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
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.
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.
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