Direct investment in farmland has outperformed stock and bond returns over various timescales with substantially lower volatility than the US equity market, according to Stephen Johnston of Calgary-based Agcapita Partners
While everyone from the Rothschild’s – via the Agrifirma Brazil fund, run with Jim Slater – through to Nicola Horlick and UBS are snapping up farmland in Brazil, I’m fascinated by another niche: Canada and New Zealand.
While ordinary Canadians watch their pensions and jobs evaporate in the global economic mess, those who brought us the crisis have found a new profit-making toy. It’s land-grabbing, 21st-century style. Canada is not being spared.
Trade minister Stockwell Day said that Canada stands to benefit from the Saudi Kingdom’s overseas agricultural investment initiative and that the Canadian Parliament is studying it.
From Kansas to Kenya, investment opportunities in a range of global farm-related ventures are increasingly drawing capital to what many players and analysts see as the early days of a burgeoning bull market in agriculture.
An investor analysis of the case for buying up farmland
Increasingly, the land deals are coming under the scrutiny of the UN and watchdog groups such as Grain, the International Land Coalition and the IFPRI. That's because it is not obvious that they are win-win situations.
Eric Sprott's hunger for commodities may have wavered since last year's price collapse took a hefty strip off revenues at Sprott Inc., his money-management business. However, the legendary hedge-fund manager is still placing bets on at least one commodity: grain.
There are now a few examples in Canada of outside corporations buying and/or leasing land and farming it themselves. In fact, a huge corporate farming entity is being planned for First Nations land in the three Prairie provinces.
Wealthy countries short of fertile land are gazing hungrily at Canada's prairies
According to Barclay Hedge, agricultural funds were up 9.5% in 2008, while the S&P 500 index lost 36%.
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