Agriculture

Why Own Agriculture?

An orange tree ready to be harvested

Productive land is the ultimate hard asset. Unlike a lot in a development community or a plot in the middle of a commercial district, productive land always retains the potential for yield.

By definition, productive land is land where you could produce something of marketable value. When whatever you plant or herd reaches maturity, you harvest and sell. That sounds like farming, but we’re not suggesting you pick up a hoe. Set up the agricultural investment properly, and you can be effectively a landlord for the crops.

Cash flow from a hard asset is the primary investor objective right now, and the best case we’d say is when that hard asset produces an agricultural product to feed a growing market demand.

The reasons for investing in agriculture are fairly straightforward…first and foremost is the rising global population that isn’t slowing down. It’s estimated that the human population will reach nine billion by the year 2050.

In addition, global incomes are rising, fueling increases in global food consumption. The rate of consumption growth is reported at 2.5% per year, with supply increasing only 1.5% annually. The UN estimates that 95% of total cropland is already being used in one form or another—which is to say that arable land is a diminishing global asset. Some UN studies estimate a need to double agricultural output by 2050 to accommodate the projected population increase. Plus, bio-fuels could reduce available cropland by 8% to 20% by 2050.

Should any world crisis strike, food and water will immediately become scarce and us, like you, we’re sure, want to be prepared for anything by making sure we can sustain ourselves and our families, should the need arise. We don’t want to be left to the mercy of whoever has control of farm land in the event of global crisis. We don’t see this as paranoia, just good sense.

As Jim Rogers put it, back in 2009:

“The best sector in the world that I know right now is probably agriculture. Everybody should become a farmer. Farming is going to be one of the greatest industries of our time for the next 20 to 30 years. I’m convinced that farmland is going to be one of the best investments of our time.

A Personalized Strategy for Investing in Agriculture.

Cash-Flow

This is for investors whose goal is to have a cash producing asset within the short-term (2-5 years).

Build Wealth

Often you don’t have a specific reason to save but still want to grow your wealth over a long period of time.

Legacy

A priority we recommend for investors who have family members they are looking to provide for long-term.

Aquaponics systems produce a variety of leafy green vegetable produce, including; Butterhead Lettuce, Coriander, Green Oak Lettuce, Mint, Mizuna, Parsley, Red Coral Lettuce, Red Oak, Rocket, Spinach, Thai Basil, and Watercress.

Check out our latest aquaponics offering.

Limes are produced by fruit bearing trees, often in tropical and subtropical climates such as Mexico, Panama, and parts of Asia. The lime fruit itself is the main product, however there are additional products which can be marketed using for a more holistic product sales plan, including balms, moisturizers, and oils.

Check out our latest offering of limes.

Mangos make a great investment for anyone new to agriculture. The ease of entry, due diligence, and growth cycles make mangos a worthy play for any portfolio.

Check out our latest mango offering.

Timber is an agriculture investment for those looking at the long-term. Demand for timber continues to grow and returns can be stable and strong for many years.

Truffles are a highly sought after fungus that grow underground, typically near the base of certain tree types (beech, hazel, oak, pine, and  poplar). There are a variety of truffle types which range in rarity and market price.

Don’t Worry If You Don’t Want To Become A Farmer

We agree wholehearted with Rogers’ estimation of the potential of farming as an investment asset class. However, it’s not realistic to imagine everyone in the world becoming a farmer. That’s why, for the past five years, we’ve been aggressively seeking out turn-key opportunities to invest in agriculture that don’t require the investor to plant, manage, or harvest crops himself.

That is, we’ve worked to identify agricultural investments that doesn’t require you to get your hands dirty. Specifically, I’ve been looking for managed, turn-key opportunities. These require a smaller investment than buying your own farm or forest and also require less management and administration throughout the lifetime of the investment. More and more turn-key investments are being put together for the individual investor, as more developers realize that retail investors are seeking them out.

Buying into a turn-key agro-play allows you to generate cash flow annually from the farming efforts of the development group while retaining ownership of the land yourself. This is a real asset investment with the added benefit of yield.

Yes, There Are Risks To Agriculture

We don’t recommend agricultural investments that have you investing in shares of a plantation or a harvest. We prefer agricultural investments where you take title to the land the crop is planted on.

Maintenance and management of the crop you own should be one of your main concerns in choosing an agro-opportunity. Another is the sales outlet, and a third is availability of water. Anyone can plant trees and watch them grow, but without proper maintenance (trimming the trees, using the right fertilizer, monitoring irrigation, etc.), the yield per tree will be less than optimal. And without a guaranteed sales outlet for the harvests, the entire endeavor is for naught.

It’s the job of the management group you invest with to maximize both the volume and the value of your harvests. If you simply plant trees, be they trees growing coconuts, teak, bananas, or whatever, and leave them to grow on their own, you’ll get a return, but it will be a fraction of the return you might get if you put more effort into managing the trees. Maintenance is key to helping trees grow and produce fruit.

Nature is going to be your biggest friend or foe in any agro-play. The location of your crop should be a natural one, one where the crop in question would grow anyway, on its own, without maintenance.

Then the challenge of the management group is to improve upon nature—that is, to grow more and better fruit, for example, than would grow without intervention. You need the right research (and researcher) to exploit this kind of opportunity.

The other key, again (and another of your primary concerns in due diligence), is the plan for selling the end product. Optimal crop production is pointless if you don’t have a ready buyer for your product.

Ideally, the management company earns its money from revenue splits after a set crop-care fee. Therefore, the management company earns more as the investor earns more. We see this as the ideal structure, as it means the developer or management company is incentivized to maximize the investor’s return.

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