Agriculture is a sure sustainable source of wealth. This is because it attends to the basic needs of all living things: man, animal and plant. It also sees to how the last two serve the first, man. Human’s need of agro produce is continuous and persistent. We all are abreast of the recent increase in population growth and decrease in food production. This makes investment in agriculture not just a safety measure but also a pathway to wealth. Most of the other sectors of world economy like oil, have failed to satisfy man’s need. Such sectors as education and power rather consume more than they yield. Much of the source of sustenance for these other sectors is agriculture, and even alternatives to oil are agro-based. Hence the opportunities for investment in the sector abound. We have taken time to look at the various levels in the agricultural sector to find out promising investment opportunities therein. Some of them are as follow:
Production
One potential investment opportunity is in firms that plant, grow and harvest crops. Some crops have limited supply in relation to their demand. Crops like this may give one unexpected return when one invests in farming to produce it. One may not necessarily own a farm, but can enter into a contract with farmers who will appreciate one’s investment in terms of provision of seedlings, fertilizer, land, man power/machinery with a share of the bounty in the percentage agreed. Some of the crops that are in high demand for household and industrial usages include; cassava, soy bean, sorghum, sesame, peanut etc. Spices like curry, thyme, scent leave, nutmeg are also in high demand. You can cultivate these spices, dry and package them for sell.
Jatropha is a crop that is cultivated for bio- diesel. It is also a promising agro-production business to venture into. The cultivators can easily cultivate Jatropha as a source of raw material for producing bio-diesel.
Fodder is another agro-production one can enjoy its outcome. Most livestock farmers especially those that rear pigs, cattle, sheep, and goats have a need for the daily supply of fodders. Fodders are mostly grasses like clover, alfalfa, grass and wheat. With the innovative approach to animal rearing called ranching, animal farmers depend on fodder producers to feed their animals. Again, the population increase in the world, and the attending industrialization and urbanization are a threat to land availability as a source of fodder. You can therefore grow these plants in commercial measure and sell to livestock farmers for a small fee.
Seedling Production is another opening in agro-business for investment. You can start a farm nursery dedicated to producing high quality seeds which you can sell to crop farmers. One may specialize just in this, and invest a large sum of money to be able to produce a commercial quantity of seedling for farmers. Sunflower seeds, soya bean seeds, sesame seeds etc. are currently in high demand.
Sunflower farming is another agribusiness one can invest in. Sunflower is a highly aesthetic and decorative plant which can be used to beautify homes and offices.
Additionally, you can choose to have an agro brand as a publicly-traded crop production firm, such as Fresh Del Monte Produce Inc. (FDP), Adecoagro S.A. (AGRO) and Cresud (CRESY).
Rearing of livestock for meat, egg, hide and skin and other things can also be a profitable business.
Storage
Fruit drying as a way of storing fruits can also be a source of income. The process of solar drying of fruits helps in preserving the nutritional value of the fruits. It is also used to make seasonal fruits available all year round.
One can also invest in the manufacturing, lease and sales of storage facilities. Additionally, provision of these facilities like cold room for the use of people can also fetch one returns.
Processing
Food processing is also one of the good agribusiness ideas. Processing of agricultural products apart from bringing crop produce to varied choice forms such as groundnut into peanut oil, snack nuts (peanut), sauce, flour, cake, animal feed, peanut butter and cookies, is generally accepted as the efficient method of maintaining the shelf-life of produce. This is a one of the very good agribusiness to invest in.
Investment in commercial roasting of groundnut is very lucrative. Especially using advanced machineries for the processing. There are De-shelling machine, Roasting machine, Red skin peeling machine, Packaging machine, Corking machine, SEALING MACHINE (for nylon packaging) etc. just as there are mechanized machines for groundnut processing into peanut snacks, there also are machines for processing of other crops for ease of work and improved productivity.
Shea Butter Extraction and Refinery stand out lucrative agro venture to invest in. A large market exists for Shea butter world-wide, particularly as it is organically produced. Shea butter is in high demand and is a wonderful product. It has high prospect and sells well in the international market. Opportunities exist in its production value chain producing on a small, medium and on a larger scale to meet the growing demand. There is a growing interest in butter for use as ingredients in the cosmetics, pharmaceutical and confectionery industries, yet the commodity is in limited supply as much of it is processed by local women through crude and labor intensive means. Investment in the processing of the butter in large volume will be very profitable.
Fruits like strawberry, orange, grapes etc. can also be processed and turned into items like jam and jelly. This process is not so complex and it can be started on a small scale with little capital.
You could start feed production and supply feeds to all the poultry farms around you. Feeds is a major money spinner in poultry business because for chicken to grow they need to eat, a lot. This may require some technical know-how but you can do that with other interested persons who may have the know-how but not the capital. It takes usually processed crop produce to make feed. Kernel, corn, peanut and blood are common constituents of feeds. Again, learning from people who are already in the business may place you on safer side against failure.
Distribution
Agro Inputs Sales and Distribution can be the focus of a business venture. Such inputs as Seedling, Agro chemicals, Feeds, Vaccines, Fertilizers etc. need to get down to its users. Apart from producing/ manufacturing feeds, fertilizers and chemicals, one can invest in the sales and distribution of these inputs. The farmers may have no direct access to the manufacturers of these products while in need of it. so, one can make money from selling and getting those inputs to places where they are needed.
