Farmland rush

When I was a teen, back in the 1990s, which were a pretty lean time around here, my dad used to say “Stay close to the land. If you’ve got land, you’ll never go hungry.” While an academic by career, Dad was born and raised in the country, so he knew what he was talking about (and he grew the best tomatoes ever). Me, not so much. I mean, urban life’s what most teens want, right? Where’s the glamour in a patch of land, where’s the excitement?

Little did I, or anyone else at the time, know that it may actually come to that — growing your own food because there’s no one else to grow it. Now, this prospect is not as distant and fantastical as it may have seemed back in the 90s. Now, the people with the money are buying farmland like there’s no tomorrow — because there might not be.

This from Reuters, last November: “Investment funds have become voracious buyers of U.S. farmland, amassing over a million acres as they seek a hedge against inflation and aim to benefit from the growing global demand for food.”

This from the FT, just this month: “Investors are pouring record amounts of money into US farmland as they snap up an asset expected to outperform as the world’s population grows sharply while natural resources become scarcer.”

Demand for farmland is not rising in the U.S. only, it seems. In the EU, the price per hectare averaged over 10,500 euro back in 2022. On the other hand, the price of leasing a hectare of land averaged 233 euro. In Bulgaria, the price of arable land last year jumped by an estimated 10% from a year earlier.

Climate activists insist that climate change is ruining the planet, including through shrinking the availability of arable land. While this is quite arguable — and I only put it like this because I feel extra polite today — there is one indisputable fact about land. It is finite. And the world’s population is growing.

That’s the reason given in a number of recent analyses on the rush by investment companies to buy as much farmland as they possibly can. Land, the reasoning goes, is the safest investment there is. Whatever else happens, people need to eat and food comes from the land — and we’ll be needing a lot more food down the road. The best inflation hedge, some call it, better than gold.

From the standpoint of an observer of increasingly deranged energy and agricultural policies, however, I believe investment in farmland will probably at some point become literally vital — because of those policies that may well do more considerable harm to farmland availability than real and hypothetical adverse weather patterns resulting from the changing climate. Land may indeed become the new gold.