This document summarizes preliminary findings from case studies on large farm acquisitions and their local implications. It finds that the increasing number of large farm acquisitions in Germany are the result of processes that began after reunification, including favorable terms for large-scale arable farming, rapid land concentration, an aging membership in farming cooperatives, and unresolved succession planning. The acquisitions are having implications for rural communities, including a weakening of local authorities relative to large farm businesses, an alienation of local populations from farming, and little opportunity for integrated rural development led by local actors.

1. Lutz Laschewski
Large Farm Acquisitions: Causations and Local
Implications. Preliminary findings from
community case studies
IAMO Forum 2018: Large-Scale Agriculture – For Profit and Society?
27 - 29 June 2018 | Halle (Saale), Germany
Lutz Laschewski
Thünen-Institut für Ländliche Räume, Braunschweig
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2. Lutz LaschewskiLutz Laschewski
Background
Increasing number of land transaction through „Share Deals“
Critical Public Debate/Media reports
Wider impacts on rural regions?
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3. Lutz LaschewskiLutz Laschewski
Agriculture and Rural Development
Historically (and today also in many non-industrialised societies), a close link
between land ownership patterns and rural development.
Uneven distribution of land ownership rights as main cause for social
inequality.
Today‘s relevance of land ownership structures for rural regions in
developed countries?
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4. Lutz LaschewskiLutz Laschewski
What we want to know…
Context/Situation
Seller. Motivations to sell /Opportunities
Buyer. Motivations to buy (and to run a farm) at a certain location
Situational Conditions. Market Access, Farm Structures, ……
Buyer/Investors
Actions. What do they do after buying a farm? Do they differ in their
behavioural patterns? Do they act differently in comparison to local business
owners?
Effects of actions. What are the effects of these actions for the (local) economy,
the local communities and the environment?
Assessment. How do third parties (particularly local actors) perceive these
changes?
Structural Coupling/Spill-overs
Concentration of land ownership. Social Inequality, Political Power,
entrepreneurial activities, migration
Absentee Ownership. Withdrawal of value added (profits, taxes..)
Networks. Bridging/Bonding.
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5. Lutz LaschewskiLutz Laschewski
Effects
Economic (Direct). Employment / Value-Added / (Local) Taxes
Farm Structures and Farming. Competition on land market /Agricultural
restructuring / Production Systems and Food Chains
Community. Civic Engagement /local policies / inequality / exit
Rural Development. Diversification of rural economy, Regional Value Chains,
Integrated Rural Development
Environmental.
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6. Lutz LaschewskiLutz Laschewski
Spatial distribution of large farm acquisitions
Farm acquisitions are
between and within
regions unevenly
distributed
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7. Lutz LaschewskiLutz Laschewski
Study Region
Rather remote rural area
• Among the poorest regions in Germany
• Since unification history of high
unemployment
Agriculture
• Pre-war history of large farm estates =>
Strong impact of socialist land reform
(1945) => high relevance of privatisation
AND Dominance of small scale
landownership
• Rapid decline of agricultural
employment after unification
• Comparatively few new family farms
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8. Lutz LaschewskiLutz Laschewski
Approach /Data
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Business Case Studies Community Case Studies
• Business reports and annual accounts
• Interview(s) Buyers and Sellers
• IACS data
• Local/Regional Statistics
• Interviews with farmers, local politicians and
experts
• Land registry
• Data on land privatisation

9. Lutz LaschewskiLutz Laschewski
Agriculture
104 Farms | Ø 363 ha | Agricultural Area ca. 37 tha
5-6 CAFOs (concentrated animal feeding operation)
3 Cross-regionally active holdings own 6 units and manage ca. 5400 ha (14,3 %)
(2 own more units outside the study region)
6 Local Holdings manage 20618 ha (54 %)
Land ownership structures reflect farm structures => concentration
BVVG share Ø 19%, of which ca. 90 % have been privatised (7345 ha)
Significant land shares to other public and institutional land owners (church)
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10. Lutz LaschewskiLutz Laschewski
Concentration
(1) Private smallholder
• Economic crisis
• Emigration
• Lacking Owner Consciousness??
(2) Community Land
• Clarification of land rights
• Land consolidation procedures
(3) Privatisation of state-owned property
• locally different effects, but 10 [20] beneficiaries received 60 [80]% of the
privatised land
• only 18 women as individual buyers received 84 ha
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11. Lutz LaschewskiLutz Laschewski
Motivation for selling large farms
Cooperatives/ Societies
Ageing membership (low incomes and pensions)
Lack of successors
Instability: In case of disagreement often room for individual defection
Family Business
Lack of successors
Management Buy-Out
Complicated process / lack of experience and regional
competences (e.g. in banking sector) /Lack of template solutions
Today: Buy out is not feasible anymore
Economic Issues (Liquidity) as supporting factors.
Dairy market crisis / Weather / Underinvestment…
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12. Lutz LaschewskiLutz Laschewski
Motivations for large farm acquisitions
Economic Motivations
Land value
Land quality
Land development opportunities => wind parks, golf hotel, urban
sprawl
Non-economic motivations
Buying farms for family members
Interest in farming and rural life style / hunting (!)
Large farms a status symbol
Farming privilege
Hobby of the very rich??
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13. Lutz LaschewskiLutz Laschewski
New owners: changes
Commonalities
Land hunger: New owners continue to buy more land (and even
further farms)
Maintaining local businesses
Establishment of a new management
Different Business Models/Farming Styles
Centralisation/decentralisation; Autonomy of local businesses
Investment focus (e.g. Specialisation/Diversification)
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14. Lutz LaschewskiLutz Laschewski
Farming Sector
Increasing pressure on the land markets /
Further candidates for take-over
Uncertain future of (smaller) family
farms
• Organic Farming likely to decline /
vanish?
• Voluntary Agri-Environmental
schemes?
Locally owned holdings!
Virtual farms?
Share of AES/Organic Farming Payments to Total
Agricultural Payments (1st and 2nd Pillar) by size of farm
(ha)
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15. Lutz LaschewskiLutz Laschewski
Community
 Weak Communities vs Strong Large Farm Businesses
 Commercial CAFO are not perceived as agriculture, and appear to be rather
disconnected from local communities
Taxes and Employment
Little significance agriculture employment, but often last remaining local
business (and employer)
Effects on Local Life
Growing “distance” of local population to agriculture
Agriculture as “disturbance” of rural life (and vice versa)
Sponsoring and local policy engagement as control efforts
Land Management and rural roads
Poor municipalities are dependant on machinery of farm businesses
Weak negotiation position /growing dependence on smaller number of
land owners
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16. Lutz LaschewskiLutz Laschewski
Community Development
Local Communities rather “objects” than „actors“ in the economic
development process
„Integrated“ Rural Development projects without (large-scale)
agriculture
No Community Energy projects
Perception of the (declining) agriculture sector as problem, rather
than developmental factor
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17. Lutz LaschewskiLutz Laschewski
Conclusions
Large farm acquisitions are the outcome of process that started after unification of
different contextual conditions that favour large scale farming
• Terms of Trade favouring arable farming
• Rapid Land concentration
• Declining and ageing of membership in successor companies
• Unresolved succession in management
Rural Issues
• Local Authorities in a comparatively weak position in face of farm businesses
• Alienation of local population from farming
• Little space for integrated rural development => investor dominated rural (land-
use) development model
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