Beautiful Virgin Islands

Thursday, Oct 03, 2024

0:00
0:00

From Powerpoint to Potatoes: Why is Bill Gates buying so much land?

The billionaire’s latest acquisition has made people wonder why rich investors are so interested in gathering large tracts.
In late June, the North Dakota Attorney General approved the purchase of 2,100 acres of farmland by a company tied to Bill Gates. Red River Trust bought it from potato growers Campbell Farms for about $13.5 million. According to legal documents obtained by FOX Business, the sale was made last November.

Media reports suggest that the reaction of locals to the deal was far from positive. “I’ve gotten a big earful on this from clear across the state, it’s not even from that neighborhood. Those people are upset, but there are others that are just livid about this,” North Dakota Agriculture Commissioner Doug Goehring told local television station KFYR. Other concerns cited in the media insist that “ultra-rich who buy land in North Dakota… do not necessarily share the state’s values.”

Before it was revealed that the deal had been approved, the office of the Attorney General sent Red River Trust a letter asking how the company planned to use the land. “In North Dakota… all corporations or limited liability companies (LLC) are prohibited from owning or leasing farmland or ranchland, and from engaging in farming or ranching. In addition, the law places certain limitations on the ability of trusts to own farmland or ranchland. The Corporate or Limited Liability Company Farming Law has certain exemptions, such as permitting registered family farms or allowing the use of the land for business purposes…”

“Our office needs to confirm how your company uses this land and whether this use meets any of the statutory exceptions, such as the business purpose exception…”

The letter required an answer within 30 days, but there’s no information about whether Red River Trust had anything to reply.

‘Meet Farmer Bill’
The news of the purchase made headlines, as many people found it surprising that the Microsoft co-founder is spending so much money on agriculture. Still, the North Dakota case is just the latest example of a billionaire’s investment in farmland making big news.

Summarizing the data as of 2020, a magazine called The Land Report put Bill Gates’ photo on its cover with the caption ‘Meet Farmer Bill’. The outlet called Gates and his then-wife Melinda “America’s largest private farmland owners.” In tracking the history of Gates’ investments, The Land Report cited a 2014 article from the Wall Street Journal about a man named Michael Larson, who, according to the outlet, has managed the billionaire’s investment empire since 1994, “mostly through a firm called Cascade Investment LLC.”

“The Wyoming ranch is part of a bet by Cascade on the steep rebound in real-estate prices since the financial crisis,” the WSJ reported, citing its sources. “The firm owns at least 100,000 acres of farmland in California, Illinois, Iowa, Louisiana and other states – or an area seven times bigger than Manhattan.”

In 2021, The Land Report said that Gates owned almost 269,000 acres across the country.

‘Why are you buying so much farmland?’
The same year, Reddit users had a chance to ask the Microsoft co-founder about the reasons behind such a large investment. The question was “hey Bill! Why are you buying so much farmland?”

“My investment group chose to do this. It is not connected to climate,” Gates replied. “The agriculture sector is important. With more productive seeds we can avoid deforestation and help Africa deal with the climate difficulty they already face. It is unclear how cheap biofuels can be but if they are cheap it can solve the aviation and truck emissions.”

The uproar over Gates’ latest land purchase created a wave of discussion online. During the height of the Covid pandemic, the Microsoft co-founder was often in the limelight due to his pronouncements about the virus, and even became the subject of conspiracy theories. So, there’s no surprise that his unusual investment unleashed online gossip as well, sparking rumors that the billionaire owns the majority of US farmland. Actually, there are some 895 million acres of farmland in the country. So even while being the largest private farmland owner, Gates actually has less than 1% of the country’s total. And, no matter how eccentric the Microsoft co-founder can be, the reasons behind his farmland investment are most likely mundane, experts say.

“If you look at farmland purchases in the United States, the overwhelming majority is acquired by farmers. The next largest group are people somehow close to farming, like retired farmers, or people from the rural area that are interested in purchasing land. People who put together large portfolios are pretty rare,” Todd H. Kuethe, an associate professor in the Department of Agricultural Economics at Purdue University in the US, told RT. “Usually, they’re buying it for the financial position and so that land usually stays in production. There’s no disappearance of that land.”

Stable asset
Still, Bill Gates’ years-long investment in land elicited a question from analysts: Is farmland such an attractive asset? The answer is yes, for several reasons: farmland is a limited resource, offers strong returns, and is a stable and low-risk asset. Interest in farmland is rising, and prices are climbing accordingly. Last year’s data show the value of US farm real estate having averaged $3,380 per acre, up 7% compared with 2020.

