The New York Times reports that as the future is set to change, with the era of cheap food being over as reported earlier, investors increasingly buy up any part of the food producing chains, speculating on future growth.
“It’s going on big time,” said Brad Cole, president of Cole Partners Asset Management in Chicago, which runs a fund of hedge funds focused on natural resources. “There is considerable interest in what we call ‘owning structure’ — like United States farmland, Argentine farmland, English farmland — wherever the profit picture is improving.”
The fear is that these investors could be participants in a real estate-like bubble; forcing prices up by withholding resources from the market, creating artificial needs or increasing them.
Others, especially the investors themselves, say fears that they would put a thumb on supplies are groundless.
Some of the investment funds really do build for the long term and invest in the communities of which they hope to reap profit.
Emergent is raising $450 million to $750 million to invest in farmland in sub-Saharan Africa, where it plans to consolidate small plots into more productive holdings and introduce better equipment. Emergent also plans to provide clinics and schools for local labor. [...]
The fund chose Africa because “land values are very, very inexpensive, compared to other agriculture-based economies,” she said. “Its microclimates are enticing, allowing a range of different crops. There’s accessible labor. And there’s good logistics — wide open roads, good truck transport, sea transport.”
Food, and I suspect pretty soon water, is becoming a solid investment. My take-away on my life’s scale is that buying canned goods is not a bad idea.
The Food Chain - Food Is Gold, So Billions Invested in Farming [New York Times]
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