The Experiment to Finance the Future of American Farming
TFor over 100 years, the Dwelley Family has farmed Brentwood in Calif. where they have grown organic sweet corn, cherry tree trees and low-leafy green beans. It is located 50 miles east from San Francisco.
The Dwelleys bring their harvest to Western U.S. grocery and wholesale stores. However, most of the farmlands nearby have disappeared in recent years. Strip malls and suburban tract housing have sprouted up as the Bay Area’s population explodes and more farmers leave the business behind. Dwelleys lease the majority of their Brentwood acreage to other families. So, since 2017, they’ve started leasing land slightly farther afield, from a different type of farm owner: a private investment fund known as Farmland LP.
The fund’s managers acquire conventional farmland and convert it to organic operations; they then lease land to farmers growing specialty crops such as berries, vegetables, and wine grapes. Farmland LP was founded in 2009. It has since purchased 5,800 acres of land across Northern California. This includes the fertile areas east of Brentwood and near Stockton. It is one of a few U.S.-based companies, along with Dirt Capital Partners and Iroquois Valley that have used their farming and financial expertise to rebuild the American agricultural landscape. Farmland LP has 15,000 acres under its management in Northern California and Washington State. Its total assets are close to $200 million.
John Dwelley, a fourth-generation farmer, grew up selling sweet corn and stone fruit from his family’s tin-roof produce stand on the side of a dusty two-lane highway. Expanding to Farmland LP’s nearby terrain is part of a larger plan to keep the family legacy going, he says, even as Brentwood transforms from an agricultural hub to a suburban boomtown.
John Dwelley is a fourth generation farmer who leases hundreds upon acres of Farmland LP.
Cayce Clifford at TIME
“For my sake, I hope to be farming until I’m a ripe old age,” says the 36-year-old, “so I want to make sure that we’re setting ourselves up for long-term success.” Today the family leases hundreds of acres from Farmland LP on top of the other acreage it owns or leases. Farmland LP, based near San Francisco, says it is working to make more organic acreage available at a time when land for farming and ranching is vanishing nationwide and rising temperatures threaten to disrupt the world’s food supply.
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Over the last 30 years, warehouses, large-box stores and sprawling subdivisions have taken over millions of acres from farmland. Small farmers and ranchers—facing mounting debt, rising property taxes, and unstable commodity prices—are losing or leaving their property. With fewer young people following in their parents’ footsteps, older generations are retiring and selling family fields. Data from the U.S. Department of Agriculture shows that nearly 125,000 farms have been lost in America between 2011-2020.
Many remaining farms have been converted to large-scale, industrial farming operations that grow one commodity crop such as corn and soy. These methods are often water-intensive, chemical-heavy, and time-intensive. Some states have seen excessive fertilizer use polluting water supplies and leading to harmful algal blooms. In addition, large-scale pesticide applications have decimated bee and butterfly habitats. Heavy rainfalls, drought, overworked soil, and poor crops make them more vulnerable than ever to climate change.
Farmland LP aims to both preserve existing farms and spare them from industrial monocropping, says Craig Wichner, the firm’s founder and managing partner. Instead, the fund promotes “regenerative agriculture,” an umbrella term for practices that help build healthy soils, improve water quality, and restore local biodiversity. The idea is that healthier plants will produce greater yields of higher-quality crops, so more money flows to farmers—who pay significantly higher rent on organic farmland—and to investors backing Farmland LP’s fund. “Our mission is to demonstrate that regeneratively managed farmland is more profitable than commodity farmland,” Wichner tells TIME.
Bay Area: New construction of housing
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Similar investments are being made by federal agencies as well universities. In February, the USDA launched a $1 billion “climate-smart commodities” initiative to help food producers and forest owners adopt new practices and track carbon emissions.
Farmland LP is far from the only private firm betting on America’s fields and pastures. Even with the increasing financial difficulties farmers face, land is still an attractive asset. Bill Gates and Ted Turner, two of the most prominent billionaires in America are owners of U.S. farmland. Shares of agricultural land are being claimed by institutional investors, wealth advisory companies, and individual owners. The agricultural land sector is a different kind of stock market than the U.S. housing sector. It has provided positive annual returns through rising land value, rent from farmers, federal subsidies, and other means.
