“Working together for access to the earth”

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Close to where I live in France there’s a very active organic farm called Domaine Saint Laurent, which produces vegetables, dairy products and meat. It has a stand at the local market and you usually have to queue there for quite a while as it gets mobbed. It’s been operating since 1992, with some changes of staff along the way.

Recently I had a chat with one of the interns there who explained to me that the farm is currently undergoing a change of ownership. What he told me about the future plans for the farm reminded me of some of the investment models described elsewhere on this site, so I thought I’d write a few words about it.

The farm is currently owned by a consortium of 85 individuals who rent it to the farmers. This has caused some instability as, if one of the owners dies, it’s unclear what status the inheritor would have: what if they aren’t interested in supporting the farm? Would they be able to sell their share if they want? What would happen to the value of the land then? There’s no long-term guarantee that the farm will remain a farm.

This is quite a problem in France, as elsewhere: apparently 1300 hectares of agricultural land disappear under concrete every week here. The price of land has increased by almost 40% in recent years, putting pressure on farmers to shoulder enormous debts if they wish to purchase their farms. Land is increasingly treated as a speculative instrument, which makes it virtually inaccessible to young farmers.

The solution which the Saint Laurent farmers have found is to arrange for the farm to be bought by an association called Terre de Liens. This association bears some similarity to an ethical bank, in which savers and investors place deposits at a bank which then undertakes to invest the money solely in enterprises or development projects that they consider to be sustainable and ethical. It also has some elements in common with equity partnerships, in which the different stakeholders in a property development project create a framework that benefits them all.

Terre de Liens occupies itself solely with organic farming, or as its promotional leaflet puts it, “supporting the installation and maintenance of agricultural activites which are respectful of humans and nature”. The way it operates is that individuals buy shares in it or make donations which are then put into the purchase of farmland. While applying to buy shares or donate you can stipulate whether you wish the money to go to a specific farm or to farms in a specific region of France.

Farmers then rent the land from Terre de Liens at an affordable price, with the understanding that the land will remain farmland well into the future, thus allowing them to make long-term plans. Of course they can buy shares as well.

The association is doing well, having grown in seven years from a tiny operation to one with 17 full-time employees. It has acquired, or is acquiring, 70 farms all over France, and 138 farmers are currently working within its network.

I’m unsure how applicable the model is to other countries as I don’t know enough about the differences in property law from one country to another, but it strikes me that this might be a useful approach for those seeking to establish equity partnerships in English-speaking countries: you could regard Terre de Liens as a sort of umbrella association for bringing together small-scale development projects and providing expertise and stability for all involved. Of course in this case the development in question is agricultural rather than property development, but the basic philosophy of overcoming conflicts of interest by operating within a partnership-based framework remains the same. Something to think about, perhaps.

Featured image: apple tree. Author: Paul Brunskill. Source: http://www.sxc.hu/photo/1054931

Edited on Sept 10 2019 to clarify that the farm is no longer biodynamic.

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2 Replies to ““Working together for access to the earth””

  1. This looks like a great idea and I do not see why it would not work here in Ireland. The price of land is already much higher than France. Indeed, Irish farmland is second highest in Europe, twice that of the UK although almost identical.

    There would be almost no return for investors as the rent for a sustainable farmer is a tiny fraction of the capital value of the farm purchase. But maybe this would not matter to the kind of investor that would be attracted.

    The high price of Irish farmland is partly attributable to the sale of sites for one-off houses as can be seen in advertisements that state things like ‘100m of road frontage on non-national road’ which is of little interest to a suckler cow herdsman. Also relevant is the fact that there is no tax on real estate property including farmland in Ireland and hardly any local charges unlike any other European country.

    But I am surprised that French farmland is under pressure from speculators or investors as I thought there was a rule that farmland had first to be offered and refused by to local bone fide farmers before it could be bought by non-farmers or non-locals. Has this been changed?

  2. Apologies for not answering your question sooner, Emer – I was chasing up some information about it. I ended up contacting Terre de Liens and they wrote me a detailed reply which I’ll paraphrase here.

    There is indeed a rule concerning the right to first refusal on farmland by local farmers in France and there’s an institution called SAFER which acts as a kind of “farm policeman” to enforce the rule. But Julie Duquesne of Terre de Liens.Bourgogne Frache-Comté explained to me in an email that it isn’t able to do its job properly if “public policies aren’t going in the same direction, and the dynamics of the farming sector aren’t strong enough”.

    Farmland around villages has a tendency to get used as “leisure land” to put the owner’s caravan or horses on. So even though it’s still officially agricultural land, it’s no longer being farmed. When it comes up for sale, it may then fall outside the SAFER system if there isn’t a farmer immediately available to buy it. This can frequently occur if the farmers in the area are either approaching retirement age or else too young to have built up sufficient assets to enable them to purchase land, rather than rent it.

    Once it’s escaped the SAFER system , non-farmers are often willing to pay higher prices for it, and when these owners wish to sell they’re unlikely to wish to charge a lower price out of idealism in order to get it back into the agricultural system. The price gets ratcheted up instead.

    This has created an odd paradox: the poorest-quality farmland in France, such as that of southern Corsica, also tends to be the most expensive. Such areas are barely viable for farming in the current economic circumstances so there’s great pressure on the land to be used for something else instead, and this pushes the price up. In stark contrast, the rich agricultural land of the Paris hinterland is very cheap as it’s much less susceptible to fall outside the SAFER “net”.

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