It’s often overlooked because it’s not particularly sexy to mainstream investors, but there is huge opportunity in global farmland and sustainable farming.
You see, global population has increased at a staggering rate over the past century, with an increase of one billion in the past decade alone and a projected world population of nine billion people by 2050. Yet today’s global food production continues to leave over a billion people undernourished.
There has also been a proliferation of a new middle class with increased purchasing power in emerging markets, coupled with a shift in dietary trends, which has increased the demand for meat.
This global population growth and an increasing reliance of the global livestock industry on grains for feeding its livestock has, in turn, led to an increased demand for grains that will continue to trend upwards.
Add to that the millions of acres of land lost to urbanisation every year and the negative impact of extreme weather events, soil degradation, water scarcity, and rising temperatures on agricultural productivity. Then there’s increase demand for biofuels, and the ‘finite’ nature of arable land to meet this ever-increasing global demand, and you’ll begin to understand why global farmlands — a prime asset — continue to be an attractive investment on a global scale.
On a local scale, we are starting to see a move into farm syndication that will allow investors to invest directly into land. Today farm syndication makes up 7.1% of all New Zealand farming operations. The fact is that not all syndicates are as good as another and prudent investing is wise. If you would like to discuss what is available, and how best to take advantage of it, please do not hesitate to give me a call.
John Barber