Several recent news items have highlighted the increased competition among non-farming investors and others for agricultural land in the United States. However, a Delta Farm Press article by Hembree Brandon describes a very similar trend dubbed as "The Global Land Grab" occurring throughout the world.
According to the article,
Australians are buying land in the U.S., the Chinese and Swedes are buying land in Australia, the oil-rich Saudis are gobbling up land in South America, everybody's eyeing the rich soils of Russia and Ukraine, where land is dirt cheap (but politics and government are uncertain), and the Chinese and Indians are coveting Canadian farmland, still relatively inexpensive to them.
So widespread is the trend for agricultural land as an investment that some governments are considering regulating large land purchases by foreign interests.
The drive for land acquisitions nationally and globally is driven by market fundamentals -- a perceived pattern of supply and demand that hinges on continued worldwide population growth. Given the finite supply of land and natural resources, especially coupled with downturns in other sectors of the economy, investors see farmland as a wise financial investment.
A report by the nonprofit organization GRAIN, states that
Fund managers see relatively low land prices (and) see those prices moving in synch with inflation . . . thus providing a diversified income stream. They see long term payoffs from the rising value of farmland and the cash flow that will come from crop sales, dairy herds, or milk production.
