Why and How to Invest in South American Agriculture?

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Many of the topics that were considered fringe in the past but are now coming to reality with the effects of global warming: the morality of food miles when countries use diminishing resources to ship food a long way to any market, geopolitical power shifts, the potential break up and loss of power in the United States, along with the growing influence of Asia, Brazil, and the Pacific rim countries, like Australia and Chile, are all topics of hot discussion.

GTSA obviously has its own agenda in all this as we see South America being in a perfect position to not only weather the current financial crisis well but, in the medium to long term, continue to be seen as the world’s most reliable food basket, if it is not already.

The reasons for this are apparent. The countries we specialise in are underpopulated and not fully developed, but on the other hand, have excellent basic infrastructures and abundant levels of primary raw materials. Suppose one looks at the building blocks of investing for the future. In that case, it will not be derivatives, complex securitisation, or financial instruments that no one understands or now trusts, but essential things that one can touch and view.

Fertile land that produces quality food close to the large consumer markets is the most secure option. This statement rules out many of the historic agricultural-producing countries of the world, whether it is because of the lack of natural fertility, needing high levels of fertilisers to produce sufficient crops, or unfavourable weather conditions that necessitate high levels of toxic chemicals to be used on crops, or the lack of reliable water supplies, caused by global warming or overpopulation invest in South American Agriculture.

Already, it has been noted that food coming from these less fertile traditional food-producing areas of the world that compensate by using high levels of chemicals, fertilizers and selective cosmetic engineering (to obtain perfect-looking but tasteless fruit), are producing nutrition levels up to 40% less than in the past. More importantly, though, many of the previously considered reliable food-producing countries and once felt hope for future world food needs are now seen for what they are: basket cases of political instability and intrigue. These areas include much of Africa and Eastern Europe, which have previously supplied much of the Northern Hemisphere’s food needs.

For many investors who agree with the above synopsis, it remains a frustrating reality that to invest in South America’s farmland is only for the wealthy, as to invest in anything less than USD 2 or 3 million means investing in one region in one country. Those experienced investors who have looked for existing vehicles for investment have usually found they are highly specialised developers using financial leverage, but come with the usual risks of lack of diversity both in country and climatic considerations.

For those private investors who want diversified exposure to these countries directly, we currently have a mix of products that offer country, land type and climatic diversity. 

 


Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

The Gateway Team – When You are Serious About Property

www.gatewaytosouthamerica.com

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About Geoffrey W W McRae

With a highly distinguished career spanning more than three decades across five different countries, New Zealander Geoffrey McRae has established himself as a leading authority on South American real estate, agricultural, and commercial matters. As the founder of Gateway to South America – a real estate consulting group specialising in six South American countries – Geoffrey has developed a reputation for discretion, expertise, and experience that has seen him represent some of the most prestigious clients in the region. His deep knowledge and experience of South American markets have placed him at the forefront of the industry and given him the opportunity to guide and advise with confidence and surety. His long and successful career – which continues to evolve and expand daily – is a testament to his talent, tenacity, and ambition.

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Post available in: English

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