Why Billionaires Are Suddenly Buying Farmland Around the World

Iowa’s golden fields don’t resemble the front lines of international finance. However, something is changing when you pass the tidy rows of corn at dusk, the kind that glows amber under a broad Midwestern sky. The “For Sale” signs go away more quickly. Not all of the buyers are local. They are also becoming fewer and fewer farmers.

Over the last ten years, a number of billionaires have covertly amassed enormous tracts of farmland. Through his investment company, Bill Gates accumulated about 270,000 acres of farmland, making him the largest private farmland owner in the United States. A large portion of Jeff Bezos’s hundreds of thousands of acres is in Texas. Ray Dalio has made significant investments in foreign agricultural land. Perhaps this is just diversification. However, it doesn’t seem random.

Farmland doesn’t fluctuate greatly with market sentiment like tech stocks or cryptocurrencies do. Even when Wall Street falters, crops continue to grow. Agricultural land values remained relatively stable during the 2008 financial crisis and even during the pandemic, occasionally increasing as other assets declined. Investors appear to think that, in contrast to consumer electronics, the demand for food does not decline during a recession.

The issue of inflation is another. Tangible assets typically hold up when prices rise and currencies lose purchasing power. Historically, farmland has increased in value during inflationary times, providing long-term value growth in addition to rental income. It’s not glitzy. However, it is obstinately resilient.

You can practically see the math at work when you stroll through a Nebraska soybean field that is under lease. It is not necessary for a billionaire to be a tractor operator. The acreage increases after they purchase the land, lease it to farmers, and receive consistent cash rent. Roughly 30% of farmland in the United States is owned by landlords who do not engage in farming, according to USDA data. A large number of those landlords are either high-net-worth individuals or institutional investors. The land yields. The checks show up.

Soil possesses a psychologically comforting quality. You can stand on it, unlike NFTs or startup equity. The crumbling dirt is palpable in your hands. That physicality is important in uncertain times. One gets the impression from watching this happen that farmland stands for something primordial: dominance over space, food, and water.

The silent driver might be water in particular. Parts of the Midwest region of the United States are experiencing a decline in the Ogallala Aquifer. The drought cycles in California are getting worse. Rainfall patterns are changing in unpredictable ways in parts of Australia and Africa. Water rights are frequently owned by those who own farmland. Furthermore, water rights are starting to resemble long-term leverage.

Whether this is about profit or something more general is still unknown. To ensure food supplies, nations like Saudi Arabia and China have made investments in farmland abroad. That is a geopolitical, almost strategic, move. Questions arise when billionaires take similar actions. Is it about consistent profits? Or shielding riches from systemic danger?

The tax angle is another. Favorable tax treatment, including advantages for estate planning and conservation incentives, is frequently associated with agricultural land. Farmland is a good fit for families who are more concerned with generational timelines than quarterly earnings. It can be inherited, divided, created, or given to trusts. silently building up.

Consolidation is a concern for critics. Local communities may experience an imbalance when land is transferred from active farmers to investors located far away. Young farmers find it difficult to compete with hedge fund-backed cash offers. Ownership gets farther away in rural towns that are already getting smaller. It’s difficult to ignore the fact that land, which was once thought of as communal bedrock, is now just another line item in a portfolio.

The billionaires, however, are not illogical. The world’s population is still growing. Conversely, arable land is limited. There is no way to produce more of it. That reasoning is further supported by supply chain disruptions, rising food prices, and climate volatility. Previously pursuing tech disruption, investors are now supporting carbon credit schemes and irrigation systems.

Indeed, carbon is important here as well. Through sustainability credits, regenerative agriculture incentives, and carbon offset markets, farmland can make money. Investors positioning themselves for environmental regulation will find that it adds another layer of income potential.

The pattern is similar in the highlands of Kenya, the cattle country of Australia, and the wheat belts of Kansas: covert purchases, frequently made through trusts or LLCs. Prices rise as soon as the news is released. After all, land is scarce.

It has a subdued pragmatism. Farmland still produces something necessary even if the economy falters. Land values frequently rise in response to spikes in inflation. Domestic food production becomes strategic when supply chains break.

What is causing billionaires to purchase farmland all over the world? because it provides stability during a period of instability. since eating is a necessity. because there is a shortage of water. Because while paper wealth is eroded by inflation, soil is not always affected.

It is more difficult to predict whether this trend will further concentrate power or strengthen food systems. One thing is evident, though, as you stand on the edge of a field that has been harvested and observe the wind rustling the stubble: the ultra-wealthy are not placing their bets on dirt. Permanence is what they’re betting on.