Despite this, concerns are growing about the rights of investors-farmers to take part in agriculture. Higher land prices, greater rents and the market for large-scale production are all acceptable to wealthy enterprises. Other potential farmers, however, are having difficulty gaining a foothold. That includes young farmers—many of whom are people of color—eager to produce food sustainably to serve their communities, says Holly Rippon-Butler, land campaign director for the National Young Farmers Coalition.
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She says that such barriers perpetuate long-standing inequalities in U.S. agriculture. More than 95% of the nation’s 3.4 million agricultural producers identify as white, according to 2017 USDA Census data. Over the centuries, explicit federal policies and practices have prevented anyone other than white men from owning any land. The consequences are evident in current demographics. Black farmers are still discriminated against when it comes to applying for loans or accessing land. However, social impact startups such as the Black Farmer Fund work hard to eliminate those obstacles.
“We need to start addressing that inequity if we’re going to have a viable future for agriculture in this country,” Rippon-Butler says.
Stockton blueberry plant, February
Cayce Clifford at TIME
Anuradha Mittal is the Oakland Institute’s founder and executive Director. She says that this investment boom is also helping to accelerate the cultural shift within farming communities towards digitally-managed farm systems managed by faraway landlords. Along with environmental impacts, she says, the push for profits can create a “race to the bottom” in wages and working conditions for farm laborers.
Last summer, after a farmworker from Guatemala died in Oregon’s heat wave, state officials adopted emergency protections for laborers. As temperatures topped 100°F—an extreme event exacerbated by climate change—farmworkers in the Pacific Northwest were still picking cherries, berries, and grapes without access to shade or cool drinking water, according to farmworker unions.
Farmland LP has also been certified as a B Corporation. That means its performance in social and environmental areas is assessed and verified by the non-profit B Lab. It is required to adhere to higher industry standards. To become organic, it must first restore nutrients to soil and add healthy bacteria. The USDA requires that conventional farms undergo three-year transition periods before they can be certified organic. This period begins from when synthetic fertilizers or pesticides were last applied.
Frank Savage, who manages Farmland LP’s 5,800 acres in California, says the company usually starts by carpeting fields with a mix of deep-rooted grasses and broadleaf plants whose roots reach down 6 ft. to pull up minerals. After that, it leases out the land to farmers who raise sheep and cattle.
After the three-year transition, Farmland LP’s managers will devise a 10-year plan for rotating crops on a property. This could mean that the property will be used to grow vegetables, grains and then return to pasture over a period of three to five years. The goal is to rotate crops in ways that benefit both soil health and the farm’s economics.
Since organic farmers can’t deter insects or rodents with chemical pesticides, they have to find more natural solutions. “It isn’t as simple as just calling your pest manager out to shoot some chemicals,” Savage says. His team constructed raptor perches to draw predators and owl boxes in order to curb the mole infestations. Farmers also plant hedges with shrubs and flowers to attract insects and bees like ladybugs. These are beneficial insects that eat tiny sap-sucking bugs. Wichner likens their approach to farming as a “mosaic,” rather than the uniform, single-plant fields of conventional farms.
Equipment for farming on Dwelley Farm in February
Cayce Clifford at TIME
Farmland LP’s fields also can’t use chemical herbicides. The farmworkers remove any weeds from their fields manually using hand hoes. The practice- is labor-intensive and time-consuming, and it’s partly why organic produce is more expensive to grow and buy in stores, says Dwelley.
Yet for all the careful planning, many factors remain outside farmers’ control. Dwelley was one of the 60 farmers who had to wear masks during bean harvesting. It happened several times over the years. Northern California saw a series of rainstorms that lasted for several months, with some intense rainfall in the beginning and then a period without any significant precipitation. For the Dwelleys, the swings in precipitation mean they likely won’t be able to grow as much sweet corn as expected this year.
Even though each year on farms is unique, the demand for food continues to rise. As the climate changes and the earth heats, so is the necessity to preserve water and keep soil healthy. Farmland LP, which is preparing for its third-largest investment fund, will open in 2022. Plans include expansion in the Pacific Northwest, and other U.S. geopolitical areas.
Wichner says the families who sell their acreage to Farmland LP “know that it’s going to be farmed organically and regeneratively for the ongoing future,” and not irrevocably become a parking lot or subdivision. “The sale of that farmland is a really big fork in the road that sets up what happens over the next 50 to 100 years.”
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