When searching for farmlands, the top three global regions for quality and productive capacity are, Midwest of the United States, Ukraine and Argentina / Brazil. The U.S. falls within the highly regulated and subsidised region and as such returns on equity are poor. Ukraine has less regulation, no subsidises and is well regarded globally for the quality of the soil; however the poor state of infrastructure, questionable legal recourse and the fact that you can not get full title to land, only a lease, rules it out.

In Latin America the choice is between Argentina and Brazil. Brazil, with the largest mass of potential farmland provides many opportunities; but there are issues with land laws and the infrastructure is still being put in place in many regions. This is obviously a place for farming in the future, however Argentina stands out as the safer option with the most potential. Argentina has a long history of supplying the world with agricultural commodities on a large scale.

The recent crisis in Argentina, the 2002 default, had a huge effect on the economy, but for the agriculture sector this was a huge positive. In Argentina the farmland and produce (Grains) are priced in USD and are more or less independent of local issues. As pre 2002 the convertibility was 1 Peso to 1 USD all banks lent against farmland in Pesos. After the default land owners paid back the banks in USD from their USD revenues, as their debts were now one-third while revenues were the same. As such, currently there is very little debt attached to farmland which in a world of leverage we believe is very important. Further more all local costs of production were reduced dramatically as they were in the debased Peso.

Argentine law which is based on Roman law, as is much of Europe, is the strongest, most respected in Latin America. Private property in Argentina is a protected right for all citizens as laid down in the constitution. There are no restrictions on land ownership and there are no distinctions between national or foreign owners in regards to land ownership rights. Foreigners are treated in equal standing to locals.


These robust laws have attracted many foreign investors to Argentina over the past 10 years including AIG, Nikkon, Walbrook, the Benetton family, George Soros and the British Royal family.

The agriculture sector in Argentina is hugely important as it accounts for 14% of GDP and 34% of export earnings. Argentina is the world’s largest exporter of Soya oil and meal and the 3rd largest exporter of soybean. As a result farming has a large influence in Argentina and there is a good infrastructure that is focused on the agricultural industry. The Buenos Aires grain exchange has been trading since 1854 and is today one of the top three global exchanges in terms of volume. The port of Rosario is the largest oil seed port in the world and all the major global grain companies have a substantial presence through out the country.

As an added bonus Argentina sits on top of arguably the largest aquifer in the world. The Guarani Aquifer drains the Amazon basin and includes the impressive Iguazu Falls, the world’s widest waterfalls. It is estimated to contain about 37,000 km³ of water with a total rechargeable rate of 166 km³ per year from precipitation. This body of water is currently one of the last major unexploited reserves with huge potential for crop irrigation.