When you’re a billionaire, your money problems are different than for non-billionaires.
Instead of figuring out just how much you can allocate each month to paying off student loan debt, billionaires have the issue of figuring out what to do with all of their money. Farmland is one of the best places to stick that money, and one of the world’s richest men, Bill Gates, has been investing an awful lot of money into American farmland. In fact, the Land Report recently noted that Gates (and his wife, Melinda) are the biggest private owners of farmland in the country.
Forbes notes, in its reporting on the topic, that Gates has some agriculture-related projects going, but investing in farmland is becoming more and more common for the wealthy, and is not usually related to philanthropy at all. In fact, farmland is one of the most stable investment bets out there, one with a limited supply and consistent returns. From another Forbes article: “From 1992 to 2016 farmland yielded an impressive 12% return vs. real estate (NCREIF) at 8.7%, and the Russell Stocks Index 3000 at 8.8%.”
Farmland can serve as an investment by purchasing and then renting out the land to farmers, and the actual value of the land also rises as the owner holds it. It is, typically, a simple real estate play. But when someone like Bill Gates owns nearly 250,000 acres of farmland across eight states, how does that affect, you know, farmers?
As of 2019, around 40 percent of American farmland is rented to tenants, who then operate on it. One of the consequences of farm operators not actually owning their land is figuring out where farm subsidy money goes; much of it trickles to the actual owner of the land, who may just be treating farmland as a basic real estate investment.
That removes a major way for actual farm operators to take advantage of the land they work, and places this highly valuable commodity—land—in the hands of people who just want it as an investment. This all contributes, as crop scientist Sarah Taber notes, to a cycle of unproductive farmland, whether it’s growing more corn than any country can possibly eat or growing nothing at all. Farmland in this sense isn’t about the “farm.” It’s about the “land.”