You know who's driving up farm land prices? Corporations and foreign investors:
In November 2012, UBS AgriVest, a unit of the Swiss banking giant UBS, paid $67.5 million, or nearly $7,000 per acre, for about 9,800 acres in southwest Wisconsin. The UBS division was behind similar land grabs in the Mississippi Delta, the Mountain West, and Georgia. Elsewhere, in Michigan, a publicly traded investment firm called the Gladstone Land Corp. is buying up parcels of land used to grow blueberries and other row crops. Gladstone is then finding corporate farmers to rent and cultivate the land.
“We’re tuning up and beginning to buy as much farmland as we can right now,” CEO David Gladstone told MiBiz.com. “There are a lot of farmers out there just leasing their farms (who) have children with no orientation for the business. They’re getting older and looking for some liquidity.”
Foreign companies are getting in on the action too. Family Farm Defenders is trying to keep that from happening in Wisconsin. Previously, a 130-year-old state law limiting farmland owned by foreign investors to 640 acres had prevented this kind of land grab. But Republican Gov. Scott Walker has been pushing for a repeal of the provision, essentially opening up Wisconsin’s farmland for sale to the highest bidder. The provision was dropped from Walker’s 2014 budget last year but is being discussed again among Republicans in the legislature for possible adoption [Steve Holt, "Here's Why Foreign Investors Are Trying to Buy American Farmland," TakePart, 2014.02.12].
South Dakota's Family Farm Act (SDCL Chapter 47-9A) is supposed to protect our farm land from foreign corporate monopolization. So I got to wondering how all those foreign EB-5 investors could invest in corporations like the state's favored mega-dairies and Northern Beef Packers.
Ah, loopholes. SDCL 47-9A-3.2 exempts beef processing plants from the Family Farm Act. SDCL 47-9A-3.3 exempts dairy operations. That change came in 2008, when the Legislature passed Senate Bill 173. The state apparently realized that all those giant corporate dairies into which they were funneling EB-5 funds might violate the corporate farming ban... so they lifted another corner of that ban. The Legislature approved the exemption partly on the testimony of serial polluter and lawbreaker Richard Millner. The Veblen dairies went bankrupt two years later, and the DENR blackballed Millner from further dairy ownership. The Veblen dairies remain under corporate ownership.
Coinciding with this state-favored corporate ownership is the ongoing decline of small family dairies. Since 2000, the number of small dairies in South Dakota has decreased from 329 to 37. Meanwhile, Governor Dennis Daugaard is recruiting more corporate-scale dairies from out of state to expand to South Dakota and fill the demand for the French cheese factory he lured to Brookings with corporate welfare.
You could argue that corporations foreign and domestic are scooping up our ag resources because there aren't enough young independent farmers going into the industry, and someone has to feed us. But when young people thinking of farming see the deck stacked against their profitability by laws and handouts that stack the deck in favor of already big corporations, why would they want to roll their dice against such big-capital competition?