More Investment in Sustainable Agriculture May Be Coming

The Huffington Post has dedicated much of its website to sustainability, and one article on sustainable agriculture caught our attention. The article is by Janine Yorio, Managing Director of NewSeed Advisors, a group that hosted Agriculture 2.0 in New York City earlier this month, which was billed as a sustainable agriculture investment conference.

In her article for Huffington, Yorio writes that Jim Rogers stirred the investment community earlier this year when he predicted that by the end of the decade farmers would represent the upper-crust of society. Yorio believes that the truth to this prediction lies in sustainable agriculture.

The typical problems people cite about the unsustainability of agriculture is covered by Yorio: water consumption, land use, pesticides, chemicals, runoff, distances food has to travel to reach the market, etc. For Yorio, the answer to these vast problems could lie in the simple concept of sustainable agriculture—a healthier and more environmentally friendly alternative to current agriculture system.

Yorio notes that the biggest factors “driving growth in the sustainable agriculture sector: rising oil prices and increasing consumer demand.” The pressure this puts on our current agricultural system that is dependent on fossil fuels is destructive to the overall environment, particularly over the long run of things. “In fact, in 2006, when fuel and fertilizer prices began to rise, USDA researchers noted that most farmers immediately began to reduce fertilizer, fuel, pesticide and herbicide usage to reduce costs. With input costs on the rise, ‘sustainable’ practices may become synonymous with ‘cost-effective.”’

Yorio also sees consumer demand as driving more production towards sustainable methods as consumers become more conscious about what they eat and the ecological cost of producing the item. This has prompted many of the nation’s top companies to move towards more sustainable practices. “All this means that a new crop of agriculture businesses, ones with cost-effective, eco-friendly innovations, will experience increased demand for their products. A few investment firms have already begun to take advantage of this trend, seeking out these companies and investing in them directly.”

To her credit, Yorio does give full disclosure in the post that her firm, New York-based NewSeed Advisors, “invests exclusively in businesses that make a significant contribution to sustainable agriculture.” Self-promotion aside, Yorio does point out a reality that agriculture investors may want to watch for. Other investment companies are seeing similar interests in sustainable agriculture, such as local food production.

Additionally, Yorio points out that “Sustainable agriculture investments are not limited to land-based agriculture. New York-based investment firm Aquacopia invests exclusively in open-sea fish farming, while San Francisco-based Sea Change Investment Fund invests in sustainably harvested seafood companies.”

Sustainable agriculture is certainly a buzz-phrase, and the idea is gaining interest, in Yorio’s opinion, investment firms will soon follow along.

To read Yorio’s post click here.

Posted: 09/30/09