A Smooth "Landing" for Sustainable Agriculture

Let’s explore how we might reshape our relationship to the land in order to promote a more sustainable agriculture.

“Congratulations, you’ve got land!”

I read the short text yet again, confirming that it’s real. After four years of technical schooling and hands-on field work, I can finally get started with my dream.

The land the text refers to is about 50 miles from a mid-tier city, which is close enough to guarantee I’ll have a market for my farm goods. The organization I applied to has granted me a 10-year lease and, while it’s not permanent, it’s certainly better than the annual contracts most farmers have.

I’m leasing from an REIT whose mission is aligned with my methods of farming - utilizing rotational, interspecies grazing for my animals and the best soil health practices for my row crops. They’re also granting me equity ownership in the capital and soil health improvements I make on the land. If I leave in 10 years, I get the value of my capital improvements in cash, as determined by an independent appraiser.

I used to imagine myself owning the land I farmed, but I couldn’t muster the capital to make an outright purchase on my own, especially so close to an urban area. Now, I can run my business and do the work that I love in a secure way.

If I want to invest in land, the REIT will allow me to invest whatever portion of my profits into their holdings – which not only includes the land that I’m leasing, but also the land that other farmers are leasing. It’s different than I initially imagined, but I can do what I love, and I like that I’m also investing in land that I know is being improved by my fellow farmers.

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The above story explores how an aspiring farmer of the future might navigate land access, and how farmland owners might adjust their structures to incentivize farm and soil health improvements.

Land is the heart of it

Today in AgPunk, we’re exploring land. What are the best approaches to managing land as an agricultural resource? How might we reshape our relationship to land to promote a more resilient, sustainable agricultural future?

Even in agriculture, where land is at the heart of our plans, strategies and labors, we are perpetually debating how to best manage it, who manages it and who gets the economic benefit of that management. And the stakes of these debates are high for farmers, who are blessed or broken based on their land, or their lack of access to it.

While land ownership is the ultimate goal for many farmers in the United States, it is not the only way forward. The concept of private land ownership is a human fabrication, and there are many other methods that draw norms and rules around how we relate to the land as a resource.

For example, a quick study in global land laws reveals that governments vary in their approach to private property rights. Countries as disparate as Nigeria and Greenland permit you only to lease land, whereas countries like Norway and the United Kingdom allow you to privately own the land but with other citizens able to enjoy the property through a policy known as “freedom to roam.”

So, if we can reimagine our relationship to the land - what solutions or alternatives might we come up with? Who is the ideal owner of land from a “sustainability” perspective, especially in the agricultural context? To understand this, let’s explore two aspects of sustainable agriculture: adoption of soil health / regenerative agriculture and farmland access by young, beginning and underserved producers.

Adoption of soil health practices and regenerative agriculture

In the current US agricultural paradigm, soil health practices are not widely adopted despite being widely known. There are many factors at play here, and yet it’s clear something in our approach to land ownership, tenure and land rights is not supporting a broader soil health transition.

Research into farmers’ actual adoption of soil health practices points to opportunities to change how we approach lease terms and landowner-farmer relationships. While the binary dynamic of whether a farmer owns or rents land was not found to significantly impact their adoption of soil health systems, certain aspects of land rental terms were found to have an impact. Specifically, the authors found that long-term leases for operators combined with encouragement from a non-operating landowner support soil health practice adoption.

Offering long-term leases to farmers and ranchers aligns well with soil health systems, since these systems take years to implement and pay off. Research from The Soil Health Institute showed that farmers can see impressive financial results from implementing cover crops and no-till, but they have to be in it for the long haul. The average length of time these farmers had been implementing one practice - cover cropping - was nine years.

So to align with soil health adoption, farm leases must be 10+ years in duration. This is a tall order in an agricultural system where oral leases are still prevalent, with the University of Missouri writing that oral leases comprise almost half of all farm leases (as of 2020). Oral leases cannot be for a duration of longer than one year at a time due to the statute of frauds. And, if farmers were to pursue written leases, they still might run into challenges getting a longer-term lease. For example, institutional farmland owners often have fund hold periods that prevent them from signing leases over 10 years.

While leases can continue on in some farming communities for generations, locations that face development pressure and high land prices may create conditions where farmers have to compete to renew their lease.

Land access for young, beginning and underserved farmers

The NYFC has surveyed farmers and found that land access is the number one barrier young farmers and ranchers face in getting started. These farmers face challenges in both renting land and purchasing it, though I’ve seen through my work at FarmRaise that young farmers often fixate on purchasing land as the best path to getting started.

