| Agriculture investment is now on the radar of both | | | | low-risk, with a lack of supply and increasing demand |
| institutional and private investors, with many seeing | | | | for food pushing up values consistently. It is easy for |
| agricultural investment as an ideal inflation hedge and | | | | a person of logic to see that demand for food will |
| a stable source of income in these uncertain | | | | continue to rise in line with population growth, and |
| economic conditions, here we will go some to | | | | there are fundamental limits to bringing any more |
| explaining how the current market is lending itself to | | | | farmland into production. |
| this type of strategy, and the various forms of | | | | So agriculture investment in this form certainly fits |
| agriculture investment, and lay out some of the best | | | | the bill when weighed against the current economic |
| options available for investors. | | | | climate, and provides investors with all of the ticks |
| The current climate can be defined by three key | | | | for their boxes. So how does one approach |
| characteristics; lack of visibility, low interest rate, and | | | | agricultural investment in the form of investing in |
| the very real threat of inflation caused by | | | | farmland? The answer to this question is long and |
| quantitative easing and austerity measures. Essentially | | | | complex and many factors must be taken into |
| investors are nervous about stocks and shares | | | | consideration to ensure your agricultural investment |
| because such limited economic visibility it is impossible | | | | turns out to be a profitable one. |
| to value companies and predict growth or | | | | Firstly one must consider location, UK, Europe, The |
| depreciation in the value of shares, also we have lost | | | | America or Australia all present opportunities, but my |
| the risk free income that we would normally accrue | | | | advice will always be to invest locally, or at least |
| from cash deposits because interest rates are so | | | | within a structure that allows any future dispute to |
| low, and inflation will eat into our cash, effectively | | | | be handled locally. |
| reducing our wealth. | | | | Secondly consider the business model, do you want |
| So how does agricultural investment solve our | | | | to buy the land and rent it out, or do you want to |
| problem? Let's take this opportunity to look at the | | | | share in crop yields? I would always prefer to |
| simplest and most transparent form of investing in | | | | shoulder the commercial farming risk with the tenant |
| agriculture; farmland investment. Firstly farmland | | | | farmer and simply enjoy a stable rental income as |
| shares a positive correlation with inflation; having | | | | any default is easily handled by evicting the farmer. |
| proven to grow in value quicker than the rate of | | | | So agricultural investment, does provide income, |
| inflation rises, therefore this type of farmland | | | | growth and capital preservation, especially it times |
| investment allows investors to grow their capital | | | | such as these, but anyone considering an agriculture |
| even in an inflationary environment. Also this mode of | | | | investment should at least take on the services of an |
| agricultural investment enables investors to capture | | | | expert consultancy who will have the investors need |
| income by renting their farmland to a commercial | | | | at security as their priority. Whenever considering a |
| farmer who will work the land, this effectively | | | | farmland investment for my clients, it is paramount |
| replace the lost risk free income that cash would | | | | to properly qualify the requirements of each investor, |
| normally provide. Thirdly, investing in good quality | | | | only then is it possible to recommend a suitable type |
| farmland has an infallible track record of being | | | | of agricultural investment. |