“The US farmland has been increasing in price in recent years because of high returns and low interest rates,”Carl Zulauf, a professor emeritus in the Department of Agricultural, Environmental, and Development Economics at The Ohio State University, explained to RT. “The high returns have been from the market and from government programs.”

Kuethe agrees: “It's a really nice thing to be added to a broad investment portfolio, to give you some of those diversification advantages. Farmland is an attractive investment, and a lot of folks see the value of adding it to an investment portfolio. It’s a relatively lower risk than investing in equities or buying individual stocks, but it offers a little bit higher return than just bond purchases. So, it sits in the middle – a financial investment where you can get a little bit higher return, but not that much additional risk.”

After all, stability seems to mean a lot nowadays. Years of the Covid-19 pandemic, marked by lockdowns, and the current conflict in Ukraine, which disrupted trade, particularly of grain supplies, made more countries look carefully at their food security. Still, Kuethe thinks that all of these factors are not enough to make individual businessmen buy land for personal consumption. “I don’t think that investors are looking for farming for their own consumption, they’re still looking at producing commodities for the global market,” he says. “I don’t have the concern that people are going to start buying up land and wanting to farm themselves because they’re worried about food insecurity.”
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
EU Urges UK PM Keir Starmer to Consider Youth Mobility Scheme
British Forces Help Thwart Iranian Missile Attack on Israel
Simon Case Rejoins Garrick Club Amid Mixed Reactions
Investigation into Labour Donor Waheed Alli's Register of Interests
Iceman Drug Boss Jailed: Major Crackdown on £76M Trafficking Operation
UK Evacuates Citizens from Lebanon Amid Growing Tensions
Rise in Vaping Among Non-Smokers in England
Earth Faces Severe Geomagnetic Storm from Solar Flare
Keir Starmer’s Corruption Exposed: Bribes (Yet Again), Broken Promises, and a Rigged System Shielding the Powerful
Bank of America Outage Leaves Customers Unable to Access Accounts, Sparks Concern
Iranian Mullah Claims Israel Used Genies to Hunt Hezbollah Leader
Privacy Concerns Over AI Monitoring of UK Bank Accounts
Robert Jenrick Reveals Daughter's Middle Name as Thatcher
Badenoch Criticizes Civil Servants, Jokes They Are 'Prison-Worthy'
UK Treasury Plans Major Infrastructure Cuts
Kemi Badenoch Criticizes Civil Servants at Conservative Party Conference
Thames Mudlarking Permits Resumed with New Restrictions
Decline in Education for Youth Offenders in England
Jimmy Carter Celebrates 100th Birthday
Iran's Missile Attack on Israel: Defeated but a Significant Escalation
Iran President Lauds Missile Attack on Israel as Decisive Response
Russia Criticizes Biden's Middle East Policies After Iran Attacks Israel
US Dockworkers Strike Halts Half of Nation’s Ocean Shipping
Boris Johnson claims in memoir Queen Elizabeth II had bone cancer
Missile Attack on Israel: A Turning Point for the Ayatollah’s Regime?
Teachers in England Approve 5.5% Pay Rise
Robert Jenrick Criticized for Statements on UK Special Forces
Robert Jenrick Faces Transparency Issues Over Campaign Donations
Phillip Schofield Addresses Firing from ITV
UK Charters Evacuation Flight for Britons in Lebanon
UK Shop Prices Fall at Fastest Rate Since 2021
Keir Starmer Urged to Address Rising Energy Bills
Tom Tugendhat Warns Against Tories Turning into Reform UK
UK to Close Last Coal Power Station After 142 Years
End of Traditional Steelmaking as Tata Closes Port Talbot Blast Furnace
Gaza Hostage Families Urge UK Government to Act
UK Braces for Continued Flooding Amidst New Rain Warnings
Post Office Scandal: Capture IT System Likely Caused Shortfalls
Prince Harry Honors Young Heroes at WellChild Awards in London
BBC Apologises to Amanda Abbington Over Strictly Bullying
UK Government Charters Flight for British Evacuation from Lebanon
Chinese Woman With Two Uteruses Successfully Delivers Twins
Putin Vows to Achieve Goals in Ukraine Amid Ongoing Conflict
Impact and Future Actions Following the Assassination of Hezbollah's Leader
Austrian Election: Far-Right Freedom Party's Historic Victory
Microsoft to Relaunch AI Screenshot Tool Amid Privacy Concerns
India Faces High Concert Ticket Prices: Coldplay and Diljit Dosanjh in Focus
Robert Bourgi Unveils Secrets of French-African Financial Ties
Hollywood Faces Crisis After Strikes and Streaming Wars
Missed Red Flags: Qatar's Controversial Acquisition of Harrods
×