This fixation with purchasing land is hard to break. That’s because there’s some practical validity to it. Land can help you produce your first income, build up an asset base that you can earn money on and secure additional financing. Given what we know about land leases - that they’re often one to three year leases - can you blame a beginning farmer from wanting to secure land for themselves for the longer term?

We might think there’s a simple solution to this challenge: our farming population is aging and millions of acres are going to change hands in the next decade. States like Minnesota even have policies and incentives in place to incentivize retiring farmers to transition their assets to younger producers, with one example being the state’s Beginning Farmer Tax Credit. But these land transitions present an inherent tension between supporting the future of agriculture and ensuring individual financial stability.

Retiring farmers often live on their land, for one thing, and they are looking to get a good sum of money in the sale of their land to protect them during retirement. Furthermore, land is oftentimes the greatest asset a farmer has, and it’s something that many farmers wish to keep in the family. The NYFC notes that 80% of wealth in the United States is inherited. This is one of the biggest challenges with land access for historically underserved communities of color or indigenous populations because white landowners own 98% of farmland.

There are different ways to approach this that could benefit all.

Alternative models of ownership and equity

There are several bright opportunities to rework land ownership and equity to facilitate a sustainable agricultural future. We’ve already established that longer term (10+ year) leases are one opportunity, and here are a few more:

• Allowing renting farmers to build equity in their capital improvements

• Allowing farmers to build equity in an institution

• Financing farmland alongside farmers as co-owners

• Public or community ownership

A theme among these opportunities is a transition towards community ownership, or community rights. Instead of focusing on an individual farmer renting from an individual landowner, or even an individual farmer owning their land, these opportunities shift us towards land rights and ownership at a community or institutional level. Because land is a resource that affects all of us, a more distributed and shared approach to ownership and use resonates.

Allowing renting farmers to build equity in their capital improvements

What if farmers were able to capture the actual cash value of the infrastructure and improvements they make on the farm? NYFC notes that “Where ownership is not an option, lease terms must allow the farmer to invest in infrastructure, soil health, and the long-term interests of the property. These investments can be translated into cash value, which the farmer can retain at the end of their lease term.”

To implement an idea like this, we don’t need to create new financing mechanisms. Instead, we might benefit most from professionalizing farm leases - ensuring that leases are written with these details in mind. Land For Good describes a few mechanisms that landowners can include in a lease to incentive their farmer operators to farm their best. These include items such as lease terms aligned with the timeline of the infrastructure investment and the declaration of who owns the assets.

If deciding who owns an asset is too complicated, there are other ideas to make capital improvements more worthwhile for farming tenants. Farmers may be able to negotiate a cost-share with their landlord, capturing the landowner’s commitment to split the cost and give a long-term lease in the same stroke.

To enable this outcome, we need more resources for farmers about how to structure and secure written leases with landowners. We also need greater willingness from landowners to embrace long-term leases, written leases and alternative and equitable approaches to capital improvements. Federal and state land laws and tax incentives can also play a role in incentivizing and supporting new models of equitable on-farm improvements.

Allowing farmers to build equity in an institution

Belltown Farms launched in 2016 and has since grown to manage over 28,000 acres in the United States. Their aim is to transition the land they manage to USDA certified organic and to utilize regenerative principles, as this ultimately increases the prices their crops can capture and the value of the land itself. They employ farm operators directly, rather than leasing their land to operators outside the institution. 

I can see how an institution like Belltown (or peers like Gold Leaf Farming) might help farming evolve into a more robust and secure profession. Imagine if, instead of going it alone as a sole proprietor like 90% of farmers in the US do today, farmers were employed by these institutions. These farmers would get all the perks of working for a robust institution - salaries, health care, time off - while getting to do the work that they love.

And, maybe they get better access to the newest technologies through this institutional relationship, too. A company is more likely to have the resources to invest in the latest and greatest tools than an individual. 

Imagine also if these farmer employees were also granted equity in the company, through the form of stock options or restricted stock awards. And, what if there were a seat on the company’s Executive Board reserved for one of their farmer employees? In this scenario, we have farmers who are building wealth and equity, only it’s in an institution rather than the land itself.

Is this more compatible with sustainable agriculture? Only if the institutions themselves are committed to diversity in hiring, equitable pay and benefits, and soil health and regenerative practices.

Financing farmland alongside farmers as co-owners

It’s worth acknowledging that the previous two ideas aren’t easy pills for most farmers today, who seem to prioritize and idealize land ownership as part of their farming story. I’m not certain whether this idealization of land ownership is a product of need (“I need land to get more financing to grow my operation”) or romanticization (“I’ve always pictured myself owning a plot of land for decades and passing it down to my kids”). But, regardless, it’s likely we won’t be able to shake our idealization of land ownership anytime soon.

