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Most Illinois farmland is not owned by farmers

chicagotribune.com

71–80 of 284 posts

Re: Most Illinois farmland is not owned by farmers

#71
post #42

Earlier quoted context omitted.

It's actually an FAA regulation. If you are not a licensed commercial pilot, there are extremely strict rules on how and when you can accept ANY money for flying, use of an airplane, etc. Actually, even if you are a licensed commercial pilot, there are still strict rules around payment. You can be paid for your skill as a pilot, but you cannot, e.g. charge for giving rides in your personal airplane.

> Actually, even if you are a licensed commercial pilot, there are still strict rules around payment. You can be paid for your skill as a pilot, but you cannot, e.g. charge for giving rides in your personal airplane. While that sounds like a bad rule when I first read it, I smell Chesterton's fence here. I'd like to understand why that regulation was written before getting rid of it.

I'm not totally sure what the GP meant, but I think it has to do with the owning/operating organization of the plane not being a qualified (Part 121/135) company for commercial operations.

A grandfather-in-law owned his own small business (a civil engineering firm), and had a plane that he flew to get to meetings/job sites across the Midwest. He could fly company employees just fine- and the company could reimburse him for the flight expense, and since it was not for the public that was fine. He could fly his family or friends on his own dime just fine. But if a family member or friend not working for the company tried to compensate him for the costs, then it is a question of "is his company actually an unlicensed airline?" and now we're getting into territory where it gets complicated. The FAA heavily regulates airlines, which is a major reason they are so safe. But there has to be a lower bound on what gets regulated, and avoiding that is what I think that GP is referencing.

Re: Most Illinois farmland is not owned by farmers

#72
post #32

Farming is somehow still regarded as being some mom-and-pop heartland thing rather than the highly optimized manufacturing operation it has been for decades. Direct farm employment is now just 1.2% of the population. It was 40% in 1900. The special treatments farms and farmers get is an outdated relic kept alive by the electoral college.

> an outdated relic kept alive by the electoral college. And yet, farmers are a vocal and critical political bloc in every other EU country, too. Farming is just important . Not as much because it employs a large portion of the population, but because it keeps a large portion of the population alive. It is the original industry that's "too big to fail" - if you let it, you get famine.

Very well said. There is no alternative to having a successful farming industry.

Re: Most Illinois farmland is not owned by farmers

#73

Most farms are not owned by farmers, most housing is not owned by tenants, most airplanes are not owned by airlines, etc., etc.. Vertical integration can have benefits, but it isn't necessary and has drawbacks. Even when vertically integrated, regulations are often written under the assumption that everything is leased, not owned, so compliance is easier if you own a company that owns an asset, instead of owning that…

Have you seen how expensive a tractor or combine is? The economies of scale are real in farming.

You need ~$1M worth of equipment to farm 80 acres (~$1M worth of land), but that same equipment can basically farm 800 acres (~10M worth of land). An equipment issue can destroy a years worth of work with 800 acres (e.g. frost damage from delays), but with 8000 acres you can have spares / avoid the loss with some overtime.

Fertilizer and pesticides aren't neatly contained. If you farm different crops than your neighbors, overspray can kill your yield (e.g. weeds spray for corn kills soybeans). Laws around who can grow/spray what and being big helps make that better

Re: Most Illinois farmland is not owned by farmers

#74

I own the farm and farm it in Illinois. I owe the land through an LLC, because farming is dangerous and I don't want to go bankrupt if somebody sues me. Farms are expensive and hard to subdivide, so people will put them into a legal entity and pass down to the next generation via a trust. All of my neighbors are doing the same, so we're all counted as "not farmers" here Farming is a terrible business. My few hundred…

It's buried in a figure legend, but the Tribune does acknowledge this too:

> Note: The 12 selected counties had some of the highest cash rents in the state. For the purposes of this analysis, a business entity was defined as an organization with an LLC, Inc, LTD, Co, Corp, LP or LLP tag. This land is not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses.

Edit: apparently not that buried...

Re: Most Illinois farmland is not owned by farmers

#76

> Eight states in the Corn Belt — Iowa, Indiana, Nebraska, Minnesota, Missouri, Kansas, South Dakota and Wisconsin — restrict the size, structure and purpose of corporations that can own farmland to limit ownership by large investment funds. > More than 22% of the farmland in 12 Illinois counties with the highest rents is owned by a business entity, defined as an operation with an LLC, Inc, LTD, Co., Corp, LP or LLP…

How does a farmer who doesn't inherit land ever afford the land?

The modern way. You make a fortune in technology or finance, then buy yourself a vineyard to become a mediocre vintner!

Re: Most Illinois farmland is not owned by farmers

#78

Most farms are not owned by farmers, most housing is not owned by tenants, most airplanes are not owned by airlines, etc., etc.. Vertical integration can have benefits, but it isn't necessary and has drawbacks. Even when vertically integrated, regulations are often written under the assumption that everything is leased, not owned, so compliance is easier if you own a company that owns an asset, instead of owning that…

[deleted]

Re: Most Illinois farmland is not owned by farmers

#79
post #74

I own the farm and farm it in Illinois. I owe the land through an LLC, because farming is dangerous and I don't want to go bankrupt if somebody sues me. Farms are expensive and hard to subdivide, so people will put them into a legal entity and pass down to the next generation via a trust. All of my neighbors are doing the same, so we're all counted as "not farmers" here Farming is a terrible business. My few hundred…

It's buried in a figure legend, but the Tribune does acknowledge this too: > Note: The 12 selected counties had some of the highest cash rents in the state. For the purposes of this analysis, a business entity was defined as an organization with an LLC, Inc, LTD, Co, Corp, LP or LLP tag. This land is not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles f…

It's not buried anywhere, it's literally the next paragraph after the lede.

> These acres are not necessarily owned by large conglomerates and investment firms. Corporate structures are also attractive vehicles for family businesses because they offer tax benefits and externalize losses.

Re: Most Illinois farmland is not owned by farmers

#80
post #27

Earlier quoted context omitted.

Europe also does some very heavy subsidies. Without subsidies, a lot of farming just goes away due to the uncompetitiveness in labor vs the southern hemisphere. The Amazon would be replaced completely with farms for rich countries. It's not surprising that countries just don't want so much of the country basically depopulating.

Good points. Need more legal immigration, and paying Brazil, etc. not to farm there. Better to do that than subsidize farmers.

Why is that better?
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