Opinion: Organic farms are paying off as financiers provide the land and tenant farmers cultivate the crops

A twist on organic farming is blooming into profits, opines Peter Coy of The New York Times. The set-up looks like this: Garrett Mussi, a farmer in California's San Joaquin Valley, "doesn’t own any of the acres he tends so carefully. He is a tenant farmer. The owner of the land is Farmland L.P., an investment fund that buys farmland and readies it for certification as organic by the Department of Agriculture: using pesticides sparingly, and only the least harmful kinds; minimizing erosion; sequestering carbon in the soil; rotating crops regularly and providing habitats for butterflies, bees and other pollinators. Some organic farmers use ladybugs to eat aphids and owls to eat rodents. . . . What we have here is finance meeting farming and doing good, not evil."

NYT illustration; images by VectorGoods and Bablab/Getty Images

Federal crop insurance "incentivizes farmers to stick with one crop — typically industrial corn or soybeans — and make heavy use of fertilizers and pesticides," Coy writes. “Companies such as Farmland are thinking further ahead while still keeping financial principles and profit in mind. Farmland bought one 4,000-acre farm that grew mainly low-value alfalfa, feed corn and processing tomatoes, assessed the ideal uses for different sections based on soil conditions and other factors, and chose to go with blueberries, olives, nuts, garden vegetables and pasture in various areas — all grown without heavy-duty pesticides." Craig Wichner, the founder and managing partner of Farmland, told Coy: “At a very simple level, our business model is based on taking high-quality land that’s growing low-value crops and converting it to higher-value crops.”

Coy writes: "Going organic isn’t cheap. Farmland has to stop using industrial-strength pesticides and fertilizers on land for three years before it can meet the Department of Agriculture’s standard for organic farming. . . . The upside is that consumers are willing to pay more for organically grown food. . . . For organic farming to catch on, young people will have to embrace it. But most can’t afford to because of the sky-high cost of agricultural land. . . . It’s as if tech start-ups had to buy their own office buildings before they could go into business, Wichner told Coy. Investors in companies such as Farmland are essentially supplying farmers with the 'office buildings' they need to work their food-producing magic."