Equipment
Machinery manufacturing is a good opportunity for investment. There are many types of machinery that serve in the cultivation, harvesting, storing, processing and transportation of agricultural produce. These machines may be needed in large quantity depending on the area and engagement of the people. While thinking of already existing machines, one can also come up with some new machines that can serve agro activities from crop and animal production to distribution. Development and fabrication of appropriate small-scale mechanized technologies for on- farm processing and secondary processing of agricultural produce will be appreciated by agricultural personnel, especially farmers. It therefore promises some returns.
Agro Equipment Leasing and Sales also serve as an investment opportunity. Farmers who need these pieces of equipment/machineries may not have the financial capacity to procure them but can hire them for use within a specific period of time. These farmers can also buy such equipment when they can.
Innovative Alternatives
Production of botanical pesticide is another profitable agribusiness idea. Botanical insecticides are naturally occurring chemicals (toxins) extracted or derived from plants or minerals. It is a very necessary item used in organic farming. The need for this type of product is increasing at a rapid pace due to declining use of chemical pesticide because of their adverse side effects. You can consider investing in it. While you can undergo some training to be able to produce it, you can as well employ hands with the technical know-how.
Land availability as I have pointed out earlier is on a speedy decline which supposes decrease in food production and high demand for the same. An alternative farming mechanizing is a good investment opening. One of such alternatives is Hydroponic farming. Hydroponics is a technology for growing plants in nutrient solutions (water containing fertilizers) with or without the use of an artificial medium (sand, gravel, vermiculite, rockwool, perlite, peatmoss. coir, or sawdust) to provide mechanical support. Hydroponics makes it possible to grow vegetables in the cities and urban areas of the world. As such, you can engage in awareness creation for the use of this alternative while making sales of the required infrastructure. You too can produce crops through this medium for commercial purposes in areas with land scarcity.
Extension Services
Agro-Export and Processing Agency is a profitable business in the sector. There is need to bridge the network gap between food processors/ exporters and farmers. This bridge can be an investment opportunity for the agent. The agents procure agriculture commodities from farmers and make them available to processors and exporters. These agents know where the farmers are and the process for exportation.
You can create an Agro-Based E-Commerce Site to meet the needs of farmers, investors, processors, manufacturers, exporters and even consumers. Farmers can display their products for sale on the platform. Many farmers complain that agents rip them off their hard-earned profits. So an agro-based E-commerce site will bridge that gap and remove the middle man. It will connect farmers directly with buyers. Again, other agro advisory agencies can utilize the platform to reach out to farmers who would in turn enjoy their services for improved productivity.
With the rise in digital technology, farmers in remote places can now easily get access to the internet in order to receive farming advice and knowledge. You can start a blog or website that is a center for agribusiness related information. One of such sites is Agronews.com.
You can become a landscape expert who has professional knowledge regarding landscape architecture which includes land planning, storm water management, construction specification and other such things. You can as well offer professional advice on choice of crop breeds, soil management, and also do researches and forecast crop needs of humanity vis a vis atmospheric conditions.
Other Areas
Investing in farming-focused Real Estate Investment Trust (REIT) is another opportunity for investor can have to gain from agro production without actually a farm. What these REITs do is to purchase land masses of land and lease then to farmers who use them for crop and animal production. Some of them include Farmland Partners Inc. (FPI) and Gladstone Land Corporation (LAND). Farmland REITs offer many benefits. When one engages in REIT, one stands the chance of owing many lands with other people, and their gains form these diversified sources. Unlike the danger in owning a single farmland alone, the dangers that affect one farm is attended to by many and the other farms still provide them with the usual benefits. One can as well choose to sell the share of REITs on stock exchange. This shows that it offers greater liquidity in comparison with owing a physical farmland. Whereas one may not have the financial strength to procure a farmland alone, REIT is an easy route to own a farm without exorbitant financial commitment.
Investors can also just buy shares in a variety of industries that support agricultural production. These companies are commonly found among fertilizer and seeds production and sales, farm equipment manufacturing and crop processing and distribution. Some of the publicly-traded companies selling fertilizer and/or seeds are the Potash Corporation of Saskatchewan Inc. (POT ), Monsanto ( MON ), The Mosaic Co. ( MOS) and Agrium Inc. ( AGU). For companies with focus on the manufacturing of farm equipment, consider Deere & Co. (DE) and AGCO Corp. (AGCO). Many companies provide the infrastructure that moves crops from the farm to the local grocery store. Among those that transport, process and distribute crops are Archer Daniels Midland Co. (ADM) and Bunge Limited (BG). Look out for more companies and buy their shares when available.
Exchange-Traded Funds (ETFs) are a good opening for investment in the agriculture sector, while getting diversified exposure therein. The Market Vectors Agribusiness ETF (MOO) and PowerShares Global Agriculture ETF (PAGG) are examples of such companies that get about 50% of their income from agro-related activities. Consider therefore, terms and conditions of investing in them and choose the one most suitable for you.
Mutual Funds also offer opportunity for investment in agriculture. Although some mutual funds extend their compass to other sectors, most of them are dominantly agro-based. There is however no danger in having to invest in other sectors as well. Depending on your choice, you can as well find mutual funds that are specifically into farming and other agro-allied ventures. The fees available and past performances of a potential mutual fund are necessarily issues to consider before investing. Mutual funds with great interest in agricultural firms and produce include but not limited to the Fidelity Global Commodity Stock Fund (FFGCX), the CI Global Infrastructure, Timber, and Agribusiness (INNAX), etc.
With the above, we have put you in the know of some of the opportunities waiting for your investment in the agro sector. Remember to put in your best as your commitment in whatever you do marks success of it. Good luck as you take the bold step into investment.
Bignedu
