The US Department of Agriculture has awarded a grant of $150,000 to a University of California rural socialist to study the effects of “farmland financialization” on small and medium-sized farmers.
The grant was provided through the USDA’s National Institute for Food and Agriculture and will sponsor a two-year research effort by Dr. Madeleine Fairbairn focused on highly-productive regions of California and Illinois, according to a USDA description of the grant.
Fairbairn’s research will include between 40 and 60 interviews with farmers and other stakeholders, analysis of geo-spatial property data and a survey sent to a broader group of about 600 farmers resulting in an informational bulletin and policy brief to be completed in 2019.
“These documents will advise financial landlords and tenant farmers on how to optimize the relationship for both parties and will advance novel land access and tenure security strategies for farmers coping with the new pressures of financial competition,” according to the USDA.
In an interview with the University of Santa Cruz Newscenter website, Fairbairn pointed to a growing interest in farmland acquisition, highlighting the example of TIAA’s farmland portfolio, which she described as having grown to include $8 billion in farmland globally since beginning its agricultural investments in about 2007.
“We are seeing new investment vehicles being developed, but we have no idea what it means for small and medium-sized farmers,” Fairbairn, told Newscenter. “This has potentially major implications, since access to affordable land is a cornerstone of American agriculture.”
Iowa State University assistant professor of economics Wendong Zhang, who leads the University’s annual Land Values Survey, told Agri Investor that he views the USDA-sponsored study as being in line with an increasing focus on environmental and social governance as material considerations of investments visible across the entire economy.
Sponsorship of the study does not suggest that USDA is against financial ownership of US farmland, said Zhang, but that they are looking for ways to harness investment to meet challenges such as declining rural populations and high regional unemployment that financial actors in farmland markets would be well-advised to also keep in mind.
“This can be a signal that there are growing concerns and that better communications and a holistic view, in addition to achieving a financial return, should be warranted” he said. “If you are concerned about potential negative coverage then you need to do something to make sure you avoid some of the downside risk.”