The agricultural industry is at a turning point as it attempts to make the transition through the third green revolution, with limited land available for traditional farming. As a result farmers as well as distributors are being presented with new agricultural technologies (agri-tech) that have the ability to produce more food without causing any damage to the environment.
The innovative technologies that are being developed in the field of farming are revolutionizing the industry and making it attractive for investors to commit capital with the expectation of good returns.
New scientific developments and entrepreneurship are advancing the agri-tech industry. These developments include GM production and ensure plant health.
Why You Should Invest in Rhe Agri-Tech Industry?
The global population continues to expand as the land mass required for traditional farming decreases. This is where the agri-tech industry plays a critical role of enabling farmers to increase the output from their farms. This practice currently makes up a third of the overall farming industry and with its current rate of growth will soon dominate it.
In addition to agri-tech development, agricultural biotechnology companies have come in and created a new niche in the field of farming, providing ample opportunity for investors make their money work for them.
Investing in the agri-tech sector is an opportunity that shouldn’t be passed up. It is true that the industry is in its infancy, but investing at this early stage ensures better returns. There are various ways to invest in the growing agri-tech industry, such as:
● Direct Private Marketing
● Public Markets
● Venture Capital Funds
More information on the different investment options available are detailed below.
Direct Private Marketing
This type of investment is for the single private investor, looking to gain experience in the field of agri-tech. Any form of capital can be invested directly into the company. Previously, individual investors faced difficulties finding private companies to invest in, making it a big hindrance into the industry. More recently however, the Security and Exchange commission set forth a new rule under the Jumpstart our Business startup act (Rule 506c), that allowed private companies to easily seek out potential investors, making it a more streamlined process.
The agri-tech industry is still attempting to penetrate the public markets field. Nonetheless, there are still specific publicly traded agri-business firms that are already investing heavily into the agri-tech development industry. These include big agribusinesses such as Monsanto. Investing in agribusinesses such as these, provides that sought after exposure to the development of the industry and what the future may hold for more informed financial decisions. Investment in public markets is primarily used to fund the R&D (research and development) that shapes the industry.
Venture Capital Funds
Venture capital funds provide access to startup agri-tech companies. Most funds generally come from the plant science or plant biotechnology base and each one has a different investment charter and a different area of focus. Investing in one of the focused agri-tech venture funds is the best way to get the maximum experience and diversified exposure to the asset class. Like any investment the risk – return trade off needs to be carefully calculated.
Agricultural focused private equity funds invest in more mature and innovative technologies. It must be noted that they still keep a close eye on native farming methods however, as that market still presents some good opportunities as well.
Individual investors struggle to gain access to venture capital fund based companies, due to the large sums of money required. That being said, there are small, prominent agri-tech based investment companies that are coming up, such as Agfunder Opportunity Fund, with great long-term potential .
As the agri-tech industry continues to grow from strength to strength, it has given investors the perfect opportunity to conduct business through a variety of methods. If you’re an investor in the field of agriculture, you should seriously be considering the agri-tech industry.