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June 2012
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Millionaire investors bet fortune on Kentucky farms

By Jere Downs The Courier-Journal

LOUISVILLE -- Mississippi's Barry Gollott made his fortune in the auto salvage business. To guard against what he sees as an inevitable economic collapse should the U.S. default on its $19 trillion national debt, Gollott has sunk a good chunk of that nest egg into four Kentucky farms.

"In a doomsday economy, farms are where the food has to come from," said Gollott, age 71, who has also poured assets into blueberry farms in Chile. "The way we are going, I think default is inevitable."

Another 20 percent of Gollott's money has been sunk into gold and silver. And then there's his purchase of an Alabama farm, a rural family refuge against a potential economic apocalypse with hyper-inflation and food shortages in the U.S., troubles akin to the likes of Venezuela or Greece in recent years. Conservative investors like Gollott, many of them self-made millionaires, are finding safety for their assets in the farmland investor pools assembled by American Farm Investors, a Lexington investment firm conceived in the ashes of the 2008 Great Recession.

To date, the annual financial returns on the nine farms purchased and managed by AFI mirror or exceed results achieved by investors in the bond market. Unlike stocks and bonds, farmland is something an investor can touch, or visit. Unlike volatile securities, farmland's been appreciating in value an average 5 percent annually.

American Farm Investors is the dream child of Brian Luftman, a financial whiz kid who once traded derivatives in the cattle pit of the Chicago Mercantile Exchange.

"Because the market was so scary, so tumultuous, and the banks were on the verge of collapse, I bought a farm," Luftman said of Illinois acreage purchased for $4,800 per acre in November 2008, two months after the crash. Three years later, Luftman sold that same farm near Champagne for $8,800 an acre.

When he looked around for a company that managed farmland for investors like himself, Luftman could not find one. So he created American Farm Investors in Kentucky, his home state, in 2011.

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