Agriculture Investment: Why the wealthy are investing in farmland

If you want to follow in the footsteps of some of the world’s most wealthy people, then invest in agriculture! Agriculture investment has become one of the most viable options right now and proof of this is that over recent years, many high profile magnates, entrepreneurs and billionaires have turned farmers (in a fashion) by investing in farmland.

There was an interesting article in Modern Farmer magazine, which looked at 5 Billionaires with ties to agriculture and why they do it. They highlight the investor and businessman Jim Rogers, who bought an agriculture company in 2015 and is the director of a Russian fertilizer company. He famously said in Time Magazine; “If you want to become rich, become a farmer” and he’s not alone in feeling this way.

Larry Ellison, CEO of Oracle, bought 98% of a Hawaiian island to ramp up their sustainable agriculture with aquaponics, hydroponics and state of the art farming techniques. The best known billionaire involved in agriculture must be Bill Gates, who through his foundation is heavily involved in agricultural research and development. Warren Buffett chose farmland over gold, as he stated that everyone has to eat, so if you invest in agricultural land, you are in very good company.

In Australia, a number of wealthy business people also recently invested in agriculture and this has fuelled interest in agricultural investment there. In the US, according to CNBC, “the super-wealthy investor set and overseas agricultural giants are snapping up land” as they are placing bets on global food demand increasing and snapping up bargains from the drop in crop prices.  However, the report notes that few individual investors are following suit and are therefore missing out on the lower prices and reduced barriers to entry.  Website MarketWatch shows that individuals can and should get involved in this exciting and profitable sector, through buying natural resources and commodities mutual funds, investing in farmland, or even by working and living off the land.

Jim Rogers says the world needs more farmers and people can improve food production by investing in agriculture. The same is true with forestry, with a surge in demand from China and predictions that current forests will not be able to meet future demand, plus a huge global problem with deforestation. Increasing demand and reducing supply mean that now is a great time to invest in forestry and start reaping the rewards.

There is already a very high demand for timber, with 1.6 billion cubic meters of wood being consumed for industrial uses each year – the same as cement, steel, plastic and aluminium combined. This is expected to grow, as pressures to be energy efficient lead companies to choose wood, as it takes so little energy to process. The resurgence of the US housing sector, China and India’s rapidly increasing demand for wood and paper means more wood is needed than ever, yet supply has not kept pace with demand. This will lead to big supply issues in the future, which will drive prices up. If you want to find out more about investing in forestry download our free guide, or contact us to discuss the options.

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