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An Airbnb for farmland hits a snag, as farmers raise data privacy concerns
- Normal_gaussian 6y agoWhat else would such a partnership be used for?
- wrkronmiller 6y agoPossibly: trying to ensure that the renters do not use up the land they are renting.
- ISL 6y agoThis is the first I've heard of Tillable. As described, it's not really AirBnB for farmland, it's a growing-rights exchange. The counterparty risk for landowners is substantial if it isn't mitigated somehow. A long-term relationship with the land is essential to keeping it healthy. The relationships between farmers and landowners often span generations -- that makes them ripe for disruption, but the many practices that have emerged to safeguard those relationships have good reasons to exist. So many deals of substantial value are made in in-kind exchanges between neighbors who have worked side by side for decades. Rapidly-changing tenants would change everything.
- onionisafruit 6y agoAs somebody who manages some family land, I wholeheartedly agree. Going back to 1830, there are only three other families we have trusted to lease our land. Some generations we lease their land. Other generations they lease ours. I’ve seen a cousin’s land destroyed for years by outside farmers. I know I could make some good money by leasing to an outsider for a few seasons, but they will use and abandon it, and it will take several seasons to recover. What’s the point in that?
- ISL 6y agoOne could imagine sufficient contracts to preserve the land's value/health, but they would be difficult to write and add friction. A lot of conservation/preservation is easier if you know you're going to be leasing it for years and the landlord is your neighbor.
- TeMPOraL 6y agoTrust is probably the greatest optimization humanity has ever had. Which is why I'm wary of the ongoing trend of removing the dependency on trust in all matters of life.
- jessaustin 6y agoNo contract enforces anything against a corporation who is willing to waste your time in court. They have employees who waste the time of poor farmers in court every day. They use what they learn in court to write progressively more evil contracts. When is the last time any of these farmers hired a lawyer so skilled at contract law? Is such a lawyer available in their state? In any neighboring state?
- dehrmann 6y agoMy family has leased land to the same family farmers for 30+ years. I went to school with the kids the are likely to to inherit the business. If I inherit some of my family's land, I have no interest in messing with the deal--they've been great long-term tenants. These are also the sorts of people and deals where it's you get x% of the crop, a handshake, and a check once per year.
- sk5t 6y agoIs is too uncharitable of me to think of Tillable as a VC-funded vehicle to make sharecropping even worse than it already was?
- haram_masala 6y agoAgreed, it seems like yet another iteration of a company that starts off by disrupting a market to make it more liquid, but whose endgame is becoming the dominant or sole rentier in that space.
- EdwardDiego 6y agoExactly, they sound like an unnecessary middle man that disrupts established relationships with promises of higher rents, which will end up killing the smaller farmers in favour of the large corporate farmers.
- randomdata 6y agoOn the other hand, as a small farmer, I am small because it is very difficult to find land that isn't already tied up in established relationships, often to those large corporate farmers. If something like this can give me an in with a landowner that I currently don't have, it helps my small farming business.
- say_it_as_it_is 6y agoSomeone probably saw what WeWork was doing and decided to try the business model out with farming
- kyle_morris_ 6y agoI hope this doesn’t discourage farmers from using technology to improve efficiency, yields, profits, etc. I can’t imagine how tough it is to farm for your livelihood. The pressure on farmers must be brutal - from John Deere making it impossible to fix/own your own tractor[0] to climate change, and now your landlord might not renew your lease. At that point, why put so much effort into something with so little upside and so much downside for the farmer. [0] https://www.wired.com/2015/04/dmca-ownership-john-deere/ https://www.wired.com/2015/04/dmca-ownership-john-deere/
- est31 6y ago> I hope this doesn’t discourage farmers from using technology to improve efficiency, yields, profits, etc. Throughout history of settled humans, Farmers have always been at the brink of technological progress. The wheel, the plow, and all sorts of machines. It's a common theme to depict them as technologically backwards, but nothing could be further from the truth. Another common but misguided theme is to depict them as stupid, which they aren't in any form or fashion. They know when something is harmful to them, and this is an instance.
- CloudHelix 6y ago> Farmers have always been at the brink of technological progress. You would think we would see more automation and fewer cows being milked by hand were this true.
- huonpine 6y agoYou should do a web search for cow milking technology. Moral milk? DeLaval International, a large Swedish producer of dairy and other farming equipment, is installing 24 robotic voluntary – meaning the cows approach the stations on their own
- jimueller 6y agoDid you have specific areas where there should be more automation? There is a lot of automation in farming.The tractors can drive themselves and planters continuously monitor and correct themselves. What is your definition of milking by hand? I suspect the percentage of cows milked by hand is extremely low. Even small family farms use milking machines.
