Releasing the True Value of Land

The enclosed study (pdf-file) was commissioned in the summer of 2012 by the International Biodynamic Association (IBDA) based in Dornach, Switzerland and carried out against the background of a growing crisis facing the market in agricultural land.

An overview of the historical development of agricultural land ownership will be presented. The ending of feudalism with its system of peasant bondage and its replacement by the private ownership of land, has been succeeded during the twentieth century with a further restructuring of agriculture. It is a process which has resulted in farm tenancies becoming once more the norm. Within the Biodynamic movement initiatives taken to hold agricultural land in trust were aimed at freeing the land from family linked inheritance and market speculation.

legal conditions pertaining to the land market will be described with particular reference to inheritance, freehold and leasehold. A comparison of the land markets operating in Lithuania, France and Denmark will be made along with assessment of the problem of 'land grabbing' in poorer countries.  The land ownership situation in Germany is summarised along with the results of a questionnaire that was sent to 78 organic farms concerning the land market in their neighbourhood. The study shows how the market in land is being affected by demographic changes. The connection between a land owning family and its land begins to loosen the moment one generation wishes to retire. The first generation which has usually grown up on the farm, leases it out and continues to retain ownership of the farm. The second generation (and in some cases also the first generation) have no direct personal connection to the land and sell it off. This 'loosening' process which typically takes place over two generations, means that today we are facing a whole wave of tenanted farm sales – a demographic echo of the restructuring that took place during the 1950s and 1960s. 

The solution oriented section of the study begins with an assessment of the ethical investment market which has been growing so strongly in recent years and a description of investors' motives and preferences.

The heart of this study, presents over 20 detailed examples of new forms of agricultural land ownership and investment structures beginning with the charitable trusts that have been founded since 1969 and concluding with the modern partly commercial, agricultural shareholding companies.  Examples are also taken from initiatives in France, Switzerland and Holland as well as in Great Britain, Italy and Romania.

At the end there is an evaluation of the criteria for setting up a suitable ownership vehicle. This demonstrates the breadth of possibilities ranging from outright purchase models that are financed by gift money (donations, grants) to those involving a redeemable investment of one form or another.

The transfer of farms between non-family members and how retirement income can be guaranteed in connection with charitable agricultural land trusts will be discussed. The key elements needed for a modern voerarching structure for land ownership and farmland purchase will be explored.

At the end a possible form for such a legal vehicle is suggested.