Why Invest in Agriculture?

  • Agricultural land is a REAL ASSET with strong fundamentals
  • Agriculture has a low correlation to mainstream asset classes such as bonds, stocks and commercial real estate
  • Scarcity - forty years ago there was 0.5 hectares of arable land per capita; today it is 0.2 hectares due to the impact of population growth, urban sprawl, land degradation and climate change.
  • Global Demand - Global food production must double by 2050 to head off mass hunger …Investments of US$83 billion a year must be made in agriculture if there is to be enough food for 9.1 billion people in 2050 (UN Food & Agriculture Organisation)
  • Demand from China - Just one example: If the Chinese match the diets of modern Koreans, it will mean a 27% increase in global consumption of meat and fish
  • Inflation hedge - during the past 30 years the compound annual growth rate of the Australian Rural Land Value Index has been 8.2%, with a 95% correlation with inflation
  • Biofuels Impact - In 2000 global land use for ethanol production was 10m hectares; by 2015 it will be 120m hectares, reducing the acreage available for other crops, and directly affecting demand for sugar, corn, and oilseed