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Growing returns: investing in agriculture - Barnett Waddingham

Given that the yields on traditional assets have remained at historic lows, investors have increasingly been allocating to private markets. While there has been a large amount of investor money flowing into private markets across private equity, private debt and infrastructure, there has been very little flowing towards agriculture.

Posted on Nov 10, 2021

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... Environmental, Social and Governance (ESG) and sustainability factors are important to consider in any investment and it is no different for agriculture. There are clear environmental issues with certain aspects of agriculture, particularly farmland. A lot of land, especially in emerging markets, used for farming purposes is a direct result of deforestation. Food and crop (eg beef and nut production) also requires a significant amount of water resource and animal-related production in particular generates a staggering amount of carbon emissions.

Preserving nature and farming responsibly is part of the solution to address climate change. If agricultural projects are profitable today, there is significant upside potential if there is an appropriate pricing for carbon and/or fines for excessive pollution or harmful chemical use. 

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