SOURCE: Farmland Marketing Group

Farmland Marketing Group

November 04, 2011 12:18 ET

FMG: University Endowments -- Don't Land Grab, Farmers Collaborate

The Farmland Marketing Group Says, "A Handful Of University Endowments See Unique Structure As a Way To Collaborate With Farmers"

MILWAUKEE, WI--(Marketwire - Nov 4, 2011) - According to Tracy Lynn Bolton of the Farmland Marketing Group, "We discovered, almost by accident, that America's University Endowments and this country's aging population of grain producers can each benefit by the other."

"Today's average farmer is 58 years old. Over 40% of farmers are over the age of 70," says Bolton. She cites a recent article estimating that over the next 5 years, in Iowa alone, some 43% of farmers will retire. In most cases, their options are limited to selling, perhaps at a record price and pay the tax, OR keep their land and have an income stream.

An unintended consequence of these sales could be the transfer of a huge amount of America's cropland out of the hands of family farmers and into the hands of venture funds, insurance companies, foreign governments and a growing list of other would be purchasers who see farmland as a very attractive alternative investment.

Faced with a significant tax and the prospect of losing future income and appreciation in an outright sale, farmers have been exploring alternatives through The Farmland Marketing Group. "We've been working with some of this country's best financial planners and we've been talking to farmers themselves to create a number of 'standardized' alternatives to outright sales. Our alternatives minimize taxes and enable farmers to get the liquidity they want, while still allowing their heirs to maintain possession of the farms."

Some of the country's largest Endowments have experienced very significant losses and are looking for investment opportunities that can protect their principal, while still providing them with a growing income stream to accommodate the needs of their respective universities.

"The investment criteria these Endowments are now considering fit farmland incredibly well," continues Bolton. "No other investment has a better track record as a tool for preserving capital or hedging inflation, having appreciated in 40 of the last 42 years. I don't believe anyone will dispute farmlands' value as an alternative investment. However, many University Endowments and others have been chastised lately, being accused of land grabbing here and abroad because of the way they make acquisitions."

"The Endowment managers we spoke to usually use hedge funds or other indirect methods to make land acquisitions," according to Bolton, "and they buy farmland and rent it back to a farmer."

The Farmland Marketing Group says that the better alternative is to make acquisitions and then allow farmers to maintain ownership of their farms.

"Family farmers who are owner/operators are better land stewards," according to Bolton. "They live and work in the area so they don't use excessive fertilizers or pollute local lakes, rivers and streams which translates into preservation of the asset. The Endowments can really feel good about this type of structure, as the farmland will stay in the hands of the people who have stewarded it so well. Its investments are made here, not abroad, thereby helping to ensure food security and to support, not harm, local communities."

It is the Mission of the Farmland Marketing Group to educate farmers and potential investors about the benefits of becoming part of what will be the world's first publicly-traded consolidation of independent grain producers.

For more information or to schedule an interview with Farmland Marketing Group call toll free 866-800-7039 extension 30 or visit www.farmlandmarketinggroup.com.

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