Land grants are tricky

By John Phipps January 23, 2021

Kody Alan Light in Indiana comments on a bill introduced by Senator Cory Booker:

Ag Committe Chairman David Scott

“I heard there is a bill that would allow Black farmers to receive 160 acres free of charge due to past discrimination practices from the USDA. First off, I have nothing against any ethnic group or religion. But this is wrong! I would love to get 160 acres given to me, but what would it teach me? Nothing. Giving other ethnic groups free ground is morally wrong and hurts other ethnic groups and in turn puts them at a disadvantage.”

This bill was introduced last fall but is given little chance of passage. Discrimination by the USDA against black farmers is well documented and tested in court, but actions like this to remediate are fraught with practical problems. This has been revealed by similar efforts in South Africa. Land redistribution there has dismal record of success and a long list of unintended consequences. For example, given the tiny fraction of US farmland for sale each year – estimated at 3-4% – government buying of 3 million acres per year would distort the market and inflate land prices for all buyers. Second, we are still fixated on the idea that farming is about labor – that hard work can substitute for capital. 160 acres is not a viable farm operation without unusual economic circumstances such as high value crop contracts like produce, irrigation potential, proximity to metropolitan areas, or intensive livestock, all of which require considerable additional investment. With a few exceptions there is no matching infrastructure for small farms like local slaughterhouses such as existed decades ago when it was marginally possible to live on 160 acres of income. Appropriately sized equipment like 6 row planters and Class 4 combines are either ancient or non-existent. Most importantly, as you can tell from the email, recipients of these farms would likely be intensely resented by neighbors.

Land grants were an excellent way to settle the expropriated prairies of the Midwest in the 19th century, but that was when agriculture was all about labor. The considerable value of a quarter-section of farmland today invites immediate liquidation and would speed consolidation as recipients simply convert them to cash from the highest bidder, which is the most logical economic decision. Regardless of your position on reparations for past injustice, we’ve learned from countless other aid programs to give money, or a basic income stream. It is simply is more effective.