In demand: More non-operators view farmland as an attractive investment, raising questions about the impacts of ‘absent landlords’ on rural areas

In recent years, many state legislatures have tightened their foreign ownership laws out of concern that, at the very least, farmland ought not to be owned by foreign adversaries.

Yet foreign owners are just one of three categories of non-operating farmland owners, the other two being corporations and investors.

While no state prevents farmland transfers to individual investors by inheritance or sale, six Midwestern states have longstanding laws that restrict corporate ownership of agricultural land.

Predominantly enacted between 1930 and 1970, these measures sought to protect the family farm unit. At the time, and today, supporters of these state-level restrictions maintain that when land is owned by the individual who farms it, the farmer and the rural community are better off.

In the Midwest, Iowa, Kansas, Minnesota, North Dakota, South Dakota and Wisconsin limit corporate ownership of farmland. These states carve out exceptions for a family farm corporation, an ownership structure that generally limits the number of stockholders, requires a familial relationship between owners, and/or stipulates that a stockholder reside on or operate the farm.

In some instances, the state-level restrictions on corporate ownership have faced constitutional challenges and sometimes been invalidated, as was the case in Nebraska. In other Midwestern states, court decisions have weakened the enforceability or scope of the measures.

Where these laws remain, questions sometimes are raised about whether they unduly limit agricultural operators’ access to capital or their ability to adapt to new or changing models of ownership. A case in point: North Dakota, where legislators reworked the state’s law in 2023 with the hope of growing its livestock industry while still protecting family farmers.

‘Local ownership is ideal’

North Dakota’s laws against corporate ownership were among the nation’s strictest.

“If a group of four or so farmers wanted to pool their resources to build an animal livestock facility operated by another individual, they would have been prevented from doing so [under the old statutory framework],” Rep. Paul Thomas says, using this scenario as an example of how the state-level restrictions were stifling growth and opportunities.

Livestock farming is capital intensive, Thomas adds, and many traditional lenders tend not to venture into this industry. North Dakota’s HB 1371, signed into law in April 2023, narrowly expands corporate ownership of farmland in the state.

Now, an authorized livestock farm corporation may own or lease up to 160 acres of farmland so long as the entity has no more than 10 shareholders. Under the law, when an individual owns a majority of stocks in an LLC, or 75 percent of shares in a corporation, that shareholder must be actively engaged in farming. Thomas, a sponsor of HB 1371, explains that constituents were very leery of separating farmland ownership from local operators. That is why the law ties majority investors to operator status.

“Local ownership is ideal, as it keeps wealth circulating within the state and rural communities,” he says.

But Thomas also notes that the shift of ownership to non-operators and a rise in farm consolidations can and does happen, regardless of a state’s limit on corporate farmland ownership.

The sense that local ownership of North Dakota’s agricultural land is slipping away is backed by a 2021 U.S. Department of Agriculture study. In North Dakota, non-operating landlords live, on average, 420 miles from the rented farmland, the highest average distance among the 50 states. Additionally, more than 50 percent of North Dakota’s farmland acreage was being rented out as of 2022, one of the highest rates in the nation.

Investors as owners

According to the USDA, 283 million acres, or 31 percent, of all U.S. farmland is owned by non-operator landlords. Most non-operator landlords have some ties to the land. Often, it was inherited and retained for any number of reasons (whether it’s the sentimental value or because the land can generate considerable rental income). There are no restrictions preventing this type of non-operator farmland ownership. Similarly, there are no restrictions on selling farmland to individual investors, a trend that often garners media attention when a billionaire purchases large amounts of farmland.

Farmland, too, attracts interest from institutional investors: corporate entities that pool money on behalf of clients. The number of farmland properties owned by the seven largest institutional investors increased 231 percent between 2008 and 2023, and the value of those holdings rose more than 800 percent, to around $16.2 billion, according to an 2023 investigation by Reuters.

André Magnan, a University of Regina sociology professor who studies farm financialization, explains that while a vast majority of sales are farmer-to-farmer, agricultural land is increasingly viewed as a smart asset by those outside the agriculture industry.

“[It] is considered a hedge against inflation, and investors believe that with a growing world population, there will be increasing demand for food,” he says.

In 2016, Saskatchewan began prohibiting pension funds and large trusts from acquiring farmland; this legislation (Bill No. 187) was introduced and passed after a private investment group sold more than 100,000 acres to the Canada Pension Plan.

