Peter Schneider is an urbane San Francsico businessmen who likes to think of himself as a friend to California's drought-striken farmers. But some here don't share that perception.
Last month, Schneider revealed plans to set up a controversial $50 million agricultural land trust here. The Schneider syndicate, known as Western Farmlands Inc., seeks capital to buy prime San Joaquin Vally farmland and then lease it back to farmers. TO some politicians and farm leaders here, the Western Farmlands scheme is nothing less than creeping feudalism, an insidious plot to rob lands from drought-distressed family farmers.
Soon after opening the Western Farmlands operations last month, Schneider watched in horror as state officials took turns blasting him. State consumer affairs director Richard Spohn headed up the attack, calling Schneider and his associates "latter-day land barons seeking to reinstitute feudalism at the expense of the distressed farmer and consumer." Backed by California Gov. Edmund G. Brown Jr. Spohn launched a full scale investigation into Western Farmlands even before the group began to raise capital.
Soon other government agencies got in the act. The State department of corporations ordered its own investigation and has held up Western Farmlands business permit. Yet another investigation, this one by the state board of food and agriculture is expected to begin this summer.
Most opposition to Schneider's Western Farmlands proposal stems from fears over the growing concentration of corporate ownership in California agriculture. The state's $8.6 billion farming business, the largest in the nation, is dominated by such corporate giants as the Blackwell Land Company, Tenneco and Sunkist.
California farms are already larger and more expensive than others in the country. The average farm in the state is 573 acres and is worth $315,000 while the average farm nationally is only 384 acres and is worth slightly over 100,000.
Some officials here fear that Western Farmlands, particularly during the drought, could accelerate the trend here towards large, absentee-owned corporate farms and away from the traditional, smaller family farms.
"It's one more nail in the coffin of the family farmer," said Lionel Steinberg, chairman of the state board of food and agriculture. "What the syndicate will be doing is create a new class of sharecroppers who are really small farmers having financial problems because of the drought."
Schneider defends his plans by saying that all he wants is to become "partners" with the farmers. "All we're trying to do is cut down the risk of farming," Schneider said. "Those guys down there are going to continue farming. We're just going to take an equity provision with the farmers."
Schneider adamantly denied that his group plans to take advantage of the drought to force farmers into a tenant relationship with Western Farmlands. "We don't want to buy land that distressed by the drought," Schneider explained. "It would not make a hell of a lot of sense - it would not be a good bet."
While insisting he wants to help family farmers with investment capital, Schneider only wants wealthy individuals - those with assets over $2 million - to join Western Farmlands. The investments will come through the brokerage house of Dillon Reed and two Western Farmland subsidiaries, one in San Francisco and the other based in the Netherlands Antilles which will concentrat on finding foreign investors.
The idea of foreigners buying up California's rich farmland has exacerbated opposition to Shneider's plan. Some farm leaders, like state grange president Chester, have expressed concern over the threat posed by having non American citizens controlling California farms.