Investment in Agriculture

by samyjackson
Last updated 1 year ago

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Investment in Agriculture

Agriculture has been a core sector in the economy of various countries. According to data obtained from the US department of agriculture, there are about 2 million farms in the country majority of which are family owned. The department further highlights that this sector generated an approximated income of $374 million for the year 2018. These stats shows the potential in the farming industry. However, the decision to Invest in Agriculture should not entirely be judged on the stats only. There has been instances of great loss due to uninformed investments. For better returns consider the following key factors;Market: Who are the target buyers? How is the market for your product? These and several other questions on the market for your products must be analysed carefully. According to several agricultural related researches, most farmers obtain much lower returns than they could get if they had sufficient knowledge of their products market. Therefore, before investing in agriculture, ensure you conduct a market research for your produce. This way, better returns are guaranteed and vice versa.Products: Just like market, the choice of the right agricultural product to invest in is important. As per the statistics from the US department of agriculture, the most profitable agricultural venture is meat production and animal feeds. The two generated approximately 75% of the total incomes from the sector. Therefore, there is a need to invest in either of them for better returns. Trends and patterns: Farming sector is an ever changing industry. According to a research conducted by the University of London in various countries of Europe, USA and Australia, there is a change in buyer’s behavior. According to the research, people are shifting to natural foods. Therefore, investing in natural and green products could pay off.Skills and knowledge: Today, agriculture is done using advanced technologies and techniques. According to the US department of agriculture, those who invest in industrial agriculture are at a better position for high incomes. Specializing in animal feeds and meat is also promising. According to this department, a successful venture into any agricultural activity requires sufficient skills, knowledge or experience. Therefore, its worth to evaluate your skill set and invest on what you understand better. Regulatory policies: Agricultural industry just like other sectors of the economy is controlled by various laws and policies. Favorable legal framework will positively influence returns. According to a research by the Harvard school of agriculture and natural resources, government willingness to promote agriculture can be seen through its policies such as subsidies on key inputs, zero duty on exports, capital allowances for agricultural equipment among others. The US federal and state governments have favorable policies to support agricultural ventures. For instance, the costs of fertilizer and animal feeds are highly subsidized to minimize production cost. Therefore investing in the US agricultural sector is advisable.

Factors To Consider Before Investing In Agriculture


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