Insurance companies build portfolios of US farmland. Reports of mismanagement rise as `absentee landlords' dawdle over resales; erosion a concern

The Travelers Companies owns the largest share of farmland, with more than 1 million acres. The John Hancock Mutual Life Insurance Company is second, with more than 900,000 acres. The Prudential Insurance Company and Metropolitan Life Insurance follow close behind. A dozen others have smaller holdings.

``It just isn't a high priority for us to sell this land right now, we just don't have the manpower,'' says Paul Rennie, second vice-president at the agricultural investment department of John Hancock. ``We've been selling some but acquiring more.''

When land prices were spiraling upward in the 1970s, the companies lent heavily in the Midwest, and also bought farmland in California, Florida, and elsewhere. After values plummeted several years ago, they were forced to foreclose, along with banks and the Farm Credit System.

But unlike the others, most insurance companies have been holding on to the land. Rural banks fail if they keep land too long, but insurance companies have the resources to keep the land longer. As a result, most seem to be waiting to see whether land prices will rise.

``The insurance companies are gambling that they'll get more money out of the land by holding it,'' says Prof. Philip Raup, a land-value specialist at the University of Minnesota. ``The transfer of land was at a peak last year ... but no one really knows yet what the effect of the drought will be.''

Farm leaders like Chuck Hassebrook, a policy analyst at the Center for Rural Affairs in Nebraska, are concerned that as company ownership increases, more land will be at risk. Mr. Hassebrook says some companies, like Travelers and Metropolitan Life, have been unresponsive to local farmers' complaints about erosion and poor land management.

Several highly publicized cases have helped farm groups nudge some of the companies to impose use conditions on renters.“