One of the largest farmland sales in state history is fueling new speculation over a proposal in Gov. Scott Walker's budget to make it legal for foreign entities to buy large tracts of land in Wisconsin. Current state law limits foreign ownership, with some exceptions, to 640 acres but Walker wants to waive those rules and end the acreage cap.

Last November, UBS AgriVest, a unit of the Swiss banking giant UBS. paid $67.5 million or nearly $7,000 per acre for about 9,800 acres in southwest Wisconsin.

The sale of the Grant County land by investor and philanthropist Ray Eckstein of Cassville was not widely reported and didn’t get much exposure until a story last month in the New York Times noting the bull market for farmland.

It's unclear if the deal violated Wisconsin's current law on foreign ownership although state officials say it probably met Chapter 710 of the statutes. One reason is that the UBS AgriVest Fund is managed out of Hartford, Conn. Current state law also provides an exemption for purchasers from nations that are part of global free trade agreements, says Brian Larson of the state Legislative Council.

Either way, farmland is apparently the new gold for some long-term investors. The idea is to purchase land and then rent it back to farmers through professional managers, with the owners pocketing the rental income.

A 7-year-old private real estate investment trust (REIT), the AgriVest fund has been buying huge chunks of farmland in the Mississippi Delta, the Rocky Mountain states, Georgia and now Wisconsin. The fund’s 27 investors are mostly pension funds ranging from the Orange County Employees Retirement System in California to the Anchorage Police & Fire Retirement System.. 

Given the interest among big pension plans in investing in farmland, the Farmland Investor Center is now speculating that money manager TIAA-CREF is behind Walker's shadowy land ownership proposal.

So far, no group has come forward to fully lay claim to the Walker proposal — although the Wisconsin Realtors Association takes some of the credit. Can you imagine the commission on a $70 million sale?

But while investors in California or Alaska or Switzerland might enjoy owning a chunk of Wisconsin farmland, the development isn’t so good for state farmers, warns Kara Slaughter of the Wisconsin Farmers Union. The problem is that land speculation tends to drive prices higher, removes local control, and makes it harder for small operators to turn a profit.

Slaughter notes in the April edition of the Farmers Union newsletter that California’s dairy industry is reeling in part because of soaring land prices that have made it prohibitively expensive for the mega-dairies there to buy grain for thousands of animals confined in giant feed lots. As a result, more than 100 of California’s 1,600 dairies went out of business in 2012, she writes.

Add in the fact that nearly 50 percent of California farm acreage is rented vs. just 30 percent in Wisconsin, and Slaughter says there are inherent risks in a system where producers don’t own their own land.

“The strength of Wisconsin’s dairy farms lies in their diversification and resilience — a brilliant system where manure feeds the plants, the plants feed the cows and the cows feed the farmer,” she writes.

Slaughter says farming has remained a backbone of the Wisconsin economy through good times and bad because of the way it has been structured. She says the trend toward outside ownership of the land is decidedly problematic.

“Sometimes we don’t know a good thing until it’s gone,” she says. “The current state of affairs in California suggests strongly that the concept of separating the acres from the cows is a bandwagon we do not want to hop on.”

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Bluezee
Bluezee

If given the opportunity the richest of the world will buy everything, then control everyone. Our forefathers new monopolies were a threat to democracy and the pursuit of happiness, not to mention personal freedoms. These laws are in place for a reason.

bro
bro

The argument that landowners should be able to sell their land to whoever they want is foolish.
If a known felon wants to buy a gun, should he be able to just pay a little more and I could sell it to him? After all, it is my property. if I can sell a 12 pack out of my refrigerator to the 15 year old neighbor kid and make a profit, should I be able to? After all, it is my beer.
I can not see where anyone in this state can look past the severe repercussions this state will see if this is allowed. Wake up Walker worshippers, this man is not what you think he is. 20 years ago the conservatives in Wisconsin would never have supported this fool's agenda.

everclear
everclear

Nice now foreign countries can come into Wis and put in hugh corp farms and either draw down the water tables or pollute with their runoff with the blessing of Cathy Stepp.

B-Man
B-Man

And then there's Dane County, where the Kathleen uses my tax dollars to buy land so I can't earn a living and pay my taxes

Mr Mellow
Mr Mellow

Classic conservative mindlock: If a corporation buys land, then it's all good, but if government buys land, then it's all bad.

Kathleen Falk bought land to preserve it. You can't fish in a WalMart parking lot, B-Man.

