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Updated: March 15, 2023
Exploring Investment Opportunities in Agri-business: Investing in Farmland and Agri-business Companies
AGRI-BUSINESS, or agricultural business, involves the production, processing, and distribution of agricultural products, including crops and livestock. The success of agri-businesses often depends on factors such as market demand, weather patterns, and government regulations.
The relationship between agri-business and the goal of our blog lies in the potential for agri-businesses to be profitable investments. Like any other type of business, agri-businesses require investment capital, and investors who are knowledgeable about the industry and can accurately assess the risks and potential returns may be able to make smart investment decisions.
One way in which agri-businesses can be a good investment opportunity is through investing in farmland. Farmland can be a stable long-term investment, as the demand for food and land is expected to continue growing as the global population expands. Farmland can also provide income through rental payments or by producing crops and livestock.
Indeed, Bill Gates began investing in agriculture in 2013 through his firm Cascade Investment due to its steady increase in value and low volatility. The average price of farmland has increased six times from 1940 to 2015, and this trend is likely to continue as climate-related pressures continue to shrink the amount of arable land in the U.S.
Investing in agri-businesses themselves, such as companies that produce and distribute agricultural products, can also be a potentially profitable venture. However, as with any investment, it is important for investors to thoroughly research the company's financials, management, and competitive position in the market.
Furthermore, investing in agri-businesses can also have a positive impact on society and the environment. For example, investing in sustainable agriculture practices can lead to more efficient use of resources, reduced greenhouse gas emissions, and improved soil and water quality.
In addition, agri-businesses can also have a positive impact on local communities by creating jobs and supporting local economies. Investors who prioritize socially responsible investing may find that investing in agri-businesses aligns with their values.
Writing for the Inquirer.net, Dr. Cielito F. Habito in an article titled ‘Provincializing’ agriculture, said that although agriculture was responsible for about a third of the Philippine gross domestic product (GDP) in the 1940s, it currently accounts for less than 10% or only a small fraction. There is potential for agriculture to contribute more to the GDP, especially in a country with abundant natural resources. However, a new strategy is needed to improve the sector. This strategy involves giving primary responsibility to provinces for making their farmers and fishers productive, competitive, and profitable.
Overall, agri-business can be a viable investment opportunity for marginal investors looking to diversify their portfolios and potentially achieve long-term returns. However, as with any investment, it is important to carefully assess the risks and potential rewards and to consult with financial advisors and industry experts before making any investment decisions.
WHAT'S OUT THERE
STARTER INVESTOR conducted a quick search on the agri-business industry and discovered several interesting findings. Here are some of the key takeaways:
Cropital
Nomad Capitalist
PhilAgrivest, Inc. – The Pili Nut Farm
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