Touch the Soil News #488 (feature photo CC 2.0)
Milltrust International is a global investment management company with headquarters in London and Singapore. They have a special division that deals in agricultural (farmland) investments. The CEO of Milltrust, Simon Hopkins, recently participated in a revealing interview about the growing investments in agricultural assets.
Following are some of the highlights of Hopkins’ remarks:
- This past year saw the birth of the 7th billion person on the planet and the global population is generally expected to exceed 9 billion people by 2050. According to the scientists, the world is currently sustainable with a population of somewhere between 300 million and 2 billion, depending on whose numbers you use. However, what is patently clear from all the scientific analysis is that the growth rate of the world’s population needs to radically decrease, as the planet simply cannot support the 7 billion people who currently inhabit it.
- At Milltrust, we have entered into a 10 year program during which we are committed to develop a billion dollar program diversified across farms in the southern hemisphere which will produce rice, wheat, corn and barley, as well as new cash crops. Our commitment is to develop marginal land into higher grade farmland, enhancing yields and productivity for top grade agronomy and farming techniques, and to sell these assets for full value within this defined timeframe.
- The world is in a very precarious place. There is more sovereign, bank and household debt today in aggregate that there was before the crash in 2008. The Eurozone is schlerotic, the US is recovering too slowly, the world is gripped with more military conflict than at any time since the Second World War. Real Assets have become a part of the investment management vernacular, and investors who are worried about inflation eating into their hard earned wealth, are increasingly looking to keep a significant portion of it in real, and tangible investments (farmland).
Australian rice farm 60 years ago. Historic farmland properties in Australia are becoming the focus of not just Milltrust, but other powerful investor groups and national governments such as China.
What might be the message in Hopkins’ remarks to the average person? Is it possible that developing an urban farm and knowing how to raise food might be a good investment – hedge against the intense competition for food that is emerging?
Companies that manage assets for their clients are creating investment pools of money that are staggering. Globally, over the next four years, assets under management are expected to exceed $100 trillion. As these assets seek investments, they may well create investment bubbles, not to mention risks of higher and higher priced food as people compete for sources of nutrition.
Following is a short video clip of Hopkins as he discusses agricultural (farmland) investments: