How to invest in agricultural land


The closest that an investor can get to owning a farm without actually doing so is by investing in a farming-focused real estate investment trust (REIT). Some examples include Farmland Partners Inc. (FPI) and Gladstone Land Corporation (LAND). These REITs typically purchase farmland and then lease it to farmers.

Why you should invest in farmland?

 · There are several ways to invest indirectly in agriculture, from farm REITs to agricultural ETFs to the commodities markets. Farm REITs The closest that an investor can get to owning a farm without…

How to invest in farming without owning a farm?

 · The most obvious way to invest in farmland is to directly purchase usable cropland or pastureland and rent it out to a farmer or rancher. This method of investing in farming has a sizable upfront…

Why is Bill Gates buying so much farmland?

 · Directly Investing in Farmland. You can directly invest in portions of a farm through AcreTrader and FarmTogether, LLC. They are not REITs, but they work in a similar way. You pick out the fields or farms you want to buy and then you purchase shares in the entity that owns it. You share in their profits according to the number of shares you purchased.

How to find agriculture investors?

 · If you own shares of the farmland, you will earn a percentage of the rent payment based on what percentage of the farm you own. Most of the farmland investing platforms will pay these distributions out on a quarterly or annual basis. The second way to make money with farmland investing is by selling the farm for a profit down the road.


How can I invest in agriculture?

How To Invest In AgriculturePurchasing Farmland Directly. Perhaps the most obvious choice when considering purchasing farmland is to purchase it directly. … Real Estate Investment Trusts. … Purchase Stocks. … Mutual Funds & Exchange Traded Funds (ETFs) … Invest in Farm Debt.

Is it smart to invest in farm land?

Over the last 50 years, the value of American farmland has risen by about 6.1% per year, with only five down years during that period. Add in the cash rent yields, and the return to investors has been even more impressive.

How do you make money on agricultural land?

6 Ways to Make Money Off of FarmlandRaising Animals To Produce Products. Animals are a natural part of owning and working farmland. … Build A Barndominium For Others to Rent. … Rent Plots of Land to Local Growers. … Rent Out The Property for Fishing or Hunting. … Create Storage Space for Others To Use.

Is investing in agriculture a good investment?

Not only is farmland a good investment in an inflationary environment — farmland also provides robust average annual returns. Between 1992 and 2020, farmland provided average annual returns of nearly 11%, including income and price appreciation.

Is farmland a good investment 2021?

The reasoning is simple: farmland is a good investment because it’s a limited resource (there’s only so much land in the US and the number of undeveloped acres keeps shrinking) and it’s in high-demand, given food production is so essential.

Is agricultural land worth buying?

Usually, agricultural land is considered a good investment for high net-worth individuals and for those with surplus income. For salaried or self-employed individuals, living in cities, going through all this process will be time-consuming and tiresome.

Which farming is most profitable?

Some Best Profitable Farming In India 2022Garlic Farming. The payoff on growing garlic can be enormous for those who prefer to grow “gourmet” garlic. … Lavender Farming. Lavender farming produces above-average gain for small growers, as it is such a varied crop. … Gourmet Mushrooms Farming. … Bamboo Farming. … Willows Farming.

How do farmers become rich?

Farmers and investors can reap great rewards from agriculture as it produces food, fruits, fish, and snails, along with poultry and livestock, all of which will generate income since food is of tremendous value to people and will never go out of style.

How much can we earn from 1 acre land?

Rs. 8-10 lakhs can be earned in a year with only 1 acre of land. This method will require less effort and less materials.

Does agriculture make money?

Net profit is 46.5 billion US dollars. The profit of the agricultural sector in 2020 will amount to $119.6 billion.

Which agriculture share is best?

List of Best Agricultural Stocks to buy – Summary TableSr. No.Company NameBSE Scrip Code1PI Industries Ltd.5236422Bharat Rasayan Ltd.5900213UPL Ltd.5120704DCM Shriram Ltd.5233676 more rows•Mar 21, 2022

How do I become a farmer?

How to Be a FarmerFarming is a huge responsibility. … Be knowledgeable in what your farm has to offer. … Be appreciative of what you have. … Be intuitive and creative. … Learn to be flexible and not be afraid to take a gamble. … Learn to learn every day. … Farming involves hard work.More items…•

What does it mean to invest in agriculture?

Investing in agriculture means putting your money behind food and crop production, processing, and distribution.

What is the closest you can own a farm?

The closest that an investor can get to owning a farm without actually doing so is by investing in a farming-focused real estate investment trust (REIT). Some examples include Farmland Partners Inc. ( FPI) and Gladstone Land Corporation ( LAND ).

What is an ag mutual fund?

