Food Is Gold, and Investors Pour Billions Into Farming

[depakid]

A cattle farm in South Africa is among the holdings of Emergent Asset Management.
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Huge investment funds have already poured hundreds of billions of dollars into booming financial markets for commodities like wheat, corn and soybeans.

But a few big private investors are starting to make bolder and longer-term bets that the world’s need for food will greatly increase — by buying farmland, fertilizer, grain elevators and shipping equipment.

One has bought several ethanol plants, Canadian farmland and enough storage space in the Midwest to hold millions of bushels of grain.

Another is buying more than five dozen grain elevators, nearly that many fertilizer distribution outlets and a fleet of barges and ships.

And three institutional investors, including the giant BlackRock fund group in New York, are separately planning to invest hundreds of millions of dollars in agriculture, chiefly farmland, from sub-Saharan Africa to the English countryside.

“It’s going on big time,” said Brad Cole, president of Cole Partners Asset Management in Chicago, which runs a fund of hedge funds focused on natural resources. “There is considerable interest in what we call ‘owning structure’ — like United States farmland, Argentine farmland, English farmland — wherever the profit picture is improving.”

The investors plan to consolidate small plots of land into more productive large ones, to introduce new technology and to provide capital to modernize and maintain grain elevators and fertilizer supply depots.

But the long-term implications are less clear. Some traditional players in the farm economy, and others who study and shape agriculture policy, say they are concerned these newcomers will focus on profits above all else, and not share the industry’s commitment to farming through good times and bad.

More: http://www.nytimes.com/2008/06/05/business/05farm.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1212652985-5jqRMugJPuOdFrfQdb3LBg

[opihimoimoi]

1. Speculators know how to invest their resources for profit,,,in this case

it can be viewed as semi benevolent as it produces food for human animal consumption.....

The Profit ratios are changing

[Nihil]

2. I question your view

> in this case it can be viewed as semi benevolent as it produces food
> for human animal consumption

It is possible that I'm being too cynical but I suspect that the comments
in the OP will be closer:

>> But a few big private investors are starting to make bolder and
>> longer-term bets that the world’s need for food will greatly increase

"Bets" are rarely made for philanthropic reasons.

>> The investors plan to consolidate small plots of land into more
>> productive (sic) large ones, to introduce new technology and to
>> provide capital to modernize and maintain grain elevators and
>> fertilizer supply depots.

Such "consolidation" has often been proven to be only an "advantage"
to large conglomerates, not to small farmers or to the land itself.

"New technology" not only absorbs money as capital but for ongoing
maintenance, training/support and infrastructure upgrades before any
true improvement is seen on the "modernisation".

>> Some traditional players in the farm economy, and others who study
>> and shape agriculture policy, say they are concerned these newcomers
>> will focus on profits above all else, and not share the industry’s
>> commitment to farming through good times and bad.

That view seems to be based on very firm ground indeed (not to mention
recent history across several industry sectors). The difference here
is that a management f*ck-up does not just result in the loss of a few
(more) jobs but directly impacts the food supply for a dependent population.

YMMV but I wouldn't even grant them "semi-benevolent". :shrug:

[bluesmail]

3. The Think Tanks they've funded for decades tell them what

to buy next. Deregulation, it's not just a word, it's a way of DEATH.

[Hestia]

4. There are area's of life that should not be held hostage to investors -

energy, food and water. Obama's team needs to lock up these area's away from investors. There are parts of our lives that are not for sale.

[GreenPartyVoter]

5. Amen to that