Peter Coy
Jan 27, 2023
I talked by phone on Thursday with Garrett Mussi as he was driving around 1,000 acres in California’s
San Joaquin Valley where he grows organic corn, squash, tomatoes, cucumbers, garlic and almonds
using environmentally friendly methods. He spoke about being a good steward of the rich soil. He
described using drip irrigation to conserve water and cover crops to add nitrogen to the soil and compost
to enrich it.
Learning to farm in an organic way “has been a good experience,” he told me. “It definitely has its
challenges, but farming overall is a challenge. I enjoy it. Always learning something new.”
Mussi doesn’t own any of the acres he tends so carefully. He is a tenant farmer. The owner of the land is
Farmland L.P., an investment fund that buys farmland and readies it for certification as organic by the
U.S. Department of Agriculture: using pesticides sparingly, and only the least harmful kinds; minimizing
erosion; sequestering carbon in the soil; rotating crops regularly and providing habitats for butterflies,
bees and other pollinators. Some organic farmers use lady bugs to eat aphids and owls to eat rodents.
What we have here is finance meeting farming and doing good, not evil.
Wall Street isn’t always a friend of the land: Pension funds, insurance companies and other institutional
investors that have begun to acquire U.S. farmland have not in general focused on regeneration. By
focusing single-mindedly on maximizing crop yields, “they continue to degrade the underlying assets
that they should be improving or at least stabilizing,” David LeZaks, a senior fellow at the Croatan
Institute in Durham, N.C., told me.
Even when farmers own the land, as is more often the case, the government-subsidized crop insurance
system incentivizes them to stick with one crop — typically industrial corn or soybeans — and make
heavy use of fertilizers and pesticides. “Since insurance companies must pay farmers when they lose
crops due to extreme weather, farmers with crop insurance see no upside in using practices that can
support the resilience of cropland against extreme weather events,” according to a report by the
Conservation Finance Network produced in partnership with the Yale Center for Business and the
Environment and Highstead, a non-profit conservation organization in Redding, Conn.
Companies such as Farmland are thinking further ahead while still keeping financial principles and
profit in mind. Craig Wichner, the founder and managing partner of Farmland, is an unabashed capitalist
who grew up in a family that owned and managed apartment buildings. “We would buy Class B
apartment buildings and improve them — add gardens, safety lights and so on. Rents went up and
vacancies went down,” he explained.
With Farmland, Wichner said, he’s simply applying the lessons of commercial real estate to agriculture:
“At a very simple level, our business model is based on taking high-quality land that’s growing lowvalue
crops and converting it to higher-value crops.” Farmland bought one 4,000-acre farm that grew
mainly low-value alfalfa, feed corn and processing tomatoes, assessed the ideal uses for different
sections based on soil conditions and other factors, and chose to go with blueberries, olives, nuts, garden
vegetables and pasture in various areas — all grown without heavy-duty pesticides.
Going organic isn’t cheap. Farmland has to stop using industrial-strength pesticides and fertilizers on
land for three years before it can meet the U.S. Department of Agriculture’s standard for organic
farming. Typically during that period the land is used as pasture. Even after the transition, costs are high:
It’s expensive to pull weeds or to bring in sheep and goats to munch on them instead of relying on
pesticides.
The upside is that consumers are willing to pay more for organically grown food. Farmland can rent out
its fields for $750 an acre on average, up from $300 an acre before conversion, when they were used for
commodity crops, Wichner said. The company leases about two-thirds of its land and farms the other
third itself.
Peter Coy has covered business for nearly 40 years. Follow him on Twitter @petercoy