How to Obtain Agricultural Loans

If you are into agriculture and have farm land as well as livestock then there is a high probability that at some point in time you might need an agricultural loan. There are several different types of agricultural loans available including specific loans for farm land, live stock, and any other agriculture related requirement. But the question is how to obtain agricultural loans?

If you require agricultural loans then there are certain aspects to consider before you can obtain the loan. The different aspects include:

Business Plan: As an existing farmer or a new farmer applying for agricultural loans, the first step is to prepare a detailed business plan that will throw light on the cash flow forecasts for the near future. The projection of the cash flow in your business plan will help your lender to understand how much loan you require and how much you are capable of paying back. You can pick up a copy of Business Plans for Agricultural Producers from the Texas Cooperative Extension Service for $1.25 and read through it to understand how to make a well-projected and detailed business plan for the loans.

Compare terms: There are several financial institutions that offer agricultural loans and each institution has its own rates and minimum loan amount. Before you apply for agricultural loans it is always a good idea to compare the various aspects of the loan like lending terms, minimum amount, scheduled payment period, marginal payment options and much more. You can compare the above information offered by banks, financial institutions, and Farm Credit Associations over the internet.

State Agricultural Finance programs: Most US states offer several state agricultural finance programs while some of the states offer at least one loan program. State agricultural finance or loan programs include everything from farmer loans to short-term farm land loans, disaster recovery loans, livestock loans, agri-business loans, equipment loans, seasonal loans, and much more. One of the popular state agricultural finance programs is the Aggie Bond Beginning Farmer Loan Program. This program is currently available in 17 states and helps new farmers to obtain loans at reduced rates for livestock, buying land, etc. You can find details on agricultural loans and state agricultural finance programs at the National Council of State Agricultural Finance Programs.

Commercial lenders: You can check the various offerings by commercial lenders like banks and financial institutions as well. There are several commercial lenders who specialize in different types of agricultural loans. There are approximately 2,500 farm banks all across US that offer agricultural loans at good interest rates. You can also check out with banks because they offer more farm loans than any Farm Credit System in the US.

U.S. Department of Agriculture (USDA) or Federal Government: Several types of agricultural loans are offered by USDA or the Federal government. You can pay them a visit if you are unable to get commercial credit or if you are unable to get the loan amount that you require for a specific agricultural requirement. There are several loan and farm land finance programs offered by the USDA Farm Service Agency.

Why Agriculture Is Important

Agriculture is important for numerous reasons, the most central of which is that we all need to eat. Agriculture allows us to provide for those needs. Agriculture is imperative because it provides food to eat for every human being. If no one worked in the agriculture meadow, humans would not be gifted to eat daily.

Agriculture science is related to the various sciences as botany, dairy science, social science, economics, pathology, engineering, food science, soil science & chemistry. This are also called as the branches of agriculture.

Why is agriculture illustrious? The view of ‘food security’ is basically notable, and for that cause, agriculture is significant. The task of feeding its people has been possibly the first precedence of its rulers throughout olden times. As such, agriculture is considered to be the very origin of political and social constancy of a nation since times immemorial. Agriculture has played a key role in the development of human civilization. Awaiting the Industrial rebellion, the huge bulk of the human population labored in agriculture. Progress of agricultural techniques has progressively increased agricultural productivity. Marvelous and fairly great farms employ workers to undertake the range of jobs relating to cultivation of crops and care of farm animals. In the majority of the countries of the world, agriculture apart remains the major sector accountable for the employing and feeding a huge percentage of the population.

Agriculture refers to the production of foodstuff and fiber and additional goods through farming and forestry. The major agricultural products can be generally grouped into foods, fibers, fuels, raw materials, and prohibited drugs. Exact foods include cereals, vegetables, fruits, and meat. Fibers include yarn, wool, silk and flax. Raw materials include lumber and bamboo. Drugs include tobacco, alcohol, and cocaine; additional useful materials are produced by plants, such as resins. Development of methods of agricultural production has increased agricultural productivity. Noteworthy changes in agricultural practices have been made of the last century with new technologies and worldwide market development. Agriculture has played a key function in the development of human being civilization. In conclusion, agriculture is important to world economy because it has immense contributions to international deal since mainly of the items that is imported and exported by countries are agricultural products. To maintain the economy of a scrupulous nation, political leaders should focus on implementing laws and policies that will make stronger the agricultural division because it has a collision on the gross domestic product.

