Representatives of family offices, fund of funds, farm managers and placement firms were among the agri-focused professionals who joined us in Central London last week for the first of Agri Investor’s regular networking drinks, Last Thursday.
How best to structure investment and who’s looking to invest capital were among the most visited topics of discussion during the evening.
But things got even more interesting as guests broached more provocative matters.
A London-based advisor had an animated discussion with other guests about the difficulties of investing into Africa. He pointed out that for some investors it is a matter as simple as the flag a country might have. Several flags on the African continent depict machine guns which, rightly or wrongly, does not instil confidence in the investment community, he said.
Responding to the failure for non-governmental organisations and development finance institutions to invest into early stage farming operations in Africa, the person suggested that introducing specific social impact initiatives such as hiring a certain number of female farmers could be a good way to win favour with, and capital from, these organisations.
Elsewhere two farmland investment managers discussed the disastrous effects of tilling the soil worldwide and how this could be stopped. “My heart bleeds when I see red rivers flowing through South Africa full of nutritious soil,” said the South African manager. It is a matter of educating the sector not to follow the system that European farmers have been using for centuries, they said.
And the debate between Australian and New Zealand dairy investment opportunities continued. Investment firms investing into New Zealand’s well-structured dairy market disagreed that the pricing gap between similar farms in the Australia would close significantly because the climate was fall less suited to the industry. And Australian dairy farmers do not have the support of a single cooperative to buy all produce and stabilise milk prices as New Zealand does in Fonterra.
Agri Investor suggested that perhaps the grazing method being used for beef cattle in Australia, the so-called Serengeti farming method, could work for dairy farming too to help mitigate the impact of adverse weather conditions — an idea that was not dismissed completely.
Stay tuned for details about our next industry get-together.