Mr Mellow
Mr Mellow

A nation of renters. Wow, we've slipped a long way from the "ownership society" proposed by former President George W. Bush. To paraphrase, it's the conservative idea that an individual's welfare is directly related to their ability to control their own lives and wealth, rather than having to depend on government programs and payments.

In the time since Bush touted this philosophy, Wall Street has crashed the economy, destroying millions of jobs, and forcing people to use up their savings and deplete their retirement accounts. Employers have suppressed unions and forced their workers to accept lower wages and fewer benefits. Big Banks have foreclosed their way into owning millions of our homes, and financiers are buying up the remaining non-corporate farmland.

So much for "conservatives" fostering the ability of individuals to control their wealth.

And as this has been going on, "conservatives" have relentlessly attempted to implement huge tax cuts for the rich, and huge cuts in government programs that help the less well-to-do (Social Security, Medicare, Medicaid, etc). These "conservatives" claim this is about freeing individuals from the tyranny of Big Government, but it's really about neutering government's ability to protect the non-rich from unfettered corporate exploitation and full out economic destitution.

What will happen once our individual wealth is gone, and the government safety net programs have been shredded?

It's a worldwide historical fact that democracy and standards of living rise in societies as their middle class grows larger and more influential. It's not very difficult to image what will happen to both once the "conservatives" have finished suppressing the middle class.

bosco
bosco

I agree conservatives want us to own land and prosper. Where I have a problem is the liberals trying to put everything in government ownership.

Mr Mellow
Mr Mellow

In the years since the economy crashed (on Bush's watch), FOX, Limbaugh, American For Prosperity, Club For Growth, the GOP, Drudge, etc., have all been endlessly repeating that EVERYTHING is the fault of government and "Liberals."

But who has prospered, and who has suffered since 2007?

The ultra rich, Wall Street, the Big Banks, the largest corporations (they're people my friends) -- all are doing quite well. Anybody believe they are the Liberals?

While the stock market is back, and setting new records, jobs haven't come back.
Millions unemployed, millions of homes foreclosed, poverty up, homelessness up.
Who suffered? Pretty much everyone--liberals AND conservatives--who isn't rich.

Who owns/controls Wall Street, Big Banks, big corporations, etc? Not the losers.
Who owns/controls FOX, Limbaugh, American For Prosperity, etc? Not the losers.

But who gets blamed for what has happened to those who have gotten the shaft?
Government, and the Liberals.

RW media is corporate media, and their paid role is to protect/serve their owners by making sure conservatives blame government and liberals, and NEVER let the losers focus on who is actually behind the curtain, running things.

witness2012
witness2012

bosco, then you would oppose this law.

Bluezee
Bluezee

thx for clearing that up for bosco, wit2012

Bluezee
Bluezee

From the article...."Either way, farmland is apparently the new gold for some long-term investors. The idea is to purchase land and then rent it back to farmers through professional managers, with the owners pocketing the rental income." Doesn't sound like owning land to me.

witness2012
witness2012

Really nicely summarized!

We're being raided of our commonwealth- the water, clean air, and resources- since this state administration has loosened the regulations that protected the public from corporate greed and now, they're loosening the regulations against policies that will undermine self-sufficiency and independence.

And, they did it all by using the boogie man of "big government".

DriveThru
DriveThru

As one of the root causes of heart disease, stroke, many cancers, and osteoporosis, dairy is anything but "brilliant." We'd be far better off growing potatoes and diversified fruit and vegetables, and these crops require so much less land and are so valuable, 7k an acre is not a problem.

milton's fried man
milton's fried man

The model for the vascular diseases you mention are seeming less and less related to diet and more related to inflammatory processes. But never mind that now. What makes you so sure that the land likely to be bought up foreign speculators is all dairy farm?

IndependentinWis
IndependentinWis

Just remember how much cash on hand the Chinese government has to spend. Selling land to a Communist country doesn't sound too good to me and that is what is coming and to have it done by a GOP run state is beyond reason. Of course it all comes down to how much GOP lawmakers will get in campaign funds from the foreign governments.

DriveThru
DriveThru

Heck, they were happy to ship our jobs off to China, why not the farmland too! Maybe when the rural people are working for Chinese wages, they'll understand why the blue parts of the state hate globalization and neoliberalism.

bosco
bosco

What you might be missing is free enterprise where the owner gets to sell their land to the high bidder.

Bluezee
Bluezee

Yes sell it all til there is nothing left and very few own everything. Great plan.

Retoother
Retoother

That price per acre is kind of cheap if it is good producing farm land. Look at what is happening to farms in CA. Farm land in Dane cty has been selling for almost twice that amount and it is not going to investment companies, it is going to farm operations. You need good land to produce enough feed to keep the operation going.

