In late June, the North Dakota Attorney General approved the purchase of 2,100 acres of farmland by a company tied to Bill Gates. Red River Trust bought it from potato growers Campbell Farms for about $13.5 million. According to legal documents obtained by FOX Business, the sale was made last November.

Media reports suggest that the reaction of locals to the deal was far from positive. “I’ve gotten a big earful on this from clear across the state, it’s not even from that neighborhood. Those people are upset, but there are others that are just livid about this,” North Dakota Agriculture Commissioner Doug Goehring told local television station KFYR. Other concerns cited in the media insist that “ultra-rich who buy land in North Dakota… do not necessarily share the state’s values.”

Before it was revealed that the deal had been approved, the office of the Attorney General sent Red River Trust a letter asking how the company planned to use the land. “In North Dakota… all corporations or limited liability companies (LLC) are prohibited from owning or leasing farmland or ranchland, and from engaging in farming or ranching. In addition, the law places certain limitations on the ability of trusts to own farmland or ranchland. The Corporate or Limited Liability Company Farming Law has certain exemptions, such as permitting registered family farms or allowing the use of the land for business purposes…”

“Our office needs to confirm how your company uses this land and whether this use meets any of the statutory exceptions, such as the business purpose exception…”

The letter required an answer within 30 days, but there’s no information about whether Red River Trust had anything to reply.

‘Meet Farmer Bill’
The news of the purchase made headlines, as many people found it surprising that the Microsoft co-founder is spending so much money on agriculture. Still, the North Dakota case is just the latest example of a billionaire’s investment in farmland making big news.

Summarizing the data as of 2020, a magazine called The Land Report put Bill Gates’ photo on its cover with the caption ‘Meet Farmer Bill’. The outlet called Gates and his then-wife Melinda “America’s largest private farmland owners.” In tracking the history of Gates’ investments, The Land Report cited a 2014 article from the Wall Street Journal about a man named Michael Larson, who, according to the outlet, has managed the billionaire’s investment empire since 1994, “mostly through a firm called Cascade Investment LLC.”

“The Wyoming ranch is part of a bet by Cascade on the steep rebound in real-estate prices since the financial crisis,” the WSJ reported, citing its sources. “The firm owns at least 100,000 acres of farmland in California, Illinois, Iowa, Louisiana and other states – or an area seven times bigger than Manhattan.”

In 2021, The Land Report said that Gates owned almost 269,000 acres across the country.

‘Why are you buying so much farmland?’
The same year, Reddit users had a chance to ask the Microsoft co-founder about the reasons behind such a large investment. The question was “hey Bill! Why are you buying so much farmland?”

“My investment group chose to do this. It is not connected to climate,” Gates replied. “The agriculture sector is important. With more productive seeds we can avoid deforestation and help Africa deal with the climate difficulty they already face. It is unclear how cheap biofuels can be but if they are cheap it can solve the aviation and truck emissions.”

The uproar over Gates’ latest land purchase created a wave of discussion online. During the height of the Covid pandemic, the Microsoft co-founder was often in the limelight due to his pronouncements about the virus, and even became the subject of conspiracy theories. So, there’s no surprise that his unusual investment unleashed online gossip as well, sparking rumors that the billionaire owns the majority of US farmland. Actually, there are some 895 million acres of farmland in the country. So even while being the largest private farmland owner, Gates actually has less than 1% of the country’s total. And, no matter how eccentric the Microsoft co-founder can be, the reasons behind his farmland investment are most likely mundane, experts say.

“If you look at farmland purchases in the United States, the overwhelming majority is acquired by farmers. The next largest group are people somehow close to farming, like retired farmers, or people from the rural area that are interested in purchasing land. People who put together large portfolios are pretty rare,” Todd H. Kuethe, an associate professor in the Department of Agricultural Economics at Purdue University in the US, told RT. “Usually, they’re buying it for the financial position and so that land usually stays in production. There’s no disappearance of that land.”

Stable asset
Still, Bill Gates’ years-long investment in land elicited a question from analysts: Is farmland such an attractive asset? The answer is yes, for several reasons: farmland is a limited resource, offers strong returns, and is a stable and low-risk asset. Interest in farmland is rising, and prices are climbing accordingly. Last year’s data show the value of US farm real estate having averaged $3,380 per acre, up 7% compared with 2020.

“The US farmland has been increasing in price in recent years because of high returns and low interest rates,”Carl Zulauf, a professor emeritus in the Department of Agricultural, Environmental, and Development Economics at The Ohio State University, explained to RT. “The high returns have been from the market and from government programs.”

Kuethe agrees: “It's a really nice thing to be added to a broad investment portfolio, to give you some of those diversification advantages. Farmland is an attractive investment, and a lot of folks see the value of adding it to an investment portfolio. It’s a relatively lower risk than investing in equities or buying individual stocks, but it offers a little bit higher return than just bond purchases. So, it sits in the middle – a financial investment where you can get a little bit higher return, but not that much additional risk.”

After all, stability seems to mean a lot nowadays. Years of the Covid-19 pandemic, marked by lockdowns, and the current conflict in Ukraine, which disrupted trade, particularly of grain supplies, made more countries look carefully at their food security. Still, Kuethe thinks that all of these factors are not enough to make individual businessmen buy land for personal consumption. “I don’t think that investors are looking for farming for their own consumption, they’re still looking at producing commodities for the global market,” he says. “I don’t have the concern that people are going to start buying up land and wanting to farm themselves because they’re worried about food insecurity.”