Ag Mutual Funds. There are also mutual funds that invest in the farming and agriculture industries. If this sounds appealing, you should first determine whether the fund invests in agriculture-related firms or invests in commodities. Also, keep in mind that many of these funds have exposure to other sectors along with agriculture.

What is an ETF in agriculture?

Exchange traded funds (ETFs) are a good tool for investors to gain diversified exposure to the agriculture sector. The Market Vectors Agribusiness ETF ( MOO ), for example, offers access to a diversified set of businesses, investing in companies that derive at least 50% of their revenues from agriculture.

What companies sell fertilizer?

Among the publicly-traded companies selling fertilizer or seeds are Nutrien Limited (NTR) and The Mosaic Co. ( MOS ). Equipment. Farming’s an equipment-intensive activity, so investors can gain exposure to the sector by making investments in equipment manufacturers with an agricultural focus.

What are the major industries that support farming?

Three of the largest industries are companies that sell fertilizer and seeds, farm equipment manufacturers, and crop distributors and processors. Fertilizer and seeds. Many firms are involved in the production and sale of fertilizer and seeds, …

What are some publicly traded crop production firms?

Unfortunately, there are a limited number of publicly-traded crop production firms, which include Fresh Del Monte Produce Inc. ( FDP ), Adecoagro S.A. ( AGRO ), and Cresud ( CRESY ).

What companies are in the farming support industry?

If you are interested in a farming support industry, there are stocks availablefor companies in processing and distribution like Archer Daniels Midland Co. or in farming equipment like Deere & Co. There are also fertilizer and seed companies.

What is Invesco DB Agricultural Fund?

Invesco DB Agricultural Fund is an example of an ETF that invests mostly in agricultural commodities. Take note that if you trade in commodities, it will also complicate your income taxes at the end of the year.

Can you invest in commodities?

You can also invest in the products produced by farmland such as soybeans, corn and cattle to name a few. Commoditiesare risky investments since their price depends on uncertain events that impact their supply and demand. Alternatively, you can invest in commodities funds, which are ETFs that will reduce the risk of investing in the risky commodities market and give you more exposure.

Can you invest in farms?

You can directly invest in portions of a farm through AcreTrader and FarmTogether, LLC. They are not REITs, but they work in a similar way. You pick out the fields or farms you want to buy and then you purchase shares in the entity that owns it. You share in their profits according to the number of shares you purchased.

Do REITs have debt?

There are both debt and equity REITs that investors can consider. Equity REITs own properties, lease them to farmers and collect rent. This income is then distributed as dividends to shareholders. Debt or mortgage REITs provide new financing or buy existing mortgages and earn interest. In this case, the interest income then goes to shareholders. When the mortgages sell, they may also earn capital gains.

Can you invest in crop production?

You can invest in the equity of any one of several publicly traded firms. There are firms that are directly involved in crop production and others that are the stocks of companies in the farming support industries. Many of the companies involved in actual crop production are privately held. There are a few public ones, like Fresh Del Monte Produce, Inc., that engage in crop production, and Cresud, which engages in the production of agricultural commodities along with other lines of business.

Is farming a profitable industry?

The issues facing farmers do not mean that it isn’t a profitable industry. Even though returns in the sector sometimes lag, farmland increases in value over the long term and keeps pace with inflation. It adds a real physical asset to your portfolio, which may be full of financial assets, providing diversification. Although returns on current income from farming can be low, capital gains can be high. However, the returns on income, over the long run, are relatively stable. On the flip side, capital gains income may be more volatile, making agricultural investing a long-term venture.

Why are investors getting into farmland?

The United States has been in a period of low interest rates for over a decade now, and this has pushed investors to seek alternate assets for a means of return. This is one reason why many investors are getting into farmland. The stock market may be too volatile with the constant ups and downs, but bond yields are relatively flat and not keeping up with inflation.

What is farmland investment?

As the name suggests, farmland investing means you are making an investment in some form related to the production of crops. At the end of the day, the land is real estate, so this is lumped in with real estate investing.

What is harvest returns?

Harvest Returns is a farmland crowdfunding platform that puts the relationship with farmers first. The terms of deals on their platform can vary significantly depending on what the farmer needs and include both equity and debt-based deals. Most deals are open to a number of non-accredited investors.

What is farmland LP?

Farmland LP is a platform specializing in converting conventional farmland to organic farmland. By capitalizing on the supply and demand imbalance in the organic market, Farmland LP is able to generate 4x as much profit-per-acre as traditional farms. Investors on the platform cannot invest in individual projects, and instead, invest in a fund created by Farmland LP.

What is Farmfundr crowdfunding?

FarmFundr is a crowdfunding platform that allows investors to buy shares in a farm, not just the land it sits on. As a result, investors share in the profits from the yearly harvest. This gives investors additional potential for upside as well as additional risk if crop yields are reduced.

Why are farm operations consolidation?

