The global farmland boom

Farmland has two important attributes that set it apart from most other investments. The first is obvious: its inelastic demand. Humans need food to survive, it’s just a question of what food they eat.

Second are the various political and environmental factors that continue to whittle away at an already-finite supply of global farmland: factors like climate change, urbanization, farmland degradation, and erosion. According to the WWF, one-third of the world’s arable land has been destroyed since 1960 by erosion and other types of degradation. Though we’ve heard it all before that ‘they aren’t making any more land,’ it turns out that we are also good at ruining what little we have.

This slowly dwindling supply must be juxtaposed to a level of global demand that is only going up. It’s not just the growing global population (8 billion people by 2025 according to the World Bank) that will drive increases in food demand, but also the socio-economic changes that are already altering consumption habits all over the world.