A Realm of Growth
The global agriculture market, valued at $12,245.63 billion in 2022, witnessed a strong Compound Annual Growth Rate (CAGR) of 9.4% and is expected to reach $19,007.8 billion by 2027 at a CAGR of 9.1%. A mere 7% of the Earth's surface is appropriate for producing food, and most of this land is currently being utilized. Consequently, a rise in the demand for food directly translates to a higher need for land.
The Demand for Food
The UN reports a yearly global population increase of over 67 million, predicting a rise to 10 billion by 2050. To meet this demand, the 2019 Global Harvest Initiative estimates agricultural output must double from 2010 levels. This will require an annual average growth of at least 1.73% in total factor productivity (TFP).
The USDA’s Economic Research Service estimates that since 2002, global agricultural TFP rose by an average annual rate of 1.63%. Although this growth rate does not seem significantly lower than the required 1.73% needed to meet future demand, when compounded over 40 years, output would fall six percent short of the target. This puts farming businesses in a very good position.
Protection Against Inflation
Very few investment types consistently match the pace of inflation, among them are Gold, Treasury Inflation-Protected Securities (TIPS), and Tangible Land. For investors aiming to add a dependable asset to their collection, farmland is a prime choice. Its worth tends to rise gradually, avoiding the extreme price swings seen in other markets. Adding a farmland to your strategy can provide stable growth, protecting your investments from economic unpredictability.
Rising Trends
The trend towards healthier and more diverse diets further propels demand for organic food, with a shift in consumer preferences towards nutrient-rich and varied food choices. A 2022 Food and Health Survey highlighted that approximately 50% of Western population altered their diets towards healthier options, indicating a broader shift that could enhance demand across the agricultural spectrum.
Protected Water Sources
With water scarcity on the rise, agricultural land that has access to sustainable water supplies, such as surface water and groundwater, is likely to experience an increase in value. Considering water's crucial role in farming, exporting agricultural goods can be seen as a way of redistributing water from countries rich in water resources to those facing water shortages.
Secure and Steady
According to the World Bank, agricultural commodities have outperformed global stocks and bonds in the last 50 years, delivering an average annual return of 10%. During the last few decades, farmland has demonstrated strong overall returns, averaging approximately 11% in total annual returns (including income and price appreciation) from 1992 to 2023.
Rise of Protien Demand
As the middle class expands in developing countries, its rising prosperity will lead to an increased intake of protein. According to the Organization for Economic Co-operation and Development (OECD), the consumption of key meat proteins (including beef, veal and lamb) in these nations is expected to rise by 21% by 2027.
A Flourishing Sector
Bosnia & Herzegovina, a burgeoning agricultural powerhouse in Europe, presents an untapped potential for agri-business investments. Its strategic geographical position, bridging East and West, provides it with a unique climatic advantage for diverse crop and livestock production. With over 60% of the country's land suitable for agriculture, Bosnia & Herzegovina offers fertile ground for the food industry.
Real Estate: A Booming Market
Farm Euro's 40-hectare estate, nestled amidst the pristine forests and hills in the heart of Europe exemplifies untapped green real estate potential.
The Bosnian real estate market has witnessed significant growth, especially highlighted by a remarkable 17% year-over-year increase in house prices as of December 2022 (CEIC Data) . This surge is indicative of the market's robust health and the increasing value placed on properties situated in areas of outstanding natural beauty and ecological significance.
Tourism & Hospitality
The global ecotourism market size was valued at USD 216.49 billion in 2023 and is projected to grow to USD 598.89 billion by 2030. The growing trend towards eco-tourism and authentic travel experiences offers fertile ground for new ventures. Farm Euro’s extensive land, with its natural beauty and strategic location, presents a unique opportunity to develop eco-friendly tourism and hospitality projects.
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