Agriculture Investments – The Effect of Commodity Prices on Farmland Investments

Agricultural Productivity and Commodity Prices

This article covering the effect of commodity prices on agriculture investments has been produced for the purpose of providing quality reference material for the prospective Investor considering the sector, specifically for the Investor wishing to better understand to relationship and influence of commodity prices and agricultural productivity in agriculture investments.

Investors are attracted to the agriculture sector for a number of reasons; not least the undeniable fundamental trends of growing demand and contracting supply likely to drive higher asset prices and revenues in the future. Farm revenues at the very basic level are a combination of agricultural yield multiplied by commodity prices, so to better understand the performance of this asset class, we should look at commodity prices and productivity in a historical context in an effort to ascertain whether higher prices are here to stay, or part of a longer term price cycle.

At present, humankind utilises approximately 50 per cent of accessible, productive land for agriculture. Put another way, half of the Earth’s surface that is not desert, water, ice or some other such unusable space such as urbanised areas is used to grow crops.

With current emphasis firmly upon increasing productivity to meet current and future demand for food, feed and fuel from an expanding, wealthier global population, the fact that we only use half of the usable global stock of farmland indicates that we should be able to simply bring more land under agricultural cultivation through the application of well-placed infrastructure and technology investments. Unfortunately, the situation as always, is not quite as simplistic as that. In fact, the land we do not currently use for agriculture remains so because it accommodates vital natural ecosystems, is located in areas of conflict, or is simply not capable of producing commercially viable yields at current commodity prices i.e. the revenue created from the land does not cover the cost of the farming operations due to poor yields.

Before the introduction of what can be perceived as modern agricultural practices, the global population ebbed and flowed at around 4 million people, rising when access to food was abundant, and falling in times when food was hard to come by. These people existed as hunter-gatherers collecting the food they consumed for survival on a daily basis from nature, and therefore the size of the human race was intrinsically limited to a sustainable level. To put this into context, up until the introduction of modern agriculture, the global population was roughly half the present day population of London.

Then, some 10,000 years ago, modern agriculture was born, presenting us with the ability to cultivate plants and rear livestock in a concentrated fashion, enabling us to feed ourselves regardless of the vagaries of nature.

As our population continues to expand past the current level of 7 billion and towards the commonly accepted total carrying capacity of planet Earth of 13 billion, with most think tanks believing the global population will peak at around 9 billion people between 2030 and 2050, we must continue to increase productivity not only to feed ourselves, but also more recently for biofuels as oil supplies diminish and also for livestock feed to sate the desire for meat from an increasingly wealthy, urbanised population in Asia.

Initially, increases in productivity to meet growing demand have come from simply cultivating more land. But as the global shortage of suitable land continues to diminish, we have relied much more heavily on the increasing use of fertilisers, herbicides, fungicides and water to increase yield, certainly within the last 50 years.

Between 1961 and 1991, global cereal production doubled, mostly due to the introduction of nitrogen based fertilisers, commonly referred to as the Green Revolution, whereas bringing more land under cultivation played a relatively minor role. According to the Food and Agriculture Organisation of the United Nations, (FAO), this sharp 30 year spike in agricultural productivity can be broken down to reveal that 78% of the increase was due to a rise in productivity per unit of land, and 7% can be attributed to greater cropping intensity, with only 15% being a result of the development of previously unused land into farmland.

The Recent Commodity Boom

Commodities have been quite the focus in recent times, with prices rising consistently since 2000, finally peaking at record levels in 2008. Many argue that this is simply part of a long-term cycle in agricultural commodity prices, noting that the same effect was felt during the oil crisis of the 1970’s. During that time, the price of oil rose by 200%, which in-turn drove food prices as the price of oil is a significant factor in the overall cost of agricultural inputs such as fuel and fertilisers.

In the long-term though, when adjusted for inflation food prices have been in decline since the 1950’s. In fact, between 1950 and 2000, food prices in real terms fell by about 50 per cent at the same time the global population increased from 2.5 billion to 6.1 billion.

Whilst on the face of it this does seem to go against the basic economics of supply and demand, when further investigation is made things start to make more sense. Whilst it is true that demand has literally exploded – and is now being compounded through the use of ‘food land’ for the production of non-food crops for biofuels – at the same time, due to the technologies introduced by the Green Revolution, agricultural productivity has tripled, increasing at a faster pace and allowing supply to outpace demand.

