The Lexington (KY) Herald-Leader is reporting that a group called American Farm Investors is buying up tracts of farmland in central Kentucky which they lease back to tenant farmers, who in turn farm the land and pay rent from their proceeds (not sharecropping). Interestingly, the corn and wheat grown on these farms is sold to big name whiskey distilleries like Jim Beam, Makers Mark and others. The Herald-Leader also reported that roughly 40% of AFI’s investors live in Kentucky while the rest are from out of state. The bottom line; it’s all about diversification.
“AFI leases its land to tenant farmers who pay labor and other costs to grow the crops. The tenant farmers pay rents to AFI, which then pays dividends to the investors.”