Why Is Bill Gates Buying So Much Farmland?
Bill Gates was quietly becoming the biggest private owner of farmland in the United States.
But, As of February 2021, Gates has made headlines across the world for purchasing nearly 250,000 acres across Louisiana, Arkansas, Nebraska, and Washington.
Why is Bill Gates buying up so much land?
While researching for his magazine, The Land Report, author, and journalist Eric O’Keefe noticed a massive land purchase in eastern Washington.
A purchase of more than a thousand acres is what he calls as a “blue moon event” because of its rarity and scale.
This particular acquisition of 14,500 acres of expensive prime farmland in eastern Washington was obviously something worth investigating.
The purchase is part of a broader 269,000-acre land portfolio belonging to Gates and associated entities across 19 US states, with the largest holdings in Louisiana (69,071 acres), Arkansas (47,927 acres), and Arizona (25,750 acres).
O’Keefe tracked the purchase to a small Louisiana-based firm called Cascade Investment LLC.
Coincidentally, this obscure investment firm headed by Michael Larson is responsible for managing large sums of Bill Gates’ portfolio.
In 1994, the Gateses hired the former Putnam Investments bond-fund manager to diversify the couple’s portfolio away from the 45 percent stake in Microsoft while maintaining comparable or better returns.
According to a 2014 profile of Larson in the Wall Street Journal, these investments include a substantial stake in AutoNation, hospitality interests such as the Charles Hotel in Cambridge and the Four Seasons in San Francisco, and “at least 100,000 acres of farmland in California, Illinois, Iowa, Louisiana, and other states … .”
Michael Larson has also been accused of nefarious behavior.
The New York Times reported in May 2021 that Larson engaged in a pattern of workplace misconduct, according to former employees.
Over the years, at least six people — including four Cascade employees — complained to Mr. Gates about Mr. Larson, according to former employees and others with direct knowledge of the complaints. (Several of them also complained to his wife, Melinda French Gates.) Cascade made payments to at least seven people who witnessed or knew about Mr. Larson’s behavior; in exchange, they agreed to never speak about their time at the firm.
When pressed during a book discussion on Reddit about why he’s gobbling up so much farmland, Gates claimed, “It is not connected to climate [change].” The decision, he said, came from his “investment group.” Cascade Investment, the firm making these acquisitions, is controlled by Gates.
And the firm said it’s “very supportive of sustainable farming”. It also is a shareholder in the plant-based protein companies Beyond Meat and Impossible Foods as well as the farming equipment manufacturer John Deere.
Its single largest acquisition of farmland came in 2017 when it paid $520 million to purchase 61 properties from the Canada Pension Plan Investment Board (CPPIB). This parcel — which apparently makes up the bulk of the Gates’s farmland holdings — had previously belonged to Agriculture Company of America, a real estate investment trust acquired by CPIBB in 2013.
In January of 2021, the Bill & Melinda Gates Foundation announced that it’s creating a nonprofit entity called Gates Ag One which will seek to “speed up efforts to provide smallholder farmers in developing countries, many of whom are women, with access to the affordable tools and innovations they need to sustainably improve crop productivity and adapt to the effects of climate change.”
Other questions put to Gates during his Reddit AMA session similarly touched on the sustainability of the agrifood system. One asked about the viability of seawater desalination to solve global water shortages.
“We have lots of water. The problem is that it is expensive to desalinate it and move it to where it is needed,” Gates wrote.
“The cost is prohibitive for agricultural use of water. New seeds can reduce water use but some areas won’t be able to farm as much.”
Gates was also asked which “niche technology” he believed could play a significant role in the battle against climate change.
“We need a lot of technologies – synthetic meat, energy storage, new ways of making building materials,” he wrote.
“We want to be open to ideas that seem wild.”
Arable land is not just profitable. With the continued pressure for sustainability, investment firms are making the argument farmland will meet “carbon-neutral” targets for sustainable investment portfolios while anticipating an increase in agricultural productivity and revenue.
The world’s richest 1% emits double the carbon of the poorest 50%, a 2020 Oxfam study found.
According to Forbes, the world’s billionaires saw their wealth swell by $1.9tn in 2020, while more than 22 million US workers (mostly women) lost their jobs.
Like wealth, land ownership is becoming concentrated into fewer and fewer hands, resulting in a greater push for monocultures and more intensive industrial farming techniques to generate greater returns. One percent of the world’s farms control 70% of the world’s farmlands, one report found.
The biggest shift in recent years from small to big farms was in the US.