This happy situation continued until around the mid 1980’s, where grain production per capita peaked at around 380 kg per person, having risen from around 280 kg per person in the early 1960’s. It is also worth noting that the majority of increased production was ultimately used for livestock feed to sate the growing demand for meat from an increasingly wealthy population. Before that the same thing happened during the great depression of the 1930’s.

The question remains for investors interested in agriculture investments, farmers and the general population, were the recent spikes in agricultural commodity prices part of a long-term pricing cycle, or was this in fact the beginning of a new type of cycle? Well, there are a number of factors to consider; firstly, the recent prices rises were by far the most extreme of recent times. Lasting over a period of 5 years, this happened to be the longest and harshest upward trend in agricultural commodity prices on record, even more so than the price spikes witnessed during the First and Second World Wars.

Also of interest is the fact that the price rises experienced in the 12 months leading up to the 2008 peaks were entirely unprecedented in their scale alone. For example, the price of the three main grain commodities rose by such ridiculously high levels that they had never before been witnessed. The prices of maize rose by 75%, wheat by 121%, and rice by 215%, all in the 12 months prior their peak in 2008.

The reality is that during the 1970’s correction in prices was achieved through increasing yield through the introduction of new technologies (the Green Revolution), allowing productivity to triple, supplies to increase and prices to ease. Again, in the 1930’s, there was ample unused land to develop, leading to the cultivation of 10’s of millions of fresh farmland, again increasing supply and easing prices. In current circumstances yield increases are smaller than population increases for the first time since the 1970’s i.e. increasing productivity that way is no longer viable, and at the same time there is very little unused land left to work with.

This perhaps indicates that higher food prices are here to stay, at least until new technologies are developed to increase productivity. This leap in technological advancement requires investment capital which in turn requires higher farm gate revenues (commodity prices) to fund, therefore it is likely that food prices will remain higher now in order to fund the change in technology required to increase production capacity and yield. The issue then becomes more one of sustainability, rather than pricing, with more concern perhaps due to precisely how we feed ourselves, and the 1 billion people already undernourished on this planet.

So, back to the most recent commodity price explosion; is the fact that prices have risen so dramatically in the most recent spike alone enough to suggest that this is in fact the beginning of a new trend or cycle in agriculture, or is it simply part of an on-going cycle that sees real assets undergo severe re-pricing every 40 or so years?

Many market pundits have pointed out that the level of pure speculation from financial traders was at least in part responsible for the 2008 peak. Indeed it is true that trading volumes increased in the run up to 2008, as interest in Maize more than doubling between early 2005 and February 2008. Looking more closely at trading volumes also tells us that whilst volume increased on the whole by 85%, non-commercial traders (speculators) doubled their share of positive or ‘long’ positions in opening interest. Trading volumes for wheat also increased by well over 100%, as did positive speculator bets.

So it is true that commercial trading of agricultural commodities boomed in the run up to 2008, it is essential to note however that this did not simply occur by chance, the reason more people were trading more commodities, can be attributed to the fact that the fundamentals driving commodity prices displayed a screaming buy signal.

By far the most reliable indicator of global demand and supply in agricultural commodities are records of global grain stores. These figures are the biggest driving force in short term agricultural commodity prices. When grain stores fall then demand outweighs supply, and grain stores rise, the opposite is true. When any commodity is in high demand and short supply, the resulting bidding war drives prices higher, especially when it is an essential commodity one cannot do without such as food.

In 2008, global grain stores bottomed hitting historic lows, and when commodity prices were at their highest, average global grain stocks fell to equate to just 18.7% of annual consumption, equivalent to only 68 days’ worth of global supply, well below the long-term average. In other words, if global production were to be significantly interrupted for two months, for example in the case of a severe drought or conflict, the whole world risked running out of food completely.

Such low global stock alerted speculators to the fact that the supply/ demand relationship had tightened, however many seemed to miss the fact that agriculture is inherently cyclical, and high prices lead to investment in production in an effort to produce more whilst prices remain high which in turn leads to an increase in production and stocks and prices falling off as the supply / demand relationship widens again and those making bets on continued high prices suffered extreme losses as an influx of product hit the market, causing prices to fall rapidly. Welcome to commodity price cycles people!