Another trend seen right now is consolidation of smaller farm operations into larger ones. This is largely due to weak commodity prices. Crops like wheat and corn are a commodity. Larger farms operate more efficiently, so combining operations is often a cost-effective move.

Do we grow cotton?

We grow a lot of cotton too, coming in at the third-largest cotton-producing country in the world!

What is agriculture investment?

When you invest in agriculture, you are investing is a physical plot of land. This land’s value will only appreciate over time, unlike stocks that often depreciate.

What are the factors that determine the best investment in farmland?

When investing in farmland, soil fertility and water are the two most important factors. Soil is classified under class 1, 2 and 3 soils. Class 1 is the best. There are a variety of crops that can grow in different soil types and it is important to match the commodity grown to the proper soil type to maximize yield. There are three water sources as well, including rain water, well water and surface water (delivered from a lake or river on demand). All farmland must have one or all three sources for it to have a chance at being a good investment.#N#‍

Why is farmland important?

With an ever-increasing global population and demand for food, farmland offers a truly unique investment opportunity with inviting long-term returns. Investing in farmland has also proven to provide diversification to portfolios along with a hedge against commonly unstable stock market corrections.

Is organic farmland a good investment?

Organic farmland investments are a good investment. However, not all soil and geographical locations are suitable for organic production. A good conventional farm may not make a good organic farm. There are many variables that need to be analyzed before buying organic farmland or converting conventional farmland to organic.#N#‍

How long does it take to see return on farmland?

Investors must realize that farmland is a long term investment. Return on an investment can vary from 12 months to 7 years before seeing your first return. They must also realize there are short term fluctuations in commodity prices, and returns are better measured over longer periods in farmland investments.

What are the risks associated with agricultural investments?

Some of the risks in this particular asset class include drought, fire, pests or disease that could damage crops. Politics can also play a hand when it comes to agricultural restrictions and risks.

How does crowdfunding work in agriculture?

For as little as $10,000, investors can own a piece of a real working farm.#N#Crowdfunding allows investors the control to invest in the farmland that best suits their investment goals. They have control on selecting the geographical area, commodity type and will experience the upsides of owning a piece of an individual farm.#N#Returns may vary depending on the offering, but some crowdfunding offerings manage the farmland so that investors actually receive the crop’s proceeds, not lease payments. This increases the return on investment.#N#When working with the right farmland crowdfunding company, you’ll experience financial returns while being able to watch the direct impact your investment has on a real working farm.

Why do you need to buy land for farming?

Land purchased for row-crop farming or for running a livestock operation affords the ability to enjoy land in the homeowning sense, as well as from the standpoint of generating income . However, there are a host of problems for small investors who purchase land in order to operate these types of enterprises. First, the scale required to operate a row-crop operation or livestock operation has to be very large to be financially viable. This, in turn, requires a significant upfront capital outlay far beyond what most people can afford. Moreover, the ongoing fixed costs associated with running these types of farming operations are extremely high.

What are the best land investments for small investors?

For small investors to truly enjoy the more traditional sense of land ownership, perhaps the best options are timber farms, mineral development lands, vegetable gardens, orchards, vineyards, and recreational land . These types of agricultural endeavors are much more attractive to small investors: The scale of the land purchase can be tailored to meet the investor’s capital constraints; operations have the potential to generate an ongoing income stream, and investors can enjoy being on the land while it is being used.

Why is it important to operate a small farm business?

For these reasons, coupled with the fact that operating a small-farm business takes a significant amount of physical strength, stamina, and a very strong work ethic, the vast majority of investors will not likely be able to handle all of the farming demands on a sustainable basis.

Is raw land good for investment?

From a pure investment standpoint, raw land has a very unattractive return on investment, particularly when one considers the length of time that investors typically must own land to generate a return on investment.

Is raw land speculative?

Investors considering a raw-land purchase need to realize that they are engaging in a purely speculative investment. This is because undeveloped land does not generate any income, and therefore any return on investment will have to come from the potential capital gain that may be received once the land is sold. With this in mind, the cost of debt for a farm real-estate loan can be used to help conduct a preliminary investment analysis.

Do ETFs have to do with farming?

With that said, a host of ETFs and ETNs also are directly tied to these types of farming endeavor s. Therefore, small investors may want to consider investing in them, if they decide that running a small-scale farming operation requires too much of their time and resources.

What is an ETN in agriculture?

Small investors can also utilize a variety of exchange traded notes (ETNs) to invest in specific types of traditional farming operations. For example, the iPath Bloomberg Agriculture Subindex Total Return ETN ( JJATF) provides investment exposure to soft commodities such as corn, wheat, soybeans, sugar, cotton, and coffee, and the iPath Series B Bloomberg Livestock Subindex Total Return ETN ( COW) provides investment exposure to cattle and hogs. 2  3 

How to invest in a farm?

