South American Real Estate News

There is not enough farmland to feed the world

Post available in: English

By Lucy Barbour

If you thought finding enough food to feed the world was a big problem, think again.

An American agribusiness adviser the real issue is finding enough farmland to produce it.

Philippe de Laperouse is the managing director of HighQuest Partners in St. Louis in the United States.

He says the rising demand for high protein food from developing countries is putting pressure on production.

“We’ve made some estimates where we think that anywhere between 65-80 million hectares of additional land is going to have to be brought into production within the next 10 years in order to meet future projected demand for food crops,” he said.

“There’s about 1.5 billion hectares currently in production.”

Mr Laperouse says the rising demand for productive farmland will mean more foreign investment.

“New farmland’s going to have to be brought in production and then there is existing farmland, where the yields are going to have to be improved when also requires investment,” he said.

“So basically we’re looking at the former Soviet Union, Ukraine, Kazakhstan, and of course the big opportunity is Africa.”

“The institutions that are looking to invest in farmland are looking to require assets that match their liabilities, a pension fund, per se,” Mr Laperouse said.

“They’re looking for an asset that’s going to give them a return comprised of both the current return – the cash generated from the crops that are produced each year plus the long-term appreciation of the value of the land.

“But the issue I think, in Australia, is that a lot of opportunities that have been presented to the marketplace, for someone particularly who’s looking to invest from abroad, have been integrated operations, so farmland production integrated with grazing, and that presents operational risk, which a lot of institutional investors are not interested in taking on.”

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Post available in: English


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