Many of the world’s biggest pension funds as well as family offices of wealthy individuals –looking for diversification and steady returns in times of market volatility– have been pouring money into farmlands, writes Kelvins Tan

Ospraie Management, the famous commodities hedge fund, is still long on farmland because it has actual cash flow. Many pension funds are now buying farmlands, reports Bloomberg.

The results of pension funds’ alternative investments have been passable so far. In the case of farmland, at the end of last year the average total annual return over a 10 year period was more than 10%.

New report from Oakland Institute looks at private equity funds betting heavily on agriculture

Major farmland investors such as banks and pension funds must stop facilitating land grabs, civil society groups on the eve of a global farmland investment conference in London on December 3-5, have said.

Taking tracts of agricultural land is among ways to play the risks of climate change says Baring Asset Management's chief investment officer, Marino Valensise.

Farmland and timberland are now separate asset classes, the UK's Pension Protection Fund has asserted in its revised investment principles.

The proportion of PPF's £12bn portfolio of assets allocated to farm and timberland will vary over time and depend on the opportunities available now and in the future.

For all the willing buyers seeking tracts of Australian farm land, local investors are not among them. They wonder what all the fuss is about.

Continued economic uncertainties are prompting a back-to-the-land movement among investors. And a favored choice of land is farmland.

Africa is regarded as the New Eldorado, and is attracting many foreign based private or public investment companies, sovereign wealth funds and even pension funds gradually. Sadly, while foreigners continue to play a major role in growth investments, African pension funds' contributions to this growth are dismal.

The Mozambiqan government has marked the northern Niassa province to promote commercial, large-scale tree plantations. Currently, the single biggest plantation in the region comprises of 13,000 hectares of eucalyptus and pine, owned by a company called ‘Chikweti Forests of Niassa.’

On October 9th 2012, the Finnish solidary network Kepa held a discussion on the effects of large-scale land investments or "land grabs" in the Global South.

A slide show by GRAIN that profiles some of those who have been most actively pursuing or supporting farmland grabs around the world.

MetLife Inc, the largest US life insurer, started a business to make agricultural loans in Brazil as insurers expand in developing markets and seek investments to boost income with interest rates near record lows.

Après le groupe Louis Dreyfus, le deuxième plus gros investisseur français dans les terres agricoles se nomme Vincent Bolloré.

In debate over large scale investments in agriculture in Australia, there are some broader issues about foreign investment that don’t seem to get talked about enough.

A delegation of peasants from Niassa recently travelled to The Netherlands and met lawmakers, students and investors in the Chikweti plantations, including the Dutch national pension fund ABP, the biggest investor in the project.

Foreigners are buying up prime agricultural land, but proposed legislation could curtail the booming trade.

Since Jane Mendillo took over the endowment in July 2008, Harvard’s holdings of forests, farms and other natural resources in Brazil as well as in New Zealand and Romania have grown to about 10 percent of the portfolio -- more than $3 billion -- and she wants to add more.

Colliers International estimates about A$4 billion is currently being raised for funds to invest in Australian agriculture, including PrimeAg’s raising of A$125 million in cash for a controversial unlisted A$250 million agriculture fund with Australia’s Future Fund.

It is understood the agricultural division of the $163 billion Canada Pension Plan Investment Board has been sniffing around Australian agricultural land recently and has had discussions in Australia with landholders such as PrimeAg.

Jusqu’à maintenant, les efforts déployés pour réglementer les accaparements de terres étaient le fait des institutions internationales. Maintenant, le secteur privé s’engage à définir ses propres règles du jeu.

From the World Bank to pension funds, efforts are under way to regulate land grabs through the creation of codes and standards. Rather than help financial and corporate elites to "responsibly invest" in farmland, we need them to stop and divest.

Joe Azelby, JP Morgan’s head of Global Real Assets, is seeing a structural shift in many institutional portfolios toward real assets, including farmland.

Jeremy Grantham of US asset management firm, Grantham, Mayo, Van Otterloo and Company (GMO), says global investors should have 30% of their portfolios exposed to natural resources, with half of that in forestry and farmland, to take advantage of the growing global food crisis. That is double today's averages.

HighQuest Partners in the US say that between 65-80 million hectares of additional land is going to have to be brought into production, globally, within the next 10 years and that this means more foreign farmland investment.

Investors are honing the focus of their cash on real assets including farmland, timber, mines and energy projects, which are less correlated to financial markets.

Investors from Canada and the Netherlands have almost half of all foreign forest and farmland holdings in the USA. The Canadian holdings reflect investment by timber companies, while the Dutch holdings reflect pension fund investments.

Drought conditions in much of the US this year could turn into a boon, rather than a bust, for institutional investors in farmland, timber and agricultural stocks.