Tag Archives: investors
Want To Invest In Farmland? Join The Crowd
By ABBIE FENTRESS SWANSON Credit Abbie Fentress Swanson/Harvest Public Media Charles Polanco’s company allows investors to team up and invest in farmland. The new company Fquare is bringing crowd-sourcing to the increasingly lucrative market of investing in farmland. Here’s how it works: On the Fquare website, an investor can purchase a share of a farmer’s land. If enough investors pool their money to buy the whole parcel, they become the new landowners and the farmer becomes the tenant on the land. The farmer gets a three-, five- or seven-year lease to work the land, and the landowners make up to 6 percent annual interest for the length of the lease. When the lease is up, Fquare sells that same farm to a new group of investors. This month, Fquare hopes to fund its first farm. In a busy New York restaurant around the corner from where the company is based, I chatted with the company’s founder, Charles Polanco. He said buying farmland through Fquare was easy, akin to purchasing a share of a mom-and-pop pizza parlor. “That’s how simple it is. You’ll go in, and there will be a land available for $1 million, and 10 individual investors would join together and put [down] the capital to buy it,” he said. Polanco said once a farm is crowd-funded, investors could see returns on their land right away. “Because we work with lease-back arrangements, the farmer will continue to pay the interest. The difference here is that they’ll start paying it to the investors,” he said. “So our investors, as soon as they get into a deal, they’ll start receiving income from that specific farmland deal. When we sell the land, the investors look to also take advantage of the land’s appreciation value.” Most of the land Fquare is interested in selling to investors is located in the Midwest. Polanco said ideally, the parcels will be between 300 and 1,000 acres and will cost investors from $1-$3 million. One of the strategies the company is using to acquire the land is through partnering with farming co-ops. “Many of these co-ops, they have farmers that are over the age of 60 that are looking either to retire or are sick and they can’t work the farm. They look towards platforms like ours because of the fact that we are more focused on lease-back arrangements,” said Polanco. “Basically we go in and offer to buy that land and lease it back to one of the producers of the coop, which is very valuable to them.” Although there’s plenty of speculation about the farmland bubble bursting, Polanco doesn’t see that happening any time soon. “We’re always monitoring farmland prices and we feel that there could be correction, whether now or in the future,” he said. “But many investors are very interested in continuing to acquire this land. We feel that as a long-term investment, farmland values are going to increase.” Continue reading
Risks to Global Food Supply and Impacts to Investors – Steve Yuzpe
By Sprott Group August 06 2013 “Control oil and you control nations; control food and you control the people.” Henry Kissinger Steve Yuzpe is the Chief Financial Officer for Sprott Resource Corp ., a publicly traded company that invests in the private equity side of the natural resource sector. Steve spoke about investing in agriculture at the Agora Symposium in Vancouver. He believes the world will one day be faced with localized food shortages and globally rising food prices that could create, in the worst-case scenario, civic upheaval in the most affected areas. According to Steve, there are several factors threatening the global supply of food. Climate change, he says, causes weather conditions to become more volatile, potentially having an enormous impact on our food supply and the productivity of existing farmland. Steve also believes that water issues are probably the least discussed factor when people talk about food scarcity. Agriculture and other uses are depleting non-refreshing, ancient fossil aquifers all over the world. When they run out, they are finished. The most intensely used ‘fossil water reserves’ will eventually disappear. In particular, the Ogallala Aquifer, which supplies about 30 percent of all groundwater used for irrigation in the U.S. is running out, he says. Lake Mead and the Colorado River are also examples of areas under water stress in the U.S. “Food insecurity and food inflation are a permanent part of our world going forward,” Steve told the crowd. “Ultimately, I believe that wars will be fought and governments toppled over the need for food and water.” “The term ‘peak water’ will become more commonly used over the coming years. By some estimates, at least 56% of the world population lives in ‘water vulnerable’ areas.” I followed up with Steve after the speech: What investment ideas in agriculture could pan out? “The areas where there may be opportunities in agriculture over the next five years include taking advantage of the growing consumer demand for healthy foods, and greater attention being paid to nutrition. Companies that provide food traceability and safety services, like the tags on the ears of animals being raised for meat production, are likely to benefit. As we tragically saw during the mad cow disease outbreak that culminated in a European ban on British beef in 1996, the ability to trace the source of food is essential to assuring a safe food supply.” Do soil degradation and erosion spell a definite decline in food production? Is this an inevitable side-effect of agriculture? Unsustainable agricultural practices are the single greatest contributor to the global increase in soil erosion rates. “Soil erosion is potentially a huge problem in the future and yet, it does not need to be problem.” Modern no-till techniques have evolved, in which an air drill sends the grains and fertilizers into the ground without disrupting the topsoil, Steve explains. “But this has only been applied to 10% of agricultural production so far — a shame for the farmland we continue to lose every year. Once the organic matter and moisture have left the soil, it takes a lot of time to build back up.” Could water rights be a good way to play the need for greater food production, and a possible shortage of water? “Investing in water is also interesting but, of course, water is a basic necessity for survival, which means that governments are unlikely to allow prices to rise too much. Right now, water is almost free, so it’s mispriced. If you want to invest in water rights, the best places to invest are in geographic areas where the local constituency can afford to pay market rates and there is rule of law. Otherwise, your investment is likely subject to a lot of political risk, as government control of prices and confiscation become more than just possibilities.” Steve Yuzpe has 15 years of experience with financial administration management in public and private corporations. Sprott Resource Corp .is a Canadian-based company, the primary purpose of which is to invest and operate natural resource projects. Through acquisitions, joint ventures and other investments, Sprott Resource Corp . seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. Continue reading
Capital Investments in Agriculture of Ukraine Increased by 10%
KIEV, Ukraine, June 12, 2013 /PRNewswire/ — Foreign investors are investing more in the agricultural sector of Ukraine. From January to March, capital investment in agriculture accounted for UAH 2.5 billion, 10% more than over the same period last year. Traditionally, the most attractive sectors for investors are the food industry, bioenergy and crop production, with major investors in agriculture coming from across Europe. First Vice Prime Minister Serghiy Arbuzov mentioned this fact prior to the first annual international conference “ABC: Ukraine & Partners”, initiated by the Ukrainian Government. “Between 2000-when investment levels in agriculture were at their lowest levels-and 2012, we have seen high annual growth rates. The government is working hard to ensure that they are constantly increasing, by creating transparent conditions for investors and deepening investment in public and private partnerships,” said Arbuzov. The First Vice Prime Minister also stressed that the food industry; bioenergy and crop production all traditionally show high ratings of investment attractiveness: “Investors look for those sectors of agriculture where there is a high level of profitability, export opportunities, high rates of scale and better terms of liquidity of investments,” he continued. Serhiy Arbuzov also underlined that the biggest investors in agriculture in Ukraine are European countries. Recall, First Annual International Business Conference will be held on June 13-14, 2013 at the capital based NSC “Olympiysky”. One of the business and government meeting topics will be the panel discussion “Investment in agricultural sector of Ukraine. Let’s Feed the world together.” First Vice Prime Minister of Ukraine Serhiy Arbuzov will participate in the discussion. SOURCE ABC: Ukraine & Partners /CONTACT: ABC organizing committee, tel +38(044)501-32-93/44, email: y.derevyanko@pr-service.com.ua Continue reading