Agriculture – Online Education Options for Career Training

The agriculture business delivers all types of foods such as meat and milk to everyone in society. Students can learn about crop and livestock farming by studying the industry through online agriculture schools and colleges. Online training can be pursued at several degree levels allowing students to enter their desired career.

The industry has seen a significant growth in technology use in recent years, which makes completing an education extremely beneficial if not imperative for interested students. Online training incorporates many fields to prepare students for professional work. Biology and chemistry are focused on to prepare students to understand plant promotion and livestock manufacturing. Students are also taught how to integrate new concepts with existing ones to better maintain the business. Many career opportunities are available to students that earn a degree. Some possible career options include:

  • Agricultural Technician
  • Ranch Manager
  • Greenhouse Manager
  • Agricultural Professor

Students can enter these careers and more after completing the correct degree program. Online education options for career training in agriculture include an associate’s, bachelor’s, or master’s degree program.

Students that complete an associate’s degree program will gain a foundation in agriculture. Most programs prepare students to become technicians in the field by teaching them how to correctly operate the equipment and machines used for farming. The business of agriculture and understanding soil composition is also highly focused on. Common courses taken at this level of education could include:

  • Agriculture Chemicals
  • Crop Science

Students can expect to understand the hazards of the business and how to promote safety on the job. Livestock and heavy machinery are key areas that are studied in a safety course. Other areas explored may include pesticides, the nature of soils, and ecosystems.

Bachelor’s degree programs give students the most career opportunities upon completion. Multiple concentration areas can be entered that focus on areas such as agricultural business management or industry marketing. Programs typically emphasize specific parts of the field like food production, soil science, and plant cultivation. Common coursework that can be found in all concentration areas may include:

  • Microeconomics for Agriculture
  • Livestock Biometrics
  • Agriculture Research

Courses help students understand the chemical and biological make up of soil, plant growth, and crop performance. This wide knowledge base allows students to pursue careers in management, technology, and business.

Students that continue education by completing a master’s degree program have the opportunity to step into careers where they conduct research or teach others about agriculture. Students explore many areas, which include courses in biological engineering, organic agriculture, and agribusiness. Other online course topics that may be examined include:

  • Horticulture
  • Agriculture Technology

Students are able to step into careers in areas that include government, science, management, and engineering. Soil composition specialists and agricultural policymakers are some career possibilities for students that complete training at the master’s degree level.

Online education allows students to work from home and enter their desired career. Enrolling in an accredited online college that offers agriculture is the first step to entering a satisfying career. Full accreditation is awarded by agencies like the Distance Education and Training Council (http://www.detc.org/) to programs that offer a quality education.

DISCLAIMER: Above is a GENERIC OUTLINE and may or may not depict precise methods, courses and/or focuses related to ANY ONE specific school(s) that may or may not be advertised at PETAP.org.

Copyright 2010 – All rights reserved by PETAP.org.

Can Agriculture Be Replaced by Industries?

Civilization began with agriculture, our nomadic ancestors settled once they began to grow their own food. Agriculture refers to the production of goods through growing of plants, animals and other life forms on land. As of 2006, 45 percent of the world’s population is employed in agriculture. However, the relative significance of farming has dropped since the beginning of industrialization. Even though agriculture employs one-third of the world’s population, agricultural produce accounts for less than 5 percent of the gross world product.

Agriculture is important for not only providing food but also for providing raw materials for other industries like textile, sugar, jute, vegetable oil and tobacco. Besides being an occupation for people, agriculture is also a way of living. Most of the world’s customs and culture revolve around agriculture. A number of festivals and holidays around the world are in conjunction with reaping or harvesting or any other aspect of farming. It increases the supply of food and tax revenue to the government. “Investable surplus” is generated which further can be expanded to other industries and provides foreign exchange.

Due to the apparent abundance of food owing to technologies for growing, transporting and storage; modern day human has overlooked the fundamental dependence on agriculture. Agriculture provides nutrition which is a key determinant of health; it alleviates poverty and individual livelihood. Some other benefits are:
o Water – agricultural crops are the largest users of fresh water. Forests maintain the groundwater we draw from for our everyday uses. Husbandry affects the health of coastal waters.
o Energy – wood is a major source of fuel and energy. Modern biomass plants are fast growing in most countries. These provide clean energy and also aid economic growth.
o Health – agriculture provides nutrition to humans. We cannot live on meat, milk and poultry for more than 2 days without consuming grains or vegetables or fruits. Imagine what lack of agriculture could do to us.
o Biodiversity – ecological balances are maintained, changed or destroyed by agriculture alone. These are critical to sustaining development and health of our planet.
o Climatic changes – reduced agricultural growth adversely affects climate. Extreme events and ecological dysfunction will ultimately affect our planet and the human race.

