GOOD REASONS WHY YOU SHOULD CONSIDER A FARM INVESTMENT
 

INCREASING FOOD DEMAND AND LIMITED RESOURCES

The world population has reached 6 billion during the fall of 1999. The population continues to grow at a current rapid pace of approximately 77 million additional people per year or 212,000 per day (Source: World Health Organization, U.S. Bureau of Census). Depending on the growth scenario, the forecasts assume that by the year 2050, there will be between 9 and 10 billion people to feed. Concurrently, valuable resources, mainly land and water, are being irreversibly destroyed by urbanization and pollution, and their production potential is drastically reduced by poor farming practices. Unfortunately, only vague estimates exist about this issue, so vital to mankind. The Food and Agriculture Organization of the United Nations (FAO) reports that already close to 200,000 km2 of fertile soil have been destroyed by urbanization. Agricultural mismanagement and overgrazing have substantially degraded over 12 million km2. The International Food Policy Research Institute (IFPRI) concludes in a recent study that almost 75% of cropland in Central America is seriously degraded, as well as 20% in Africa and 11 % in Asia. The efficiency of agricultural production will have to increase significantly. There should be enough food for all, if politics allow. However, as productive land resources become scarcer, more sought after, farmland will become more valuable.
 

FINANCIAL STABILITY

Quality farmland provides financial stability, strong returns, and long-term appreciation in value. Farmland belongs in every sizeable, well-balanced portfolio with a long-term investment horizon. There are no "vacancy rates" in medium to high-grade farmland. Farmland provides perfect protection against inflationary risks. AGRIWORLD concentrates mainly on investments in the United States of America, due to its strong agricultural markets, the well-developed production systems and excellent infrastructure. Especially important to the investor are the comparatively predictable and quantifiable risk factors, the strong U.S.-economy and the stable political system.
 

RETURN ON INVESTMENT

Crop Land, leased to an efficient U.S. Farmer, provides a "Return on Total Investment" before taxes and depreciation, but net of all overhead and management fees, of 4% - 6%. This does not include the annual appreciation of the land value (See below).

Specialty or permanent crops, such wine grapes or almonds will produce annual returns of 6% - 10%. The production is normally financed by the owner/investor.

U.S. - farm real estate values have increased on average more than 5% annually since the mid-1980's. Click here for a graph on U.S. Farm Real Estate Values.

Personal Satisfaction
Last, but not least, farmland is an investment with a very personal note. An investment one can experience, a place to enjoy and to be proud of.


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