| Investment funds are starting to show interest in not only commodities
like wheat and corn but also farmland and other necessary structures
for agriculture. Investors plan to consolidate small plots of land to
increase productivity, introduce new technology, and provide the
capital to improve and maintain grain elevators and fertilizer depots.
By directly investing into the agricultural business, investors can
avoid the rules limiting the number of speculative bets they can make
on the derivatives market. However, some caution that aggressive
investment could cause a bubble in the farmland market similar to the
housing market. In response, investors emphasize that their capital
would help maintain services like grain elevators and fertilizer
depots in volatile markets. The influx of capital could also encourage
development of agricultural infrastructure, especially in emerging
markets. In particular, there has been an increase in the number of
farmland investment funds based in Britain such as the BlackRock
Agriculture Fund, Emergent Asset Management, and Braemar Group. |
