A Quick Tour Of The World's Booming Farmland Markets

Brazil farmFarm workers drive cattle in Argentina’s Entre Rios province

Photo: AP

Farmland prices in the UK increased 13% in 2010 alone, according to the Knight Frank Farmland Index. High quality land is available at a fraction of the price in places like Argentina where farmland value went up 10% last year.Prices have been driven by a rising demand for land with sovereigns looking to secure their food supply and investors looking to diversify their portfolios.

Developing nations often perceive this sort of investing to be land grabbing and countries like Brazil have moved to restrict ownership. Economists like Robert Shiller even believe farmland could be the next bubble.

For those still interested in the asset though, there’s a lot of land for the taking. Read on to look at farmland values around the world.

RUSSIA

Average price per hectare: $300 - $1,000 depending on size of holding and progress of freehold application

2010 price change: -10%

Background: Farmland in Russia can come with political and economic risks. Acquiring freehold estates in the country is complicated. Last year's severe drought, extreme heat, and resulting wildfires ruined about 10.1 million hectares of land, or 32% of all land under cultivation, according to Bloomberg.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

NEW ZEALAND

Average price per hectare: $23,000 for dairy farms

2010 price change: -3%

Background: Since 90% of the country's milk output is exported, land prices in New Zealand are closely connected with the health of the dairy sector.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

ZAMBIA

Average price per hectare: $1,000 - $1,500 for a long leasehold

2010 price change: N/A

Background: Land values here are likely to be affected by politics and changes in weather. Foreign investors are often viewed as land grabbers and neo-colonialists. Zambian politicians have in the past suggested nationalizing land.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

UKRAINE

Average price per hectare: $150 - $350 for a five-to-10 year lease

2010 price change: 0%

Background: Ukraine bans the sale of agricultural land. Food production companies typically lease plots from individual owners but Ukrainian President Viktor Yanukovych said farmland in the country will finally be sold in 2012. Experts however advise against investing on the expectation that the moratorium will be lifted.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

ROMANIA

Average price per hectare: $1,560 - $3,250 but prices depend on size of holding

2010 price change: 0%

Background: With only 3% of its 9.7 million hectares of agricultural land in use, there's a lot of open space in Romania. The country has flexible legislation on land ownership and use. Investors do need to look for consolidated land since a lot of land is broken up into smaller plots.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

POLAND

Average price per hectare: $4,550 - $8,125 though price depends on size of holding

2010 price change: 0%

Background: The European Commission is trying to implement reforms that require greater equality in the distribution of farm subsidies in the EU which could benefit Poland, according to Reuters.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

AUSTRALIA

Average price per hectare: $1,600 - $1,700 for dry land that is arable with reliable rainfall

2010 price change: +2%

Background: Ownership in Australia is not restricted, and farmland here has the benefits of first-world governance and the prices of emerging nations. A huge exporter, land values are impacted by the price of agriculture commodities, according to the report.

International Farmland Index via The Wealth Report

BAHIA, BRAZIL

Average price per hectare: $6,000 for dry land that allows double-cropping in west Bahia

2010 price change: +6%

Background: Political changes could have a significant impact on land values in Brazil. In 2010, former President Lula da Silva announced measures to restrict foreign land ownership.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

CANADA

Average price per hectare: $1,300 for Saskatchewan province

2010 price change: +7%

Background: Saskatchewan is one of three Canadian prairie provinces offering farmland at emerging-economy prices. While there are no clear economic, political, or climatic risks, the Canadian government heavily restricts foreign investment in the land.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

US

Average price per hectare: $16,000 for quality dryland in cornbelt states

2010 price change: +8%

Background: Land values appreciated 16% in 2010 because of increasing rent and commodity prices. States like Iowa restrict ownership by investors and corporations to curb speculation, according to the report.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

ARGENTINA

Average price per hectare: $5,000 - $10,000 for central provinces

2010 price change: +10%

Background: In February 2011, Argentinian president Cristina Kirchner announced that she was creating a bill that would limit foreign ownership of land, according to The National. Policymakers are upset that foreigners already own 10% of Argentinian land.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

ARGENTINA

Average price per hectare: $1,200 - $2,500 for northern provinces

2010 price change: +10%

Background: Investors looking to buy Argentinian land need to be cautious of political and economic risks. Argentina does levy large export taxes on most agricultural commodities but production costs are low and investors can gain legal title, according to Savills.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

PARA, BRAZIL

Average price per hectare: $300 for native bush with high cattle potential

2010 price change: +11%

Background: Prices of Brazilian land tend to be affected by the market for soft commodities like soy beans, according to the report. On the policy front, it is widely believed that restrictions on land ownership will likely be reviewed to differentiate investors interested in developing the land from speculators and sovereign funds.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

ENGLAND

Average price per hectare: $22,000 which is the average for all land types

2010 price change: +13%

Background: Land in England doesn't have any ostensible political or climatic risks that investors need to be aware of. In fact investors even qualify for tax breaks.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

MATO GRASSO, BRAZIL

Average price per hectare: $7,000 for dry land with potential for double-cropping

2010 price change: +20%

Background: Government reform could set a cap of 5,000 hectares for foreign buyers. Plans to release 100 million hectares of land to foreign owners have been put on hold, according to the report.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

SAO PAULO, BRAZIL

Average price per hectare: $12,000 for top sugar cane land

2010 price change: +24%

Background: The average value of Brazilian farmland has soared 350% since 2000. Land in the south has seen the highest value increases, according to Savills.

Data provided by The Knight Frank International Farmland Index via The Wealth Report

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