So, in the meantime, there are some innovative ways of financing land purchases alongside farmers - as co-investors - that we can hang our hats on.

Iroquois Valley Farmland is a Real Estate Investment Trust (REIT) that focuses specifically on organic farmland purchases. Iroquois is incorporated as a public benefit corporation (PBC) and B-Corp, signaling the institution’s commitment to high standards of equity, inclusion and sustainability.

Here’s how it works:

• Iroquois takes on capital from a network of over 750 investors, including “individuals, partnerships, IRAs, trusts, corporations, foundations, nonprofits and more.”

• Farmers reach out to Iroquois and can initiate either a long-term lease or mortgage with the company to operate or purchase a plot of land. Iroquois’ leases are for five-year terms to start and the company states its intention to offer its farmers “life-long leases.” Farmers also have the option to buy land they’ve leased from Iroquois if they’ve leased it for at least seven consecutive years.

• Iroquois also offers assistance to help farmers refinance their debt and provides operating capital as needed.

Do these efforts support more equitable land access? Unfortunately, farmers still need to come to the table with some farming experience under their belts to partner with the organizations mentioned above.

For example, Iroquois works with farmers who: “have farming experience, usually with organic production or grass-based operations, and who have a financially viable operation…[and it is] helpful if you have a family history of successful farm operations.”

To improve land access for aspiring farmers with no farming experience, we need new models of education, training and those coveted long-term leases, too.

Creating community ownership

To achieve both ecological stewardship and equitable land access, we might be able to rely on public or community-based organizations such as governments, land trusts or non-profit organizations. 

Public land ownership is is the way things are done by default in some countries, like Nigeria or Mozambique  (which offers 50+ year leases). In the United States, we see this on rangeland managed by the Bureau of Land Management (BLM).

But there are challenges to government ownership of land. Bureaucracy is the first - can you imagine going through multiple levels of government in order to implement a decision on your leased land? And, second, the government isn’t always the best operator of innovation.

As Nathan Kelly, a development finance expert and regenerative agriculture proponent, said to me while we discussed this topic: “The government is not the best source of innovation in and of itself. It can be a really good partner for innovation. But you need private sector partners who are competitive.”

There is one mechanism of public land ownership that holds promise and that’s the concept of easements and land trusts. These are legal mechanisms (easements) and institutions (land trusts) that preserve land for certain uses like agriculture and conservation for long periods of time, even in perpetuity.

But easements aren’t prevalent across the US yet. In 2021, only 2 million acres were in agricultural land easements. These mechanisms require the involvement of multiple stakeholders - the farmer, the landowner, a land trust and a government agency. Easements are definitely an option, but much remains to be seen about their scalability to broader acreage. 

Although it faces the same scalability challenges, there is an emerging and innovative model of community land ownership currently offered by a non-profit organization called Agrarian Trust. Agrarian Trust owns various properties, which they call “commons” that are rented out as farmland through long-term leases. The organization specifically aligns its structures and agreements around the issues of land access and ecological stewardship.

This is a powerful, community-driven solution. The intentionality and stakeholder management required make it both effective for promoting sustainable agriculture, and also slower to scale. Agrarian Trust, which started in 2020, currently works with about eight different small farm commons comprising about 500 acres cumulatively. Iroquois, comparatively, has a portfolio of over 30,000 acres of farmland, though they’ve had a head start (they began in 2007), and Belltown now manages over 25,000 acres (since 2016).

Summing it up 

The land is shared by all of us, yet managed by a select and humble few. Our land ownership structures and policies directly shape the ability of land managers to invest in public benefits, like soil health and water quality, and public needs, like transitioning to and training the next generation of land stewards. 

The current system in the United States isn’t serving our communities well with regard to social equity and ecological stewardship. We don’t need to own land individually to manage it well.

Thus, our opportunity is to embrace alternative models, such as those provided by responsible institutions whether corporate or community run. Our best opportunities might lie in some hybrid of community and institutional ownership, such as the models put forth by Agrarian Trust, Iroquois Valley Farmland and Belltown Farms. 

What additional models inspire you? Let us know in the comments, and thank you for reading!

Contributors

• Author: Sami Tellatin

• Editing and Contributions: Nathan Kelly

• Editing: My Mom (Hi, Mom 👋 )

This AgPunk article was written and edited by humans. We use AI art generator tools, such as MidJourney and Dall-E, to provide art throughout the text.

Do you want to contribute to a future AgPunk piece? Please reach out!

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