FAQs

Frequently asked questions

What is farmland investing?

Farmland investing is exactly what it sounds like – a direct investment in land used for agricultural production. Because its end result is essential to sustaining human life and meeting certain social needs, farmland generally has an underlying value that does not fluctuate in response to market forces the way stocks and bonds do. Consequently, it can potentially be a source of stable investment returns.

What makes farmland investing so attractive?

Farmland has attracted significant investor interest recently because of its distinctive investment characteristics and ongoing price appreciation. A key resource in the agricultural production chain, farmland is also – like oil and other commodities – a tangible, finite resource. Indeed, the global supply of arable land is shrinking as worldwide demand for food, stock feed and biofuels increases.

How does Paraguay Farmland Investment work?

We guide the investor as investing directly in farmland

We design a new corporation to run your project investor through the corporation

The corporation is 100% of the investor

This is very beneficial because then diversified in Paraguay, there are cases that become exporters of raw materials, make other investments, and can operate commercially in all areas.

Issue shares to new partners, through private placements.

The corporation may trading its securities on the Stock Exchange Asuncion  http://www.bvpasa.com.py/

Direct Investments in Farmland.
Investors Farmland Services - Farmland Management Services. You own the land. 
Assistance in locating, purchasing and managing an investment in farmland en Paraguay - South America

What are the main benefits of farmland investments?

Investments in farmland provide attractive total returns. Between 1970 and 2009, agricultural land values, as measured by the USDA’s ERS database, have outperformed both domestic stocks and bonds on an annualized basis, returning an annual average of 10.25% vs. 6.24% for the S&P 500 and 7.3% for 10-year Treasuries. We also believe that spreading farmland investments across the world—in regions with different climates, crops and economic influences—can further reduce portfolio risk. Finally, farmland prices have generally risen faster than the rate of inflation. Between 1970 and 2009, the same period covered by the USDA data, the U.S. Consumer Price Index rose an average of 4.36%. As a result, we believe that farmland investing offers a certain degree of inflation protection.

How do farmland investments differ from investments in agricultural commodities?

In the past, investors gained exposure to the farmland asset class through the commodity futures market. Agricultural commodities futures are easy to buy and sell, but their prices can fluctuate dramatically in response to changing market sentiment. Investors participate only in the appreciation of the commodity – soybeans, for instance – in which they invested. A direct investment in farmland, in contrast, is illiquid and less volatile. Farmland investments perform based on the value of the land and crops.

What are some factors to consider in farmland investing?

Agricultural investing in the developed nations offers all the benefits of the asset class – good return potential and inflation protection. Global farmland ownership creates further diversification opportunities as well. Many developing nations are experiencing strong economic growth and their farmland productivity is likely to increase. Paraguay, for example, is attractive because its climate can support two annual harvests for many crops that typically yield just one harvest per year in the U.S. and much of the rest of the world. Furthermore, because Paraguay has a lot of arable land and an economy that lacks infrastructure, its land prices are typically cheaper than those in the U.S.

A portfolio can also be diversified among different types of agricultural investments, each with distinctive risk and return characteristics. Row crops, such as corn, soybeans and wheat, are planted and harvested annually. These crops tend to produce more stable income returns over time because planting decisions are made annually. A number of row crops are also used in the production of alternative fuels. Permanent crops, such as wine grapes, nuts, citrus, apples and cranberries, take three to seven years to mature, so there is a lag between investment and the realization of returns. Investors can also look beyond farmland to agriculturally related companies and technologies that support the production and distribution of food, including alternative fuel producers and distributors, grain storage facilities and water treatment companies.

If you don't have the time to go through the detailed material, here it is in a nutshell:

1. Inflation Hedging - Farmland has been described as “gold with yield” for its strong inflation hedging qualities combined with stable income streams.

2. Competitive Returns - The returns to direct investments in farmland have exceeded stock and bond returns over the last 17, 10 and 5 years

3. Lower Risk - Direct farmland investment returns have been much less volatile than investments in stocks. Over the long term, farmland may be a convenient way, less volatile way to participate in higher agricultural commodity prices.

4. Real Asset – Farmland is a tangible, real asset with a underlying productive value.

Conclusions

Farmland is a relatively new investment asset class that is not widely understood. Many deals are not publicized, meaning that they take place “off market.” So a good reputation and local market knowledge are vitally important. In addition to insight and access, exclusive relationships with partners around the world can be also critical to making the most of this compelling investment opportunity