Green agriculture is often discussed as an alternative to our existing system: one that’s better for the environment and produces healthier food. While this is true, there is another factor at play: investing in green agriculture can be quite lucrative. It is an emerging innovation, drawing customers that are younger and more affluent. This means money is to be made in supporting green farmers, and here is how you can do it.
Investing in Yields
Investing in yields is the simplest method of making a profit from agricultural projects. This means investing in the share of yield a farm produces, and getting paid when the yield is sold on the market. This is similar to the process of investing in ordinary shares. These profits will sometimes be annual, while in some cases there will be more than one harvest a year. There are also risks involved in this approach, but it remains the most straightforward way to earn.
Investing in Land
The second way to help support green farmers and make a living in the process is to invest in land. Land is an essential asset for any farmer, and by far the most expensive. Purchasing and leasing land is an expensive endeavor as well, but one that will turn profits for years to come. With the rise of urban agriculture, leasing opportunities are on the rise in cities as well as rural areas. These patches of land need not be interconnected, and play a crucial role in food sustainability within cities.
Forced Equity
The term forced equity comes from real estate, but the same rules apply when used in agriculture. Forced equity is the practice of improve land, then selling it to farmers at a higher price. Equity can be achieved by adding buildings and features that may be of use to buyers, as well as improving soil quality. This is a longer process, requiring work to maintain the land before selling it.
Additional Income
There are countless other ways to make a profit from investing in a small farm. Some aren’t obvious right away, but are worth noting. For instance, if you’ve purchased a farm with a pond on property, you can treat it as a separate income source by selling water rights.
Placing billboards on the edges of the farm near a road is an easy source of passive income, as well. Some farms sell their land to solar energy companies, especially if the soil is unworkable but offers plenty of access to sunlight.
Principle Pay down
Principle pay down is yet another real-estate term. If debt is connected to your land, you can use your income to pay down the principle, accumulating equity over time. This won’t provide an immediate profit, but if you’re planning to work your land for years to come, it’s an option worth considering.
Teaching
More farmers are entering the industry nowadays, looking for ways to survive without adding to their carbon footprints or damaging the soil. Oftentimes, they come from industries with no connection to agriculture, and need to learn about the trade from those with more experience. Providing lessons onsite is a way to earn profit, while showcasing what your farm has to offer.
Conclusion
There are many ways to invest in green agriculture and they are all beneficial for your bottom line. Some are passive, while others will require a more hands-on approach to land management and finance.