Sunday, February 10, 2008

They can see it!

Courtesy of Warmwell, we picked up this piece recently published in The Times property pages. It tells us that:

The cost of farm property looks likely to soar as traditional British "lifestyle farmers" are joined by multimillion-pound investors hurriedly moving their wealth out of stocks and shares and into farmland.

Across the world, hedge fund managers, property developers and other investors are turning their eyes to places such as Russia, Argentina and Uruguay, where farms are thought to be underdeveloped and provide an opportunity to profit from the rising prices of staples such as wheat, barley and oil-seed rape.

Britain is likely to feel the effects because our farmland is cheap by Western European standards. Marc Duschenes, of the property company Braemar, hopes that the surge in grain prices will persuade hard-pressed British farmers to sell their land. Braemar aims to raise £20 million for its agricultural land fund.

"We are speculating that commodity prices will feed through into higher land prices," says Duschenes. Carter Jonas is quoting forecasts of prices increases of 10-15 per cent this year.
It is probably fair to say that hedge fund managers are a lot brighter than your average politician, and they do have a highly successful record of generating wealth in this country (and globally). If therefore, they are piling into agriculture in the expectation of making a profit out of sustained increases in commodity prices, then the smart money (to coin a phrase) is on betting that they are right.

However, interpreting the trends is not exactly rocket science – even this impoverished blog can see the writing on the wall. So how do we explain the acute myopia of our politicians?


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