At Gladstone Land, our farms represent over $1.5 billion of the approximately $2.9 trillion in gross farmland real estate assets in the United States as of December 31, 2022. Our farms are uniquely positioned to generate tangible and positive environmental impacts due to both their significant physical footprints and their downstream influence. For example, we have transitioned to and begun the installation of renewable energy sources on multiple properties, and several of our tenants have begun implementing regenerative farming practices to earn carbon credits and/or sequester carbon. As we strive to achieve and improve our sustainability, the positive effects of these environmental initiatives and others will help create a more stable climate.
Owning Farmland for the Long Term
Our objective is to buy and hold farmland for the long term, which allows us to:
- Contribute to feeding the world's population;
- Promote a healthier population by producing nutritious fruits, nuts, and vegetables; and
- Preserve farmable soils, reducing urbanization of the country, thereby preventing more greenhouse gases being produced.
By reducing carbon emissions and promoting improved food security for US citizens, we can move forward in our efforts to create a more sustainable future for subsequent generations.
Organic farming practices help preserve prime, natural growing conditions by protecting soil biodiversity, maintaining healthy soil nutrients and minimizing pollution by using natural fertilizers and USDA-approved pest/weed control. We embrace our tenant farmers’ objectives to convert farmland to organic farming. As of December 31, 2022, nearly 40% of our acreage used to grow annual fresh produce was either certified organic or in transition to become organic. Overall, approximately 20% of our total farmable acreage falls into this category. We believe the organic sector will continue to be a strong growth area as more farmers expand into organic farming and more grocery stores expand their organic offerings.
Transitioning from conventional to organic farming is a costly process. The farm generally needs to be farmed organically for three years as part of a transition period (thus experiencing lower yields); however, during the transition period, the farmer is not able to market the crop as being organic (thus losing out on the organic price premium). In certain situations, Gladstone Land will partner with the farmer and support them during this transition phase.
- In Kern County, California, we purchased farmland consisting of an old wine vineyard and open ground and paid for the redevelopment of the property to become a large organic almond orchard. Furthermore, we gave the incoming tenant a reduced rental rate in the earlier years, during both the transition period and the pre-productive phase, while the trees were still in development and not yet producing significant income for the tenant.
Our goal is to build the premier farmland real estate company focused on high-quality farms and farm-related properties that are leased on a triple-net basis to tenants with strong operating histories and deep farming resources. We also take steps to make these farm investments more sustainable by investing in environmental improvements over time.
On our California farms, we are actively working with tenants to enroll acreage into the California Department of Food and Agriculture’s Healthy Soils Program, which promotes the development of healthy soils. Additionally, on farms where the environmental impact can be improved, we have partnered with our tenants and local environmental agencies to implement best practices on the farms, including erosion control projects and irrigation runoff control strategies.
We also actively work with tenants on improvements to our farms to incorporate green energy technology, such as solar and wind. See below for certain examples of these projects.
Solar and wind power generation are examples of common green energy sources. In addition to reducing our tenants’ operating costs, we believe these types of investments are advantageous because they improve the environmental footprint of our portfolio.
- In California, we are working with tenants to develop solar energy resources for their farming operations. To date, we have over eight megawatts of solar capacity installed across seven of our farms in the state. In addition, six of our farms in Colorado use windmills to power certain wells on the properties.
- On a property in southeast Colorado, we recently signed an agreement with a third party to allow for the future development of wind and solar energy. Over the next 10 years, it is anticipated that up to 60 wind turbines and up to 1,600 acres of solar panels will be constructed on the property. The project is expected to connect to the Colorado Power Pathway, which is expected to carry approximately 5,500 megawatts of new wind and solar energy across Colorado. The eastern plains of Colorado are among the preeminent regions in the nation for wind and solar power. More information can be found here.
With changes in climate, including many regions experiencing more frequent droughts, water basins in certain areas of the country have dropped to levels where water conservation is necessary to ensure there is enough water to meet demand.
