Agricultural investment strategies are now high on the agenda of institutional and private investors alike with many of the world’s wealthiest investors proclaiming their allegiance to agriculture in the coming years. Agricultural land is becoming an increasingly popular asset because of its distinctive investment characteristics. As a tangible finite resource in a world where the supply of arable land is shrinking rapidly, agricultural land prices continue to experience ongoing price appreciation.

Spurred on by the 2008 food, fuel and financial crisis and continuing price volatility, sovereign wealth funds, private equity funds, agricultural producers, and other key players in the goods and agribusiness industry have been buying up land at an unprecedented rate.

Food security is a problem for many regions around the world, especially in China, India, South Korea and the Middle East. Chinese & Middle Eastern companies and sovereign wealth funds and investors have become some of the largest players in the vertical supply chain for global agriculture.

Following are the key drivers for global agriculture investments:

• The human population has increased by almost 400% in the past 100 year. The primary drivers underpinning current and future farmland returns are global economic growth, rising income level, and population growth, all of which ultimately dictate global demand for food, feed and fuel.

• Increasing demand for agricultural commodities in the face of a finite stock of suitable productive land.

• Climate change, deforestation, desertification and urbanization has reduced agriculture productivity in many countries.

• Dietary shifts in emerging nations. As existing populations in developing economies become richer, they shift towards a higher protein, more resource intensive diet.

• Healthy lifestyles in developed nations. More and more people are shifting to fresh, organic and healthy food which may be exotic and sourced from far away places.

• High energy cost has helped renewed focus on agriculture sector as many nations are marching ahead with plans to produce bio-energy: biodiesel, biomass and biofuels.

• Land degradation, poor land management, exploitation, changing climates, erosion, flooding, expanding desert, soil salinity spread, wars, political conflicts, and dwindling fresh water reserves have considerably reduced agriculture productivity in many countries and investors are moving to countries conducive to agricultural activity.