I wanted to post one of my favorite rants, from December 2018. It’s related to US capitalism, finance, real estate, and “farming”.
In the following, “corn,” “maize,” and “soybeans” refer to the industrial varieties which humans don’t eat, but which make up most of what the US grows. Think industrial feedstocks; not popcorn, corn on the cob, or edamame.
(scroll up and down that thread for enough examples to make you sick)
And Dr. Taber picked up from there:
Corn is a platform with both limitless purposes, and one purpose:
to turn rural land into a dependable & infinitely fungible financial asset.
If you want to understand US agriculture, you gotta understand one thing.
It’s not even about making food.
It’s a real estate hustle.
Can I be honest for a second, as an ag person who’s done most of their work in CA & the South?
Land in the Midwest … isn’t really good for much. Sure, the soil’s real nice, but the growing season is too short for most globally-traded cash crops.
The Midwest is exactly the kind of giant wet low-population area you’d want for cash crops. Except most of the big-money ones are tropical, & Midwest has a 3-6 month growing season. You’re stuck with annual crops.
“Well what’s wrong w wheat, flax, oats, rye, hemp, & other short-season cash crops?”
Hemp ain’t been legal
We can’t use an entire Midwest’s worth of oats & rye
Wheat & flax grow nearly everywhere, including huge areas of arid US west. Too much competition to rely on.
Enter maize & soybeans. Here’s what they bring to table:
Short-lived enough to make use of Midwest growing season
Need lots of water- that cuts out competition from the US West
Humans can’t eat them, but that’s ok, they’re just infinitely fungible starch & protein.
If you’re just growing raw sources of starch & protein, you can just handle market gluts by inventing a new use. That’s harder to do with crops that make something less malleable like fiber, or (in case of wheat, oats, rye, & most grains) a mid-yield mix of starch & protein.
And boy do we get our market gluts on. Because for 3-6 months every year, the Midwest turns into a giant hot wet basin of plant growing power.
But: without a platform like corn & soybeans, hot wet plains are just hot wet plains. They’re not a financial powerhouse. You couldn’t, say, include farmland as a securitized asset in investment funds.
The Food Discourse™ really fixates on how corn is used after it’s grown. “Oh my God! It’s in everything!”
I’m more interested in what that means for those who possess the land to grow it & what that means for our society. And @SwiftOnSecurity hit the nail on the head.
Part of the Food Discourse ™’s fascination with food manufacturing is that it’s fairly recent. It feels new & foreign. And, you can see the size of the facilities and visualize the money that it takes to build and run them.
It’s a fairly new way to accumulate wealth. It’s visible. And it fits with our “wealth is capital is manufacturing & Wall Street” mentality. So we fixate on it.
Meanwhile, most folks have no idea what the value of farmland is. Or that subsidies don’t go to the people growing the corn- they go to the people who own the land it grows on.
Most folks have no idea that the big hustle in food isn’t food. It’s real estate.
That doesn’t fit with our image of how wealth works in a capitalist society.
Capitalism is supposed to mean new, modern, and scary! Farmland is ancient and wholesome! Farming is our one connection to more wholesome times!
Farm landlords were grinding people to death for thousands of years before capitalism was ever invented.
Real estate’s always been the ideal asset. Can be used for food, minerals, or development- and you can collect rents pretty much infinitely w zero work.
But thanks to our focus on “bad stuff in our economy = modern = capitalism = industry” & “agriculture = old = good,” we rarely see farmland as being an asset that can be traded globally.
AND THAT’S EXACTLY HOW THE GOD DAMN LANDLORDS WANT IT
We’re busy fretting about agribusiness and food processing, meanwhile real live land barons are out here collecting rent & subsidy checks on millions of acres and using it as low-risk ballast for their portfolios.
To be clear: Wall Street is part of this.
So are good ol’ boys.
Most rural counties are run by 2-3 families that quietly own a huge slice of the land. You want to know why rural areas are so fucked up? It ain’t the coastal elites. It’s the landlords right there in the county.
Rural landlords might collect their rent checks directly from their serfs, I mean neighbors in the county instead of a hedge fund office in Manhattan. But they’ve got the same job. Own land, futz around all day, profit.
Ever notice how most proposals to solve farm-related problems- not enough food, too much food, soil conservation, wildlife conservation, water shortages-
all seem to boil down to “throw money at land owners”?
Isn’t that weird?
The philosophy behind conservation payments is sometimes people own farmland that’s too fragile to farm.
But not farming loses money! Therefore, we must pay them not to farm it!
Is anybody asking why own “farmland” that can’t be farmed in the first place?
This is a problem that could be solved a lot of different ways. Trusts, land buybacks, tax writeoffs for donating to conservation, etc. These are all used to some extent.
But the big federal programs are all built around sending landowners a reliable subsidy check every year.
So … yeah. Sometimes rural land ownership is just an instrument for rich people to extort bribes from taxpayers. “Pay me or I’ll ruin your water.”
And sometimes you just monetize it on the corn platform.
Either way, it’s a huge asset class. In many ways it’s more influential & politically powerful than the “industrial food” sector we’ve been taught to fear. But it’s invisible, distant, and quiet, monetizing the earth in ways few of us understand.
Bonus links, a musical cartoon, “Chudesnitsa”, praising the virtues of corn in agriculture, from Nikita Khrushchev’s USSR:
Чудесница (мультфильм) (Russian Wikipedia)