gates have all gotten in on agricultural land markets, with profoundly negative consequences for smallholder farmers and Indigenous communities around the planet.
These investors are well-equipped to evade accountability through tax avoidance and regulator shopping, and as absentee owners they tend to be cavalier about deforestation, land theft, and environmental degradation happening on their watch. Housing development threatens farmland no less, as lucrative McMansion and subdivision complexes sprawl out into increasingly remote rural areas.
For ag land and housing speculators to buy low and sell high, some rural communities need to fall apart, keeping land fallow and cheap. Then after each real estate bubble bursts—whether it’s based on house flipping, hemp farming, vacation rentals, or anything else—land prices stay high, beyond more people’s reach. The policies that include some people into ownership paradoxically exclude far more.
What would a new structure look like? To start, it would mean setting aside “market access,” “opportunity,” and “market inclusion” as ways of solving social problems. These concepts have meant that we measure progress in dollar terms, equating a few people’s growing nest eggs with the security of all. Instead, our policy could be structured toward results, and toward increased democratic control of the economy. This would mean a USDA whose goals aren’t increasing the dollar wealth of farmers but guaranteeing good livelihoods for owner-operators and farm workers.
Farm policy could concern itself with health and nutrition outcomes for our communities. We could find ways to increase the decision-making power of farm worker unions, grassroots community organizations, and local electorates. We could see prosperity in material terms—full bellies and stable housing—rather than growing asset portfolios. This means a structure of democratic market regulation, not market access. It’s a radical vision, but it points us in the direction many of us seek to travel. The market-based approaches that built the asset economy won’t bring racial equity or workers’ rights, let alone meet visionary calls for reparations and land back. Structural change of any kind requires a changed economy.
Acknowledging the need for change can’t be where the conversation ends. What kind of interventions can make a new structure?
“Carbon trading, water futures, crop securities, and similar asset classes give control of crucial natural resources to the richest people on earth, while encouraging asset bubbles.”
For starters, we need to stop the creep of financialization and securitization into agriculture. Investors are not only transforming farmland into a financial asset; carbon credit trading, water futures, crop securities, and a whole host of similar asset classes have become more important in the last 20 years. These sites of trading don’t just “encourage investment” in agriculture, let alone solve climate change (as carbon credit traders claim). They place control of crucial natural resources firmly in the hands of the richest people on earth, while encouraging asset bubbles.
Carbon credit trading is an excellent example; leaving carbon capture to high finance has resulted in programs without oversight, without accounting for negative impacts, and without decreasing the CO2 in the atmosphere. The finance industry’s playbook—avoiding regulation, privatizing everything, and earning the highest return on investment they can—has proven to be great for making money and awful for anything else. As the role of finance increases in ag, the possibility for democratic oversight decreases.
Diminishing the role of finance touches on every challenge young farmers face. We need healthcare, we need retirement plans, and we need childcare. Universal programs, like Medicare for All, would get us what we need while keeping the profit motive—and profiteers—out. Likewise, we can push for far heavier taxing and regulation of the finance industry. This allows public investment in the kinds of innovation small-scale farms need—local supply chains, renewable energy, and agroecological practices—rather than investor-driven “innovations” that fuel market concentration, like lab meat, energy intensive “smart agriculture,” and genetic patenting.
We’re in a moment when the balance of power between the government and the financial industry is unclear and being rewritten. Sustainable farmers and our advocates can join the chorus against financial capital and make a stand for land, care, the environment, and more being taken off the market for good.
However, the financial industry doesn’t stand on its own. Problems driven by finance are just as much a result of global trade policy. As it stands, trade policies are built to benefit the people highest up in the value chain—the FIRE sector, biotechnology companies, and transnational agribusinesses and food processors like Cargill. Food producers and local processors are at a disadvantage relative to these giant corporations—and food producers in developing countries are at a particular disadvantage.
People often hear about trade balances between countries, as a balance of imports vs. exports. There’s another kind between raw commodity suppliers and buyers, and between buyers and sellers of labor, that describes how much market value goes to either side. This balance of trade needs to change, giving workers and primary producers a greater share of every dollar spent. Subsidies and state-backed crop insurance are built to benefit large, monocrop farms that supply cheap commodities to the global food chain.
Replacing these supports with parity pricing and other price controls would decisively benefit smaller producers and local economies. Parity sets a floor for commodity prices, using regulation and government support to get farmers fair prices that reflect their expenses. Because our food system is already global, these protections need to extend far outside the U.S.
Agricultural commodity dumping and predatory investment in soy, cattle, and palm oil plantations undermine smallholders everywhere and drive down prices for everyone. We can reverse this damage by ending pro-dumping policy, aggressively regulating the impact of foreign investments, and by reinvesting in green, sustainable development abroad, as proposed climate debt solutions require.
Perhaps most importantly, we need policy that cuts right to the heart of our problems. Land, processing infrastructure, and purchasing power need to be bought outright and given directly to the people who need them. There are thousands of tribal governments, community-based organizations, worker-owned cooperatives, and tenant farmers in this country that need land, and state and federal government have the resources to redistribute it. A government that can spend $31.5 billion in ad-hoc disaster payments can spend a few billion on buying farms, protecting them from future sale, and transferring the title.
“Land, processing infrastructure, and purchasing power need to given directly to the people who need them—tribal governments, community-based organizations, worker-owned cooperatives, and tenant farmers.”
The principle at work can be that simple: If we want young people owning sustainable farms, give them the land. Likewise, if we want local processors to bring good jobs and healthier food to our communities, build the infrastructure without waiting for private investment. And if we want everyone to afford local, healthy food, invest in SNAP and forward contracts with public health and emergency food agencies.
There won’t be one weird trick to fix the farm succession crisis. But there are allies everywhere if we can accept the scale of our challenges and explore bold solutions. There are a lot of farmers like me, young and locked out, fed up with bootstrapping, and still eager for good work. We’re not struggling alone; we’re tied to movements that stretch far beyond the small world of sustainable agriculture—whether it’s for urban housing justice or for the return of Indigenous land and sovereignty.
By naming our problem as structural, and global, we can better reach these potential allies. We can contest, even rewrite, the structure of our economy from the grassroots. If we don’t want the farms of the future to belong entirely to the ultrarich, we need to.
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