Agriculture Investment Funds - The Best Alternative

In the rapidly expanding population, low interest rates, inflation and dark capital markets, investors are looking for assets that will grow in value, producing a regular income, and retain value in the event of a collision. Basically we need a safe haven for our money and that is leading many investors to the agricultural sector and 75 million new mouths to feed every year and change of diet in developing countries supports the theory that agribusiness will do well in the mid to long term.

There are many opportunities open to investors choosing the sector of agricultural investment funds, ETFs, foreign direct investment in the agribusiness company, or trading of soft commodities such as wheat. My problem lies in the fact that these investment strategies do not tick all our boxes. Funds incur management fees, over the life of a mutual fund, investors lost 80% of their income for management fees, supplies can be volatile in the short term, and investment in agribusiness firms do not provide any level of non-correlation.

So what's the alternative? More and more astute investors, both private and institutional, are snapping up what little quality agricultural land is left in the hope that as time passes, and the population continues to grow, the land we have become more valuable in the face of increasing demand for food. We also know that good work the land will produce income each year of growing and selling crops, replacing the lost risk-free income is no longer achieved by holding cash. Of course, if someone somewhere finds an alternative to food, then the value of agricultural land will drop, but I think we can all agree that we all have to eat at some point and therefore retains the value of arable land even in the worst circumstances.

So how can a small investor is the source of a piece of land large enough to farm commercially? And how do we reduce the general agricultural risks such as exposure to adverse weather conditions, commodity prices and the quality of agricultural management? There are opportunities for smaller investors to participate in large transactions, any pooling of capital from other investors to buy better and bigger lots, and other very interesting structured vehicles which small investors to buy a small piece of a much larger, commercially managed farms, the farmer shouldering general agricultural risk and payment of land ownership the investor a fixed annual income. This methodology provides the farmer with the much needed liquid capital to expand operations and invest in their businesses, while providing the investor with a risk managed exposure to high yield farms, according to revenue, the principle of protection and capital growth.

Where should consider buying land? EU, Latin America and Australia are investable places, and have consistently achieved returns of between 10% and 20% higher revenue and growth depending on the location of the farm and the investment structure.