From GENE LOGSDON
In the early 1970s, I left Marvin Grabacre within the pages of Farm Journal magazine just after he had, in the 21st century, bought out his last competitor who owned the other half of the U.S. farmland. Now he owned it all. Half of the U.S. had not been a large enough economic unit for a farming enterprise, he said. And he was already thinking about buying Japan, figuring he could sell off Arizona and New Mexico to get the equity in his stock portfolio that he needed to attract that kind of investor money. Arizona and New Mexico would soon run out of water anyway, he figured, so why not get rid of them while the price was still high.
I thought I was being a smartass humor writer, drawing out to its ultimate absurd conclusion the madness of monster farming that pervaded the countryside at that time. The collapse in the land bubble came about ten years later and I thought that would be the end of idiot money farming. But by 2007, it was on the rise again and my absurdities about Marvelous Marv didn’t sound absurd at all. Huge farms were forming in Eastern Europe, Africa, Brazil and in fact anywhere investors could get their hands on cheap land. (You can track all this with USDA’s Economic Research Service at http://www.ers.usda.gov which does not indulge in droll humor like I do.) By 2010 Black Earth Farming, in Russia, for one, was running tractors over 1,200 square miles of farmland. (Honest). Farms of 300,000 hectares were becoming ho-hum. Some 400 large investment companies were in the process of being formed that would, by 2012 control 35 million hectares of farmland around the world. (A hectare is more than two and a half acres, don’t forget.) So in 2010, I was inspired to write in the Autumn issue of The Draft Horse Journal about one of Marvin Grabacre’s disciples, Vladimir Megabundlevich, already farming half of Russia. He had found that half of Russia still not a viable enough unit to make a profitable farm so he bought Poland. Megabundlevich, like Grabacre before him, was known for techniques such as running rivers (think Volga) underground so he could farm right over them. When in an interview I asked him what his strategy was in buying Poland, he replied: “Uberminsk ta loudervichnikoff,” which roughly translated, means “get big or get out.”
I ended my report on Mr. Megabundlevich by saying that “maybe I just don’t understand big business, but I have a feeling some crazy thinking is going on here, and it is not coming from me.” And so it has come to pass. You don’t need to take my word for it. Just go online to sites like farmlandgrab.org and see for yourself. Black Earth Farming, all 1,200 square miles of it, reported a loss of $26 million dollars in 2008 and $39 million in 2009. More recently, “it unveiled a loss of 18 million in 2013 compared to earnings of 7 million in 2012, the only profitable year in company’s nine year history.” Since the unprofitability of this newest rage in bloat farming began before the fighting in Ukraine, war fears can’t be the whole problem here.
The bailout going on now is being described in language that sounds strangely like my absurd humor about Grabacre and Megabundlevich. Some random quotes: “Mikkail Orlov, after having sold off his Russian farming operations and shifted focus to Zambia, is back with a 4,888 cow dairy in Chechnya.” “Black Earth Farming sells 28,000 hectares of farmland in Russia to a company owned by Ukrainian oligarch, Oleg Bakhmalyuk and U.S. grain trader, Cargill.” Kinnevik, the investment group which is one of the biggest investors in Black Earth Farming revealed that it is selling its Polish farm to cash in on gains in land prices and bankroll other opportunities in emerging markets farther east.” “Mriya, the giant Frankfort- listed wheat and corn grower in Western Ukraine is having its bottom line revamped after admitting it can’t make a $32.6 million interest payment.”
I wonder if Mr. Grabacre ever thought about having his bottom line revamped. At least Mr. Megabundlevich has something to fall back on. They make some mighty fine vodka in Poland.