OECD sees extended surge in farmland investment-INTERVIEW

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Black earth farmland in Russia, targetted by numerous funds

Reuters | Thursday June 24, 2010

• Private funds investing in farmland are growing -survey

• Private investment seen beneficial, differs from govt aims

• Survey results due within next month

LONDON, June 24 (Reuters) - A recent global surge in private investment in farmland is set to continue as investors look to returns from agricultural production and to rising land values, said an OECD executive on Thursday.

An Organization for Economic Cooperation and Development (OECD) survey found that investment funds in this space are growing and that the surge is not just a bubble, Wayne Jones, head of the organisation's agro-food trade and market division, told Reuters on the sidelines of an agricultural conference.

The OECD, the United Nations Food and Agriculture Organisation and other institutions have been developing guidelines for international farmland investment after a wave of deals in the past two years led to accusations that wealthier nations have been staging a land grab.

A spike in agricultural commodity prices in 2007-2008 led to unrest in parts of the world and prompted countries such as China, Saudi Arabia and South Korea to invest in farmland abroad to improve their access to food supplies.

The OECD survey of around 25 funds buying farmland in regions including Latin America, Europe and Asia found they brought much needed investment into the sector, said Jones.

Jones differentiated between private investments, which produce food to sell on domestic and international markets, and government investments, which are designed for export to foreign populations.

"In the case where you've got investors putting money into companies that have developed land portfolios ... I think that's quite a good thing for the host countries," he said.

"What we've seen is that it takes land which is perhaps not productive, making it productive with major investments. Because they (the investors) have access to capital, they increase output, productivity, often reducing environmental damage and they create employment for local areas," Jones said.

The survey results are due to be published within the next month, he added.

(Reporting by Sarah McFarlane; editing by Jane Baird)

OECD sees extended surge in farmland investment-INTERVIEW
Original source: Reuters
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