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Gabillionaires who invest in hedge funds generally have the ethical and aesthetic sensibilities of dirt clods. As far as they care, fund managers can put their money into skunk pelt futures – as long as the investment pays a super-fat return. But since Wall Street’s 2008 crash revealed that so many of these investment schemes were based on nothing more than financial cobwebs and fairy dust, some of the clods began seeking hedge funds that would invest in something more down to earth. Thus, Wall Street discovered: Dirt. More specifically, farmland.
Such money handlers as BlackRock (the world’s largest asset manager) now offer big pieces of America’s heartland as an asset that super-rich penthouse dwellers can own and till for mega profits. As a result, ag professors report that their farmbelt conferences on land economics – which normally draw an audience of farmers and local farm lenders – are dominated these days by Wall Streeters, and American farmland investment seminars are even being held in Dubai and Singapore.
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But this Wall Street land rush is a flimsy fad, for it’s not based on economic realities. While crop prices are at record highs today, the painful historic record is that they will plummet tomorrow, destroying the cash flow that makes the hedge fund investment in land work. Then, of course, the gabillionaires will rush to shed their overalls. But who will line up to buy the land? Certainly not real farmers, who can’t afford the inflated Wall Street price. And especially not young people who want to farm, but who’re already finding it hard to locate affordable land.
America desperately needs this next generation of food producers, yet we’re letting Wall Street speculators literally wall of the land they need. To learn more, contact the National Young Farmers Coalition: www.youngfarmers.org.