Good grief, now we’re importing/exporting FARMLAND (?!?)

With farmland and fresh water becoming increasingly scarce and valuable resources, there is an increasingly active market in buying and selling farmland across national borders.  I suppose we’ve been trading bits of earth this way for centuries (in the form of minerals, food, etc.), but it was still a shock to see this extending to encompass actual soil, hills, and watersheds.  This illustration, from an illuminating Vox “explainer,” is captioned “The color of the node shows to what extent a country is an importer (gray) or an exporter of land (red), and the size of the node represents the number of trading partners.”

Beyond the cognitive dissonance of the mere existence of “importing land” there are, of course, several deeper concerns; the most fundamental is the practice of new landowners shifting from food production for local farmers and their neighbors, shipping the fruits of the land into global supply chains instead (in particular, China is buying up lots of farmland to provide for its population’s needs).  Compounding this is local powerbrokers muscling their poorer citizens off the land so that it can be sold.  An ambiguous overlay a tendency to focus on how the new, distant owners may increase efficiency or otherwise increase the productivity of the land; again, such improvements may or may not serve local people and ecosystems, even if they appear beneficial for the global food production.

This wasn’t new to us, thanks to an article by our colleague James Frazier in the Natural Investment News last year.  As he stressed:

About half of all US farmland is expected to change hands within the next twenty years. Consider how the ability of a new generation of young farmers to acquire and finance farmland stacks up against the ability of large institutions to top any bid and pay cash for the best properties, and you can understand how big of a deal this really is, potentially for decades to come. To top it off, the new institutional owners are apparently quite savvy about what to grow, selecting the most profitable crops to meet growing demand for meat, nuts, and other gourmet foods in emerging Asian markets, presumably leaving the more risky, lower margin crops to small farmers. Fortunately, responsible investors have the means to make their own positive impact on American farming.

Click through to his article to learn more; and of course the Resilient Investing Map focuses on this problem (and opportunity!) within the “tangible assets” realm in Zones 4 and 6, and as an evolutionary approach to financial assets in Zone 9.

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