Sustainable Agriculture Investments - Another Industry Poised to Surge.
Earlier this year, GGAgriculture reported, that investment guru Jim Rogers predicted that within the next decade farmers will be the ones driving Lamborghinis, while stock brokers will drive tractors or taxis. His contrarian proclamation has since fuelled intense investor interest in the agriculture sector. But despite this growing interest, the majority of investors have yet to discover the sector’s most promising niche: sustainable agriculture. Today, farming uses 80 to 90% of all the water consumed within the developed world, along with millions of gallons of chemical pesticides, hormones and antibiotics. After food is grown, processors and retailers ship it across vast distances before it reaches consumers. The result is a tangled web of farms, runoff, oil dependency and highly-processed or unripe food laced with chemicals. Sustainable agriculture offers a healthier, more environmentally-friendly alternative.
At Growth Green Agriculture we believe “Sustainable agriculture is a space that looks as big or bigger than clean tech” and “the future for agricultural investments looks very good indeed”.
Two measurable factors are driving growth in the sustainable agriculture sector: rising oil prices and increasing consumer demand. Traditional agriculture is highly dependent upon petrochemicals. In fact, in 2008, when fuel and fertilizer prices began to rise, the USDA researchers noted that most farmers immediately began to reduce fertilizer, fuel, pesticide and herbicide usage to reduce costs. With input costs on the rise, “sustainable” practices have begun to become synonymous with “cost effectiveness.”At the same time, savvy health-conscious consumers are demanding foods free of pesticides, hormones and antibiotics. In an effort to appease these consumers, large food conglomerates like Tesco`s have already been asking farmers to change the way they farm, from conserving water to limiting pesticide usage. Moreover, companies like Wal-Mart Stores Inc., The Kellogg Company and PepsiCo’s Frito-Lay have mandated conservation practices, and the few producers able to meet their requirements have been inundated with orders. What this all means is that a new crop of agriculture businesses, ones with cost-effective, eco-friendly innovations, will experience increased demand for their products. Institutional investors such as Growth Green Agriculture have already begun to take advantage of this trend, seeking out these companies and investing in them directly. By doing so, they are making double-digit returns -all with a clear conscience.
Agriculture is a $100 billion industry and there is room for everybody, including the small investor.
Agricultural Investments are set to soar and high net worth individuals and family offices are also beginning to scour the sector. For example, according to this year’s edition of the World Wealth Report, 12% of high net worth investors, worth a total of $40.7 trillion (€26 trillion), allocated money to the sector last year. What this means is simple: The sustainable agriculture sector is about to explode with the future for sustainable agriculture investments looking very promising indeed.
Growth Green Agriculture Plc is a UK based agricultural investments company specialising in emerging markets offering unique opportunities to invest in Ghana. GGAgriculture acts as consultant on green and socially responsible investments to the private and institutional investor community in Europe. http://ggagriculture.com/