Seems to me they already found a loop hole to buy more than 640 acres........either close it or open it up to keep a better eye on it.

bp1277
bp1277

And why shouldn't the landowner be able to profit from this? What should he do, say "No, don't give me $67.5 million for my land, I don't agree with the way our state government is run" Everyone of you would be lying if you would turn this deal down. Ever think that maybe the money is going to be put right back into WI?

historyfelon
historyfelon

And what would you be saying if this was happening because of some Obama policy..and "foreigners" were buying up our land? Oh, then it would be a plot on the part of the Obama Administration to destroy the country...but since Republicans are selling our state out from under us..it's just good business sense. BS

bp1277
bp1277

Not at all. I just think that a person should be able to sell any land that they own to whomever they want. Why should the government be able to tell us how much of our land we can and can not sell and to who we can sell it to. It has nothing to do with political parties, but you go ahead and make that assumption about me. Talk about BS

Bluezee
Bluezee

so that one person/company/ foreign country doesn't monopolize everything.

witness2012
witness2012

How is the money going to be reinvested in Wisconsin if the owner is from another country?

My god! Use your head- think!

Bluezee
Bluezee

because we would have to change existing laws in order for the farmer to do that. These laws exist for a reason.

Lumberjack
Lumberjack

Greed is an amazing human frailty. Ever since the days of Ronald Regan and his esteem of money, money managers, and the wealthy, and his dribble down theory or economics for the rest of us, I am amazed how corrupted our country has become. We just can't seem to see the forest through the trees.

ObbieZ
ObbieZ

"A 7-year-old private real estate investment trust (REIT), the AgriVest ... fund’s 27 investors are mostly pension funds ranging from the Orange County Employees Retirement System in California to the Anchorage Police & Fire Retirement System.."

This is eerily familiar. We've seen this bubble before, and the pension funds should run away and run away fast.

witness2012
witness2012

We've got to stop this. Even Republican legislators have to see what a bad policy this would be. I hope so, anyway.

Bluezee
Bluezee

don't count on it.

lute
lute

"...the trend toward outside ownership of the land is decidedly problematic"

Nice understatement.

paulwesterberg
paulwesterberg

The serfs will own neither the land nor the fruits of their labor, but they will be happy in the service of their lord.

Crow Barr
Crow Barr

We will be known as the "Walkerites" happy to serve My Lord and My Lady, tending our rented plot of land.

Bluezee
Bluezee

This exert say it all ...."Either way, farmland is apparently the new gold for some long-term investors. The idea is to purchase land and then rent it back to farmers through professional managers, with the owners pocketing the rental income."

Bluezee
Bluezee

especially considering it is nearly impossible for individuals to get financing but foreign companies and big business continue to get plenty.

PapaLorax
PapaLorax

So a deal that is already done, to a firm that is likely a legal new owner is the driver? hmmm...You even point out that there are exceptions. Could it be the proposed change was just to make this clear?

Bluezee
Bluezee

This part makes me angry...."Either way, farmland is apparently the new gold for some long-term investors. The idea is to purchase land and then rent it back to farmers through professional managers, with the owners pocketing the rental income."

Alauda
Alauda

He wants to borrow a billion dollars and put the state into futher debt while turning down Federal money. He wants to destroy the clean water and air and violate tribal agreements with mines. Now he wants to sell our land to foreign entities? Who is Scott Walker?

Wis_BlogRider
Wis_BlogRider

Aluada,
Who is Scott Walker? Read the book "EVIL GENES" by Barbara Oakley. It will explain some of the current dysfunction going on in Wisconsin with the Koch Brothers, Scott Walker and their paid off legislatures forcing their predatory agenda on the citizens of Wisconsin.

Beingbucky
Beingbucky

And neither does your post, Mr.or Ms. LM. Do tell. Personally I am fascinated by the concept that agriculture is returning to a model where renters do all the field work for the benefit of rich people. Both share cropping and serfdom come to mind. Walker probably knows nothing about either phenomenon, but you know what they say about people who don't know history.

Laudmauth
Laudmauth

Aside from erasing any doubts about Phil Ivey's basic misunderstanding of the real estate industry, this article provides no real information

witness2012
witness2012

LM, there is plenty of information in this article about the implications and effects of raising the cap on the amount of land that can be sold to foreign ownership!

Read it again!

bosco
bosco

I have to agree with LM

Bluezee
Bluezee

Did you read the article? The part about California was pretty informative to me.

jbob
jbob

Hence his "trip" to china

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