- joezydeco 6y agoKull’s previous startup, 640Labs, was purchased by Climate Corporation. Smith had to wonder: Did Tillable target specific landlords because it got access to data about how productive and profitable their land is? Climate Corp is a division of Monsanto. Wanna bet they have their own data about crop yields?
- CloudHelix 6y agoFarming is an inefficient industry full of generational land princes who are hicks. Time for total disruption. It is a backward industry that sucks up tax dollars so people with small amounts of land can player grower/milk man.
- JumpCrisscross 6y agoYour core point, that American farming is heavily subsidised, is sound. The rest is unwarranted.
- creddit 6y ago> Farming is an inefficient industry full of generational land princes who are hicks. If you’re ever the type of person to wonder why someone like Trump could win the presidency, I highly suggest you first look inward.
- jimueller 6y agoDid you have a bad experience on a farm? > full of generational land princes who are hicks That is pretty uncalled for and ignorant. You seem to have an agenda so I'm not going to waste much time other than to say that I see no evidence that you know anything about actual farming.
- CloudHelix 6y agoAny heredity industry is going to be kinda backward.
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- yalogin 6y agoIf the farmers have decades long relationship with the landowners this looks like a power play by tillable/VCs to get in there and take a recurring cut. They know the farmers have no option but to rent land and the VCs know it. So they are using their money to pay cash to landowners and get them on the site. Probability wise there is a 90% chance that the land will be rented by the same farmer as before because of land proximity issues. So it’s just free money for tillable.
- creddit 6y agoSo, why would the farmer use it then?
- est31 6y agoFor now it's fueled by VC cash so people will adopt it because of it. This gives Tillable growth numbers that impress investors to give even more money and so on, until it's so large that it can apply ideas of scale, like integrating vertically in some form. The vertical integration Uber envisions is self driving cars. Any company which has a foot in the hauling market will have an advantage over a purely self driving research company. The vertical integration of Tillable would involve things like buying the land, renting out machines, completely automating the work, etc. Something like that.
- luckylion 6y agoBecause he needs land to farm on, or he stops being a farmer and has to shut down his business. He will now pay e.g. $1000. Tillable will offer $1100 upfront to the land owner and then "offer" it to the farmer for the low price of $1200. Since he can't just farm on some piece of land 500 miles away, he can either pay the new price, or stop farming. Tillable offers no significant service here. It's not that there's a lot of land sitting idle because farmers and land owners have no way to come in contact, they are not solving a problem, they are just injecting themselves to extract rent with VC money.
- EdwardDiego 6y agoBingo. It's literal rent seeking.
- jelliclesfarm 6y agoThere is actually more to this than is visible on the surface. And I can’t talk about some of it. But here it is: 1. Climate Corp was part of Monsanto before it became Bayer. It was acquired by Monsanto. 2. John Deere wanted to buy Climate as well as Monsanto but that was struck down by US courts and Bayer bought Monsanto. 3. What was Climate Corp doing before? They had something called Field View where they charged farmers to collect and collate data. 4. All precision Ag, Ag robotics and farm data collections have two big industry ‘partners’: Wall Street and Farm input companies. 5. Now add farmland to Precision Ag/Ag robotics. 6. This is a kind of consolidation of land, inputs, data and machinery. 6. Eventually, all land will be owned by farm machinery companies and input companies. There won’t be any more farmers in the future but only farming corporations. 7. It goes back to Wall Street because big Ag is commodities. I am a small scale farmer interested in small acreage Ag robotics to save labour. But no one was interested even though food is important and Ag is a big deal in the USA. No investors, no traction, no interest and I have no qualms about cold calling...and down that rabbit hole, I found out that diff between food farming and commodity crop farming. In reality, there is no agtech for food farming. In the USA anyways. Agtech is about land, inputs and mostly commodity crops. And speculation markets. I don’t have an opinion. Maybe this is more efficient. Maybe it’s not a good idea. And this kind of Ag isn’t even what I am interested in and I just stumbled upon this while trying to figure why Agtech is such a big deal but I can’t find interest in automating food production. It is pretty fascinating how Big Ag has managed to consolidate and rein in together. The players are still the same and it’s a few big corporations that will control this sector. Many of the players and VC companies and start ups are well known but it’s not really necessary to drop those names. But anyone can connect the dots if they invested some time. It is literally a web ..six degrees and all that. Back to the article, expect ‘family farmers’ to be separated from their land in the near and near-distant future. Already a lot of American farmland is owned by foreign countries/investors, pension funds, insurance companies, university wealth funds and hedge funds.
