Where and how to invest in agriculture

Where and how to invest in agriculture

24 / 09 / 2020
The best investments are investments whose profitability is not related to market fluctuations, luck and other circumstances that are independent of the investor. The main feature of such assets is reliability. The agro-industrial complex fully falls under these parameters.

Fundamentals of competent investment in the agro-industrial complex

The best investments are investments, the return of which is not related to market fluctuations, luck and other circumstances, independent of the investor. The main feature of such assets is reliability. The agro-industrial complex fully falls under these parameters. Investing in agriculture in Ukraine means investing money wisely, protecting it as much as possible from unforeseen accidents.

No technology can replace food, which is one of the basic human needs. From this point of view, investment in the agro-industrial complex is the best way to invest.

Key aspects

The main task is to correctly determine the choice of land. The territory of Ukraine consists of three zones:

  • steppe;
  • woodland;
  • forest-steppe.

Almost the entire territory is covered with fertile soil. At the same time, crops planted in different zones show different yields.

The cost of the site depends on several factors. The main one is the growth rates of highly profitable crops. These include corn, soybeans, wheat and canola. The possibility of replacing a crop (for example, sunflower with barley) is of no small importance. This should not reduce the yield. If the land is suitable for growing only a few crops, then its cost will be lower than the universal soil.

The price also depends on the location of the site. In this regard, the Cherkasy region is considered one of the most expensive. Its climate is optimal for growing a variety of crops.

Important! Global warming needs to be taken into account. Areas that could boast fertile soils twenty years ago are now suffering from drought. This made their land unsuitable for the cultivation of certain plants, such as corn.

The territory needs to be bought for a specific culture:

  • optimal conditions for wheat have been created in Vinnytsia and Khmelnitsky regions;
  • Vinnitsa land and Rivne region are suitable for corn;
  • for barley - the territory of the Khmelnytsky region;
  • for sunflower - Cherkasy region;
  • for rapeseed - Volyn.

To choose the right investment, you should be guided by the latest data. They must have been collected in the last three years.

The benefits of investing in the agro-industrial complex

Investments in the agricultural sector have a number of advantages compared to other types of investments:

  • low competition;
  • consistently high demand for agricultural products;
  • constant increase in food prices;
  • popularization of natural food;
  • support of the agro-industrial complex by the state.

In the industrial sector, the level of competition is much higher. To enter the market, especially to win a niche in it, one needs significant reserves. In agriculture, there are many more opportunities for the development of a profitable business. One of the options is to modernize the existing farm. In addition, you can start a business from scratch, taking technological advances as a basis.

Caution! Potential investors should also consider the disadvantages of investing in the agro-industrial complex. This is the dependence of profit on climatic factors, as well as the need for a long wait for income received from the results of product sales.

The main advantage of investments in agriculture is a stable growth in value. Products grown without the use of chemicals are in special demand.

Another benefit is tax breaks. The agro-industrial sector enjoys tangible support from the state. Moreover, it turns out to be both at the local and at the national level.

Special programs include the provision of subsidies, as well as a reduced tax rate. In addition, farmers have the right to partial compensation for production costs, namely the purchase of fertilizers, fuel, seeds.

Land itself is an excellent investment vehicle. Its price is constantly increasing. Therefore, you can make great money by buying a plot for the purpose of its further resale. Land is a valuable resource that increases the owner's credit rating, which makes it possible to obtain a loan on more favorable terms.

Another plus is favorable conditions for domestic producers of agricultural products. Each state provides quotas for food. At the same time, the size of the export duty is much less than for other categories of goods. At the same time, higher rates apply for the export of agricultural products - from 30 to 60%. Thanks to this policy, products of domestic producers receive preferences over products of foreign origin.

There are loyal credit programs especially for farmers. In most cases, the central or local government provides subsidies to repay the interest on the loan. This approach allows the farmer to use borrowed funds practically free of charge. At the same time, farmers have ample opportunities to attract financing from third-party sources.

The company offers complete solutions and the best products (for fertilization, sowing, soil cultivation, protection and feeding) to agricultural producers to organize a profitable business. Agronomists, service engineers, sales managers will make every effort to help the farmer to efficiently farm.

Instructions for beginners

Investing in any industry, including agriculture, requires caution. Compliance with simple rules will enable novice farmers to avoid gross mistakes that can lead to the loss of substantial funds.

First you need to objectively assess your financial capabilities. This task often becomes overwhelming for private investors, while it is much easier for companies to determine the amount of capital due to the involvement of experienced financiers in the settlement process.

Individuals need to balance their assets and liabilities. The first includes not only cash and funds in the current account. In addition, shares and real estate objects that can be quickly converted into money fall under this category. Liabilities include insurance premiums, loan payments and other financial obligations.

Knowing the exact amount of capital will enable the investor to choose the optimal source of investment. If the available resources are not enough to cover all costs, then you need to study in advance the possibility of attracting additional assets from third-party sources. The best option is to obtain a loan on favorable terms.

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