Canada

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

Promotional piece for investing in farmland

According to Barclay Hedge, agricultural funds were up 9.5% in 2008, while the S&P 500 index lost 36%.

Agcapita allows investors to gain direct exposure to a key part of the agriculture commodity bull market story - Canadian farmland.

Angola, one of the world's fastest-growing economies, has launched an ambitious plan to exploit both its fertile soils and high global food prices to attract $6bn (€4.3bn, £3.4bn) in agriculture investments over the next five years.

Contributing their bit to the global Indian takeover, the government and India Inc plan to buy sizeable land abroad for cultivation. Seen as a long-term answer to keep prices of farm products under control, the grand plan envisages acquisition of large tracts of land in neighbouring countries like Myanmar and far off places like Paraguay.

Big Money from Wall St. to the Middle East are on the hunt for farmland. Canada, especially Ontario, stands to profit but will the costs be too great?

Agacpita President Steven Johnston explains the philosophy of investing in farmland