Variation in state laws

Of the six Midwestern states that have laws against corporate farming, not all preclude institutional investment ownership.

For example, in Wisconsin, domestic corporations and trusts may own farmland or carry out farm operations, provided there are 15 unrelated shareholders or less and no more than two classes of shares. In Iowa, authorized trusts comprised of less than 25 beneficiaries may own up to 1,500 acres of farmland and may own even more if it is leased to the previous owner. Minnesota flatly prohibits pension and investment funds or trusts from owning agricultural land or using it for farming purposes. South Dakota’s and North Dakota’s anti-corporate-farming laws similarly restrict institutional investors, without exception.

Starting in the mid-2000s, real estate investment trusts (REITs) also began purchasing farmland in states that allow this type of ownership model in the agricultural sector. Under a REIT, individuals (as opposed to asset managers) pool resources to purchase farmland. Farmland ownership among the two publicly traded farmland REITs has increased by approximately 180,000 acres in a little over a decade.

Gladstone Land, which entered the farmland market in 2013 and focuses on niche crops, owns 9,686 acres in Michigan and Nebraska. Farmland Partners, which went public in 2014 and focuses on row cropping, owns approximately 44,000 acres in the Midwest.

In Canada, the farmland investment firm Bonnefield has $1 billion in assets under management that comprise approximately 134,000 acres across seven Canadian provinces. According to Magnan, when a landlord is an investment company in Toronto or Calgary, those rent payments end up in the hands of partners or the investors, with the result being less revenue circulating in the local economy.

Nexus to the local economy

In 2021, the USDA studied the relationship between “absent” non-operator farmland owners (those located more than 100 miles from the rental farmland) and local economic factors. It found that “the prevalence of absent landlords is associated with declining local employment rates.” When data was analyzed at the state and county levels, per capita income growth was lower in areas with higher rates of landlord absenteeism. This federal study only looked at the correlation between income levels and the prevalence of landlord absenteeism; it did not make any causal links.

Members of U.S. Congress had mandated the study as part of the 2018 farm bill, seeking to better understand, in part, the impacts of absent landlords on the economic stability of rural communities.

Fast forward to 2023, and concerns about corporate “land grabs” led to the introduction of the Farmland for Farmers Act. This congressional proposal seeks to restrict future farmland ownership and leasing by corporations, pension funds and investment funds. The bill’s supporters also say it would protect and enhance the role of states in regulating farm ownership, in line with the intent of the anti-corporate farming laws passed in the mid-20th century. For example, the proposed federal legislation spells out a role for state attorneys general and other state officials in enforcing the act. It also explicitly authorizes states to adopt their own, “more restrictive requirements” on farmland ownership.

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Military 101: The U.S. Army

Military 101: The U.S. Army

Recon Training at Fort Indiantown Gap, Pennsylvania, on June 8, 2024. Photo credit: Sgt. Du-Marc Mills, 109th Mobile Public Affairs Detachment.

By Joe Paul, Policy Analyst

The United States Army is a core branch of the United States Armed Forces. The Army engages enemy ground forces and identifies, seizes and controls the land, resources and population of a designated adversary. The Army is split into two components: the active force and the reserve force. The Reserves consist of the United States Army Reserve and the Army National Guard.

The Army has operational and institutional missions. The operational Army is the fighting force comprised of armies, corps, divisions and more that conduct worldwide operations. The institutional Army supports the operational component by providing the infrastructure needed to raise, train, equip and otherwise ensure the Army’s readiness. The institutional Army can be divided into training and industrial bases, with the training base developing the knowledge, skills and abilities of the soldier and the industrial base providing the equipment and logistics needed.

Mission

The Army’s Mission is “to deploy, fight and win our Nation’s wars by providing ready, prompt and sustained land dominance” by Army forces across the full spectrum of conflict as part of the Joint Force.   

History

The Army was established on June 14, 1775, making it older than the Declaration of Independence by more than a year. The new Continental Army drew upon the traditions of the local militia and the professional standards similar to the British Army. Following actions by the British government, especially the Coercive Acts of 1774, New England citizens attacked British forces at the Battle of Lexington and Concord. This initial militia became the basis for the modern Army.

The Second Continental Congress convened in May 1775, and on June 14, 1775, passed a resolution establishing companies of riflemen across the colonies to join existing soldiers in Boston. The following day former President George Washington was appointed commander in chief. After the Revolutionary War, the Army was reduced to one regiment consisting of eight infantry companies and two of artillery and charged with safeguarding the new nation’s military arms and stores.

