We know from the childhood song that Old MacDonald had a farm. But e-i-e-i-o — look who’s got his farm now. It’s outfits like American Farmland, Farmland Partners, and BlackRock.
These aren’t dirt farmers wearing overalls and muddy boots. They’re Wall Street hucksters in Armani suits and Gucci loafers.
The latest fast-buck fad for high-roller investment trusts, hedge funds, and venture capital speculators is “farming.” Not that these dude ranch dandies are actually plowing and planting.
No, no — these are soft-hands people, buying up farmland with billions of rich investors’ dollars, then tilling the tax laws and threshing the farmers who do the real cultivation.
For example, American Farmland Company — which owns 16 farms — is a combine of the largest real estate empire in New York City, two Florida sugar barons, a wealth management outfit, and the real estate brokerage arm of insurance giant Prudential.
None of these nouveau sodbusters has a speck of dirt under their fingernails, but they’ve figured out how to work the land without touching it and still harvest a sweet profit. The founder of this scheme says “It’s like gold, but better, because there is this cash flow.”
Cash flow? Yes, farmers are charged rent to till the Wall Streeters’ land. Then the financiers get a prime cut of any profits from the crops that the farmers produce. Also, the combine is set up as a Real Estate Investment Trust, providing an enormous tax break for the Wall Street plowboys.
And, of course, there’s the mega-pay the moneyed elites will reap when they convert their scheme into securities for sale on the stock exchange.
A few rich speculators get richer, farmers are turned into sharecrop laborers, and farms are switched to high-profit crops that require heavy pesticide dosages and soak up scarce water resources. Other than that, this is one hell of a deal.
OtherWords columnist Jim Hightower is a radio commentator, writer, and public speaker. He’s also editor of the populist newsletter, The Hightower Lowdown. OtherWords.org