With the global economy teetering on the edge of collapse making for an incredibly risky investing environment there are few good places left to put your money. The standard “safe havens” are gold, cash and bonds. The problem with these are gold’s volatility, cash devaluation via inflation and sovereign bonds run the possible future risk of going belly up. (think Greece & Spain)
However there are other places that may or may not be considered “safe havens”. Precious metals, commodities, real estate and especially income producing real-estate. Farm funds are another viable alternative. In some ways they are a combination of commodity, real estate and they are income producing.
One thing to note is that farms are subsidized in Canada, although less so than in the United States. Most countries subsidize their farming industry and Europe is particularly bad for this. Thus the farming market is one that is highly manipulated by governments across the world and tariffs abound depending on the products. Due to high tech and government subsidies food is often produced cheaper in first world nations than in third world nations, much to the dismay of the third world as it is largely their only source of income.
That said Farm Fund’s produce on average 6-7% return per year which currently compares well to most investment portfolios specializing in equities. Considering their incredibly low risk profile and the alternatives, Farm Funds appear to be an incredibly lucrative investment opportunity.
Bar, major national wide droughts, a sudden decrease in global population via a plague, war or environmental disaster, the value of farm land and food will undoubtedly rise for the foreseeable future in order to keep up with exponential like human population growth. People need to eat in order to survive and farming/food is one of the basic necessities. As recent food price increases show demand often outstrips supply. In addition to this there is increasingly less available farm land left on the planet. The only other options are destroying the last forests on the planet or building vertical farms. Thus whatever farm land is out there for the time being should maintain it’s value.
Note: Most Canadian Farm funds are ONLY open to accredited Canadian investors.
Primary Farm Funds in Canada
- Assiniboia Capital
- HCI Ventures
- One Earth Farms – Focused on First nations land (run by Sprott Resoruces Corp.)
- Hancock Agricultural Investment Group (Canada in US)
- Prairie Merchant – by Brett Wilson
Farming as Investment in popular media
- The Future of Farmland in a World of Financial Fraud and Safe Haven Bubbles! – YouTube Video
- Land Values – Excellent Article
- Farmland funds grow in more ways than one
- How To Invest For The Global Food Crisis – comments section
- Canadian Money Forum – Farmland Investing
- A new Model for Investing in Farmland