It is a vicious cycle where environmental degradation is affecting agricultural productivity and agricultural practices are affecting the environment. To conclude agriculture, agricultural science and technology aids in reducing hunger, improving livelihood and increasing economic growth.

Indigenous and local agricultural practices need to be used along with scientific research and developments. There should be a co-ordination of international scientific programs for enhancing agriculture and agricultural produce. Policies and technologies that are conducive to sustainable use of natural resources must be shared internationally. It is imperative to alleviate hunger and look for the causes of nutritional insecurity and degraded natural resources. Productivity of crops, livestock and fisheries need to increased in a socially and environmentally sustainable manner which is acceptable to both the farmers as well as the consumers. Agriculture is an important aspect of every society for its social, economic and environmental growth.

Agriculture Education in Philippines

The Philippines is an agrarian economy with agriculture being the main occupation of its people. Most of its citizens live in the rural areas and follow various livelihood options in the agricultural sector. The total land area in the country is 30 million hectares, out of which 47% is under agriculture. Prime agricultural lands are located around the main urban and high population density areas.

The agricultural sector in Philippines is divided into four sub-sectors comprising of farming, fisheries, livestock and forestry. Rice and corn account for nearly 50% of the agricultural produce in the country. This has led to the increased awareness about agricultural studies.

Besides rice and corn, the other important crop yields in the country are coconut, bananas, pineapple, coffee, mangoes and abaca (a banana type plant). Apart from these, the secondary agriculture produce include peanut, cassava, garlic, onion, egg-plant, cabbage, rubber, cotton and calamansi (type of lemon).

The agricultural land in the country is a mixture of small, medium and large farms. An average farm size is about 2 hectares which are usually owned and managed by single family units and range from the subsistence to the commercial production. The typical farming system constitutes of crop yields like rice, corn and coconut as common base and also includes a few heads of livestock and poultry.

Due to all these prevailing conditions, a need was felt to impart knowledge about the various agricultural practices and the latest trends being followed around the globe. This gave birth to the Agriculture Colleges in Philippines, some of which are owned by the state.

The following colleges in the country are considered to be the best in terms of infrastructure, the faculty and the quality of education.

Pampanga Agriculture College: Primarily established as an agricultural school, Pampanga Agriculture College became a state college in September 1974. Originally started in 1885, this century old institution is located on the foothills of the Majestic Mt. Arayat in the town of Magalang, province of Pampanga. It is spread out on an area of 700 hectares of government agricultural lands. The main focus of the college is on Instruction, Research & Development, Extension Training and Production.

Presently the college offers 13 under-graduate courses, 2-year computer course, 2-year course in agricultural technology, agricultural science high school, and graduate schools for three masters and three doctoral degrees.

Xavier University – College of Agriculture: This prestigious institution was founded in 1953 by the late Fr. William F. Masterson and is the second oldest amongst the colleges of agriculture in Mindanao and also has the proud position of being the only Catholic College of Agriculture in the entire country. It is also the founding member of the Association of Colleges of Agriculture of the Philippines (ACAP).

The curriculum of Xavier University – College of Agriculture is a distinctive combination of active field work and the liberal arts formation. The main thrust of the college is on Instruction, Research, Extension and Production.

Apart from the above two educational institutions, there are also many other state sponsored Universities which provide education on the different facets of agriculture. Most of the colleges are affiliated with some overseas faculty and organizations which provide valuable inputs on a regular basis.

Search for the Best Agriculture Jobs Online

How serious are you in your search for jobs in agriculture?

Searching agriculture employer sites for jobs in agriculture can be a very tedious task.

The main reason is there are of thousands of agriculture employers located all across the United States and it would take you years to scan their job boards.

However, these employer job boards are very critical because most agriculture jobs posted on employer job boards are not posted anywhere else.

So searching these employer job boards must be part of your job search.

There are thousands of agriculture jobs posted all over the internet. Agriculture jobs are found on employer sites, job boards, recruiter sites and niche sites specifically focusing on the agriculture profession.

