I have often blogged in the past about a specialized chapter under the Bankruptcy Code for farmers and fishermen, Chapter 12 for Family Farmers and Fishermen. Farmers are near and dear to my heart because they have been the backbone of this country since its inception. However, that status is now becoming endangered by the same folks who brought us the Great Recession of 2008, ie Wall Street. That’s right. The same folks who thought it would be a good idea to securitize home mortgages and sell as investment vehicles are now doing the same thing with our family farms in America. A recent article in Salon illustrates that slick Wall Street hedge funds and investors are scooping up farmland throughout America and creating Real Estate Investment Trusts (REIT).
Real Estate Investment Trusts
The REITs allow Wall Street to create a trust entity into which ownership of farmland is placed. Some might say this is just a corporate farm entity and the only thing different between this and a family farmer is that a corporation owns the farmland instead of an individual. But look closer and you will discover the motivation for the creation of the REITs is the ability to claim “enormous tax breaks to subsidize their scheme.” These are the same tax breaks created to assist a family farmer in maintaining farm production through the good and the lean years. Yet as Wall Street subsidizes its farm operations with tax breaks originally intended for the family farmer, it is raking in tons of money from investors eager to buy into the REITs.
Wall Street Creating Tenant Farmers
So if Wall Street is buying up farms, how is it producing off of these farm lands? The real possibility is by taking those who can no longer afford to operate as a family farmer and turning them into a tenant farmer. Remember those folks? The good, decent, salt of the earth workers who for decades in this country could not afford to purchase their own land and so toiled for large landowners who hired them to produce the crops which then created more wealth for the large landowners? That’s correct. Wall Street is creating another generation of tenant farmers. I guess it was not enough to put people out of their homes. Every day politicians on one side tell us there is too much regulation while the other side complains there is not enough. And while we yo-yo between these two positions year after year, Wall Street slyly takes over another core of the American dream.
If such a future is anathema to you and you wish to support the family farmers of America, please visit the website for the National Young Farmers Coalition. If you are currently a family farmer who is experiencing financial difficulties, please contact one of our locations nearest you for a free, confidential consultation with one of our experienced, licensed attorneys.
Carla M. Handy is the Managing Partner of the Bond & Botes Law Offices in Gadsden and Anniston, Alabama. She holds a Bachelor of Arts from Auburn University, and a Juris Doctorate from the University of Alabama School of Law. She has been helping families navigate consumer bankruptcy cases since 1994.Read her full bio here.