If You Want to Get Rich, Become a Farmer

This surprising bit of advice comes from Wall Street investment whiz Jim Rogers. It seems that while the rest of the economy continues to limp along, the farm sector is in something of a boom. According to an article in the July 11, 2011 issue of Time Magazine, while overall economic growth in the country is a disappointing 1.9 percent, net farm income was up 27 percent last year and is expected to increase another 20 percent this year. The Federal Reserve says that the value of the average farm has doubled in the last six years, making farmland one of this year's hottest Wall Street investments.

This change in farming's fortunes is due in large part to economic growth in countries like China and India. Wealthier consumers in these countries are eating more, especially more meat, which drives up the demand for the grain needed to feed livestock, as does the production of ethanol fuel from corn. Technological advances, like GPS-aided, computer-monitored planting systems, have also enabled farmers to increase their yields.

In the face of this prosperity, there's talk about significant changes to legislation that currently provides bountiful subsidies (to the tune of $19 billion a year, $8 billion of it in direct payments) to many farmers when the farm bill comes up for renewal next year. Opponents claim the current subsidies favor grain production over other crops and mainly benefit large commercial farms or hobby farmers that don't need help.

Unfortunately, what benefits this country's farmers comes at a cost to many of the poor in developing countries who depend on staples like corn as the basis of their diets. As demand goes up and more grain goes to make ethanol or feed livestock to meet the increased demand for meat, higher prices make it harder for those struggling in many parts of the globe to afford to feed themselves.

Will the good times on the farm last? Historically, farm income has fallen as the economic picture improves. But some economists think that the continued increase in demand for food in developing Asian countries will keep crop prices high even when the economy finally swings upward again.

To read the entire article on farming's economic boom, go to Farmer. To read more about the problem of rising global food prices, go to: Food Prices.

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