You can employ the following methods, to turn your land investment into a profitable venture: 1 Depending upon the location, you can rent it out for community gardening. 2 Start blogging about your newest farming adventures. 3 Set up a beehive farm and convert it into a tourist activity. 4 If the land is fertile, grow unique flowers to sell at the local market. 5 Sell plant seeds online. 6 Offer your services for pet sitting/creche. 7 Grow herbs and sell it online. 8 Offer tours or classes on farming. 9 Use the land to generate solar energy.

Why are urban investors investing in agricultural land?

A number of urban investors are investing in agricultural land, owing to the slump in urban realty and the promise of greater long-term returns. We examine the benefits and risks, for those who wish to buy agricultural land.

Can everyone buy land in India?

Not everyone can buy: As per the law, you need to be a farmer to own agricultural land in India. While most states have such a ruling, some have eased this prerequisite. You may also get receive such a land, through a gift or through inheritance.

Does land depreciate with time?

As is true of all land-related developments, your asset does not depreciate with time – something that cannot be said about property such as flats, apartments, etc. With time, the quality of the building structure deteriorates and the owner has to spend substantial amounts of money, to maintain it.

What happens if you become an owner of a land pool?

If you become an owner under the land pooling policy, you will get a guaranteed regular returns from the pool. See also: Commonly used land and revenue record terms in India.

Is it good to own land in Delhi?

Pradeep Mishra, a Delhi-based real estate consultant, points out that it is good, if the land is located in an area, where some government scheme is to be launched, or if it is included in the master plan of the region. Chances are that such a piece of land will fetch a higher value in future, he says.

Where are urban investors looking for land?

Urban investors are now looking at the returns potential of agricultural land in the suburban or peripheral areas of big cities and state capitals.

What is an investor in farmland?

As an investor, you are lending money to farmers rather than buying shares of a farm. 1. AcreTrader. AcreTrader is one of the newer farmland investing platforms to hit the scene. Founded in 2018, the crowdfunding platform allows investors to pool their money together to purchase larger deals.

How much investment is required for AcreTrader?

However, some projects on the platform will require a $15,000 – $25,000 minimum investment. Investors should keep in mind that there is no secondary market on AcreTrader. As a result, you will not be able to sell out of your investments early and should be prepared to hold them through to completion.

What is Farmfundr investment?

Founded in 2015, FarmFundr allows investors to buy shares in entire farms, not just the land they sit on. As a result, investors receive a share of the profits generated when the harvest is sold.

Can farmers get bank loans?

Historically, it has been difficult for these farmers to get bank loans, so as lender you’ll be able to address this issue and help them in the process.

What is AcreTrader platform?

AcreTrader is one of the newer farmland investing platforms to hit the scene. Founded in 2018, the crowdfunding platform allows investors to pool their money together to purchase larger deals.

How much money does Acretrader raise?

Over the last 3 years, Acretrader has raised over $20 million in funding to expand their platform. You can invest in a variety of deals on the platform ranging across the United States. Most deals involve farmers selling their farm to investors, investors holding the property for a number of years, and selling it.

Do you have to include primary residence in net worth calculation?

To meet the net worth requirement, you cannot include your primary residence in the calculation. Fortunately, while many of these platforms require investors to be accredited, there are a number that do not. So whether you are an accredited investor or not, there will be something for you.

How many acres of land will be covered by digital agriculture in 2020?

And, while this might be a new opportunity, hundreds of millions of acres were covered as of early 2020.

What are the agricultural inputs that have faced challenging market conditions in recent years?

2. Pesticides ( cash flow and dividends) Pesticides are another agricultural input that has faced challenging market conditions in recent years and for many of the same reasons as fertilizers. But a wave of consolidations and broad expectations for improving market conditions could make a big difference in the 2020s.

How much has John Deere stock returned since 1978?

In fact, the stock has delivered a total return of more than 10,000% since its debut in 1978.

What is vertical farming?

Vertical farming, a method of growing crops using layers or shelves to conserve space, is a hyped technology, and newly public AppHarvest (NASDAQ:APPH) gives investors their first opportunity to get pure-play exposure to the new farming technique.

What are the companies that are supplying plant based meat?

Therefore, these companies must partner with, and create supply agreements with, the world’s largest agriculture companies such as Archer Daniels Midland, Bunge, and Tyson Foods.

Is agriculture changing?

The agriculture industry is rapidly changing in the current economic climate. Check out the “recent articles” feed below for the latest.

What is digital agriculture?

Digital agriculture (growth and cash flow) Advancements in data crunching, satellite imagery, and mobile computing power have given rise to digital agriculture. And, while this might be a new opportunity, hundreds of millions of acres were covered as of early 2020.


Leave a Comment