Private equity funds remain optimistic that Brazil’s farm sector offers investment opportunities despite the deteriorating world credit market, executives said on Thursday.

Private equity funds remain optimistic that Brazil's farm sector offers investment opportunities despite the deteriorating world credit market, executives said on Thursday.

The owners of Multigrain, a leading Brazil-based agricultural commodity business, announced today the company has acquired 100,000 hectares (247,000 acres) of farmland and related processing operations intended to strengthen its ability to serve customers around the world.

Soaring food prices, supply fears among import-dependent countries and rising demand for biofuels have driven up investment in agricultural land, notably in Africa.

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.

Le gouvernement brésilien envisage de limiter les achats de terres par des étrangers ou par les compagnies nationales dont le capital est majoritairement entre des mains étrangères. Il prépare un projet de loi en ce sens qui sera soumis au Congrès fédéral.

As with timberland, while direct ownership and management (i.e., being a farmer), is a possibility, such a route is similarly fraught with difficulties. One of the most significant of these is the issue of diversification in the farmland itself - especially with a single investment. A well-diversified holding of farmland (row crop, permanent crop, pasture and even timber) will, therefore, not only require a significant investment, but may also involve land holdings in a number of different locations.

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.

Saudi Arabia's new ambassador to Brazilian capital Brasília, Mohamad Amin Ali Kurdi, wants to promote the flow of investments between his country and Brazil. The ambassador even proposed the idea of establishment of an agribusiness multinational with Saudi investment, Brazilian know-how and land and possible future participation by companies in other countries.

Japan's big trading houses, which have enjoyed bumper years from betting on iron ore and metals, are getting into the food market, aiming to tap voracious demand in China and emerging economies.

Sudan is seeking to attract at least $1bn of capital for its agricultural sector from Arab and Asian investment groups, which are turning to Africa in search of new food supplies as their governments try to manage the impact of commodity price inflation.

What’s with farming these days? The humble, even if slightly romantic vocation, is attracting a new breed of participants as investing in farmland and agriculture becomes the latest fad in the world of investments.