The Army played a vital role in the War of 1812 with an attempt to invade Canada and later victory against the British in the Battle of New Orleans. The Army was also deployed in the Mexican American War and won decisively at Vera Cruz. The Civil War saw major technological advances in warfare from munitions to arms. The development of mechanized guns and breach loading munitions increased the ability to inflict terrible damage. Additionally, the Army was used throughout the West to force Native Americans onto reservations. The Spanish-American War, perhaps most known for former President Theodore Roosevelt and the Rough Riders’ charge up San Juan Hill, was the last major engagement during the 1800s.

World War I saw the Army fighting alongside the British and French forces against the Imperial German and the Austro-Hungarian forces. The United States committed infantry and machine gun and artillery units to the cause. The First Army was organized and activated under General John Pershing on July 4, 1918. The U.S. forces assisted in operations up and down the lines from the Franco-Belgium border and Luxembourg to the Italian border with the Austro-Hungarian Empire.

During WWII, the U.S. Army operated globally. From the front lines against Nazi Germany to the War in the Pacific and all points in-between, U.S. Army soldiers played a key role in the liberation of France, Italy, the Philippines, North Africa, and other countries.

Branches of the Army

Today, there are 17 branches of the Army. Each branch is a key component of the Total Army concept.  

  • Adjutant General (AG) — The adjutant general manages all personnel systems within the Army that impact readiness, morale and career.

  • Air Defense Artillery (ADA) — The air defense artillery protects against aircraft and missiles with systems like the Patriot anti-missile system and the Stinger.

  • Armor (AR) — The armor takes its heritage from cavalries. It performs scout and reconnaissance missions and are often leaders in areas of conflict.

  • Aviation (AV) — Aviation is, in raw numbers, the largest air force in the U.S. military. It consists of transport, scout and attack helicopters used for a wide utility of missions.

  • Chemical Corps (CM) — Chemical corps operates in the realm of logistics, training, intelligence, research and analysis of chemical threats.

  • Corps of Engineers (EN) — The Corps of Engineers provides much of the infrastructure combat, construction, topographic and civil works, as well as environmental and other engineering specialties.
  • Cyber Corps (ARCYBER) — The cyber corps this branch protects the U.S. Department of Defense networks from cyber threats, both foreign and domestic.

  • Field Artillery (FA) — Field artillery provides the support to engage an enemy at a distance with cannons, rockets, and missiles and coordinates all supporting fire including air and naval.

  • Finance (FC) — Finance controls all aspects of pay, allowances, accounting and contracting.

  • Infantry (IN) — Infantry is the core of the Army’s strength. They maintain a constant state of readiness in preparation for combat across the globe.

  • Medical Services (MED) — Medical services include doctors, dentists and nurses, as well as the support personnel, facilities, supplies and administration of medical services, provided to soldiers and their families.

  • Military Intelligence (MI) — Military intelligence is a large branch which monitors and provides tactical, counterintelligence, signals and electronic security, surveillance, and aerial reconnaissance.
  • Military Police (MP) — Military police are specialists in protecting “rear area” assets, which are those farthest from conflict, as well law enforcement, criminal investigations, counterterrorism, physical security and corrections.

  • Ordnance (OD) — This branch develops, produces or acquires, along with supporting, the Army’s weapon systems, ammunitions, missiles and wheeled and tracked vehicles.

  • Quartermaster (QM) — The quartermaster plans and directs all resources providing food, water, petroleum, repair parts, weapon systems and other services such as laundry, telephone and mail.

  • Signal (SC) — The signal corps maintains and creates the communication and information technology used across the Army, including radios, cell phones, lasers and satellites.

  • Transportation (TC) — Armies must move people, weapons, equipment, and supplies across land, sea and air. The transportation corps operates all the Army’s transport systems to make sure resources are where they need to be, when they need to be there.

Each branch of the military operates its own elite forces in addition to their regular enlisted units. The special operations unit of the Army includes the Rangers, which date back to the 1700s with Robert Rogers’ Rangers. The Night Stalkers of the Special Operations Aviation Regiment run international missions from helicopters in the dark. They are aviation experts who use aircraft tactics to surprise the enemy anywhere at any time. The Green Berets, who wage and excel at guerilla war missions that can take place in any environment, are U.S. Army Special Forces.

