LIVE24SEVEN // Best Of Birmingham
Quilter Cheviot
INVESTING IN AGRICULTURE: SUSTAINABILITY AND THE NEXT GENERATION
Agriculture is not a market for the faint hearted, with volatility inherent in both the creation of the product, and how the market reacts to it. Farmers can’t reliably predict, for example, how much wheat they are likely to produce in a given year.
Due to the impact of supply and demand on prices, they find it difficult to predict what prices they will receive for their product either. So far, so capricious. And even though their world may be a million miles away from the City, fluctuations in currency will also have a huge impact on the bottom line. For example, the gods of good fortune can be aligned, with favourable growing conditions, an optimal crop and a level of global supply that will ensure the market is not flooded by product causing prices to lessen, when political or financial events - such as terrorism, or a major corporation folding - will cause a drop in the pound, or for its strength to increase relative to other crop-producing nations, meaning suddenly a farmer’s prices are less attractive and they either have greater difficulty selling their crops, or must accept that their profit margin will be greatly eroded.
It is, then, a somewhat precarious investment category. However, some of farming’s vulnerabilities as an industry can actually lead to opportunities for the investor. For example, ‘one to watch’ in the agricultural economy is the provision of water: population is growing driving higher water demand, just as changing weather patterns lead to scarcity of fresh water across the world. And no industry needs these innovations quite like agriculture. It is a very thirsty industry, currently consuming more than two-thirds of the world’s fresh water for both irrigation and livestock rearing. For example, cattle consume around 95 to190 litres of water per day, compared to approximately 150 litres per day per person in the developed world and cereal crop farmers using conventional methods of irrigation can waste up to 40% of the water used, especially in developing countries.
This issue is driving utilities and regulators to explore ways of maximising water supply, such as new types of infrastructure (e.g. reservoirs, water pipelines and desalination) and new operating models which can help drive greater levels of water efficiency. For example, a US-based farming supplier has developed central pivot mechanised irrigation with very low rates (around 5%) of water.
Similarly, because of the caprices of the agricultural environment, many farmers are adding a side-line in the production of renewable energy and are welcoming investment. Figures from the Department for the Environment,
QUILTER CHEVIOT Two, Snowhill Birmingham B4 6GA TEL: 0121 212 2120
WWW.QUILTERCHEVIOT.COM
Food and Rural Affairs (DEFRA) showed that in 2010, almost 5% of commercial holdings were producing renewable energy on their farm, for example by harnessing slurries, food and plant waste to produce bio-gas, and using willow, wood waste and crops to produce electricity. Other farmers are exploring the possibilities of getting the most out of their land by generating solar farms.
As the agricultural industry seeks new ways of operating in, and catering to, a carbon-constrained world, we expect innovations like these to see favourable returns on investment in the coming years. Investors can also be heartened that in using their portfolio to support sustainability, and specifically sustainability in agriculture, they are not only helping to protect their own future, but that of the planet too.
Quilter Cheviot are proud sponsors of the very first BBC Countryfile Live, a major new countryside event that will bring Britain’s most watched factual television show to life. The show will run at Blenheim Palace from 4 – 7 August. For more information please visit:
www.quiltercheviot.com/countryfile-live.
For more information contact Sean Raftery on 0121 710 3808 /
sean.raftery@quiltercheviot.com
Investors should remember that the value of investments, and the income from them, can go down as well as up. Investors may not recover what they invest. Past performance is no guarantee of future results.
/ 36
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156