3 DO FINANCIAL INVESTORS TAKE CONTROL OF THE GLOBAL AGRI-FOOD INDUSTRY?
It is no secret that investment funds have the necessary resources and foresee the surplus values. These groups do not operate autonomously, thus leading to an increase in demand for land. Even governments seek to acquire agricultural areas in other countries, to ensure food and energy supply. Last, but not least, we must not forget about the big companies wishing to expand their business or become vertical, by integrating primary production.
Investments in agriculture are attractive to private individuals because:
1. They have good income prospects, since, in the long run, the agricultural products supply-demand imbalance is expected to increase prices.
2. The value of agricultural areas may increase, as a result of their scarcity and high demand for food.
3. Of the possibility for investment portfolio diversification and protection against inflation. Agricultural yield remains unaffected by inflation in developed economies and is usually higher.
The funds are interested in securing access to food or other agricultural products, water, and inflows, to ensure returns for this alternative type of investment. However, they also have a responsibility. To respect the economic and social rights of the local populations and to preserve environmental sustainability. Otherwise, they are condemned to failure.
We know that today’s Agriculture is focusing on growth and employment, emphasizing Sustainability. I believe there will be better and more effective environmental rules to connect harmonically Agro science with nature. Many Agro concepts have abandoned direct subventions in favor of a model that ensures agricultural production, while global agricultural competitiveness is affected by exchange rates.
Thus, knowledge and information shall prevail over resourcefulness and timely action will prevail over inactivity or procrastination, impediment, and obsession for old-fashioned business models.
One thing is for sure. Agriculture and its inputs shall become the most powerful global industry in the next decade, and will finally be recognized as the most fundamental business sector for contribution to our health.
Funds should invest but they will get profits only if they will put sustainability at its core and support the science to serve nature.
#agriculture#InvestmentsFunds#agrifood#agritechnology
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this is an excerpt of the new book of Panos (Panayiotis) Chamakiotis that will be released in late January 2022
