A recent article in Yahoo! finance highlights the enormous investment Bill Gates and other billionaires are making in farmland. Gates alone reportedly owns 270,000 acres. Experts speculate this motivation is driven by returns and highlighted by the six-fold increases from 1940 to 2015, according to Mother Jones. The trend is likely to continue as the amount of farmable land continues to shrink due to climate change and current farm practices.
At Organic Farm Partners, we are driven by these same risk and reward factors, but our investments do something more – they drive improvements to the land and the soil, and to farming operations – focusing on building rather than destroying the value of its soil.
If investors are more focused on collecting rents, they are perpetuating ruinous farming practices while simultaneously driving up farm prices which keeps the next generation of young farmers from buying land.
Our model is built to incentivize investors to move to organic farm practices by letting them participate in the transition from conventional to organic. In other words, they get to purchase at conventional farmland pricing and sell at organic farmland pricing; while during the conversion they also participate in an annual dividend based on lease income.
As investors ourselves, we love high returns and need safe havens to round out our portfolios, but we are also committed to protecting the long-term viability of American farming.