The job titles for the agriculture profession varies greatly based on experience and education level.

If you are looking for agriculture job openings such as department of agriculture jobs or want to start a new career in agriculture then this job site is for you.

This site will show you where to find the hidden agriculture jobs that exist all over the internet.

At any single point in time, there are thousands of agriculture jobs posted all over the internet. The secret is to know where to look and how to extract the agriculture jobs.

Use this site and link to all kinds of jobs in agriculture and agriculture related jobs. You can also find the highly sought after department of agriculture jobs.

The point is there are many agriculture job openings on the internet and now finding them is very easy.

Agriculture-Jobs-Online.com is a one stop guide for anything and everything related to finding agriculture jobs and agriculture resources such as links to agriculture recruiters and agriculture employers.

Recruiters in the agriculture profession fall into various categories such staffing, retained search, permanent placement, and temporary placement.

There are thousands of recruiters specializing in the agriculture field. The best way to quickly search their sites for agriculture jobs is to visit the Recruiter Links section of WorkTree.com

– Agriculture Credit Analyst

– Agriculture Associate Buyer

– Agriculture Manager

– SProduction Supervisor

– Food Processing

– Agriculture Clerk

– Senior Agriculture Analyst

– Audit Manager

– Agriculture Assistant

– Agriculture Supervisor

Visit and bookmark http://www.agriculture-jobs-online.com and refer to this site for all your agriculture job search needs.

The Secrets of Nigerian Agriculture! – Naija Face

Due to a great climate and global positioning, Nigeria is one of most fortunate nations when it comes to agriculture. In this way, the Nigerians have plenty of agricultural resources to explore and even to export. By effectively managing the available agricultural resources, Nigeria is also able to improve its economic status by exporting.

Agricultural implications in Nigerian economic development
Whether we are thinking of the coastal mangrove, northern savannas, woodland savannas or rain forests – Nigeria has it all. Besides the petroleum industry, the agriculture industry is also an important resource for economic development and increase of GDP level. Having this in mind, during the last 20 years more than 40% of the GDP level was derived from the agricultural sector.

In the same time, agriculture is an important factor in Nigeria since it contributes to the rate of employment and creates new and reliable employment opportunities. Currently, more than 60% of labor force is concentrated in the agricultural sector. Similarly, farming is a very resourceful activity in Nigeria and only 33% of nation’s land is under cultivation. In this way, the agricultural sector will also be one of the main fields of activity in the future.

Furthermore, the government also favors the development of cooperative societies with the purpose of encouraging the industrial agriculture because in Nigeria due to a diverse climate, it is possible the production of almost all agricultural products in the semi-tropical climate.

Agricultural sectors in Nigeria
Before the 1960’s, agriculture was the main activity in Nigeria. However, once with the development of the oil exporting industry it became necessary the import of food. In order to maximize the agricultural outcomes, other agricultural areas were developed during the last decade.

In this way, the main agricultural sectors in Nigeria are the following:

– Food Crops
The crop production was the main agricultural activity in Nigeria for a long time and currently comprises of beans, rice, palm oil, yams, cocoa, groundnuts, melon and many other food crops that are favored due to the tropical and semi-tropical climate of this nation.

– Cash Crops
In this agricultural sector we may include the production of cotton, rubber, kolanut, gum Arabic, beniseed, palm kernels and many other such crops that can grow in this tropical climate.

– Forests
In the case of forests, the following forest tees are available in Nigeria: abora, teak, ebony, ekki, black afara, camwood, mahogany, Nigerian walnut. This agricultural sector is an important and resourceful one in Nigeria and it contributes to economic development in the area.

– Livestock
Starting with the 1970’s, a total of 11 million cattle existed and since then on the Nigerian nation has successfully enlarged its livestock production out if which 90% was found in the northern states of the nation. Nowadays, almost all rural households raise their own poultry while chickens represent the predominant poultry in the area. Apart from chickens, in Nigeria there are other animals reared such as cattle, duck, pigs, turkey, sheep, goat, pigeon, donkey and guinea fowls.

– Fisheries
This agricultural sector is an important one for Nigeria and ever since the 1970’s when the domestic production of fisheries has been reaching the level of 700.000 tones on a yearly basis. Currently, the fisheries produced within the borders of Nigeria include crabs, shrimps, spade, shark, grunters, cat fish, thread fin, shiny nose and many more.

