Fields of Gold Financing the Global Land Rush by Madeleine Fairbairn

1

FARMLAND INVESTMENT 
COMES OF AGE
And it came about that owners no longer worked on their farms. 
They farmed on paper; and they forgot the land, the smell, the feel
of it, and remembered only that they owned it, remembered only 
what they gained and lost by it.
—John Steinbeck, The Grapes of Wrath, 1939
While most of the investment conferences I attended were of the tablecloth-and-

chandelier variety, in 2011 I went to an unassuming regional farmland investment 
event in the US Midwest. Here jeans and plaid replaced suits and ties, and those 
promoting farmland investment were more likely to tout opportunities in the 
wilds of Wisconsin than in sub-Saharan Africa. Meandering through the exposi-

tion hall, I met Ingrid, a family farmer turned personal financial consultant to 
farm families. When I explained that I was studying growing investor interest in 
farmland, Ingrid shook her head and said that the current atmosphere reminded 
her of the 1970s. Back then, she said, bankers were pushing midwestern farmers 
to expand their operations by taking out additional farm loans and mortgages. 
But then interest rates shot up to 21 percent, grain prices fell, and farmland values 
plummeted. When farmers could no longer pay their debts, the bankers called 
them fools and took their land. “A lot of people in the market now don’t remem-

ber the late seventies well,” she concluded.
Ingrid’s comments serve as a reminder that the current wave of farmland 
investment can only be understood within historical context. In the US, pri-

vate financial institutions have a long history of involvement with agriculture, 
though the nature of that involvement has changed over time. Historically, 
institutional investors were involved in farmland markets primarily as farm 
mortgage providers. Rather than buying farms themselves, they used their 
extensive capital to facilitate land purchases by farmers—a crucial distinction. 
Yet the farmland investment industry did not materialize out of nowhere in

2008 either. In the US, it has been building slowly since the 1980s when those 
same farm mortgages led many farmers into foreclosure and dispossession. Its 
rise has paralleled shifting ideas about the role of finance capital in the economy 
as a whole—from supplying capital to producers to making the greatest possible 
profit for shareholders. These gradual developments prepared the ground so 
that, when conditions were ripe for another land boom, the farmland invest-

ment sector could rapidly flourish.
I focus in this chapter on the historical development of the US farmland 
investment industry. Because many of the biggest global players got their start 
investing in US farmland, and because US farmland is still a highly desirable 
target for investment, this history sheds considerable light on the drivers behind 
the global land rush. It reveals a gradual shift in how the financial sector has 
approached farmland—from collateral on producer loans to investment object 
in its own right—and explores the reasons that the search for land went global. 
It also shows that the recent land rush cannot be understood in isolation from 
past farmland booms and busts, whose financially mediated dispossession laid 
the groundwork in fundamental ways for what was to come.
My history begins in the early twentieth century, but first it is important to 
note that we are discussing stolen land. All US land was originally territory of 
indigenous peoples—from the Haudenosaunee and Mvskoke of the east to the 
Cheyenne and Osage of the Great Plains to the Chinook and Chumash of the 
West Coast. The violent, racialized dispossession of these original inhabitants 
and the enclosure of their lands under settler colonialism are the foundation upon 
which this entire history rests. Precursors: Farmland Market Participation of 
Insurance Companies and Banks, 1910s–1980
Life insurance companies and commercial banks have long been involved in farm-

land markets in the capacity of farm mortgage lenders. Throughout the twentieth 
century, life insurance companies provided between 10 percent and 25 percent of 
total farm real estate lending, the long-term nature of their liabilities providing a 
good match for the long-term income stream provided by farm mortgages. Com-

mercial banks, meanwhile, tended toward shorter-term agricultural loans, but 
also contributed a sizable amount of financing for farmland purchases, generally 
ranging between 5 percent and 15 percent of the farm mortgage market between 
1910 and 1990. Since the 1990s, insurance companies have gradually become less 
prominent players in farm mortgage lending, a response to financial stress and a 
broader shift toward more liquid assets; banks, on the other hand, have greatly 
expanded their lending. Government programs like the Farm Credit System 

Fields of Gold Financing the Global Land Rush by Madeleine Fairbairn