C2o—Lancaster Farming, Saturday, July 12,1980
Farm
Talk
Absentee landowners
aren’t all bad, particularly
in today’s farm economy
I could probably be shot
for saying that in some
places, and thr I'lay be one
of those plac .1, but the
financiers of < 6 r, culture -
bankers, mvestors - nake a
pretty persuasivr case for
the merits of absentee
farmland ownership
When you’re talking about
absentee landowners, you
include a wide range of folks
Everything from the
widowed farm wife who’s
gone to live with her sister m
Tallahassee to the
Philadelphia dentist looking
for an inflation hedge, to the
union pension fund manager
who’s trying to maximize
worker benefits, and to the
land speculator who is
looking for a quick buck
To that list you can add a
lot of other folks, up to and
including some foreign in
vestors who have faith in
American farmland even
though they don’t have much
faith in the American dollar,
or anything else American
When you start drawing
lines and deciding who
should or should not own
farmland, you enter mto a
dangerous arena If you’re
truly interested in protecting
family farmers, then rules
should say that no one can
own farmland except family
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farmers And obviously, that
won’t work
What happens to the
family farmer when he
passes on and none of his
heirs want to continue in that
business 7 I suppose you
could pass a law that says
the land must be sold to
another family farmer, but
that would certainly limit
the bidding and hurt the
u cirs who may have spent a
lifetime developing that unit
and who are entitled to its
full value
What about the sons and
daughters who inherit a
farm but who are actively
mvolved in other careers in
other places and have no
immediate plans to return to
the home place 7 Should they
be forced to sell to a local
farmer just to preserve the
tradition of family farming 7
What’s wrong with them
continuing to own that land
and renting it to a local
family farmer who wants to
expand 7
Or for that matter, what’s
wrong with a farmer wan- ,
ting to retire and sell out to
whoever will pay him the
most money 7 Maybe it’s an
investment company or
maybe a land speculator
Maybe the farmer next door
All of them are potential
buyers, so why not let the
one with the strongest desire
buy the property 7
1062 MANHEIM PIKE, LANCASTER, PA
One of the unique things
about a farm is that when it
changes ownership it usually
remains in farming Suie
there are pressures t. lake
farmland out of pioduction
and use it foi other things,
but that pressure is pretty
much confined to some fairly
small areas of urban growth
and to places where eminent
domain takes priority
regardless of who owns it
Meanwhile, farms tha are
sold to off-farm investors
usually remain as farming
units to be rented to
neighboring farmers who
need the land for their own
expansion plans
Really, those farmers
benefit High land rents are
seldom high enough to cover
the true cost ot ownership
and sr •; r
rent are able to expand
less than retail cost.
Occasionally farmland is
bought up by large
conglomerates who want to
go into the farming business
It happens often enough to
keep the myth alive, but in
practice it’s a rare oc
currence. Seldom does a
large off-farm corporation
buy up a bunch of land and
set up a farming business.
If anything, the trend is m
the other direction--of
corporations selling off their
farmland and getting out of
farming
And who’s buying those
corporate farms’ In many
instances, it’s the neigh
borhood farmers
Usually they’re bidding
against investors who are
hoping to ride the land in
flation phenomena into a
tidy profit Meanwhile, the
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neighboring fanners till the
land
So unlike a rare painting
that ->ukl once in a lifetime
for some phenomenal price
and is then whisked off to a
gallery in some faraway
place, a farm is sold and
stays a farm The opeiator
may change and perhaps
some of the kinds of farming
that once occurred disap
pear But each spring the
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ground is plowed, the crops
are planted and the
productivity in that farming
area continues
One real estate expert 1
read recently makes a
strong case for the off-farm
investor, saying that without
him large farm corporations
will appear, the family farm
will disappear, and land
values will fall.
Bert Hanson, an lowa
farm realtor, claims the
investor is a steadying in
fluence on farmland prices
and is really no threat to the
family farm. As evidence, he
cites the fact that 90 percent
of all farm purchases are
made by farmers and that
the investor never pays as
much for land as the farmer,
except in very unusual
circumstances
(Turn to Page C2l)
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