As food prices soar in response to growing demand and crops fail in the US after the worst drought since the 1930s, investing in agriculture, or agribusiness if you want to diversify along the value chain, is becoming more and more popular.
There is plenty of scope for the money to be usefully invested. According to the UN’s Food and Agriculture Organisation, “it is estimated that net investments of $83bn a year must be made in the agriculture sector of developing countries if there is to be enough food to feed the world population of 9.1bn in 2050”.
High quality global journalism requires investment.
The Robeco subsidiary Sustainable Asset Management recently released a paper on the topic* suggesting “food and agribusiness offers fundamentals that enable responsible investors to combine attractive long- term returns with investments in solutions that can help secure a stable food supply well into the future”.
Although investing in farming may be necessary to help feed the world, there are many critics of the practice, concerned the industrialisation of farming will lead to environmental and social damage as intensive, fertiliser-dependent practices will degrade soil and push small farmers into poverty