There are different types of foreign investment in agriculture such as land purchase, private sector development projects, purchase of foreign ETFS, and buying commodity derivatives. These purchases often are not publicized to the public, so the practice is not well-known to most people. Since data is not readily available, it is difficult to quantify the extent of these investments, especially in developing countries. Most of the information that is known pertains to investment in foreign agricultural land.
Recently, there has been increased interest in foreign land purchase for agricultural purposes. Large plantations owned by foreign investors abound in Latin America, Asia, and Africa produce export crops such as cocoa, sugar, bananas, and tea. This investment phenomenon is not new, but it was in a decline from the 1980s until recently. The global food crisis and biofuels boom revived this investment strategy.
Investors either purchase or enter into a long-term lease of this land for food production purposes. These investors often hail from Arab and the more wealthy Asian countries and make investments into property in Southeast Asia and Africa. They may be either private individuals, groups, or commercial or state-owned entities.
There has also been an investment by the private sector and state-owned investors into foreign land for the purposes of biofuel production. This land is predominantly located in Australia, Russia, and the Ukraine and known investments have been made by private entities in North America, Europe, and Japan. Investors interested in this type of purchase should start by investigating the opportunities publicized online and in trade publications.
An investment in foreign agricultural land can be quite lucrative because there is a very limited amount of farmable land on the planet. Investors sometimes pool their money to purchase a sizeable tract of land that will yield numerous crops. Commercial and government entities are some of the largest investors, but opportunities for an individual investor can be found through some online research.
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- Why Agriculture Is Always A Safe Investment
- Investing In Your Own Farmland
- Investing In Non-Public Farming Companies
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