- All of our California properties lie within and are governed by Groundwater Sustainability Agencies (“GSAs”), which are currently developing groundwater management plans in response to the Sustainable Groundwater Management Act enacted in 2014. These groundwater management plans thoroughly detail how each groundwater basin and the farmland involved will manage its water supplies in a sustainable manner to reach the State of California’s groundwater sustainability goals. In partnership with our tenants, we monitor groundwater pumping levels on our farms to ensure continued compliance with the current governing GSAs’ polices and regulations. Further, we are actively working with our tenants to develop sustainability plans and implement improvements where necessary to reduce our water footprint in the state. Examples of these plans and improvements include irrigation efficiency improvements, groundwater-reduction strategies, tile water recirculation capabilities, groundwater recharge projects, and supplemental water infrastructure. Conservation of water has been and remains a key element in California, and looking for ways to recharge groundwater during wet periods for later use during droughts is an important strategy for our farms and the overall health of the water resources associated with the land.
- All of our properties in the southeast have water allocation permits that cannot be exceeded, and we maintain compliance with those thresholds.
Another aspect of water management is to ensure that any runoff that flows from farms into nearby rivers and lakes does not contaminate those areas with pollutants and harm their ecosystems.
- In southern Florida, four of our farms are enrolled in the Florida Department of Agriculture and Water Management District’s “Best Management Practices” program, which monitors and promotes the reduced use of pesticides and fertilizers that would otherwise flow off the farms into the regional water systems. It also addresses the method and scheduling of irrigation to reduce water losses. This is a voluntary program with annual data submissions, and we participate because these properties are located on eco-sensitive water basins.
- In 2019, we acquired a 3,585-acre property in south Florida that is used for retention and filtration of the local watershed and tributaries. This helps in the effort to reduce the nutrient load in the water that ultimately flows to certain coastal communities. For years, these communities had been adversely affected by excessive algae blooms that can be exacerbated by high nutrient loads in the local water systems.
Conserving farmland helps safeguard the soil, landscapes, biodiversity, and habitats that are hard to recreate once lost to development.
- Gladstone Land has currently pledged approximately 950 acres of its farmland in the Chesapeake Bay Region across three separate agricultural conservation programs: Maryland Agricultural Land Preservation Foundation, Maryland’s Rural Legacy Program, and Delaware’s AgLands Preservation Program. All three programs are designed to preserve highly-productive farmland, enhance the natural landscape, and protect both the Chesapeake Bay and the surrounding environment.
- To preserve and ensure our land continues to be used for agricultural purposes, we have committed over 50,000 acres, including over 20,000 acres in California, to certain land conservation contracts.
We are committed to the highest standards of ethical and professional conduct in our business operations, as well as in our interactions with shareholders, business partners, and employees. Our Code of Ethics reflects our commitment to these values and relationships. We strive to be dependable and respectable in all our dealings with our business associates and employees, value each shareholder and lender to our company, and be faithful stewards of their funds. We are committed to providing a work environment where there is no conflict between moral or ethical values and where everyone is treated justly and with respect.
Board of Directors Diversity
We have an Ethics, Nominating, and Corporate Governance Committee Charter that speaks to our hiring practices for board positions, including focusing on diversity. The committee considers in its review of nominees for director multiple factors which are assessed with the perceived needs of the company and the board at that point in time to maintain a diverse group. Upon the occurrence of any vacancy on the board, the committee will actively seek out highly-qualified candidates, including female candidates and racially or ethnically diverse candidates, to include as qualified candidates from which an ultimate nominee for director is chosen.
The David and Lorna Gladstone Foundation
In 2011, our founder and CEO and his wife set up the David and Lorna Gladstone Foundation and since then have regularly given to charities. This foundation seeks to further the advancement of humankind and personal freedom through the charitable relief of the poor, distressed, and underprivileged; the advancement of religious freedom; the advancement of education; the elimination of prejudice and discrimination; and the prevention of cruelty to animals.