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- kitotik 6y agoThanks for the extremely insightful context. With so much first-hand knowledge of this situation, I’m having a hard time processing how you don’t have an opinion on it. It seems that this is exceedingly detrimental to the well being of literally everyone and everything involved except for those that profit from it.
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- rmason 6y agoLong term the Tillable idea won't fly. I worked with farmers as a fertilizer company agronomist for twenty years. If I understand it correctly Tillable is trying to insert themselves in the middle, acquire the right to sublease large amounts of land and mark it up. Say you own a farm and lease it out. The family you lease your land to might be a neighbor. In the winter they might plow your driveway gratis. They add fertilizer and lime as needed. I've known farmers to even add small amounts of drainage tile at the beginning of a lease. Now consider I'm a super large farmer who has rented your land through Tillable. Farming is a super thin margin business. I live two counties over so I am not going to plow out your driveway or look after your farm for you. I will pay top dollar, I will in effect mine your land to make a profit. I won't put on fertilizer if levels are high and skip the lime. I will make a nice profit for a few years and then when yields drop I will drop the lease. Over time the price of the lease will drop sharply. So in effect the landlord will gain a few bucks short term but lose big time over the long term. On a small scale I've seen this happen. When the landlord offers it back to the original renter he will be shocked and angry when he either refuses or offers a pittance. The landlord either has to invest his own money on lime and fertilizer building the farm back up or have a series of short time renters from outside the county who take a chance on the land.
- jefftk 6y agoIt sounds to me like you're making two points: 1. Tenant farmers often pay their landlord partially in kind, with things like driveway plowing. Outsider tenants wouldn't do this. 2. The tenant farmer has a wide range of options for how well to take care of the land, which affects its long-term value. Outsider tenants would optimize to maximize production during their lease at minimum cost, hurting long-term value. I don't think (1) is a major issue: landlords can consider the in-kind benefits they get just as well as cash compensation. But (2) seems very serious to me. Market rates for land are much lower than they would be without the issue that the landlord needs to trust the tenant to be a good long-term steward. Whether Tillable can succeed long-term depends on whether they can solve this.
- empath75 6y agoSo then the land owner goes bankrupt and has to sell the land and Tillable buys it.
- econcon 6y agoIn India big farmers rent their land to big corporations and sit back relax and collect rent dollars. Many have become millionaire overnight by doing this. Government started taxing farmers for this reason. Untill recently, all farm income was tax free. The case in point being that MNCs are producing the kind of output, no farmer here ever could dream of producing. And the con? All they need is a huge piece of land. Very little labor if any is used in this. Most small farms are not profitable as overhead of bringing machine or labor to small farm is just too high. I know a few farmers who sold their few hectares land in Punjab and brought several thousands of hectare land in Australia. So you can how inflated the price of farm land is in India. Now after making enough money in Australia, they are buying back their ancestral lands and this is sending the price of farm land in Punjab through the roof.
- peterwwillis 6y agoFamily farming in Pennsylvania died years ago from land competition. The first general category of threat came from industrial farming. Large corporations started acquiring land in order to optimize profits for their monocultures. Over time, much of the land that was historically family farms became mega-farms that out compete any new family farms. The second general category of threat was real estate developers. They would buy up land, often from the people who used to rent to farmers. At first they might not raise rents at all. But later when the market was agreeable, they'd raise rents until farmers couldn't afford to farm it, and then develop it for more profitable commercial or residential use. (interestingly, many plots that weren't being developed sat empty, and so some farmers would actually guerilla-farm it for years/decades) A third general category was non-developers (usually the inheritor of older farms or land owners) who owned lots of land and rented it to farmers. They would "suggest" that the most profitable crop be placed and that they receive a cut, or they'd rent the land to someone else when the lease was up. So over time most land went to farming corn even if the farmer wanted to grow real food, and eventually that land would get sold to one of the two above.
- jackfoxy 6y agoThe Fed's response to the pandemic has been essentially to bail-out every financial instrument. Today we are seeing deflationary pressures. But this is only in the short term. Eventually this unprecedentedly massive printing of money will turn inflationary. We have possibly (I don't know) run the course of inventing new financial instruments to turn money into more money. Or maybe the Fed will continue to exceed its charter and and encourage moral hazard. One thing is for sure, smart capitalists are searching for real assets to acquire. There is a tsunami of capital looking for preservation in the face of coming inflation. Look for consolidation of small residential leases, productive farmland, productive forestry and mineral land and leases in a big way.
- User23 6y agoThis sounds an awful lot like tortious interference.