Billions more mouths to feed

Food security is the new energy security. So says Susan Payne, chief executive of Emergent Asset Management, a Surrey-based company which claims to run the biggest agricultural fund in Africa following the launch of its first fund less than 18 months ago.

Payne, a Canadian who cut her teeth as an emerging-markets expert first at JPMorgan and then at Goldman Sachs, attracts investors by conjuring up the Malthusian devil. The world’s population is set to grow by 2 billion to 9.1 billion over the next 40 years; feeding the children of tomorrow will require a 50 per cent increase in farm output by 2025 and a doubling by 2050.

Meanwhile, the price of staple crops has risen by more than 80 per cent since 2005, pushing 100 million people into poverty, according to the World Bank. And Payne is fond of pointing out that there were food riots in 15 countries during a period of soaring prices in 2008. This scenario, coupled with a growing demand for biofuels, means — Payne and others argue — that there has never been a better time to invest in agricultural land.

In December, Dixon Boardman, chief executive of Optima, a New York fund-of-funds business, announced plans for a $100 million fund to invest in American farmland. In the same month, the London-based Agro-Ecological Investment Management announced that it is raising $60 million to buy land in New Zealand. Others already established in this market include Deutsche Bank (pig breeding and chicken farming in China) and Russia’s Renaissance Capital, with 100,000 hectares of farmland in the Ukraine.

Emergent, meanwhile, specialises in countries where land is cheap. ‘A number of factors made sub-Saharan Africa optimal,’ says Payne. ‘It offers fertile soil, secure and plentiful water resources and very good, technically trained farmers, particularly in Zimbabwe, South Africa and Zambia.