To conclude, the Nigerian agriculture offers many opportunities to reach economic development on the long run and represents one of the main activities when it comes to export, as well as the petroleum industry. Nevertheless, Nigeria is applying the appropriate solutions in the case of agricultural resource and this gives this nation a competitive advantage as compared to other emerging markets.

Also visit Naija Face at Naijaforum.net.

Agriculture Investment – A Must Read Article

Finding the best agriculture investment can be tricky for the inexperienced investor with little or no knowledge of the sector, but there are of course many different options available including agriculture investment funds, direct agricultural land investment, and purchasing equities in agricultural companies. In this article I will go some way to investigating the different options, the risks they present to investors, the mechanics of how each type of agriculture investment works, and the returns that are currently being achieved.

Firstly we will look at the relevance of agriculture investment for the current economic climate, and whether this particular sector shows us the signs of being able to generate growth and income.

The Current Economic Climate

The global economy is still in a state of turmoil, and the UK in particular is cutting back public spending to reduce an unmanageable national debt, the population is growing, and quantitative easing is likely to lead us into a period of extended inflation. Also, the lack of economic visibility means that it is very hard to value assets such as stocks, and interest rates being so low means that our cash deposits are not generating any tangible income to speak of.

So what does this mean for investors? It means that we need to buy assets that have a positive correlation with inflation i.e. they go up in value quicker than the rate of inflation, these assets must also generate an income to replace the income we have lost from cash, and finally any asset that we purchase must also have a strong and measurable track record.

It is very clear that agriculture investment, especially investing in agricultural land, displays the characteristics of growth, income, a positive correlation with inflation, is easy to value, and has a clear and evident track record to analyse, and as such agriculture investment ticks all of the relevant boxes to potentially become the ideal asset class for investors today.

Agriculture Investment Fundamentals

The fundamentals supporting agriculture investment are pretty easy to measure; as the global population grows we need more food, to produce more food we need more agricultural land as this is the resource that provides all of the grain and cereals that we eat, and all of the space to graze the livestock that end up on our plate. So we are dealing with a very basic question of supply and demand, if demand increases and supply can’t keep up, the value of the underlying asset increases, so let’s look at some of the key indicators of supply and demand for agriculture investment.

For seven of the last eight years we have consumed more grain than we have produced, bringing the global store down to critical levels.

Since 1961 the amount of agricultural land per person has dropped by 50% (0.42 hectares per person down to 0.21 hectares per person in 2007).

The global population is expected to grow by 9 billion by 2050.

Most think tanks and experts believe that we will need to increase the amount of agricultural land by 50% to support that growth, essentially a productive field the size of greater London need to be found every week.

In the last ten years virtually no more land has been bought into production as climate change, degradation and development and a host of other factors mean that there is little or no more new land we could use to farm.

The underlying asset that produces our food, the land, will become more valuable as more people demand food.

Agricultural land value rise when the food it produces can be sold for a higher price, making owning farmland more profitable, and food prices are at a 40 year low, leaving room for around 400% price inflation. In fact a bushel of wheat cost around $27 in the early seventies and now costs just $3.

Farmland in the UK has risen in value by 20% from June 2009 to June 2010, and 13% in 2010 alone according to the Knight Frank Farmland Index.

So the fundamentals supporting agriculture investment are sound and very clearly demonstrate a good picture for potential investment. But can we absorb price inflation? Well there are a myriad of studies that tell us very clearly that as a population, we absorb increases in food prices almost 100%, and sacrifice spending in other areas, so yes, we can.

Methods of Agriculture Investment

Agriculture Investment Funds

There are many types of agriculture investment funds to choose from, most invest in farming businesses, other purely in arable land, and others by stock in agricultural services companies. Most agriculture investment funds are showing excellent growth, and the fact that they are buying has increased the level of demand in the market therefore their mere presence is contributing to capital growth. Rural agent Savills recently commented on the fact that they have access to £7 billion in capital from fund to purchase farms, that is enough capital to purchase six times the amount of farmland that will be advertised in the UK this year, in fact, according to Knight Frank there has been 30% less farmland advertised this year from last, and buyer enquiries have increased by 9%.

To talk about risk for a moment, the risk involved with this fund based investment strategy is that you give over control to a fund manager who will spend your money for you and acquire assets that he or she believes are relevant. Also, if one fund performs badly, that usually has a knock on effect for other agriculture investment funds as confidence in this particular strategy takes a hot, you can therefore lose value through no fault of your own. You also have to pay a fund management fee, eating into your profits.

