Farmland-Stewardship Organization Cooperatives in Europe

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Thomas Rippel on FSO's:

"Kulturland Genossenschaft, BioBoden Genossenschaft, and Terre de Liens are European FSO cooperatives founded in the past ten years. Their purpose is to end the problems created by commercial land grabbing by purchasing farmland and leasing it to organic farms at low fees. As of late 2017, 100 million Euros has been raised to purchase over 6,000 hectares of land. In early 2018, the Kulturland Genossenschaft conducted a pilot crowd-investing campaign that raised over one million Euros for one farm.

This cooperative model is however not without limitations. First, the investment is unattractive. Cooperatives charge farmers low lease prices to reduce their financial burden and thus are unable to pay dividends to investors. Due to the fact that share prices for the cooperatives are fixed, shareholders do not profit from any increase in land values owned by the cooperative. Additionally, investments in these cooperatives are highly illiquid. Periods of notice for the liquidation of shares can be up to three years in some cases.

Despite these limitations, a remarkable amount of capital has been raised for such a purely idealistic investment. However, it is becoming apparent that the model will most likely remain an investment niche and be unable to significantly tackle the challenges resulting from global land-grabbing. The democratic governance structure of FSOs creates the second problem. A qualified majority of shareholders could decide to sell the land and monetize unrealized profits of the cooperative. This constellation could lead to a dangerous misalignment between the financial interests of shareholders and the core mission of the cooperatives to protect land from financial speculation." (