Army aviators in helicopters take flight.
Army aviators take flight near Washington, D.C., on June 4, 2024.
Photo credit: George Markfelder, Joint Task Force — National Capital Region.
Command Structure
Chart going left to right of the U.S. Army Command Structure.

The command structure of the Army consists of teams, squads, platoons, company, battalions, brigades, divisions, corps and armies. A team is a smaller unit usually consisting of four soldiers led by a sergeant. A squad is two to three teams and is led by a staff sergeant, and a second or first lieutenant commands a platoon, which is two to three squads. A company, made up of three to four platoons, is led by a captain. Three to five companies gather to form a battalion, which are led by a lieutenant colonel. A brigade is commanded by a colonel and is made up of three or more battalions. A division consists of three brigades and is commanded by a major general. Corps are made up of as many as 40,000 soldiers led by a 3-star lieutenant general. An army is made up of multiple Corps.

Rank

The rank structure of the Army consists of enlisted personnel, warrant and commissioned officers. Enlisted ranks range from private to sergeant major. Officer ranks range from second lieutenant to general.

Enlisted Ranks:                    

  • Private (E-1)
  • Private (E-2)
  • Private First Class (E-3)
  • Corporal (E-4)
  • Sergeant (E-5)
  • Staff Sergeant (E-6)
  • Sergeant First Class (E-7)
  • Master Sergeant (E-8)
  • First Sergeant (E-8)
  • Sergeant Major (E-9)
  • Command Sergeant Major (E-9)

Officer Ranks:

  • Second Lieutenant (O-1)
  • First Lieutenant (O-2)
  • Captain (O-3)
  • Major (O-4)
  • Lieutenant Colonel (O-5)
  • Colonel (O-6)
  • Brigadier General (O-7)
  • Major General (O-8)
  • Lieutenant General (O-9)
  • General (O-10)

The highest-ranking enlisted member of the Army is Sergeant Major of the Army, while the highest-ranking officer of the Army is the General of the Army. Army soldiers can also hold rank as a warrant officer in specialties from W-1 through W-5. As highly specialized officers, warrant officers are officer-level technical specialists in a particular field that provide leadership, training and extensive knowledge to the Army in their occupational specialty. Five-star generals only exist during wartime. The last five-star general was Omar N. Bradley, who the U.S. Senate elevated, with consent, in 1950. Gen. Bradley died in 1981 and no other U.S. military officer in any branch has been promoted to 5-star since.

Functional Categories

In addition to the branches, the Army also assigns functional areas to align with branches consistent with joint doctrine. In functional areas, units are grouped and categorized by their functions to facilitate competencies required in today’s modern Army. Functional areas include:

  1. Maneuver, Fires & Effects, which brings together units with similar battlefield applications or complementary roles, such as infantry, armor, aviation, artillery, engineers, military police and others.
  2. Operations Support, which brings together military intelligence and signals which impact networks, overall intelligence and surveillance, planning, development and education.
  3. Force Sustainment, which brings together all the soldier support roles from logistics and adjutant general, to the medical, chaplain and judge advocates general.

Southern Pulse Newsletter, November

HELLO!

As the days grow shorter and the holidays approach, we’re reflecting on a season full of accomplishments while also gearing up for what’s next. 🥧🍁

Recently, our team brought together state legislative leaders from Alabama, Arkansas, Kentucky, and West Virginia to Capitol Hill in Washington, D.C. The group met with federal lawmakers to discuss the state impacts of Federal Energy Permitting Reform. We also hosted a webinar titled “Finding Forever: Understanding Permanency in Foster Care” in partnership with Casey Family Programs. The webinar highlighted legislative challenges and provided actionable strategies to improve outcomes for children. Finally, the 2024 Staff Academy for Government Excellence (SAGE) class has graduated! The class, consisting of 29 staff members from Southern state legislative, judicial, executive, and agency positions, spent four full days in intensive leadership development, learning from expert speakers and facilitators, while also forming lasting connections and friendships. Click here to learn more and cheers to the SAGE class of 2024!

We’re especially grateful for you, our dedicated members, and the work you do to make a difference. Wishing you a day filled with joy, gratitude, and plenty of pie – Happy Thanksgiving!

With Gratitude, 
Lindsey G.

