A Win/Win/Win Approach To Farmland Ownership

There are not very many Americans still doing the farming that feeds our citizens and many others around the world. The legacy of the Homestead Act of 1862 persists in that many of those farmers still own land from those 160 acre grants that have been passed down for generations, but particularly for the “broad acre crop” regions it takes a much larger farm to be economically viable. Farms have grown significantly through purchases from neighbors whose families got out of the farming business, but it is risky to over-extend on land mortgages because of the economic uncertainties that comewith a business that is highly impacted by weather and in which the farmer is a “price taker” without leverage in commodity markets. The industry learned that lesson in the Farm Crisis of the 1980s. Expansion through land rental is the logical solution and that is why a significant share of cropland in the US is under lease (see graph below)

One could modify the line about love from the award-winning Broadway musical and Movie, Rent to say, “you probably shouldn’t ‘buy the farm,’ but you can rent it.”