In terms of the returns one can expect from a fund, this varies wildly but most project annual returns of around 10%, although this will vary depending on a whole host of factors including the fund management, investment strategy, and general market conditions.

Buying Shares in Agricultural Companies as an Agriculture Investment

Another option for chose considering cashing in on agriculture investment is to purchase shares in an agricultural business, be that a farming business, or a services business, the options to consider vary wildly and careful thought must be undertaken to pick a suitable market (LSE, NASDAQ etc), and then a suitable company in which to invest. The business of picking shares remains, in my opinion, a job best left to those with the time, experience and resources to carefully research the company, its management, and it product line, and only those company displaying sound fundamentals should be added to a portfolio.

The risk here is as with any equity based investment, a down-swing in the market can cause a good company to lose value and thus affect the wealth of the investor in a negative way. We have all seen recently how a bear market can bring down profitable companies and the whole premise of agriculture investment is to avoid financial markets and add an element of non-correlation to a portfolio, ensuring the investor owns an asset that is unaffected by volatile stock markets.

So does an agriculture investment in the form of shares fit the bill? Well not really, as we were looking for stability, non-correlation, a positive correlation with inflation and income, and this mode of agriculture investment ticks none of those boxes other than a nominal dividend.

Buying Farmland as an Agriculture Investment

In my opinion the most sensible strategy for investors is to acquire profitable farmland that has a track record of producing an income yield, and rent that land to a commercial farmer. This mode of agriculture investment allows the buyer to access an asset that displays all of the characteristics that we are looking for, non-correlation with stock markets, positive correlation with inflation, income and growth, as UK farmland continues to increase in value yet is still only half the price of agricultural land in Ireland, Denmark and the Netherlands, leaving a huge margin for future growth.

There are of course a number of risks to consider here as well, sourcing good land for example, and of course sourcing and managing a farming tenant, these risks can all be managed effectively by partnering with a specialist agriculture investment consultancy that will handle the sourcing of both land and tenant and also handle all ongoing management too.

So to summarise, if one is to make an agriculture investment, the best option right at this moment is to buy agricultural land, giving the investor growth and income in a volatile market.

Africa Promotes Agriculture for a Bright Tomorrow

“There are few better ways to show one’s love for one’s country and the well-being of one’s nation than by working on the soil.”

– Nelson Mandela

Here in this article, we will talk about Africa and its agriculture sector, which remained neglected for decades. Of late, African governments seem to have woken up to the need of promoting their agriculture and create better skilled workforce. However, before we delve deep into this matter, let’s familiarize ours with what the Africa’s agriculture sector entails.

About 65% of Africa’s labour force is employed in the agriculture sector; however, the sector has still been underdeveloped and accounts for about 32% of GDP, owing to low productivity. Here are a few more figures for you:

  • Africa has 60% of the world’s arable land
  • By 2030, agriculture sector in Africa would be $1 trillion strong
  • Agriculture sector to create 16 million jobs by 2030

These figures clearly indicate the huge potential that the sector holds. Seeing the opportunities that are waiting to be tapped, several end-to-end training companies have entered the agriculture space. And these companies are impacting the entire agriculture value chain in Africa with their end-to-end learning solutions, which include programs like agriculture sales training in Kenya that impact the productivity of the farm agents and seed distributors. Apart from agriculture sales training, there are many more programs that have been recently devised to boost the commercial agriculture in the African countries.

Apart from agriculture sales training in Kenya, learning companies have developed a number of other programs as well to boost development in the agriculture sector. The programs are intended to skill the manpower and make them productive in different areas of agriculture sector. Skilled manpower is likely to be more productive and easy-learners. And the best thing is they can be put to work right away.

Governments in various African countries are introducing new policies and programs to promote the sector and create skilled manpower. The governments have understood that agriculture training and education, such as agriculture sales training in Kenya, have a direct impact on agricultural productivity and on the performance of ancillary businesses and trade. The keys to the desired growth in the commercial agriculture lie in production for market, diversification in crops and cropping patterns, and usage of mobile telephony/ICT.

Agriculture has the potential to change the very economic face of Africa. Only if the governments of African countries can keep up with their agriculture-friendly policies and schemes, the sector will see immense growth and creation of millions of new jobs.