Click here to read Southern Pulse- November 2024

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CSG South Senior Policy Analyst Tom Opdyke Spoke to Lawmakers on Wind Energy Tax Policies

The Chair of the House Energy & Natural Resources Committee, Representative Brad Boles, invited Senior Policy Analyst Tom Opdyke to give testimony on state tax policies related to the wind energy industry. Opdyke gave the committee an overview of Oklahoma’s policies and how they compare to three of the Sooner State’s neighbors: Kansas, New Mexico, and Texas. He covered how properties with wind farms are taxed and the different incentives each state offers. Members of the committee then asked several questions to gain a better understanding of the issue.

Click here to view full recording

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CSG South Senior Policy Analyst Cody Allen Spoke to Lawmakers on Higher Education Systems

On Monday, October 21, 2024, CSG South Senior Policy Analyst Cody Allen presented to the Georgia House Study Committee on Assessing the Semester and Quarter Systems at the University System of Georgia (USG) and the Technical College System of Georgia (TCSG) Institutions at the invitation of Committee Chairman, Representative Shaw Blackmon at the Georgia Military College in Milledgeville. The study examined whether the USG and TCSG transitions in 1999 and 2011 realized the anticipated benefits, such as the alignment of curricula within and across the systems to facilitate the transfer of courses, increase administrative efficiencies, and reduce administrative costs. However, lawmakers expressed concerns that the conversion from the quarter system to the semester system has resulted in longer terms with more classes and fewer graduation cycles and if there are better options for students or workforce development. As part of the study, Cody Allen presented on the public university systems that still operate on a quarters calendar – the University of California System and those in Oregon and Washington – as well as the CSG South’s own Louisiana Tech University in Ruston, Louisiana.

Nationally, only approximately 5 percent of postsecondary institutions do not operate on semesters, which could potentially make transfers and articulation agreements difficult – as recognized by the University of California at Berkley opting out of the quarter system. While there has not been much of a legislative appetite to revert to quarters, Cody Allen shared promising legislation from Indiana, Pennsylvania, Rhode Island, and Tennessee that aimed to align high school curricula with core college courses, simplify the transfer process, encourage more students to graduate and programs to be completed in three years or less, and recognize apprenticeships or other workforce credentials for college credits. In closing, he highlighted how the trend for reducing time-to-degree completion and preparing students for the workforce in the states appears to be towards ensuring credit recognition and better aligning all levels of the education system.

Click here to view full recording

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The Art of Civility

Illinois Sen. Elgie Sims will serve as the 2025 CSG National Chair. As a public servant, Sims believes there is a responsibility to exemplify civility and decorum in political spaces, not only for the sake of effective governance but also for the democracy that the next generation will inherit.

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Critical Minerals & the Midwest: Legislators take deep dive at November policy workshop

In November, lawmakers from seven Midwestern states and two Canadian provinces traveled to Chicago for a two-day learning opportunity that deepened their understanding about critical minerals and related public policies.

The workshop was held as part of the work of two policy committees of The Council of State Governments’ bipartisan, binational Midwestern Legislative Conference (MLC): Energy and Environment and Midwest-Canada Relations.

Attendees included legislators from Indiana, Iowa, Kansas, Manitoba, Minnesota, North Dakota, Ohio, Ontario and Wisconsin. They were joined by leading national and international experts from the U.S. Geological Survey, the Geolological Survey of Canada, the Illinois State Geological Survey, the province of Québec, the Critical Minerals Institute and the Rocky Mountain Institute.

Three officers of the two MLC committees took part in the event and helped oversee it: Indiana Rep. Ethan Manning, co-chair of the MLC Energy and Environment Committee; Ontario MPP Ernie Hardeman, co-chair of the MLC Midwest-Canada Relations Committee; and North Dakota Rep. David Monson, vice chair of the MLC Midwest-Canada Relations Committee.

More on critical minerals and the workshop

A critical mineral is defined under U.S. federal law as one that is essential to the economic or national security of the country. Changes in the energy sector and overall economy are increasing the need for many of these critical minerals.

During the the interactive policy workshop, legislators learned what critical minerals are and where they are (and might be) in the Midwestern region. Other discussions focused on the end uses of critical minerals and the importance of building regional, binational supply chains.

The Consulate General of Canada in Chicago served as a partner on this event. This partnership, along with the generous support of external sponsors, helped allow CSG Midwest to provide travel scholarships to participating legislators.

CSG’s Midwestern Legislative Conference thanks the partners and sponsors, as well as the featured speakers and participating legislators, for contributing to the success of the policy workshop.

View the agenda

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