Investors know about Peak Food
In the last few years investors have poured millions of dollars in to farmland, farming businesses, commodities and companies supplying farmers with machinery, fertiliser, seeds and pesticides.
In Fortune magazine, Shonda Warner explains why she launched an investment firm to buy farmland.
She says “…..The simplest metric to consider is the amount of farmland per person worldwide: In 1960 there were 1.1 acres of arable farmland per capita globally, according to data from the United Nations, By 2000 that had fallen to 0.6 acres. And over the next 40 years the population of the world is projected to grow from 6 billion to 9 billion.
“Land is scarce and will become scarcer as the world has to double food output to satisfy increased demand by 2050. With limited land and water resources, this will automatically lead to increased valuations of productive land. And it goes hand in hand with water. Water scarcity will probably increase even more than land.”
The article goes on to say that the biggest investors in farmland over the next decade will probably be sovereign wealth funds and governments of crop-starved countries eager to secure food supplies for their rapidly growing populations. In 2008, China announced a $5 billion plan to develop agricultural assets in Africa. That’s just the start. Given that it has 20% of the world’s population but only 7% of its arable land and 7% of its freshwater resources, China has no choice but to look beyond it’s borders. And the global recession has hardly slowed it’s appetite for crops. In the first four months of 2009, China imported a record 13.0 million tons of soybeans.
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