Shifting Dynamics of Farmland Ownership

AGRICULTURAL MARKETS

Darcy M. Lepine

10/7/20244 min read

man wearing gray long-sleeved shirt on green grass field
man wearing gray long-sleeved shirt on green grass field

This article discusses the shifting dynamics of farmland ownership, highlighting the growing wealth gap between young and established farmers, inflation, and rising land prices that make ownership increasingly out of reach for younger farmers. As a result, more farmland is expected to be rented rather than owned in the future. To address this challenge, initiatives are underway to create a universal land assessment platform that helps young farmers evaluate land suitability and profitability before renting.

The Future of Farmland Ownership: A Growing Divide and a Way Forward

The dynamics of farmland ownership are shifting, shaped by growing wealth inequality between young and established farmers, rising inflation, and the devaluation of currency and therefore the value of current savings. The agricultural landscape is undergoing a transformation that raises questions about the future of who farms the land and who owns it. As land values surge and access to capital becomes increasingly limited for young farmers, a future looms where the majority of land will likely be farmed by those who do not own it. Against this backdrop, creating tools that empower young farmers to make informed decisions about land rental is crucial.

The gap between young farmers and land ownership is widening. While older farmers often hold significant land assets that have appreciated over time, younger farmers struggle to afford skyrocketing land prices and meet stringent financing requirements. Inflation compounds these issues, devaluing their earnings and reducing their purchasing power. Rising interest rates make borrowing more expensive, further restricting young farmers' ability to purchase land. Additionally, institutional investors and large-scale farming operations have increasingly entered the market, driving up land prices and making it even harder for young farmers to compete. As a result, renting farmland has become the most feasible option for many young farmers. However, renting carries its own risks—chief among them, the uncertainty of how suitable a piece of land is for specific crops and the profitability of the inputs and outputs required.

The trend toward increased land rental is also supported by the aging farmer population. Many established farmers are reaching retirement age and are less inclined to sell their land, preferring instead to lease it out for a steady income stream without giving up ownership. This shift means that more farmland is becoming available for rent rather than purchase, further reinforcing the rental model as the primary means for young farmers to access land. The financialization of agriculture, combined with macroeconomic pressures, points to a future where ownership is consolidated among fewer, older landowners, while the next generation of farmers increasingly relies on rental agreements to sustain their operations.

A Universal Land Assessment Platform for Young Farmers

In light of these challenges, there is a pressing need for a universal land assessment platform that allows young farmers to efficiently evaluate land suitability before signing a rental agreement. Such a platform would enable them to assess the potential profitability of inputs and outputs, providing a clear understanding of whether a specific parcel is worth renting for their desired crops.

This idea is already gaining momentum, with collaborative initiatives between organizations like Eco Health Industries, Cropland Analytics, RDAR (Results Driven Agricultural Research), and the University of Alberta. Together, they are working to develop a regionalized platform that leverages the Comprehensive Assessment of Soil Health framework created by Cornell University. By integrating regenerative agronomic practices, the platform aims to provide young farmers with the tools they need to assess land quality comprehensively and make decisions that are both financially sound and ecologically sustainable.

The Comprehensive Assessment of Soil Health framework is designed to measure multiple indicators of soil quality, including biological activity, organic matter content, and nutrient availability. Incorporating this framework into an easy-to-use digital platform allows farmers to quickly determine a plot’s suitability for specific crops and its long-term potential. Such a platform, enriched with region-specific data and regenerative practices, could help young farmers make better choices and align their farming practices with ecological stewardship, ultimately improving soil health and increasing yields.

Incentivizing Regenerative Leasing

But a platform alone is not enough. For young farmers to truly succeed, they need supportive landowners who are willing to lease their land under terms that promote sustainability. One solution is to create financial incentives for landowners who lease to young farmers implementing regenerative practices. This could take the form of tax breaks, grants, or subsidies aimed at encouraging landowners to prioritize these types of tenants. Governments and agricultural policy bodies could play a key role in establishing such incentives, recognizing that supporting the next generation of farmers benefits society as a whole.

On the other side of the equation, young farmers who commit to using regenerative methods—such as cover cropping, minimal tillage, and integrating livestock—should be compensated for their efforts. Landowners could offer discounted rental rates or performance-based bonuses tied to improvements in soil health. By directly linking rental agreements to ecological outcomes, both the landowner and farmer stand to benefit: the farmer gains access to affordable land, and the landowner sees their property’s value and productivity improve over time.

Partnerships for a Sustainable Future

The partnerships being forged today between research institutions, agritech companies, and agricultural organizations represent a step in the right direction. By pooling resources and expertise, these entities are creating a platform that not only benefits young farmers but also promotes long-term sustainability in agriculture. Young farmers equipped with the right tools and incentives can play a critical role in reversing soil degradation, enhancing biodiversity, and ensuring a resilient food system for future generations.

Farmland ownership may increasingly lie in the hands of fewer individuals, but the stewardship of that land—its care, cultivation, and regeneration—must be shared broadly. By giving young farmers the tools they need to evaluate land effectively and by incentivizing regenerative practices, we can create a system where the health of the land, the success of the farmer, and the prosperity of the landowner are intertwined.

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